Effectiveness of Distribution Channel: A Study Conducted in

Bangalore with reference to BAMUL

Presented By :- Yashank H.M Reg No: 151159

Sec ‘A’, PGDM 2015-17MSRIM

Industry Profile - Dairy

Indian Dairy Key Facts• Ranks 1st in world milk production – 146.3 million metric tonnes in 2015.• Contributes close to one- fourth of India’s National Income and total work force engaged in

agriculture is about 60%.• In the early 1950’s, India was importing around 55,000 tonnes of milk powder annually to meet

urban milk demand.• The 1st large scale and systematic breakthrough in dairy cooperatives was made in 1948 by the

Kaira District Co-operatives Milk Producers Union Limited at Anand.• The Kaira Cooperative Union established a marketing agency named Gujarat Cooperative Milk

Marketing Federation – follows a three-layer structure that collects, processes and markets dairy products at village, district and state levels.

• GCMMF is the largest exporter of dairy products from India and owns the brand “Amul”. • The National Dairy Development Board was set up at Anand in 1965 – set up a program

“Operation Flood” to replicate Anand pattern.

Industry Profile - Dairy

Regulatory Changes• Dairy sector was de-licensed in 1991.• No industrial license is required for dairy industry.• Foreign equity participation permitted to the extent of 51 per cent in dairy processing sector.• Excise duty on dairy machinery has been fully waived off.

Porter Competitive Analysis• Threat of competition is high as there are no entry barriers and consequently there are many brands and

local players making up the competitive rivalry.• Threat of substitutes is low as milk is an essential item for beverages like tea, coffee etc. Also

traditional consumption habits make milk a favourite with most households in India.• Bargaining power of suppliers is low because suppliers mainly comprise rural households and small co-

operatives.• Bargaining power of consumers is high because of competition in the organized sector and large

unorganized market in rural areas.

Company Analysis - BAMUL• KMF sells milk & milk products in the name of “Nandini”. It is a federation of milk producers

association working on cooperative principles.• KMF has 13 Milk Unions throughout the state which procure milk from Primary Dairy

Cooperative Societies (DCS) and distribute milk to the consumers in Karnataka.• The Bangalore Urban, Rural & Ramanagara District Cooperative Milk Producers Societies Union

Ltd. (BAMUL) was established in 1975 under Operation Flood II.• Has 80% market share in Bangalore and main competitors are Heritage, Amul and Arogya.• The strategy of BAMUL is “Procure More, Sell More & Serve More” and reap the benefits of

economies of scale.• Technical Input Services through 12 camp offices:-

• Weekly Mobile Veterinary Service• Emergency Veterinary Service• Artificial Insemination Service• Periodical Vaccinations• Balanced Cattle Feed Sales• Fodder development and Fodder Seed Production• Cattle Insurance etc.

SWOT AnalysisStrengths• Wide distribution network leads to regular and

timely supply.• Milk processed is local therefore reduced

transportation cost.• Automated computerized plant.• Wide product range.• An ISO, HACCP, EMS certified company.• Prompt consumer’s complaint redressed.• Maintaining uniform quality.• Automatic correction power factor unit.• Brand loyalty among consumers

Opportunities• Checking the processing and packing unit.• Addition of new varieties to the existing products.• It has an opportunity to introduce new products like

ready to eat sweets, cheese, low fat milk chocolates and biscuits.

• Can expand its marketing activities all over the India.

• It can increase its sales and grab the unoccupied market share.

Weakness• Excess manpower.• Less advertisement.• Lack of flexibility in the system.• Promotion is based on seniority.• Retention of brilliant brain is difficult.

Threats• Irregular power shutdowns and inter-dairy

competition.• Entering of MNC’s.• Entry of loose milk providers at cheap rates.

Tasks accomplished during InternshipRoles and Responsibilities:• Issuing new agencies to the customers (retailers).• Supervision of Milk Sales Enhancement.

• Insurance to Agents and their spouse.• Inviting schools and other educational institutions to visit the factory premises.• Help the agents to obtain the free De-freezer for ice-cream sales from KMF.• Help the agents to avail 50% off on the bottle cooler from BAMUL.• Provide jerkins to the agents.

• To study the organization structure and functions of the various departments.

Contribution to the Organization:• The tasks handled by me helped in saving a lot of time and effort of the company’s employees.• Effectively worked on helping the organization in issuing 15 agencies during my internship.• Invited around 40 schools and other educational institutions from Bangalore to visit the factory

premises.• Conducted research on the effectiveness of the Distribution channel of BAMUL.

Analysis of the Research Undertaken

Title: Effectiveness of Distribution Channel: A Study Conducted in Bangalore with reference to BAMUL.Statement of the Problem: Distribution channel plays a dominant role in making available milk & milk products to consumers. The effective distribution channels make milk & milk products available at right time, right place & at proper quality. Therefore there is a need to study the distribution system & the effectiveness.

Objectives of the Study• To understand the existing distribution system.• To identify & analyse the problem in the existing distribution channel.• To know the level of satisfaction of retailers with the services of BAMUL.

Sampling Procedure• Sampling units: Retailers of BAMUL in Bangalore.• Sample size: 50• Sample plan: Non Probability Sampling (Judgemental Sampling).

Data collection• Primary data: Data collected using Questionnaire method.• Secondary data: Websites, Newspapers, Ads & media, Research Publications.

Findings:• BAMUL is organized and systematic in its distribution of milk and milk products.• Commission given to retailers by BAMUL is less compared to its competitors.• Majority of the retailers are satisfied with the commission given by BAMUL.• Some retailers are unhappy with the damage policy of BAMUL.

Suggestions:• BAMUL should give more commission than its competitors to attract more number of retailers.• BAMUL should provide additional storage facilities when the retailers increase their sales and also

provide maintenance to equipments at proper time. • BAMUL should find ways to check more number of products for damages.• Care must be taken not to damage the products during transportation.• BAMUL should reduce the minimum limit i.e. 6 litres to less than 6 litres for returning the damaged

goods.• BAMUL should conduct more meetings aiming to resolve the problems of the retailers.

Thank you