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S.V. Institute of Management, Kadi.

1.1 Global Scenario of Industry

Europe remains the largest market in the dairy Industry. US Follows Europe as the second

largest market. Preference for rich, fortified, fat-specific, and organic variants of variousdairy products in the market. India is going to be a major market for international players

Growing population

lot of growth opportunities

It is projected to account for over 1/3 of the global milk consumption by 2020

CAGR(2011-2014) drinking milk sector:

Global : 1.9 % , APAC: 3.5%, Western Europe: 0.2%, Africa: 2.2%, Eastern Europe:2.4,Latin America: 2.8%

Market Value in Asia Pacific

Category % Share

Japan 37.3%

China 31.2%India 9.5%

South Korea 8.3%

Rest of Asia-Pacific 13.7%

Total 100%

Source: Data monitor

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In developed dairying countries such as the U.S.A., the year 1850 is seen as the dividing line

between farm and factory-scale production. Various factors contributed to this change in

these countries, viz. concentration of population in cities where jobs were plentiful, rapid

industrialization, improvement of transportation facilities, development of machines, etc.

whereas the rural areas were identified for milk production, the urban centers were selected

for the location of milk processing plants and product manufacturing factories. These plants

and factories were rapidly expanded and modernized with improved machinery and

equipment to secure the various advantages of large-scale production. Nearly all the milk in

the U.S.A. before 1900 was delivered as raw (natural) milk. Once pasteurization was

introduced, it developed rapidly. Mechanical refrigeration helped in the rapid development of

the factory system of market milk distribution.

37.30%

31.20%

9.50%8.30%

13.70%

100%

0

% Share

Japan

China

India

South Korea

Rest of Asia-Pacific

Total

Source: Data monitor

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Global players

Switzerland , started in 1866with sales turnover Rs

1,471.30 crore

New Zealand, started in2001 with sales turnover US

$17 billion.

Denmark , started in1881with annual turnoverof Danish krone (DKK) 64

billion

Barcelona, Spain started in

1994,

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1.2 History of the Industry

India is the highest milk producer in the entire

globe. India is well known as the 'Oyster' of theglobal dairy industry, with opportunities galore

for the entrepreneurs globally. It might be dream

for any nation in the world to capitalize on the

largest and fastest growing milk and milk

products' market. The dairy industry in India has

been witnessing rapid growth with liberalization.

As the economy provides good opportunities forMNCs and foreign investors to release the full

potential of this industry. The main objective of

the Indian Dairy Industry is to manage the

national resources in a manner to enhance milk

production and upgrade milk processing using

innovative technologies.

The crossbred technology in the Indian Dairy Industry has further augmented with the

viability of the dairy units by increasing the milk production per animal. Then subsequently

milk production has also increased at an exponential rate while the benefits of an increase in

milk production also reached the consumers from a relatively lower increase in the price of

milk. The favorable price environment for milk producers for the Dairy Industry in India

however appeared to have weakened during the 90's, a decline in the real price of milk being

noticed after the year 1992. And then slowly regained it is glory after 1992 to till now.

In India dairying from very much earlier is regarded as an instrument for social and economic

development. The country's milk supply comes from millions of small producers, who are

dispersed throughout the rural areas. All these farmers maintain an average herd of one or

two milk animals, comprising cows and/or buffaloes. Mostly ample labor and a small land

base encourage farmers to practice dairying as an occupation subsidiary to agriculture. As

income from crop production is seasonal instead dairying provides a stable which is a year-

round income and also an important economic incentive for the small farmer.

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The co-operative society was stated about 26years ago in indices while in the foreign country

(Britain). It was established in 1844. I.e. 146 years ago. In Gujarat the first milk producer

union was stated in kheda district were inspire and guided by the Sardar Patel and the

kheda district milk producer union ltd. The co-operative based industry was started in 1946 at

Anand name AMUL DAIRY. Following the footstepof Amul Dairy the milk producer

union was started at Surat in 1951. It is called as Surat in Sumal Dairy. Then in 1957 -58,

the other co-operative milk producer union was established in Baroda called Baroda dairy

in 1960. Dhanasura Dairy was started in Mahesana. In Banaskanthadistrict, the Banas

Dairy was established in 1966. Dr. V.Kurien the General Manager of Amul Dairy talked to

Mr. Bhalabhai Patel a prominent of dairy industry is Sabarkantha District and with great task

efforts on the Mr.Bhalubhai Patel the foundation Chairman Mr. C.C. Desai,Mr. GopalbhaiPatel and Mr. Ambabhai Patel. The Sabarkantha district Co-operative Milk producers union

was established on 27th November 1964. It called as Sabar Dairy. It has got its name as it

is situated in the Sabarkantha district first 19 societies registered their names on 20th October

1965. 5100 liters milk was collected and supplied for Ahmedabad. Ahmedabad municipal

dairy could not accept more quantity of milk during the seasons. For the first seven years the

milk union kept in on supplying raw milk to Ahmedabad municipal dairy and could not

expand its activities due lack of financial sources. Therefore, in 1970 the milk unionsubmitted proposal to Indian Dairy Corporation for establishment of multiproduct dairy plant

in Sabarkantha district.

History of IndianMarketMilkIndustry

Beginning in organized milk handling was made in India with the establishment of Military

Dairy Farms.

Handling of milk in Co-operative Milk Unions established all over the country on a

small scale in the early stages.

Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945

Pasteurization and bottling of milk on a large scale for organized distribution was

started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961),

Madras (1963) etc.

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Establishment of Milk Plants under the Five-Year Plans for Dairy Development all

over India. These were taken up with the dual object of increasing the national level

of milk consumption and ensuing better returns to the primary milk producer. Their

main aim was to produce more, better and cheaper milk.

1.3 Indian Scenario of Industry

Co-operative:

A man takes a muster seeds 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 comes

and make their nest in its shredded branches.This approach of the growing and nesting

birds the spirit of co-operation between the natures, the person who shows the seed is the

true essence of a co-operative. Co-operation amongst competitive is the fundamental

principal. One is reminded of the story where the father tells his five sons to break small

wood stick individually and then trying to breaks them when they are joining. The sticks

do not break.

Co-operative movement in dairy industry:

Milk is perhaps the only agriculture product that a farmer is required to sell twice a day

every day of the year. In view to its extremely limited keeping quality, the farmer has also

got to sell it within few hours of production; otherwise it becomes a total loss. In India as

farming is carried on very small it is not possible for a farmer himself to market what

little milk he produce. The production being small it does not become worthwhile for him

to sell the milk to the consumer himself. Inevitably, therefore draying so developed that

middle man entrench themselves in the milk producing areas to buy the milk from the

farmer transport it to the consuming centers and to sell in to the consumer. We are all

aware of the tremendous exploitation that the middle man indulges in when marketing

agricultural commodities.

Even product like wheat, rice, tobacco, the exploitation of the farmer by middle men is

very important but these are products that are needed to be marketed only once a year.

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These are also products, which the farmer can stock for some time in order to obtain a

good market.

India is one of the largest milk producers in the world

Market size of Indian Dairy Industry stands at around US$4.4 billion

CAGR (2005-2009): 11.9 %

Domestic Market 50% in fluid form, 35% in traditional products (cheese,

yogurt and milk based sweets), and 15% is consumed for production of butter,

ghee, milk powder and other processed dairy products

Forecast 2014: increase by 49.4 % to take market value to US $ 6.5bn

Indian Dairy Industry

Size of the Industry More than 10 million dairy farmers belong to 96,000 local dairy

cooperatives, who sell their product to one of 170 milk

producers' cooperative unions who in turn are supported by 15

state cooperative

Geographical

distribution

Delhi, Punjab, Mumbai, Gujarat, Surat, Lucknow, Bihar,

Hyderabad

Output per annum Growing 5 % per annum

Market Capitalization The industry contributes about Rs 1,15,970 crores (US $ 25,771

million) to the national economy.

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India ranks first in the world in milk production, which went up from 17 million tons in

1950-51 to 121.84 million tons in 2010-11. The per capita availability of milk has also

increased from 112 grams per day in 1968-69 to 281 grams in 2010-11. The world average

per capita availability was 284 grams per day in 2009-10 compared to 273 grams per day

for India.

The Indian dairy sector acquired substantial growth momentum from the Ninth Plan

onwards, achieving an annual output of 121.84 million tons of milk during 2010-11. This

represents sustained growth in the availability of milk and milk products for the growing

population of the country.

Dairying has become an important secondary source of income for millions of ruralfamilies and has assumed an important role in providing employment and income-

generating opportunities next to agriculture.

India ranks first in the world in milk production, which has gone up from 53.9 million tons

in 1990- 1991 to 127.9 million tons in 2012-13. The per capita availability of milk has also

increased from 176 grams per day in 1990s to 290 grams per day in 2012 -13. This is

comparable with the world per capita availability of milk at 289.31 grams per day for 2012.

This represents sustained growth in the availability of milk and milk products for the

growing population of the country, apart from being an important secondary source of

income for rural families.

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1.4 Gujarat Scenario

Gujarat has registered an impressive industrial

development since its formation as a separate statein 1960. The industrial sector at present

comprises of over 1200 large industries and over

3,45,000 micro, small and medium industries. A

As per the results of the Annual Survey of Industry

(ASI), 2005-06 carried out by the Central

Statistical Organization (CSO), under Ministry of Statistics and Program Implementation,

Government of India, Gujarat accounts for 19.69% of fixed capital investment, 16.13% ofgross output and 15.35% of net value added in industrial sector in India. This survey

further reinforced the position of Gujarat as the most industrially developed state in India in

respect of first ranking in industrial investment and second in terms of value of production

and value addition in industrial sector.

Over the years, Gujarat has diversified its industrial base substantially. In the year 1960-61,

textiles and auxiliaries were the major contributor to industrial economy of the state. In the

span of over 49 years, the industrial spectrum has completely transformed and today 12 major

industry groups together account for 86% of factories, 96% of fixed capital investment, 94%

of value of output and 95% of value addition in the states industrial economy. In the

recent years, refined petroleum products has emerged as one of the largest industrial groups

having 33% share, followed by chemicals having 21% share. Other important groups include

agro and food products (8.5%), textiles and apparel (6.9%), basic metals (6.2%), machinery

and equipment (2.7%), non-metallic mineral based products (2.5%), plastic and rubber

products (1.8%), furniture industry (1.4%), fabricated metal products (1.4%), electrical

machinery (1.2%) and paper and paper products (1.1%). The industries in Gujarat produce a

wide variety of products. A The products which have substantial contribution in terms of

production in India include: Soda Ash having 94% share, Salt (80%), Processed Diamond

(80%), Polyester Filament Yarn (63%), Caustic Soda (42%), Phosphate Fertilizers (37%),

Sponge iron (35%), Textile Fabrics (34%), Refined Petroleum Products (33%), Nitrogenous

Fertilizers (19.5%), Cement (10%) and so on.

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Over a period of time, Gujarat has also succeeded in widening its industrial base. At the time

of inception in 1960, the industrial development was confined only to four major cities

namely Ahmedabad, Baroda, Surat and Rajkot and some isolated locations such as Mithapur

and Valsad. Today, almost all the districts of the state have witnessed industrial development

in varying degree. Such a massive scale of industrial development has been possible on

account of judicious exploitation of natural resources, such as minerals, oil and gas, marine,

agriculture and animal wealth. The discovery of oil and gas in Gujarat in the decade of 60s

has played an important role in setting up of petroleum refineries, fertilizer plants and

petrochemical complexes. During the same period, the state government has also established

a strong institutional network.

Gujarat Industrial Development Corporation (GIDC), established industrial estates providing

developed plots and ready built-up sheds to industries all across the state. Institutions were

also set up to provide term finance, assistance for purchase of raw materials, plant and

equipment and marketing of products. Later, District Industries Centers (DICs) were set up in

all the districts to provide assistance in setting up industrial units in the form of support

services. The state also developed infrastructure facilities required for industries, such as

power, roads, ports, water supply and technical education institutions. The Government also

introduced incentive schemes, from time to time, to promote industries mainly in the under-

developed areas of the state to correct regional imbalances. All these initiatives have made

Gujarat to emerge as the highly industrialized state in the country today.

1.5 Growth of the Industry

Over the past five years, the ministry of science and technologys Dairy Industry

Development project has improved technological innovation in the industry, made great

progress in key technology Research and Development, e.g., breeding of milk cows,

feedstuffs, prevention and treatment of epidemic diseases, processing of dairy products,

quality and safety, and initially set up chinas technology pillar system for dairy industry.

The project has established 20 demonstration zones with 1.18 million milk cows,

increased output per cow from 5000 to 6500 kilograms, and fostered a great many

competitive brands driven by the Dairy Industry Development project, chinas dairy

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industry output has maintained a very high average growth rate of 25% a year, and

accounts for 3.7% of the world total.

The National Dairy Development Board (NDDB). At the foundation of dairy industry are

the cows and buffaloes that, during the last three decades, our nations milk producers

have transformed Indian dairying from stagnation to world leadership. During this period

and before, science and technology have played a critical role in supporting our farmers

efforts. During the next decade, that role will be further enhanced as they face a number

of new challenges. The dairy cooperative movement has been central to the development

of dairying in India. The inspiration for this movement was the success of the Kharia

District Cooperative Milk Producers Unionbetter known as AMUL. Founded in 1946in response to the exploitation of districts dairy farmers, AMUL grow rapidly from it is

one of the most successful and the largest cooperative dairy enterprises in the whole of

Asia.

NDDB has also supported animal nutrition through the financing of 46 cattle feed plants

and supporting these plants with quality control laboratory services. A useful innovation

has been the development of protected feed technology which minimizes the degradationof protein and fat in the rumen. Mineral deficiencies are also a constraint to improved

animal productivity. NDDB is supporting area surveys resulting area surveys resulting in

profiles that lead targeted mineral mixtures to be used as supplements in cattle feeds sold

to farmers in this regions. Last, but not least, animal diseases cost our nations milk

producers thousands of million rupees are lost annually in production. NDDBs efforts in

this field are matter of great pride.

Latest developments

Indian Dairy Industry is the largest milk producer all over the world, around 100

million MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in

2004-05 which approximately equals combined output of paddy and wheat. With

1/5th of the worlds bovine population

In India the Milk animals constitutes45% indigenous cattle, 55 % buffaloes, and 10%

cross bred cows

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Intensive Dairy Development Programmed (IDDP): The Schemes, modified under these

programmers are on the basis of the recommendation of the evaluation studies which were

launched during Eighth Plan period and are being continued throughout the Eleventh Plan

with an outlay of Rs. 32.49 core for 2009-10.

Strengthening Infrastructure for Quality and Clean Milk Production (CMP):this is a

centrally sponsored scheme which was launched in October 2003, which had the main

objective of improving the quality of raw milk produced at the every village level in the

India.

Dairy Venture Capital Fund- this is introduced in the Tenth Fiver Year Plan to bring about

structural changes in unorganized sector, which would measure like milk processing at

village level, marketing of pasteurized milk in a cost effective manner, quality or the up

gradation of traditional technology to handle commercial scale using modern equipments

and management skills.

1.6 Top Companies in the Industry

The Leading Dairy Product Companies in India, which are under the control of different state

governments, are generally cooperatives. These cooperatives buy milk from the dairy farmers

at minimum support price. Later these cooperatives process it to different high nutritious milk

products. The leading private milk product companies of India are more into producing and

further processing of this milks. Most of the leading dairy product companies in India are

well equipped to handle processing of bulk quantities of cow and buffalo milk. Further, the

technology used by these leading companies of India to process the milk is at par with the

international standards.

National Dairy Development Board towards educating dairy farmers on producing quality

milk, cattle disease control, cattle feeding, genetic improvement of cattle, vaccination and

other allied education on dairy farming.

Some of the leading dairy product companies in India are:

Amul and Gujarat Cooperative Milk Marketing Federation Ltd

The Orissa State Cooperative Milk Producers Federation Ltd (OMFED) Andhra Pradesh Dairy Development Cooperative Federation Ltd

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Haryana Dairy Development Cooperative Federation Ltd

Kream Kountry

Mother Dairy

Vasudhara Dairy

Lactose (India) Ltd.

Modern Dairies Ltd

Pastonji Ice Cream

Kings Ice Cream Ltd

Param Dairy Ltd

Dhruv Makhan (India) Ltd

1.7 Industry Structure

Indian DairyIndustry

Organized

(20%)

Privatedairies

CooperativesSocieties

Government

Unorganized

(80%)

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1.8 Nature of Demand

In dairy industry the demand for dairy products are basic consumption goods itsnecessities product for the consumer. The consumption of any single dairy products

depends not only the demand for that product but also on the consumption of the several

other dairy products because for any short period of time combined consumption of all

dairy products must come from the same fixed supply of milk. Prices must be at level

such that the quantities of milk demanded in all outlets equals the total supply of milk.

1.9

Profit potential

2007-08 2006-07

Sales, Profit, Depreciation (Rupees in crores)

Sales 1482 1266

% Increase over Previous year 17% 20%

Profit before depreciation 16 15Depreciation 12 11

Net Profit 3.55 3.73

Segment sales compared to previous year

Dairy business 1323 1135

% Increase over previous year 17% 20%

Cattle feed business 159 131

% Increase over previous year 21% 18%

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1.10 Entry and Exit barrier and Rivalry among Competitors

According to this model there are five forces which determine the competitiveness of an

industry in the long-run. The five competitive forces are:

1. Potential Entrants

2. Bargaining Power of Buyers

3. Threats of Substitute

4. Bargaining Power of Suppliers

5. Rivarly

1. Potential Entrants:

The row material availability is adequate and thus too many small firms comes into

existence which affect the market share of small and big firms.

Government rules and regulation to be followed are less because of there is free entry and

exit

2. Bargaining Power of Buyers:

Bargaining powers of buyers is very high.

Product of industry is standard.

IndustryCompetitors

Rivalry Among

Existing Firms

Potential

Entrants

Buyers

Substitute

Products

Suppliers

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There are low switching cost faced by buyers

3. Threats of Substitute:

Substitute product affect price elasticity as more substitute become available, the demand

become more elastic since customer have more alternatives.

4. Bargaining Power of Suppliers:

Suppliers power is not high, as they are numerous in number.

The companies are purchasing the spices from the farmers.

As there enough availability of raw material, company can purchase it from the place find

its cheaper as compare to other places.

5. Rivarly:

Rivarly is intensive in this industry. Every price cut is matched by subsequent price cut by

other manufacturers.

Increase rivarly because more firms must compete for the same customers and resources.

2.1 Introduction of Organization

The MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD.

Mehsana dairy is a Co-operative organization registered under Co-operative Societies

Act.1925 on 08-11-1960 by Registration No. c/-1960.It has about 1241 member villages

milk co-operative societies in Mehsana District from whom it procures milk. The Societies

have over 4, 52,000 producer members. Working with Manpower (force) in the capacity ofManagerial 34, officers 283, Skilled 798, Semi-skilled 346, & Unskilled 27. Total strength

of Manpower comes to 1488.

The MEHSANADISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD has

its head Quarters & Dairy plant in Mehsanatown. The union has five milk chilling center at

Vihar, Kheralu, Kadi, Hansapur, & Harij, these chilling centers helps to store milk for longer

period. All these centers are located in the rural area. Ithas two cattle feed plants, at Boriavi &

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Ubkhal (capacity 300 M.T) & an animal breeding station at Jagudan,this breeding station

helps to improve milkproductsanimal.

The union provides various technical inputs to its members through village milk co-operative

societies. The milk collected is processed in to various products such as market Milk, Butter,

Ghee, Milk powder &Sweetened condensed milk. The market milk is sold in Mehsana

District directly by the Union, whereas other milk products exported by the Gujarat Co-

operative milk marketing federation into which the union is totally committed to provide

quality & error-free products & services to its customers with the ultimate aim of satisfying

them.

PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY

Mehsanaa largest milk producing district of Gujarat is famous since long for cattle breeding

& animal husbandry practices. Large, small & marginal farmers & landless laborers are

engaged in the practices of animal keeping & milk production. The high yielding well known

Mehsana buffalo breed is native of the district & is known for its potential of economical

milk production. The union makes use of most advanced technologies for manufacture ofvarious milk products, for providing better animal health care services & for building socio-

economic strength.

Historical Background

1960 - Establishment of the MDCMPU Ltd.

1961 - Started milk supply to Ahmadabad Municipal dairy.1963 - The MDCMPU ltd has Innograted

1964 - Innogration of the Vihar chilling center.

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2.2 Organization Vision and Mission

Provide maximum customer satisfaction by quality of milk product diversification

Dudhsagar Dairy has a mission to save the surplus and give employment to village

people.

Dudhsagar Dairy sells their items at MRP price and their mission to provide

healthy and happy life

2.3 History and development of the Unit

The dairy was established on 8thNovember 1960. The dairy has been registered under the

leadership of shri. Mansihbhai Pruthviraj Patel in April 1961. He was the founder of the

DUDH SAGR DAIRY

Late Shri. Mansinbhai Pruthviraj Patel(1919-1970)

A visionary step initiated 50 years ago, against all odds,

with only 1125 producer members to start with, by our

founder Chairman Shri. Mansinbhai Pruthviraj Patel hasgrown to become Asias largest cooperative society, an

Institution that epitomizes the economic & social

empowerment of about 5 LACS milk producing

members.

Late Shri. Motibhai R Chaudhary (1923-2005)

As an able Leader & Administrator, Shri.. Motibhai R

Chaudhary was Chairman of our Union continuously for a

period of about 34 years. He has taken the Mission forward

to very high peaks of achievement. His contributions to the

progress of the Union, his ideas and beliefs in simple

living and high values, all continue to inspire us in our

activities.

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2.4 Size of the Unit

The Mehsana District Cooperative Milk ProducersUnion Ltd., popularly known as Dudhsagar Dairy, is

a member of the state-level GujaratCooperative Milk

Marketing Federation Ltd., Anand. Dudhsagar Dairy is

the largest dairy in Asia, processing on an average

1.41 million kilograms of milk each day. It has

established a network for procuring milk from

4,500,000 milk producers through 1150 village milk

cooperatives.

Today, Dudhsagar Dairy has a membership of over 5.2

lakhs(520,000) dairy farmers. Its consolidated turnover in 2012-13 was more than

Rs.3400crores(34 billion). The union procured 6,147 lakh kg of milk during 2012-13 at an

average milk procurement of 32 lakh kg of milk per day during peak season.

The union is ISO 9001:2000, ISO 14000:2004, and ISO 22000:2005 certified and is anenvironment-friendly organization.

2.5 Form of Organization

NAME OF THE COMPANY

Mehsana District Co-Operative Milk Producers Union Limited

(Dudhsagar Dairy)

ADDRESS OF THE COMPANY

Dudhsagar dairy

Mehsana District Co-operative Milk Producers Union limited.

Mehsana384002

Gujarat State, India.

Dudhsagar Dairy

Dudhsagar Dairy - Amul

Dudhsagar Dairy
http://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/File:Dudhsagar_Dairy.jpghttp://en.wikipedia.org/wiki/Crore

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REGISTERED OFFICE

Dudhsagar dairy

Mehsana District Co-operative Milk Producers Union limited.

Mehsana384002

Gujarat State, India.

DATE OF ESTABLISHMENT

Dudhsagar dairy was established as on 8thNovember 1960.The starting date of union is

2ndApril 1961.

BANKERS

The Mehsana District Central Co-operative bank ltd, Mehsana.

Bank of Baroda, Mehsana.

State Bank of India.

U.T.I. Bank, Mehsana.

H.D.F.C. Bank, Mehsana.

2.6 Profiling of all Departments in the Company

Meaning of PRODUCTION is simply that To use material which is not in form to use but

through systematically process- it converts into finish products which can be used.

Production Department plays a vital role in the industry. In this department different kinds of

milk products are prepared from their raw material. It is called as input output process of the

product.Mr B.K. Rana, A.G.M. (Egg.) is the in-charge of Process-Production Department.

The department handles various processes as RMRD, Processing, and Pouch Filling &Sterilized Flavored Milk. The milk is received through various CC on Mehsana Dock for

Production Department

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further processing. For processing the milk, they have old and new process facility with

different capacities. The milk is passed through pasteurization, cream pasteurization

transferred to milk storage tank and cream storage tank, same procedure for new process

capacity. For pouch filling, various packing limits are available as per the market requirement

after standardizing the milk at the required Fat & SNF %. Current pouch filling capacity is

sufficient enough to provide for market demand. As per the requirement from the market,

SFM bottles are being filled and dispatch from the plant. As per the standards required for

SFM batch, the pasteurized milk is being standardized and taken in the lot of 1200 liters

batch, sugar and approved. Colors are being added to complete the bottle filling. Daily

inward of milk, pasteurization and standardization of milk, pouch filling and dispatch and

SFM bottle filling and dispatch records are being maintained at this level.

Production Planning

Production planning process is responsible for the overall production planning for all the

products. The planning is based on the dispatch requirement, as specified by GCMMF, other

party orders such as Army and ITBP, capacity of the plant, availability of resources, and

quantity of milk expected to be procured, closing stock of finished goods, local demand.

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Organization Structure of Production Department

Production

Manager

JuniorOfficer

Supervisor

Workers

SeniorOfficer

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Milk Flow Process

Milk Farmers

Village Milk Co-op Soc.(collection center)

Chilling center

Raw millk ReceptionDock

Milk Processing Plant

Power sectionButter Ghee

section

Storage

Dispatch

Distributionchannel

Customer

Fedretion

Milk packingsection

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The personnel function is important of any other management function because a good

personnel policy of an organization ensures it of availability of the required type of

employees and the removal of any disputes arising among the management and the

employees.

There are 500 employees working in the plant. As the plant is fully automatic the employees

requirement is less compared to other dairies. The machines are imported so the employees

should be skilled enough to handle them. These are 170 technicians, 110 staff and 230

trainees with average age of 23 years.

Dudhsagar dairy hires these employees on seasonal bases and out of the total 500 employees

these are 190 permanent employees and the rest are seasonal.

Organization Structure of HR Department

HRDepartment

Generalmanager

HR manager

Seniormanager

JR. manager Others

HR Department

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Finance Management is the part of the Managerial activity, which is concerned with

planning, and controlling of the firms financial resources. It is an applied branch of general

management it has to plan to organize and control the finance of the enterprise. Chief duties

of financial management are planning and control of corporate finance.

Financial Management is called upon to take three major decisions viz.Investment decision,

financial decision, and dividend decision. Financial Management involves theimplementation of these three major decisions it is an integral part of overall management

rather than merely a staff activity concerned with fund raising operations without sound

management of financial resources, business cannot achieve its objective and may occur

heavy losses.

The finance is of great importance in business. It is described as lifeblood of business, the

science of money. From establishment of business its termination finance is necessary. Theefficiency of production and marketing operations are directly influenced by the manner in

which the finance functions of the enterprise are performed. Finance is that administrative

area or set of administrative function in an organization, which relates with arrangement of

cash and credit so that the organization may have means to carry out its objectives as

satisfactorily as possible. It has been said that a businessman takes money and you manage it

properly, you will make more money. This management of finance is necessary for all.

Finance Department

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Organization Structure of Finance Department

Chairman

General manager

Deputy Generalmanager

Assistant generalManager

Sr. Executive

Executive

ManagingDirector

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Process of Finance & Account

The accounting function covering the Mehsana office and plant, the five Chilling centers at

Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at Boriavi and Ubkhal

are performed by the Accounts Department at Mehsana head office of Dudhsagar dairy. All

the purchase and sales forDudhsagar dairy are executed from the Mehsana head office

centrally. The purpose and scope of Account process are Management of Financial resource

of the union accurate and timely payment to societies and supplies, maintain proper books of

the union and advise Dudhsagar dairys management of the performance of the union based

on accounting records, finance process includes the accounting functions of payables,

Receivable, Cash Management, Asset Management, and General Accounting & Reporting

functions including Budgeting. It also covers Costing activities performed at Dudhsagar

dairy. The Audit Budgeting and Costing process are performed by the internal Audit

department in closeness with Accounts Department.

Financial Planning

A firm needs to manage its resource effectively and efficiently to achieve its objective. The

managing of resources in an a effective manner is possible only when the management work

out the future course of action in advance and take decision in professional manner and

rational manner thats why financial planning is very important Financial planning is a

statement estimating the amount of capital and determining its composition. It includes the

determination from and proportionate amount of securities.

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Steps for financial planning

Costing Activities:-

In Dudhsagar Dairy is done on a yearly basis for the financial year. This is too limited to the

product group costing. As the value of asset is not finally known production wise process,

depreciation is avoided for allocation to the product groups. The yearly cost sheets forms an

important basis in the estimation of costs, pack wise prepared, yearly for all products packs.

Of late concept of conversation costing where by the milk purchase price is excluded from

the estimated contribution analyses. The client opinions that as milk purchase price of the lastyear does not reflect the current and by comparing the gross contribution and gross profit

visa-a-versa the milk Purchase price existing as on the date, one could as certain the

profitability of the products and packs. The incremental cost of milk for fat, SNF and

moisture are based on standard costing. The unit price is the actual transportation and chilling

post based on the previous years financial data. The wastage is calculated based on actual

content of the milk fat and SNF content in the milk purchased of the previous year less the

standard content of fat and SNF for actual production for which milk had been consumed.

This wastage is applied to the fat and SNF inputs in proportion. Based on the standard inputs

Establishing Objective

Determine Investment Need

Forecasting Cash flow

Financing

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the actual quantity product wise is derived applying the wastage rate on the standard the

consumption.

Capital Structure

Capital is one of the most important factors of production without capital organization cannot

production or other type of the activity. Capital includes share capital reserve and surplus and

long term liabilities. The authorized share capital of the dairy is 2500,000 shares of Rs. 100

each and the capital is2500, 00,000

The major finance is procurement of money needed by the business, keeping and increasing

the invested money through sound financial policies and programs and generating income or

profit for the business.

2.7 Contribution of the unit to the Industry

Total contribution to the economy/ sales

The Indian Dairy Industry engages in the production and processing of milk & cream. This

industry is involved in the manufacture of various dairy products like cheese, curd, yoghurt

etc. The Indian Dairy Industry specializes in the procurement, production, processing, storage

and distribution of dairy products. India as nation stands first in its share of dairy production

in the international scenario. The industry contributes about Rs 1, 15,970 to the national

economy.

Employment opportunities

The Indian Diary industry which is in the developing stage provides gainful employment to a

vast majority of the rural households. It employs about 8.47 million people on yearly basis

out of which 71% are women.

Jobs in Indian dairy industry are mainly in the fields of production and processing of dairy

products. An individual with minimum of 60% marks who has bachelor's degree course in the

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dairy technology can easily be availing an opportunity to work in this industry. For the

graduation course in Dairy technology one has to qualify the All India Entrance Test that is

affiliated to the Indian Council of Agricultural Research. After that the person can continue

with his masters in dairy technology. Jobs would be for the following positions.

Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk

and taking care of the high yielding variety of animals.

Dairy Technologists: the work of Dairy technology requires procurement officers

who take the responsibility of collecting milk from farmers, milk booths and cattle-

reapers. This particular procurement officer should well understand the latest

technology that is applicable in maintaining the quality of milk of the process of

transporting it to the desired location.

Dairy Engineers: dairy engineers are usually appointed is to set up and maintain

dairy plants.

Marketing Personnel: These individuals deal with the sale and marketing of milk

together with milk products.

2.1 Organization of marketing department

The marketing is very broad concepts for the business. We can distinguish between social

and managerial definition of Marketing. Asocial definition saw the role Marketing plays in

society. One market said that Marketings role is to Deliver a higher standard of living.

Here is a social definition that serves our purpose Marketing is a societal process by which

individuals and group obtain of what they need and want through creating, offering and freely

exchanging products and services value with others. For Managerial definition, Marketing

has often being described as the art of selling products.Dudhsagar Dairy, Mehsana covers a

domestic market and now days its marketing is widely spread in foreign countries also. It has

covered major markets in the states like Karnataka, Rajasthan, Maharashtra and many other

states in India including Gujarat.

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Dudhsagar dairy is having its goods reputation in the market because of its best quality.

Quality is the bench mark of Dudhsagar dairy resulting in to raising the graph of consumer

demand and market. At current year Dudhsagar dairy procured more than 20, 00,000

kg/day and its turnover have more than1750 crores for the year 2008-09.Mr.P.A. Mukharji,

Manager is the in-charge of Sales dept. Any kind of sales in the society is being booked

through this dept. Majority of sales are booked through GCMMFL, ANAND, as direct &

Through federation sales, consignment sales, Army sales, member farmer sales, etc.

Federation transaction is ruling at federation decided prices, while rest of pricing is

independent to our union. Our union has also entered in export market, where the price ruling

is under the union control. Federation makes payment to the union on advance bases orapproximately within 10-15 days as per the requirement of union or the fund facility available

at GCMMFL.

Activities

Milk, chhash, flavored milk sales:

The liquid milk is sold in pouches, in cans & tankers. The pouch milk will be supplied as per

the requirement of milk distributing agents. The loose milk in tankers will be supplied to

Mother Dairy, Gandhinagar, other member union other parties & to individual customer as

per their requirement. Mother dairy 7 other member unions are lifting milk as per the

monthly milk dispatch program decided in GCMMF, Anand. Chhash is also sold in

pouches & in cans. Flavored milk is sold in bott les as per the requirements of

GCMMF, milk distributors &approved parties.

The appointment of milk distributing agent:

The sales process of Dudhsagar dairy invites applications from the parties of potential areas,

who are interested in selling milk, chhash, flavored milk. The area may be fixed while

appointing the milk-distributing agent, whenever required. In case of an individual customer,

milk, chhash, chilled water is given in union scans vessel against cash payment basis.

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DEFINITION

Marketing is a social and managerial process by which individuals and groups obtain what

they need and want by way of exchanging things for mutual benefits.

Purpose & scope:-

To supply milk & milk products

To review customer requirement, resolving any requirements differing

from established norms.

To meet customer requirement.

Responsibility & authority:-

Sales coordination of liquid milk, Butter milk & flavored milk within Mehsana milk

shed area.

Sales coordination of milk products to various GCMMF depots & their bulk parties

Sales coordination of milk products to Defense

Liasioning with Government & legal agencies as & when required

Liasioning with National Co-operative Dairy Federation of India Ltd (NCDFI),

GCMMF Ltd.

Complaints redressed.

2.2 Product Planning and Management and Development

Product Planning

Product is a key element in the market offering. Marketing-mix planning begins with

formulating an offering to meet target customers need and wants. The customer will judge

the offering by three basic elements. Product feature Service mix and quality Price a

product is anything that can be offered to satisfy a want or need. Products that are

marketed include physical goods, services, experience, events, persons, places, properties,

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4 Ps ofMarketing

Product

Price

Place

Promotion

organization, information and ideas. In planning its market offering, the marketer needs to

think through five level of the product. Each level adds more customer value and the five

constitute a customer value hierarchy. The most fundamental level is the core benefit; the

fundamental services or benefits that the customer is really buying. A patient is buying

cure for his disease not medicines.

The Art of Selling Products

Essentials of Marketing

Focus on brand name

Effective Differentiation

Effective public relations Price differentiation

Product mix

Product mix is the set of marketing tools that firm uses to pursue its marketing objectives in

the target market. It consists of everything the firm can to influence the demand for its

product. The many possibilities can be collected into 4 groups of variable known as the four

Ps:Product mix which is also called as product assortment is the set of all product and items that

a particular seller offers for sale. A companys product mix has certain width, length, depth

and consistency.

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PRODUCT

Marketing is a comprehensive term and it includes all resources and a set of activities

necessary to direct and facilities the flow of goods and services from producers to

customers in process of the distribution. Business regards marketing as a management

function to plant promote and delivered product to the clients or customers.

PRODUCT CLASSIFICATION

Marketers have traditionally classified products on the basis of Characteristic. Durability

Tangibility Use (Customer or Industrial)

Dudhsagar dairy is a production unit located at Mehsana. But the marketing of the Dudhsagar

dairy is being managed by the Gujarat cooperative milk federation.

The three As of marketing is.

Availability,

Acceptability, and

Affordability.

Already, the glass bottle for retailing milk has given way to single use sachets which are

more economical. Another viable alternative to sell small quantities of milk powder in mini

sachets adequate for two cups of tea or coffee. Dudhsagar dairy has also started to produce

favored in tetra pack which was previously used to distribute in bottle. The flavored are

available in variety in Gulab, Ilachi, Kesher.

Name of the Products:-

Amul gold, (Pasteurized full cream milk 6.0% Fat & 9.0% SNF.)

Sagar standard,

Amul Shakti Pasteurized standard milk,

Amul ghee,

Sagar ghee,

Sagar sfurti flavored milk,

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Amul cool flavored milk,

Sagar skimmed milk powder,

Amul whole milk powder

Amul Pasteurized butter,

Amul mithai,

Sagardan (Cattle Feed)

Development

Milk, Butter milk, flavored milk sales: the liquid milk is sold in pouches, in cans & tankers.The pouch milk will be supplied as per the requirement of milk distributing agents. The loose

milk in tankers will be supplied to Mother Dairy, Gandhinagar, other member union other

parties &to individual customer as per their requirement. Mother dairy 7 other member

unions are lifting milk as per the monthly milk dispatch program decided in GCMMF,

Anand. Butter milk is also sold in pouches& in cans. Flavored milk is sold in bottles as per

the requirements of GCMMF, milk distributors&approved parties.

The appointment of milk distributing agent: - The sales process of Dudhsagar dairy invites

applications from the parties of potential areas, who are interested in selling milk, butter milk,

flavored milk. The area may be fixed while appointing the milk-distributing agent, whenever

required.

In case of an individual customer, milk, butter milk, chilled water is given in union's cans

vessel against cash payment basis. Product sales within district including village co-operative

societies: -the demand for ghee, butter milk, chilled water etc., within the district is being met

by selling the products to the individual customer or institutional customers. The sale may be

done against cash payment or cheque or DD or credit sales depending upon the party.

Export orders: - the export dept. of GCMMDF Ltd. Anand sends the copy of export order for

the various products to the managing director, production process, QA process, purchase

process &sales process. On the receipt of the same, the order details are examined.

Production planning is done as it done as it is mentioned in production process. The dispatch

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of different products is made by dairy against GCMMF Ltd.s Dispatch ins truction letter, to

its various depots. Whenever there is demand for products, which is specific & special

requirement from customers, it is received by sales process. Sales process in turn reviews the

requirements with top management &concerned personal. Detail of the reviving and meeting

customers requirement are explained in customer satisfaction sub process. General

housekeeping: Housekeeping is maintained at sales process as per the work instruction of

general housekeeping.

2.3 Market Segment

Market segmentation is a process by which the company dividing the market on the base of

need, features or behavior that require separate product. Market segment means classification

of market on the base of Geographic, Demographic, Psychographic and Behaviorist.

Process

Market segment is a very important function for market department of the Dudhsagar dairy

because the market consists of buyers different in any ways. They are different in their wants

resources, locating buying practices. Because buyers have unique needs and wants each buyer

is potentially separate market Dudhsagar dairy has segmented its market in following

variables.

In the Dudhsagar dairy market segment on the base of Geographic. In the geographic base

market divided in to different geographic units like nations, regions, states, cities.

Survey stage

Analysis stage

Profiling stage

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Geographic

In the Dudhsagar dairy market segment on the base of Geographic in the geographic base

market divided in to different geographic units like nations, regions, states, cities and

neighborhood.

2.4 Pricing Policy

PRICE

Price is the only element in the marketing mix that creates sales revenue; the other elements

are costs.-

-Philip Kotler

It is the value, usually in monetary terms that sellers ask in-exchange for the products they

are offering.

The prices of products of DUDHSAGAR are also decided by the GCMMF; it conducts the

market survey to check the validity and feasibility of prices in the market and accordingly

decides the prices of DUDHSAGAR products. However, the price is inclusive of several

elements like:

Cost of Milk Raw Material Cost

Labor Cost

Processing Cost

Packaging Cost

Advertising Cost

Transportation Cost

Sales Promotion Cost Taxes etc.

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The GCMMF considers all these cost aspects and set them up in pricing structure to decide

the jelling price of milk and milk products.

DUDHSAGAR decides prices for the product Milk, Butter Milk and Curd. For that they

mainly focus on commission of retailers.

Pricing Methods and Strategy

The aim of each and every company is the maximum of profit and customer satisfaction. The

level of profit is generally depending on the pricing policy of the company. Prices of theproduct are decided evaluating the return of factors of production i.e. interest, rent, wage, and

profit. Also other such as direct and indirect taxes etc. is also considered while deciding the

price. The factors affecting the pricing are as follow.

Cost of production.

Competition

Quality of product Payment period there are five types of price setting methods.

Value pricing

Target return pricing

Mark-up pricing

Group Pricing

Going rate pricing

In DUDHSAGAR DAIRY, prices are not fixed for the products; there are some regular

changes in price of some products, just like milk and ghee. Prices are more and less depends

upon the cost of the raw materials and other expanses. They can also adjust the price

according to the market price and demand of product

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Place

DUDHSAGAR dairy is classified into large scale industry. Dairy is producing its various

products like milk, ghee, butter and milk powder etc. it is very necessary to have strong

distribution channel. The DUDHSAGAR dairy has its own sales office which is organized by

DUDHSAGAR dairy himself and Gujarat state milk marketing Federation Company

distributes 70% products through GCMMF and 20%through local marketing and remaining

10% to the Army.

Product price

Particular Price

Amul gold Rs. 22

Sagar standard Rs. 21

Amul Shakti Rs. 21

Amul tazza Rs. 21

Amul ghee

Sagar ghee

Sagar sfurti flavored milk Rs. 14

Amul cool flavored milk Rs. 15

Amul Butter Rs. 33

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2.5 Channel of Distribution

Dudhsagar Dairy Mehsana is producing various products like Milk, Butter, Ghee,

Milk powder and Sweetened condensed milk etc. Distribution channel is important

for business. It has two types of Distribution channel like:

Local Distribution channel

The Dudhsagar dairy has its own sales office, which is organized by Dudhsagar dairy itself.

It has different sales office in different cities like Kalol, Kadi, Mehsanaand other

places.

Wholeseller

Dealer

Retailers

Customer

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Federation dairyunion

Federation

Depot

Wholesale

dealer

Retailer

Customer

Nationally Distribution Channel

This Distribution channel decided by Gujarat Co-op Milk Marketing Federation Ltd.

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2.6 Sales Promotion

Sales Promotion consists of short term incentives to encourage Purchase and Sales

of a product or services whereas advertising offer reasons to by a product orservices, sales promotion offers reason to buy it. Advertising is joined by two other

mass production tools, sales promotion and public relation. Two tools of the

sales promotion

(a) Consumer sales promotion tools and

(b) Trade promotion tools.

The main consumer sales promotion tools include:

Samples

Coupons

Cash refund

Price pack

Premium

Advertising specialties Contents and games

Patronage reward

For the sales promotion, in the Dudhsagar some stapes are taken like in dipavli festival some

discount is given to the customers. For increase the morale of agent some benefits are given

like bonus, increase commission etc.

PROMOTION MIX

Promotion refers to marketing activities used to communicate positive information about an

organization, its product and activities to directly or indirectly expedite exchange in a target

market. DUDHSAGAR promotes its products through newspaper, hoardings etc. The

GCMMF however uses hoarding for advertising in local areas. Hoarding designed on the

creative basis attract the customer more.

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2.7 Advertisement

DudhsagarDairyis do advertisement of its product many different ways, which are under

Advertisement through

Newspaper- Advertisement through

Board and Hoardings- Advertisement through

Posters- Advertisement through

Internet the sales of organization mostly make by Gujarat Co-operative Milk

Marketing Federation (GCMMF).

Local Sales

It is the sales made in the boundaries of Mehsana district. The products mainly sold are

Sagar Milk, Sagar Ghee, Sagar Butter Milk, Amul Butter and Amul Milk Powder.

This local sale is done through distributors. On special occasions like marriage, party big

orders are taken directly from party. Average milk sold locally is 7500 liters, per day.

Army SalesIt is very special selling to Army. There is no intermediate between two. Only Butter,

Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this, Powder

is negotiated by federation and Sweetened condensed Milk by dairy.

Powder is supply by main three centers

Mehsana District Co-operative Producers Union Ltd. (Amul dairy) Sabar

dairy (Sabarkantha) Whole milk powder is given to Armys supply depot. There total 47

Army supply depot in India. Skimmed milk powder is gives to Armys Military farm.

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2.8 Marketing Research

Marketing Research is a systematic problem analysis model building and fact binding for

the purpose of improves decision making and control in the marketing of goods and service

Marketing Research is a systematic gathering, recording and analysis of date about

marketing problems to facilitate decision-making.

Marketing Research is also raised thought cell four phases of the administration process

selecting strategies developing marketing plans putting the plan in to action, and integrated

their marketing research activities in to miss designed to provide manager the information

they need for recurring problem decisional.

The marketing manager had to take various decision regarding activities of marketing. The

selection of decision depends upon the information available to him. If has to decide about

many matters such as who are dealer, why they sales companys product and ratio of the

product sales etc. are the questions that might spore within managers for answers of such

questions. A new concept establishes in marketing which is called marketing research.

Marketing Research is a continuous activity. It includes product analysis, Market analysis,

distribution analysis and competition analysis.

In Dudhsagar Dairy Clean Milk Production (CMP) programmed in procurement of clean milk

is the first step towards providing quality product to the consumer. Their union has started

focused efforts in this direction. Besides, planning and execution have been initiated to

include all our societies for ISO certification. To begin with, in the first phase, it has been

decided to cover 61 numbers of societies with bulk coolers plus 24 numbers of societies, each

having currently a turnover of over 3 crores rupees.

Documents

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