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ABSTRACT

The topic of my study is consumer preference in vellore thiruvannamalai distict cooperative milk producer union vellore This study focuses on analyzing the consumer preference they regarding taste and preference of the consumer needs and wants as to be dedicated. The objective of the study is analyze the various opportunity and threats of the Aavin milk, various statistic tools. To my topic consumer preference analyzes I have used the statistic tools of percentage analyzes, chi-square analyzes and annova. Above tools are powerful for the organization, to make its decision about consumer what they expect. It helps the farmer and government to make their decisions. Finally the calculations are based on questionnaire. The suggestions are recommended on the basis of findings. The conclusion is proposed on the basis of findings and suggestions.

TABLE OF CONTENTS

TABLE OF CONTENTS
Chapter 1 CONTENTS Introduction Introduction of the topic Objectives of the study Scope & significance of the study Industry profile Company profile Review of literature Literature survey Theoretical Framework Research methodology Research methodology Research design Limitations of the study Data analysis& interpretation Ratio analysis Comparative statement analysis Common-size statement analysis Summary of conclusions Findings Suggestions Conclusion Bibliography Profit and loss account Balance sheet Page number 1 4 6 7 10 20 22 33 34 36 40 53 58 63 65 67 70

APPENDIX

LIST OF TABLES
S.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 PARTICULARS Working capital Current ratio Liquid ratio Fixed assets ratio Debt equity ratio Proprietary ratio Overall solvency ratio Return on equity shareholders funds Return on total assets Earnings per share Dividend per share Pay out ratio Comparative profit &loss a/c as on march31,2007,2008 Comparative balance sheet as on march 31, 2007,2008 Comparative profit& loss a/c as on march 31,2009,2010 Comparative balance sheet as on march 31,2009,2010 Common size balance sheet as on march31,2007,2008 Common size balance sheet as on march 31, 2009,2010 PAGE NO 41 42 43 44 45 46 47 48 49 50 51 52 54 55 56 57 59 60

LIST OF BAR DIAGRAMS

S.NO 1 2 3 4 5 6 7 8 9 10 11 12

PARTICULARS Working capital Current ratio Liquid ratio Fixed assets ratio Debt equity ratio Proprietary ratio Overall solvency ratio Return on equity shareholders funds Return on total assets Earnings per share Dividend per share Pay out ratio

PAGE NO 41 42 43 44 45 46 47 48 49 50 51 52

INTRODUCTION
A consumer is an individual who purchase or has the capacity to purchase goods and services offered for sale by marketing institutions in order to satisfy personal or household needs, wants or desires. According to a statement made by Mahatma Gandhi, consumer refers to the following, A consumer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an outsider to our business. He is part of it. We are not doing him a favors by serving him. He is doing us a favors by giving us an opportunity to do so. So consumer is like the blood of our business and also a satisfied customer is a word of mouth advertisement of a product / services. Every human being is a consumer of different produces. If there is no consumer, there is no business. Consumer attitude measurements are taken on either potential buries or existing clients buries in order to identify their characteristics. Why should the competent market engineer conduct consumer research? Consumers surveys scan provide the researcher with a wealth of information, valuable of the marketing function. The underlying foundation of demand, therefore, is a model of how consumers behave. The Individual consumer has a set of preferences and values whose determination are outside the realm of economics. They are no doubt dependent upon culture, education, and individual tastes, Among a plethora of other factors. The measure of these values in this model for a particular Good is in terms of the real opportunity cost to the consumer who purchases and consumes the good. If an individual purchases a particular good, then the opportunity cost of that purchase is The forgone goods the consumer could have bought instead. We develop a model in which we map or graphically derive consumer preferences. These are measured in terms of the level of satisfaction the consumer obtains from consuming various Combinations or bundles of goods. The consumers objective is to choose the bundle of goods Which provides the greatest level of satisfaction as they the consumer define it. But consumers are very much constrained in their choices. These constraints are defined by the consumers Income, and the prices the consumer pays for the goods.

OBJECTIVES OF STUDY
PRIMARY OBJECTIVE 1. To study the consumer preference in aavin milk SECONDARY OBJECTIVES 1. To study the consumer awareness of aavin milk 2. To identify the factors influences consumer to prefer the brand 3. To know about the consumer satisfaction towards the aavin milk 4. To find out consumer complaints towards aavin milk

SCOPE OF THE STUDY

The study was made to find out consumer preference towards Vellore, Tiruvannamalai district co-operative milk producer union.

The survey was conducted in Vellore at the area of (Bagayam, Saidapet, Gandhi nagar, Old town, and Vellore old bus stand) with 300 samples

This study is to know the fast-moving aavin milk in various regions of Vellore

Indian dairy Industry - a profile


Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the international dairy processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world. As he expands his overseas operations to India many profitable options await him. He may transfer technology, sign joint ventures or use India as a sourcing center for regional exports. The liberalization of the Indian economy beckons to MNC's and foreign investors alike. Indias dairy sector is expected to triple its production in the next 10 years in view of expanding potential for export to Europe and the West. Moreover with WTO regulations expected to come into force in coming years all the developed countries which are among big exporters today would have to withdraw the support and subsidy to their domestic milk products sector. Also India today is the lowest cost producer of per liter of milk in the world, at 27 cents, compared with the U.S' 63 cents, and Japans $2.8 dollars. Also to take advantage of this lowest cost of milk production and increasing production in the country multinational companies are planning to expand their activities here. Some of these milk producers have already obtained quality standard certificates from the authorities. This will help them in marketing their products in foreign countries in processed form. The urban market for milk products is expected to grow at an accelerated pace of around 33% per annum to around Rs.43, 500 crores by year 2005. This growth is going to come from the greater emphasis on the processed foods sector and also by increase in the conversion of milk into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10, 00,000 million. Presently the market is valued at around Rs7, 00,000mn

Background
India with 134mn cows and 125mn buffaloes has the largest population of cattle in the world. Total cattle population in the country as on October'00 stood at 313mn. More than fifty percent of the buffaloes and twenty percent of the cattle in the world are found in India and most of these are milch cows and milch buffaloes. Indian dairy sector contributes the large share in agricultural gross domestic products. Presently there are around 70,000 village dairy cooperatives across the country. The co-operative societies are federated into 170 district milk producers unions, which is turn has 22-state cooperative dairy federation. Milk production gives employment to more than 72mn dairy farmers. In terms of total production, India is the leading producer of milk in the world followed by USA. The milk production in 1999-00 is estimated at 78mn MT as compared to 74.5mn MT in the previous year.

This production is expected to increase to 81mn MT by 2000-01. Of this total produce of 78mn cows' milk constitute 36mn MT while rest is from other cattle. While world milk production declined by 2 per cent in the last three years, according to FAO estimates, Indian production has increased by 4 per cent. The milk production in India accounts for more than 13% of the total world output and 57% of total Asia's production. The top five milk producing nations in the world are India, USA, Russia, Germany and France. Although milk production has grown at a fast pace during the last three decades (courtesy: Operation Flood), milk yield per animal is very low. The main reasons for the low yield are

Lack of use of scientific practices in milching. Inadequate availability of fodder in all seasons. Unavailability of veterinary health services.

Production of milk in India


Year 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 199900(E) 200001(T) Production in million MT 48.4 51.4 53.7 56.3 58.6 61.2 63.5 65 68.5 70.8 74.7 78.1 81.0

Operation Flood
The transition of the Indian milk industry from a situation of net import to that of surplus has been led by the efforts of National Dairy Development Board's Operation Flood Programme under the aegis of the former Chairman of the board Dr. Kurien. Launched in 1970, Operation Flood has led to the modernization of India's dairy sector and created a strong network for procurement processing and distribution of milk by the co-operative sector. Per capita availability of milk has increased from 132 gm per day in 1950 to over 220 gm per day in 1998. The main thrust of Operation Flood was to organize dairy cooperatives in the milk

shed areas of the village, and to link them to the four Metro cities, which are the main markets for milk. The efforts undertaken by NDDB have not only led to enhanced production, improvement in methods of processing and development of a strong marketing network, but have also led to the emergence of dairying as an important source of employment and income generation in the rural areas. It has also led to an improvement in yields, longer lactation periods, shorter calving intervals, etc through the use of modern breeding techniques. Establishment of milk collection centers and chilling centers has enhanced life of raw milk and enabled minimization of wastage due to spoilage of milk. Operation Flood has been one of the world's largest dairy development programs and looking at the success achieved in India by adopting the co-operative route, a few other countries have also replicated the model of India's White Revolution.

Per Capita availability of milk


Year 1950 1960 1968 1973 1980 1990 1992 1996 1997 1998 1999 2000 2001E 2002P gm/day 132 127 113 111 128 178 192 198 200 202 203 212 225 250

Fresh Milk
Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk. The buffalo milk contribution to total milk produce is expected to be 54% in 2000. Buffalo milk has 3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water whereas cow milk has 3.5% protein, 3.7% fat, 4.9% milk sugar, 0.7% ash and 87% water. While presently (for the year 2000) the price of Buffalo milk is ruling at $261-313 per MT that of cow is ruling at $170-267 per MT. Fresh pasteurized milk is available in packaged form. However, a large part of milk consumed in India is not pasteurized, and is sold in loose form by vendors. Sterilized milk is scarcely available in India. Packaged milk can be divided according to fat content as follows, Whole (full cream)milk 6%fat Standardized(toned)milk 4.5%fat Doubled toned (low fat) milk 3% fat Another category of milk, which has a small market is flavored milk.

Consumer Habits and Practices


Milk has been an integral part of Indian food for centuries. The per capita availability of milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and 203 gm in 199899.This is expected to increase to 212gms for 1999-00. However a large part of the population cannot afford milk. At this per capita consumption it is below the world average of 285 gm and even less than 220 gm recommended by the Nutritional Advisory Committee of the Indian Council of Medical Research. There are regional disparities in production and consumption also. The per capita availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day. This disparity is due to concentration of milk production in some pockets and high cost of transportation. Also the output of milk in cereal growing areas is much higher than elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which have a high food value for milch animals. In India about 46 per cent of the total milk produced is consumed in liquid form and 47 per cent is converted into traditional products like cottage butter, ghee, pannier, khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like milk powders, processed butter and processed cheese. The remaining 54% is utilized for conversion to milk products. Among the milk products manufactured by the organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed milk infants foods etc. Of these ghee alone accounts for 85%. It is estimated that around 20% of the total milk produced in the country is consumed at producerhousehold level and remaining is marketed through various cooperatives, private dairies and vendors. Also of the total produce more than 50% is procured by cooperatives and other private dairies. While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is used for manufacturing processed value added dairy products; for private dairies only 45% is marketed in fluid form and rest is processed into value added dairy products like ghee, makhan etc. Still, several consumers in urban areas prefer to buy loose milk from vendors due to the strong perception that loose milk is fresh. Also, the current level of processing and packaging capacity limits the availability of packaged milk. The preferred dairy animal in India is buffalo unlike the majority of the world market, which is dominated by cow milk. As high as 98% of milk is produced in rural India, which caters to 72% of the total population, where as the urban sector with 28% population consumes 56% of total milk produced. Even in urban India, as high as 83% of the consumed milk comes from the unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk sold by unorganized sector however is inconsistent and so is the price across the season in local areas. Also these vendors add water and caustic soda, which makes the milk unhygienic. India's dairy market is multi-layered. It's shaped like a pyramid with the base made up of a vast market for low-cost milk. The bulk of the demand for milk is among the poor in urban areas whose individual requirement is small, maybe a glassful for use as whitener for their tea and coffee. Nevertheless, it adds up to a sizable volume - millions of liters per day. In the major cities lies an immense growth potential for the modern sector. Presently, barely 778 out of 3,700 cities and towns are served by its milk distribution network, dispensing hygienically packed wholesome, quality pasteurized milk. According to one estimate, the packed milk segment would double in the next five years, giving both strength and volume to the modern sector. The narrow tip at the top is a small but affluent market for western type milk products.

Growing Volumes
The effective milk market is largely confined to urban areas, inhabited by over 25 per cent of the country's population. An estimated 50 per cent of the total milk produced is consumed here. By the end of the twentieth century, the urban population is expected to increase by more than 100 million to touch 364 million in 2000 a growth of about 40 per cent. The expected rise in urban population would be a boon to Indian dairying. Presently, the organized sector both cooperative and private and the traditional sector cater to this market. The consumer access has become easier with the information revolution. The number of households with TV has increased from 23 million in 1989 to 45 million in 1995. About 34 per cent of these households in urban India have access to satellite television channel.

Potential for further growth


Of the three A's of marketing - availability, acceptability and affordability, Indian dairying is already endowed with the first two. People in India love to drink milk. Hence no efforts are needed to make it acceptable. Its availability is not a limitation either, because of the ample scope for increasing milk production, given the prevailing low yields from dairy cattle. It leaves the third vital marketing factor affordability. How to make milk affordable for the large majority with limited purchasing power? That is essence of the challenge. One practical way is to pack milk in small quantities of 250 ml or less in polythene sachets. Already, the glass bottle for retailing milk has given way to single-use sachets which are more economical. Another viable alternative is to sell small quantities of milk powder in mini-sachets, adequate for two cups of tea or coffee.

Marketing Strategy for 2000 AD


Two key elements of marketing strategy for 2000 AD are: Focus on strong brands and, product mix expansion to include UHT milk, cheese, ice creams and spreads. The changing marketing trends will see the shift from generic products to the packaged quasi, regular and premium brands. The national brands will gradually edge out the regional brands or reduce their presence. The brand

image can do wonders to a product's marketing as is evident from the words of Perfume Princess Coco Channel: In the factory, we pack perfume; in the market, we sell hope!

Emerging Dairy Markets


Food service institutional market: It is growing at double the rate of consumer market Defense market: An important growing market for quality products at reasonable prices Ingredients market: A boom is forecast in the market of dairy products used as raw material in pharmaceutical and allied industries Parlour market: The increasing away-from-home consumption trend opens new vistas for ready-to-serve dairy products which would ride piggyback on the fast food revolution sweeping the urban India.

India, with her sizable dairy industry growing rapidly and on the path of modernization, would have a place in the sun of prosperity for many decades to come. The one index to the statement is the fact that the projected total milk output over the next 15 years (1995-2010) would exceed 1457.6 million tones which is twice the total production of the past 15 years!

Penetration of milk products


Western table spreads such as butter, margarine and jams are not very popular in India. All India penetration of butter/ margarine is only 4%. This is also largely represented by urban areas, where penetration is higher at 9%. In rural areas, butter/ margarine have penetrated in 2.1% of households only. The use of these products in the large metros is higher, with penetration at 15%. Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per capita consumption even among the cheese-consuming households is a poor 2.4kg pa as compared to over 20kg in USA. The lower penetration is due to peculiar food habits, relatively expensive products and also non-availability in many parts of the country. Butter, margarine and cheese products are mainly manufactured by organized sector. Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to 31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is 24.1%. In relative terms, penetration of ghee is significantly higher in North and West, which are milk surplus regions. North accounts for 57% of ghee consumption and West for 23%, South & East together account for the balance 20%. A large part of ghee is made at home and by small/ cottage industry from milk. The relative share of branded products in this category is very low at around 1-2%. Milk powder and condensed milk have not been able to garner any significant consumer acceptance in India as indicated by a very low 4.7% penetration. The penetration is higher at 8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively higher in medium sized towns at 8.5% compared to 7.7% in large metros.

Market Size and Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT valued at Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production. Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under Operation Flood, production growth increased significantly averaging over 5% pa. About 75% of milk is consumed at the household level which is not a part of commercial dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by most consumers. In reality however, it poses a higher risk of adulteration and contamination. The production of milk products, i.e. milk products including infant milk food, malted food, condensed milk & cheese stood at 3.07 lakhs MT in 1999. Production of milk powder including infant milk-food has risen to 2.25 lakhs MT in 1999, whereas that of malted food is at 65000 MT. Cheese and condensed milk stands at 5000 and 11000 MT respectively in the same year. Production

Major Players
The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative Milk Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives have their local brands (For e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a leading player in the sector has turned bankrupt and is facing liquidation.

Packaging Technology
Milk was initially sold door-to-door by the local milkman. When the dairy co-operatives initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over the years, several developments in packaging media have taken place. In the early 80's, plastic pouches replaced the bottles. Plastic pouches made transportation and storage very convenient, besides reducing costs. Milk packed in plastic pouches/bottles have a shelf life of just 1-2 days , that too only if refrigerated. In 1996, Tetra Packs were introduced in India. Tetra Packs are aseptic laminate packs made of aluminum, paper, board and plastic. Milk stored in tetra packs and treated under Ultra High Temperature (UHT) technique can be stored for four months without refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7 compared to plastic pouches. In 1999-00 Nestle launched its UHT milk. Amul too re-launched its Amul Taaza brand of UHT milk. The UHT milk market is expected to grow at a rate of more than 10-12% in coming years.

Export Potential

India has the potential to become one of the leading players in milk and milk product exports. Location advantage: India is located amidst major milk deficit countries in Asia and Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all located close to India. Low Cost of Production: Milk production is scale insensitive and labour intensive. Due to low labour cost, cost of production of milk is significantly lower in India. Concerns in export competitiveness are Quality: Significant investment has to be made in milk procurement, equipments, chilling and refrigeration facilities. Also, training has to be imparted to improve the quality to bring it up to international standards. Productivity: To have an exportable surplus in the long-term and also to maintain cost competitiveness, it is imperative to improve productivity of Indian cattle. There is a vast market for the export of traditional milk products such as ghee, pannier, shrikhand, rasgolas and other ethnic sweets to the large number of Indians scattered all over the world

What does the Indian Dairy Industry has to Offer to Foreign Investors?
India is a land of opportunity for investors looking for new and expanding markets. Dairy food processing holds immense potential for high returns. Growth prospects in the dairy food sector are termed healthy, according to various studies on the subject. The basic infrastructural elements for a successful enterprise are in place.

Key elements of free market system raw material (milk) availability an established infrastructure of technology supporting manpower

An entrepreneur's participation is likely to provide attractive returns on the investment in a fast growing market such as India, along with an export potential in the Middle East, Singapore, Malaysia, Indonesia, Korea, Thailand, Hong Kong and other countries in the region. Among several areas of potential participation by NRIs and foreign investors, the following list outlines a few promising opportunities:

Biotechnology:

Dairy cattle breeding of the finest buffaloes and hybrid cows

Milk yield increase with recombinant somatotropin Recombinant chymosin, acceptable to vegetarian consumers Dairy cultures, proboscis, dairy biologics, enzymes and coloring materials for food processing Fermentation derived foods and industrial products alcohol, citric acid, lysine, flavor preparations, etc. Biopreservative ingredients based on dairy fermentation, viz., Nisin, pediococcin, acidophilin, and Bulgarian contained in dairy powders.

Dairy/food processing equipment:


Potential exists for manufacturing and marketing of cost competitive food processing machinery of world-class quality.

Food packaging equipment:


Opportunities lie in the manufacturing of both machinery and packaging materials that help develop brand loyalty and a clear edge in the marketing of dairy foods.

Distribution channels:
For refrigerated and frozen food distribution, a world class cold chain would help in providing quality assurance to the consumers around the region.

Retailing:
There is scope for standardizing and upgrading food retailing in major metropolitan cities to meet the shopping needs of a vast middle class. This area includes grocery stores of European and North American quality, warehousing and distribution.

Product development:

Dairy foods can be manufactured and packaged for export to countries where Indian food enjoys basic acceptance. The manufacturing may be carried out in contract plants in India. An option to market the products in collaboration with local establishments or entrepreneurs can also be explored. Products exhibiting potential include typical indigenous dairy foods either not available in foreign countries or products whose authenticity may be questionable. Gulabjamuns, Buffy, Peda, Rasagollas, and a host of other Indian sweets have good business prospects. Products typically foreign to India but indigenous to other countries could also be developed for export. Such products can be manufactured in retail package sizes and could be produced from milk of sheep, goats and camel. Certain products are characteristically produced from milk of a particular species. For example, Feta cheese is used in significant tonnage, in Iran. Sheep milk is traditionally used for authentic Feta cheese. Accordingly, India's goat and sheep herds can be utilized for the manufacture of such authentic products.

Ingredient manufacture:
Export markets for commodities like dry milk, condensed milk, ghee and certain cheese varieties are well established. These items are utilized as ingredients in foreign countries. These markets can be expanded to include value-added ingredients like aseptically packaged cheese sauce and dehydrated cheese powders.

Cheese sauce: Canned cheese sauce is made from real cheese to which milk, whey, modified food starch, vegetable oil, colorings and spices may be added. Cheese sauce is useful in kitchens for the preparation of omelet, sandwiches, entrees, and soups. In addition, cheese sauce is used as a topping on potatoes and vegetables and may be incorporated in pasta dishes. Cheese powders: Cheese powders are formulated for dusting or smearing of popular snacks like potato chips, crackers, etc. They impart flavor and may be blended with spices.

With the globalization of food items, an opportunity should open up for food service and institutional markets.

Technology-driven manufacturing units:


These plants would fulfill an essential need by providing a centralized and specialized facility for hire by the units which cannot justify capital investment but do need such services. Potential areas for state-of-the-art contract-pack units may conceivably specialize in cheese slicing, or dicing line, cheese packaging, butter printing, and aseptic packaged fluid products.

Training centers for continuing education:


NRIs could set up technology transfer and updating centers for conducting seminars and workshops - catering to the needs of workers at all levels of the dairy industry. Here technical, marketing and management topics can be offered to ensure that the manpower continues to acquire the latest know-how of their respective fields. The entrepreneurs need powerful tools to implement their plans. Appropriate investment and involvement by NRIs can serve as a catalyst for India's dairy food industry leading to exploration of business potential in domestic and export trade. Risk factors must be identified and managed by in-depth study of chosen areas so that chances of rewards are maximized under the current liberalization climate.

Indian (traditional) Milk Products


There are a large variety of traditional Indian milk products such as

Makkhan unsalted butter. Ghee - butter oil prepared by heat clarification, for longer shelf life. Kheer a sweet mix of boiled milk, sugar and rice. Basundi milk and sugar boiled down till it thickens. Rabri sweetened cream. Dahi a type of curd. Lassie curd mixed with water and sugar/ salt. Channa/Paneer milk mixed with lactic acid to coagulate. Khoa evaporated milk, used as a base to produce sweet meats. The market for indigenous based milk food products is difficult to estimate as most of these products are manufactured at home or in small cottage industries catering to local areas. Consumers while purchasing dairy products look for freshness, quality, taste and texture, variety and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are perishable products with a shelf life of less than a day. These products are therefore manufactured and sold by local milk and sweet shops. There are several such small shops within the vicinity of residential areas. Consumer loyalty is built by consistent quality, taste and freshness. There are several sweetmeat shops, which have built a strong brand franchise, and have several branches located in various parts of a city.

Branding Of Traditional Milk Products


Among the traditional milk products, ghee is the only product, which is currently marketed, in branded form. main ghee brands are Sager, Milkman (Britannia), Amul (GCMMF), Aarey (Mafco Ltd), Vijaya (AP Dairy Development Cooperative Federation), Verka ( Punjab Dairy Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt). With increasing urbanization and changing consumer preferences, there is possibility of large scale manufacture of indigenous milk products also. The equipments in milk manufacturing have versatility and can be adapted for several products. For instance, equipments used to manufacture yogurt also can be adapted for large scale production of Indian curd products (dahi and lassie). Significant research work has been done on dairy equipments under the aegis of NDDB. Mafco Limited sells Lassi under the Aarey brand and flavored milk under the Energee franchise (in the Western region, mainly in Mumbai). Britannia has launched flavored milk in various flavors in tetra packs. GCMMF has also made a beginning in branding of other traditional milk products with the launch of packaged Paneer under the Amul brand. It has also created a new umbrella brand "Amul Mithaee", for a range of ethnic Indian sweets that are proposed to be launched The first new product Amul Mithaee Gulabjamun has already been launched in major Indian markets.

Western Milk Products

Western milk products such as butter, cheese, and yogurt have gained popularity in the Indian market only during the last few years. However consumption has been expanding with increasing urbanization.

Butter
Most Indians prefer to use homemade white butter (makkhan) for reasons of taste and affordability. Most of the branded butter is sold in the towns and cities. The major brands are Amul, Vijaya, Sagar, Nandini and Aarey. Amul is the leading national brand while the other players have greater shares in their local markets. The latest entrant in the butter market has been Britannia. Britannia has the advantages of a wide distribution reach and a strong brand recall. Priced at par with the Amul brand, it is expected to give stiff competition to the existing players. In 1999-00 the butter production is estimated at 4 lakhs MT of this only 45K MT is in the white form used for table purposes rest all is in the yellow form.

Cheese
The present market for cheese in India is estimated at about 9,000 tones and is growing at the rate of about 15% per annum. Cheese is mainly consumed in the urban areas. The four metro cities alone account for more than 50% of consumption. Mumbai is the largest market (accounting for 30% of cheese sold in the country), followed by Delhi (20%). Calcutta (7%) and Chennai (6%). Mumbai has a larger number of domestic consumers, compared to Delhi where the bulk institutional segment (mainly hotels) is larger. The major players are Amul, Britannia, and Dabon International dominating the market. Other major brands were Vijaya, Verka and Nandini (all brands of various regional dairy cooperatives) and Vadilal. The heavy advertising and promotions being undertaken by these new entrants is expected to lead to strong 20% growth in the segment. Amul has also become more aggressive with launch of new variants such as Mozzarella cheese (used in Pizza), cheese powder, etc. The entry of new players and increased marketing activity is expected to expand the market. All the major players are expanding their capacities

Milk Powder
Milk powder is mainly of 2 types

Whole milk powder Skimmed milk powder

Whole milk powder contains fat, as distinguished from skimmed milk powder, which is produced by removing fat from milk solids. Skimmed milk powder is preferred by diet conscious consumers. Dairy whiteners contain more fat than skimmed milk powder but less compared to whole milk powder. Dairy whiteners are popular milk substitute for making tea, coffee etc. The penetration of

these products in milk abundant regions is driven by convenience and non perishable nature (longer shelf life) of the product. Dairy sector of advanced nations export milk products with a subsidy of $ 1000 per ton with a level of subsidy more than 60 % of the price of milk powder produced in India, this has led to large scale imports of milk powder both in whole and skimmed form. To protect the domestic sector from these subsidized imports the central government has recently increased the basic import duty on all imports of milk powder more than 10000 MT to 60% from 15%. For imports less than 10000 MT the basic customs duty has been left unchanged at 15%. In 1999-00 India is estimated to have imported about 18,000 tones of milk powder against a total estimated production of 2.40 Lakh MTs. In 2000-01 India is expected to export 10000 MT of skimmed milk powder due to rise in international prices to $2300 per MT from last year's levels of $1400 per MT. These expectations are based on the strong demand from Russia, East Asia and Latin America, and also on tightening of supply in EU, which accounts for 75% of the annual global Skimmed Milk Powder exports.

Major Players
Milk Powder/Dairy Whiteners: Major skimmed milk brands are Sagar (GCMMF) and Nandini (Karnataka Milk Federation), Amul Full Cream milk powder is a whole milk powder brand. Leading brands in the dairy whitener segment are Nestls every day, GCMMF's Amulya, Dalmia Industry's Sapan, Quality Dairy India's KreamKountry, Wockhardt's Farm Fresh and Britannia's Milkman Dairy Whitener.

Condensed Milk
The condensed milk market has grown from 9000 MT in 1998 to 11000 MT in 1999. Condensed milk is a popular ingredient used in home-made sweets and cakes. Nestls Milkmaid is the leading brand with more than 55% market share. The only other competitor is GCMMF's Amul.

Value addition in milk powder - Infant Foods


Nestle is the market leader in the segment. This is a category where brand loyalties are very strong as mothers want the best for their babies. Heinz is the only other significant competitor to Nestle in this segment. Nestls Cerelac and Nestum together have around 80% market share and Heinz's Farex has close to 18% share. Wockhardt is a relatively new entrant with its First Food brand. Wockhardt also proposes to launch a new baby food Easum containing moong (moong is one of the easily digestible pulses). The Easum brand will directly compete with Nestls Nestum (made from rice). In infant formula also Nestls Lactogen formula and Lactogen standard formula are the leading brands with around 75% market share. Other brands are Heinz's Lactodex Farex, Wockhardt's Raptakos, and Amul's Amulspray

Regulatory Framework
The dairy industry was de-licensed in 1991 with a view to encourage private investment and flow of capital and new technology in the segment. Although de-licensing attracted a large number of players, concerns on issues like excess capacity, sale of contaminated/ substandard quality of milk etc induced the Government to promulgate the MMPO (Milk and Milk Products Order) in 1992. Milk and Milk Products Order (MMPO) regulates milk and milk products production in the country. The order requires no permission for units handling less than 10,000 liters of liquid milk per day or milk solids up to 500 tpa. MMPO prescribes State registration to plants producing between 10,000 to 75,000 liters of milk per day or manufacturing milk products containing between 500 to 3,750 tons of milk solids per year. Plants producing over 75,000 liters per day or more than 3,750 tons per year of milk solids have to be registered with the Central Government. The stringent regulations, government controls and licensing requirements for new capacities have restricted large Indian and MNC players from making significant investments in this product category. Most of the private sector players have restricted themselves to manufacture of value added milk products like baby food, dairy whiteners, condensed milk etc. All the milk products except malted foods are covered in the category of industries for which foreign equity participation up to 51% is automatically allowed. Ice cream, which was earlier reserved for manufacturing in the small-scale sector, has now been de-reserved. As such, no license is required for setting up of large-scale production facilities for manufacture of ice cream. Subsequent to de-canalization, exports of some milk based products are freely allowed provided these units comply with the compulsory inspection requirements of concerned agencies like: National Dairy Development Board, Export Inspection Council etc. Bureau of Indian standards has prescribed the necessary standards for almost all milk-based products, which are to be adhered to by the industry.

Proposal to Amend the MMPO


A proposal to raise the exemption limit for compulsory registration of dairy plants, from the present 10,000 liters a day to 20,000 liters, is being considered by the Animal Husbandry Department. The 75,000-litre limit is likely to be raised either to 100,000 liters or 125,000 liters in the amended order. The new order would also do away with the provision for re-registration.

Amul's secret of success


The system succeeded mainly because it provides an assured market at remunerative prices for producers' milk besides acting as a channel to market the production enhancement package. What's more, it does not disturb the agro-system of the farmers. It also enables the consumer an access to high quality milk and milk products. Contrary to the traditional system, when the profit of the business was cornered by the middlemen, the system ensured that the profit goes to the participants for their socio-economic upliftment and common good. Looking back on the path traversed by Amul, the following features make it a pattern and model for emulation elsewhere. Amul has been able to:

Produce an appropriate blend of the policy makers farmers board of management and the professionals: each group appreciating its roles and limitations Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment Provide a support system to the milk producers without disturbing their agro-economic systems Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers and Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense, Amul is an example par excellence, of an intervention for rural change.

The Union looks after policy formulation, processing and marketing of milk, provision of technical inputs to enhance milk yield of animals, the artificial insemination service, veterinary care, better feeds and the like - all through the village societies. The village society also facilitates the implementation of various production enhancement and member education programs undertaken by the Union. The staff of the village societies has been trained to undertake the veterinary first-aid and the artificial insemination activities on their own.

Amul's success: A model for other districts to follow.


Amul's success led to the creation of similar structures of milk producers in other districts of Gujarat. They drew on Amul's experience in project planning and execution. Thus the 'Anand Pattern' was followed not just in Kaira district but in Mehsana, Sabarkantha, Banaskantha, Baroda and Surratt districts also. Even before the Dairy Board of India was born, farmers and their leaders carried out empirical tests of the hypotheses that explained Amul's success. In these districts, milk producers and their leaders experienced significant commonalties and found easy and effortless ways to adapt Amul's game plan to their respective areas. This led to the Creation of the National Dairy Development Board with the clear mandate of replicating the 'Anand pattern' in other parts of the country. Initially the pattern was followed for the dairy sector but at a later stage oilseeds, fruit and vegetables, salt, and tree sectors also benefited from it's success.

GCMMF: An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organization. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.

Future Prospects
India is the world's highest milk producer and all set to become the world's largest food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and Foreign investors to find this country a place for the mammoth investment projects. Be it investors, researchers, entrepreneurs, or the merely curious Indian Dairy sector has something for everyone. Milk production is

relatively efficient way of converting vegetable material into animal food. Dairy cows buffalos goats and sheep can eat fodder and crop by products which are not eaten by humans. Yet the loss of nutrients energy and equipment required in milk handling inevitably make milk comparatively expensive food. Also if dairying is to play its part in rural development policies, the price to milk producers has to be remunerative. In a situation of increased international prices, low availabilities of food aid and foreign exchange constraints, large scale subsidization of milk conception will be difficult in the majority of developing countries. Hence in the foreseeable future, in most of developing countries milk and milk products will not play the same roll in nutrition as in the affluent societies of developed countries. Effective demand will come mainly from middle and high income consumers in urban areas. There are ways to mitigate the effects of unequal distribution of incomes. In Cuba where the Government attaches high priority to milk in its food and nutrition policy, all pre-school children receive a daily ration of almost a liter of milk fat the reduced price. Cheap milk and milk products are made available to certain other vulnerable groups, by milk products outside the rationing system are sold price which is well above the cost level. Until recently, most fresh milk in the big cities of China was a reserved for infants and hospitals, but with the increase in supply, rationing has been relaxed

COMPANY PROFILE About the company


The Vellore-Thiruvannamalai District Co-operative Milk Producers Union is registered on February 1982. In accordance with Government Policy, the entire Dairying were taken up by producers Union on 01.10.1984

THE MAIN OBJECTIVES OF THE UNION Is to provide remunerative price to the milk producers by arranging assured market through-out the year for the milk produced by them, through primary Milk Producers Cooperative Societies.

In order to provide infra-structure support to the primary village milk co-operative, processing facilities have been created under operation flood programe with the financial assistances from the National Dairy Development Board, Anand. The union owns one Dairy and five chilling center covering two districts.

THE VELLORE THIRUVANNAMALAI DISTRICTS CO-OPERATIVE MILK PRODUCERS UNION LIMITED VELLORE -632009 UNION AT A GLANCE
1 Address The Vellore-Thiruvannamalai Districts Co-operative Milk Producers Union Ltd Vellore-632009 Ph no:0416-2252342,2252061 Area of Operation Vellore and Thiruvannamalai Head Quarters Vellore Month and Year of Registration October 1982 Dairy activity of the union attend by state February 1981 to September 1984 Federation during Dairy activity of the districts take over by the 01.10.1984 union from Sources of finance for infrastructure Operation Flood Programe Monitoring agency National Dairy Development Board Name of Apex body The Tamilnadu Co-op, Milk Producers Federation Ltd Chennai-51 No. of Dairy/Chilling centers Installed Storage Milk Capacity Capacity Handled (LLPD) (LLPD) (LLPD) 1.Vellore dairy 2.Ambur CC 3.Kodakal CC 4.Tiruvannamalai CC 5.Anakavur CC 1.50 0.50 0.30 1.00 0.50 1.58 0.50 0.30 1.25 0.55 1.02 0.51 0.26 1.18 0.25

2 3 4 5 6 7 8 9 10

Total Milk Procurement 11 Average milk procurement Functional DCS Women DCS Step DCS Total Members Men Women Total Pouring members Milk sales

3.80

4.18

3.15

2.5 lakhs per day 1003 175 20 342334 220780 563114 105991

12

13

Local sales 14 15 Metro sales Milk sent for conversation Functioning routes Rural Milk collection routes Milk veterinary routes Mobile procurement teams Input Activities Animal in co-op ambit Cattle Buffalo Total No. of AI centers No. of AH DCS Cases treated per month No. of AI done per month Anoa. of female calves born per month Fodder cultivation in acres Milk Marketing Network No. of parlors No. of milk distribution agents No. of franchise Retail Outlets Financial status Milk bill payment made per week Union staff strength

82000 2.01 LLPD 55000 45 09 06 233312 13992 247304 307 564 130423 15912 51841 2117 16 386 202 290 lakhs 305

16

17

18 19

PROGENCY TESTING SCHEME

Milk production is a genetic character which passed in from one generation to next generation. The present milk production could be achieved only through cross breeding and upgrading our cattle and buffalos over the past three decayed through massive Artificial Insemination programme with superior genetic material on the exotic bulls imported from various countries. Hence, genetically superior bull is the main requisite for milk production. A bulls genetic potential in terms of milk production can be more accurately based on the performance of daughters born on that bull. The progeny testing scheme was started for jersey crossed bulls from 1989 in this union. The necessity of producing/ selecting genetically superior bulls for our breeding programmers is inevitable and to select such bulls, PTS is the best tool available. Jersey crossbred bull semen produced from nucleus Jersey Stud Farm, Ooty is being used and based upon the daughters milk yield the proven bulls are selected and the genetic potential is exploited. The PTS has been implemented in 39 dairy co-operative societies covering both Vellore and Thiruvannamalai districts. The producers will be directly benefited through increased milk production and productivity of the progenies of their animals and thereby their income. Through this programme the union will have better bulls in future and able to supply better quality semen for general artificial insemination programme, which is turn would increase milk production of animals not only in selected villages but also in other villages where animals are bred by Artificial Insemination.

CALF REARING SCHEME


To help the down trodden milk producers, in keeping the genetically potential heifer calves on scientific feeding and management, monthly ration of concentration feed is being supplied 100% subsidy. In this scheme, 226 Adi-Dravida beneficiaries with effect from April 1996-1998.

MILK PROCUREMENT
The union is presently producing an average of 2.83 lakhs litters of milk per day from 864 milk co-operative societies and marketing an average of 82000 liters of milk a day locally in sachets and cans by covering major towns at Vellore & Thiruvannamalai districts. An average of 2.05 lakhs litters is dispatched to Metro a dairy which meets out 30% of milk demand at Chennai and balance of the milk is sent to feeder Balancing Dairies within and outside the state for converting in to milk by-products like butter, ghee and skim milk powder.

MILK PROCUREMENT TEAMS


4165 revenue villages and 2851 hamlet villages are under co-operative societys fold in the two districts. The milk procurement teams, namely Vellore, Ambur, Kodakal, Thiruvannamalai, Polur, and Cheyyar to monitor the smooth functioning of dairy co-operative societies. The union motivates to increase women participation in dairy co-operatives by organizing more number of women dairy co-operative societies (DCS). The dairy extension activities aim of inducting and orienting the milk producers towards the dairy development on co-operative lines and seeking participation in building a strong co-operative base.

ANIMAL HUSBANDARY ACTIVIES


The provides a package of technical inputs to the farmer members enhance milk production, to prevent losses of the valuable dairy animals and also provides an imitative to the farmers for better management and care of animals. Through the extensive activities of the milk union for the past

two decades the genetic quality of the milch animals has been improved to a great extent with the ongoing massive Artificial Insemination centers provided with regular supply of frozen semen to benefit the producers at their door steps and approximately 20,000 artificial insemination are carried out monthly. Under TAHDCO scheme the subsidy is provided at the rate of 33% from the period 1999-2000.

TABCEDCO AND TAMCO SCHEME


TamilNadu backward class economic development corporation and Tamil Nadu minorities economic development corporation schemes are being implemented from the year1998-1999 on wards by providing two milch animals per beneficiary. The union acts as an implementing agency to distribute the loan to the identified farmer members. Every member is provided with two milch animals as the rate of 28500/- The financial assistance under this scheme has been given to purchase 960 milch animals thereby 481 beneficiaries have benefited so far.

SUPPORT TO TRAINING AND EMPLOYMENT PROGRAMME FOR WOMEN (STEP)


Advent of women Self Help Groups bring rural women to lime light which gives a hope that dairying could be an apt alternative to the farmers providing the women a regular income through dairy business. STEP programme is being implemented for the period of three years in this union. The main objective of the programme is to bring more remunerative through continues dairy business to the women farmers of Vellore and Thiruvannamalai districts. Due to this programme, it is expected that the annual income raises from Rs.7000/-to Rs.20, 000/-per member. During the three years of project period, 20 new women DCS have been organized and 1400 women members have been benefited. The women employees of these societies were given training in the areas like Artificial Insemination, Animal Husbandry, Clean milk production , women oriented programme, Secretary training, Tester training and further, the women member are exposed to various seminars, workshops and also field visit to Co-operative dairying as a viable economic enterprise.

BULK MILK COOLING CENTERS


In the current competitive market, the strategy of supplying good quality milk to the consumer has become compelled to thrive. The economic success of the milk producers is based on the off take of milk by the union. Installing of Bulk Milk Cooler at feasible areas improves the keeping quality of raw milk ensuring the quality standards and fetches a better price to the farmer producers. At present there are 6 Bulk Milk Cooler centers are there and its main function was procuring an average of 33000 liters of milk and sent to Chennai directly. Also, 12 Bulk Milk Cooler centers have been proposed and the installation process is going on.

MARKETING ACTIVITIES
The union is average litters of milk per day according to the consumer needs The milk is marketed in 250ml, 500ml sachets and bulk sales in cans. The milk pouches are packed at Vellore dairy, Ambur chilling centers and thiruvannamalai chilling centers and supplied. The milk is supplied at consumers doorstep for special orders of any occasion.

MILK MARKETING NETWORK

Local sales 82000 Metro sales 200000 They were being distributed through 15 distributed routes covering both Vellore and Thriuvannamalai districts through 359 agents who are on commission basis. To improve the profit of the union, the milk is converted in to value added products like Goa, Dates Goa, Milk cake, Buttermilk, Lassie, Ghee, Varieties of ice creams are marketed through union parlor and Franchise Retail Outlet. In addition to the union and Franchise retail outlets. S.No Type of milk sold Fat/SNF Rate per litter 1 Tonned milk 3.0/8.5 20 2 Standardized milk 4.5/8.5 22

Various department of the VTDCMPUT


Department is an element of the organization process. It is means of dividing the large and complex organization in to a smaller and flexible administration unit it involves horizontal differentiation of activities in enterprises. *Administration *Finance *MIS Management (Information System) *Marketing *Procurement *Dairy

ADMINISTRATION DEPARTMENT
The administration department takes care of the entire proceedings of the organization. It covers the requirements of the personal and ensures that all the HR activities are carried out on time.

FINANCE DEPARTMENT
The department of finance concentrates on allocation and distribution of funds for day today activities as well as for the long term plans. It simultaneously works upon the accounting function like maintaining the bill. Pay bill of the employees, milk bills etc.

MIS Management (Information System)


As the name denotes the department takes care of all the information requirement of the organization. The department of MIS in Vellore acts has the center of for all its branches (Amber, Kodaikal, Thiruvannamalai and Anakavur) in the surrounding areas. It ensures that the require information is gathered and discriminated on routine basis.

MARKETING DEPARTMENT
Marketing department plays an active role both before and after the production process. Based on the details given by the marketing department on the requirement the production process carried on.

PROCUREMENT
Procurement has got in critical role in the organization because milk being a perishable good the department has the responsibility in keeping a cheek on time. The lend time is adjuster according to the requirement of the production department.

DAIRY
This is the actual soul of the firm. Where the milk is being processed this firm (VTDCMPUL) being the center for surrounding districts. Here the process has been done from reception to accessing the milk and with the packaging the milk.

REVIEW OF LITERATURE
1. In the journal of marketing research Vol. 26, No. 3, Aug., 1989, under the consumer preference, there is a concept that, Market pioneers outsell later entrants in both consumer and industrial markets. Entry barriers arising from preemptive positioning and switching costs have been advanced to explain this market share difference, termed "pioneering advantage." 2. In the journal of Consumer research, Vol. 24, No. 2, September 1997 under the topic that gives consumer preference that denotes that it as the traditional focus in the decision

making literature has been on understanding how consumers choose among a given set of alternatives. The notion that preference uncertainty may lead to choice deferral when no single alternative has a decisive advantage. 3. In the journal of marketing research, Vol. 34, No. 2, May, 1997 under the topic of consumer preference it is given that The authors propose that consumers' preferences are systematically affected by whether they make direct comparisons between brands (e.g., a choice task) or evaluate brands individually (e.g., purchase likelihood ratings). 4. In the journal of marketing science, Vol. 17, No. 1, 1998, under the topic Shopping behavior and consumer preference it is given that, in recent years, the supermarket industry has become increasingly competitive. One outcome has been the proliferation of a variety of pricing formats, and considerable debate among academics and practitioners about how these formats affect consumers' store choice behavior. 5. In the book written by Richard L. Oliver, Gerald Linda (1981), "EFFECT OF SATISFACTION AND ITS ANTECEDENTS ON CONSUMER PREFERENCE AND INTENTION", in Advances in Consumer Research Volume 08, eds. Kent B. Monroe, Ann Abor : Association for Consumer Research, Pages: 88-93 given that Theorists and researchers in the satisfaction area now generally agree that product satisfaction intervenes between expectancy disconfirmation and various post purchase cognitive states including attitude and behavioral intention. 6. In the journal of consumer research Vol. 25, No. 4, March 1999.under the topic of The role of direction in consumer preference formation involves comparing brands on specific attributes (attribute based processing) or in terms of overall evaluations (attitude based processing). When consumers engage in an attribute based comparison process, the unique attributes of the focal subject brand are weighed heavily, whereas the unique attributes of the less focal referent brand are neglected. 7. In the journal of operation research Vol. 24, No. 5, Sep. - Oct., 1976, under A consumer preference study of health care system given that A problem in planning the expansion of a rural primary health-care delivery system is to determine the set of facilities to be added to an existing system so as to maximize the incremental benefit to the community subject to a cost constraint. 8. In the journal of consumer research Vol. 19, No. 1, Jun., 1992, under the topic The influence of purchasing preference it is given that We propose that what consumers buy can be systematically influenced by how much they buy. We hypothesize that, as the number of items purchased in a category on a shopping occasion increases, a consumer is more likely to select product variants (e.g., yogurt flavors) that s/he does not usually purchase. 9. In the Journal of Consumer Research, Vol. 3, pp. 557-565, December 2004, a concept of consumer preference written by Alexander Chernev of Northwestern University Department of Marketing states that Consumers often must choose between a course of

action that preserves the status quo and a course of action that is a departure from the status quo. 10. In the journal of Operations research Vol. 28, No. 2, Mar. - Apr., 1 1980 under the topic of intensity measures gives that to design successful new products and services, managers need to measure consumer preferences relative to product attributes. Many existing methods use ordinal measures. Intensity measures have the potential to provide more information per question, thus allowing more accurate models or fewer consumer questions (lower survey cost, less consumer wear out).

THEORITICAL FRAMEWORK CUSTOMER PREFERENCE:


This term can be understood from a variety of perspectives. All of them tend to verge on the customer or firms perspective. From the customers perspective, value can be understood as what he or she is willing to pay and hence customer value refers to perceived value refers to perceived value by the customer in an offer. In other words, its the value that the customer

perceives as being superior and relevant to him/her and hence is willing to pay for the purchase and consumption of the products/services. Let us understand this term both from the customer and the firms perspectives as it influences relationships between the company and its customers.

CUSTOMER VALUE FROM CUSTOMERS PERSPECTIVES:


It is important to understand two terms here, namely value and values. Holbrook suggests a frame wok. value refers to preferential judgment, while values refer to the decision criteria that shape this preference. Research shows that the following factors collectively influence a consumers decision to buy a durable product like microwave oven and hence may be termed as values that customers look for

PERSONAL
The demographics and life style of the customers are personal factors that influence her to buy a microwave oven. For example, a workings womens need for a microwave is different from that of a non-working woman and, hence, her expectations differ.

ESTEEM
One of the significant factors in the purchase of a product or service is its esteem value. For example luxury products or premium priced products are often bought to enhance the esteem of the buyer

UTILITY
The economic perspective of a product purchase is its utility. Different target markets attach different utility values to the same product. For example, the younger customer(age group up to 25 years) may perceive staying in continuous contact with friends as the major utility of a cell phone.

SOCIAL

Many a time a customers social needs drive him/her to buy the product. When this happens, the primary value a product serves is social. Hence the market needs to project it in its positioning statement. For example, a good a neighborhood/community is an important social value in the purchase of an apartment/house.

PRICE
Another important value in the purchase of a product is reflected by its price tag. For example, values of low price and product quality draw customers to big bazaar, while the value of exclusivity attached to premium pieced products draw customers to designer showrooms. Low price is an important values that customer look for when buying goods and services.

QUALITY
Like utility and price, quality is an important core value in the customers decision making. As we shall learn in the subsequent chapters, quality is what a customers, quality is what a customer pays for and not what the company wants the customer to believe in hence, it is the perceived quality that is important to a customer. As was mentioned above, there is a relationship between price and perceived quality and hence, perceived value.

FIRMS PERSPECTIVE OF CUSTOMER VALUE


From the perspective of a firm, customer value is often understood as the value of a single customer to a firms profit and market share. Research has today shown that firms gain more through their retained customers and hence they (firms) need to focus on enhancing the life of a customer in their customer portfolio. Inherent in this statement is the need to prevent leakage in the basket of customers.

CUSTOMER PREFERENCE AND RELATIONSHIP MARKETING


It is apparent that customer is a dynamic concept in which both the customer and the firm actively participate. Every development of the technology front or the competition alerts value paradigms. It is therefore important that the firm needs to continuously monitor these development and innovate in order to retain the customer.

There are six such key partners that have been identified as facilitating a firms relationship with customer. These are 1. Supplier/alliance markets 2. Referrals market-for example, community of satisfied customers considered opinion leaders 3. Manpower suppliers 4. Influencers like financial and investor groups, regulatory bodies, press, internet groups. 5. Internal employees 6. Customer markets 7. It is important to note that each of these markets is interrelated and relationship with customers can be strengthened only when firms pay attention to all five simultaneously. 8.

CUSTOMER PREFERENCE AND LOYALTY


Customer relationships are built on the basis of trust. Invariability, it has been observed that repeat business gets generated only when customers believe their suppliers and perceive them as creating more value. Hence loyalty is created only when customers perceive fairness, equity, and transparency in his/her relationship with the seller. It is in the interest of the seller to convert more number of customers into loyal customers because loyal customers are the biggest engine of growth. They generate profits; help the firm retain its high-performing employees, and investors who continue to invest in it the loyalty base 3d business model clearly indicates a relationship between customers loyalty, employee motivation, and investor confidence.

RESEARCH METHODOLOGY
Research methodology is a systematic way to solve a research problem. It may be understood as a science of studying how research is done scientifically. It is necessary for the researcher to know not only the techniques but also the technique and the methodology.

RESEARCH DESIGN:
The researcher has used descriptive research for the study.

Descriptive Research
Descriptive research studies are mainly concerned with the description of characteristic of particular individual (or) group. Studies concerned with specific predictions with the narration of facts and characteristics concerning individual, group (or) situation is all examples of descriptive research studies. This research includes surveys and fact finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists at present.

SAMPLE DESIGN
POPULATION/UNIVERSE The population of the study conducted in Vellore aavin milk SAMPLE SIZE: It refers to the number of elements to be included in the study. Sample size is complex and involves several qualitative and qualitative considerations. Here sample size is 300.

SAMPLING TECHNIQUE Sampling is one of the components of a research design. The formulation of the research design is one of the important stages in marketing research process. The sampling is mainly classified into two main categories, Probability sampling Non Probability Sampling

THE TECHNIQUE ADOPTED FOR THE STUDY IS STRATIFIED SAMPLING FROM PROBABILITY SAMPLING.

SOURCE OF DATA
PRIMARY DATA Primary data is known as the data collected for the first time through field survey based on their questionnaire to the respondent suggestions SECONDARY DATA Secondary data refers to the information or facts already collected in the method used by the researcher collecting secondary data is Books Magazines Journals Internet websites

DATA COLLECTION
Questionnaire Observation

STATISTICAL TOOLS

PERCENTAGE ANALYSIS

CHI SQUARE The quantity 2 describes the magnitude of discrepancy between theory and observation can be attributed and expected frequency. The formula for computing chi square is: 2 = (O-E) 2 / E The calculation value of 2 is compared with the table value of 2 for given Degree of freedom at a specified level of significance. It is accepted when the calculated value is lesser than the tabulated value.

ANOVA The technique of analysis of variance is referred to as ANOVA. A table showing the source of variation, the sum of squares, degrees of freedom, mean square (Variance) and the formula for the F-ratio is known as ANOVA TABLE. F-Statistic = variance between the samples Variance within the samples The calculation value of F - value is compared with the table value of F distribution at a specified level of significance. It is accepted when the calculated value is lesser than the tabulated value.

HYPOTHESES OF THE STUDY There is no significance relationship between the Preference level of milk and satisfaction level. There is no significance relationship between type of package and reason for preference.

LIMITATIONS OF THE STUDY

The tastes or consumer preference subjects to change often so that the behavior existing today may not be the same tomorrow. The survey is conducted only in Vellore
The people are in busy work so they cant respond the survey correctly

Consumer preference is sometime where human being is to be studied that is complex task. The people who are involved in it require a high level of skill and intelligence to see consumers minds is difficult. Generally, while conducting research on consumer preference, small samples are taken. But small samples cant guarantee whether the results are right or wrong

DATA ANALYSIS AND INTREPRETATION


TABLE 1 TYPE OF FAMILY S.NO 1 2 ATTRIBUTES Joint family Nuclear family Total NO OF RESPONDENTS 65 235 300 PERCENTAGE 22 78 100

CHART 1

INFERENCE: From the above table it is inferred that 22% of respondents belongs to joint family and remaining 78% of respondents belongs to nuclear family.

TABLE 2 AWARENESS OF AAVIN MILK S.NO 1 2 ATTRIBUTES Yes No Total CHART 2 NO OF RESPONDENT 281 19 300 PERCENTAGE 94 6 100

INFERENCE: From the above table it is inferred that 94% of respondents are aware of aavin milk and remaining 6% of respondents are not aware of aavin milk.

TABLE 2a INFORMATION ABOUT AAVIN S.NO 1 2 3 ATTRIBUTES Friends Relatives Television Total CHART 2a NO OF RESPONDENT 11 206 64 281 PERCENTAGE 4 73 23 100

INFERENCE: From the above table it is inferred that 4% of respondents get to know information through friends, 73% of respondents get to know from relatives and remaining 23% of respondents get information from television.

TABLE 3 LITERS OF PURCHASE S.NO 1 2 3 4 ATTRIBUTES 0.5 liters 1 liters 2 liters Above 2 liters Total NO OF RESPONDENT 4 41 34 202 281 PERCENTAGE 1 15 12 72 100

CHART 3

INFERENCE: From the above table it is inferred that 1% of respondents buy 0.5 liters, 15% of respondents buy 1 liters, 12% of respondents buy 2 liters and remaining 72% of respondent buy above 2liters.

TABLE 4 DURATION OF PURCHASING THE AAVIN MILK S.NO 1 2 3 ATTRIBUTES Morning Evening Both Total NO OF RESPONDENTS 1 50 230 281 PERCENTAGE 1 18 81 100

CHART 4

INFERENCE: From the above table it is inferred that 1% of respondents buy in the morning time, 18% of respondents buy in evening time and remaining 81% of respondent buy both time.

TABLE 5 YEAR OF BUYING AAVIN S.NO 1 2 3 ATTRIBUTES <5 years 5-10 years Above 10 years Total NO OF RESPONDENT 14 37 230 281 PERCENTAGE 5 13 82 100

CHART 5

INFERENCE: From the above table it is inferred that, 5% of respondents said that they buy milk in less than 5 years, 13% of respondents say that buy the milk at 5-10 years and remaining 82% of respondent buy the milk at above 10 years.

TABLE 6 MODE OF PURCHASE S.NO 1 2 3 ATTRIBUTES Agent Shop Door step Total NO OF RESPONDENTS 11 12 258 281 PERCENTAGE 4 4 92 100

CHART 6

INFERENCE: From the above table it is inferred that, 4% of respondents said they buy the milk daily from agent, 4% of respondents said they buy the milk daily at shop and remaining 92% of respondent said they buy the milk daily at door step.

TABLE 7 PREFERENCE OF MILK S.NO 1 2 ATTRIBUTES Standard milk Tonned milk Total NO OF RESPONDENTS 48 233 281 PERCENTAGE 17 83 100

CHART 7

INFERENCE: From the above table it is inferred that, 17% of respondents prefer standardized milk and remaining 83% of respondents prefer tonned milk.

TABLE 8 PACKAGE PREFERED S.NO 1 2 3 ATTRIBUTES 250 ml 500 ml Both Total NO OF RESPONDENT 40 120 121 281 PERCENTAGE 14 43 43 100

CHART 8

INFERENCE: From the above table it is inferred that 14% of respondents prefer 250 ml package, 43% of respondents prefer 500 ml package and remaining 43% of respondent prefer both package.

TABLE 9 REASON FOR PREFERENCE S.NO 1 2 3 4 ATTRIBUTES Availability Quality Brand image All the above Total NO OF RESPONDENT 9 70 14 188 281 PERCENTAGE 3 25 5 67 100

CHART 9

INFERENCE: From the above table it is inferred that 3% of respondents said they prefer the aavin milk for their availability, 25% of respondents said they prefer for quality, 5% of respondent said they prefer for brand image and remaining 67% of respondents said they prefer aavin milk for availability, quality, and brand image.

TABLE 10 PREFERENCE OF OTHER PRODUCT S.NO 1 2 3 4 ATTRIBUTES Aarokya Kavins Appu Shrudi Total NO OF RESPONDENT 11 9 18 243 281 PERCENTAGE 4 3 7 86 100

CHART 10

INFERENCE: From the above table it is inferred that 4% of respondents said they prefer aarokya milk as their substitute, 3% of respondents said they prefer kavins milk as their substitute, 7% of respondent said they prefer appu milk as substitute, and remaining 86% of respondents said they prefer shrudi milk as their substitute.

TABLE 11 TIMELY AVAILABLE OF AAVIN MILK S.NO 1 2 3 4 5 ATTRIBUTES Strongly agree Agree Partially agree Disagree Strongly disagree Total NO OF RESPONPONDENT 155 108 9 5 4 281 PERCENTAGE 56 38 3 2 1 100

CHART 11

INFERENCE: From the above table it is inferred that 56% of respondents strongly agree that milk is available in time, 38% of respondents agree that available in time, 3% of respondent partially agree that available in time, 2% of respondents disagree that available in time and remaining 1% of respondents in strongly disagree that available in time.

TABLE 12 QUALITY OF AAVIN MILK S.NO 1 2 3 ATTRIBUTES Very good Good Not bad Total CHART 12 NO OF RESPONDENT 146 122 13 281 PERCENTAGE 52 43 5 100

INFERENCE: From the above table it is inferred that 52% of respondents says that quality of aavin milk is very good, 43% of respondents says that quality of aavin milk is good, 5% of respondent says that quality of aavin milk is not bad.

TABLE 13 PRICE LEVEL S.NO 1 2 3 4 ATTRIBUTES Very high High Moderate Cheap Total NO OF RESPONDENT 98 41 56 86 281 PERCENTAGE 35 15 20 30 100

CHART 13

INFERENCE: From the above table it is inference that 35% of respondents feel that the price level is very high, 15% of respondents feel that the price level is high, 20% of respondent feel that the price level is moderate and remaining 30% of respondents feel that the price level is cheap.

TABLE 14 SATISFACTION OF AAVIN MILK S.NO 1 2 ATTRIBUTES Yes No Total CHART 14 NO OF RESPONDENT 275 6 281 PERCENTAGE 98 2 100

INFERENCE: From the above table it is inference that 98% of respondents said that they are satisfied in aavin milk and remaining 2% of respondents said that they are dissatisfied aavin milk.

TABLE 15 EXAMINING OF EXPIRY DATE S.NO 1 2 3 4 ATTTRIBUTES Always Sometime Often Never Total NO OF RESPONDENT 10 26 28 211 275 PERCENTAGE 4 9 10 77 100

CHART 15

INFERENCE: From the above table it is inferred that 4% of respondents said that they always examined the expiry date of aavin milk, 9% of respondents said that they sometime examined the expiry date of aavin milk, 10% of respondent said that they often examined the expiry date of aavin milk and remaining 77% of respondent said that they never examined the expiry date of aavin milk.

TABLE 16 COMPLAINTS IN AAVIN PRODUCTS S.NO 1 2 ATTRIBUTES Yes No Total CHART 16 NO OF RESPONDENT 261 14 275 PERCENTAGE 95 5 100

INFERENCE: From the above table it is inferred that 95% of respondents says that they have complaints in aavin milk and remaining 5% of respondents says that they have no complaints in aavin milk.

TABLE 16a SATISFACTION TOWARDS REDRESSAL LEVEL S.NO 1 2 3 ATTRIBUTES Highly satisfied Satisfied Dissatisfied Total NO OF RESPONDENT 86 167 8 275 PERCENTAGE 33 64 3 100

CHART 16a

INFERENCE: From the above table it is inferred that 33% of respondents says that they have highly satisfied with redressal practice, 64% of respondents says that they have satisfied with the redressal practice and remaining 3% of respondent says that they have dissatisfied with the redressal practice.

TABLE 16b COMPLAINTS ABOUT AAVIN PRODUCT S.NO 1 2 3 4 ATTRIBUTES Package Expiry date Service More price Total CHART 16b NO OF RESPONDENT 23 27 160 51 275 PERCENTAGE 9 10 61 20 100

INFERENCE: From the above table it is inferred that 9% of respondents says that they have complaints about package, 10% of respondents says that they have complaints about expiry date, 61% of respondent says that they have complaints about service and remaining 20% of respondent says that they have complaints about more price.

TABLE 17 MAKING OF CHANGES S.NO 1 2 3 4 ATTRIBUTES Quality Price Services Package Total NO OF RESPONDENT 8 40 141 86 275 PERCENTAGE 3 15 51 31 100

CHART 17

INFERENCE: From the above table it is inferred that 3% of respondents said that they should change quality in aavin milk, 15% of respondents said that they should changes price in aavin milk, 51% of respondent said that they should changes services in aavin milk and remaining 31% of respondent said that they should changes package in aavin milk.

TABLE 18 ACCEPTANCE OF COMPLIANTS S.NO 1 2 ATTRIBUTES Yes No Total NO OF RESPONDENT 249 12 275 PERCENTAGE 95 5 100

CHART 18

INFERENCE: From the above table it is inferred that 95% of respondents says that the organization accept the complaints and remaining 5% of respondents says that the organization do not accept the complaints.

FINDINGS OF THE STUDY 1. Almost 78% of the respondent were of nuclear family 2. Majority (94%) of the respondent were aware of aavin milk 3. Nearly 69% of the respondent know about aavin milk through relatives 4. Almost 67% of the respondent purchase about 2 liters per day 5. Nearly 82% of the respondent buy both the time

6. Majority(82%) of the respondent buy regularly at above 10 years 7. Nearly 92% of the respondent prefers the milk in door step 8. Almost 83% of the respondent prefers tonned milk 9. Majority(43%) of the respondent prefers both (250ml and 500ml) package 10. Almost 67% of the respondent prefers all (i.e.) quality brand image and availability 11. Majority(86%) of the respondent prefers shrudi milk as the alternative milk 12. Nearly 55% of the respondent were strongly agree that milk is available in time 13. Majority(52%) of the respondent feel that the quality of aavin milk is very good 14. Almost 35% of the respondent the price level is very high 15. Nearly 98% of the respondent were satisfied with aavin milk 16. Nearly 77% of the respondent said they never examine the expiry date 17. Majority(51%) of the respondent like to change the service in aavin milk 18. Nearly 95% of the respondent were having complaints in aavin milk 19. Almost 64% of the respondent were satisfied with the redressal level 20. Majority(61%) of the respondent were having complaints on the service 21. Nearly 95% of the respondent said the organization accepts the complaints

SUGGESTIONS OF THE STUDY


The Company can improve the service provided to their customers. The Company may improve its redressal level to attract more customers. The company can also improve the distribution channel for better customer retention. The Company can provide the quality and innovative packages for attracting competitors customers. From this Study it is found that most of the respondents are getting milk at time, although the company can improve its delivery on time for better consumer preference.

CONCLUSION OF THE STUDY In todays fast growing economy and living style, study of Consumer preference plays an important role in understanding Consumers taste and preferences. Therefore this study helps the Aavin milk Vellore, to study about their consumers mindset towards Aavin. From this study, it is clear that Aavin is one of the leading milk producers in the geographical area of research. By improving the promptness of delivery and Service of the customers, aavin can become the market leader.

CHI-SQURE TEST-1 Null Hypothesis:H0 : There is no significance relationship between the type of milk and satisfaction level..

OBSERVED FREQUENCY:TYPE OF MILK SATISFACTION LEVEL YES NO TOTAL STANDARDIZED MILK 44 4 48 231 2 233 275 6 281 TONNED MILK TOTAL

EXPECTED FREQUENCY:47 1 48 228 5 233 275 6 281

CHI-SQUARE TABLE

Oi
44 231 4 2 6 44 231 47 228 1 5

Ei
47 228 6

Oi-Ei
-3 4 0

(Oi-Ei)2
9 16

(Oi-Ei)2/Ei
0.2 0.1 0 0.3

0 TOTAL

Chi-square Calculated value = 0.3 Table Value Degrees of freedom = (r-1) (c-1) = (2-1) (2-1) = 1 (1) =1

Critical value Degrees of freedom at 5% level of significance = 3.841 Tabulated value = 3.841 Chi square calculated value is lesser than tabulated value Accept Ho Interpretation There is no significant relationship between type of milk and satisfacation level

ANNOVA

OBJECTIVE: To identify the significance difference between the type of package and reasons for preference. TYPE OF PACKAGE 250ml 500ml Both TOTAL Availability 17 23 25 65 REASON S FOR PREFEREN CE Quality brand image all the above 27 21 21 69 18 26 18 62 15 34 36 85

TOTAL 77 104 100 281

SOURCE: Primary data obtained from questionnaire FORMULATION OF HYPOTHESIS Null Hypothesis (H0) There is no significance difference between type of package and reasons for preference. X1 17 23 25 65 STEP 1 CORRECTION FACTOR CF= T/N = (281)/12 =6580.1 STEP 2 SST=SUM OF SQUARE OF TOTAL - CF = x12+x22+x32-C.F =1443+1611+1324+2677-6580 =475 Degree of freedom =12-1=11 STEP 3 X12 289 529 625 1443 X2 27 21 21 69 X22 729 441 441 1611 X3 18 26 18 62 X32 324 676 324 1324 X4 15 34 36 85 X42 225 1156 1296 2677 TOTAL 77 104 100 281

SSC= SUM OF SQUARE OF COLUMN-CF =(x12/n+x22/n+x32/n+x42/n )-C.F =65/3+69/3+62/3+85/3-6580 =1408.33+1587+1281.33+2408.33-6580 =105 Degree of freedom =4-1=3 SSR=SUM OF SQUARE OF ROW-CF = (y1)2/n+(y2)2/n+(y3)2/n-CF = 77/4+ 104/4+ 100/4 -6580 =1482.25+2704+2500-6580 =106.21 Degree of freedom =3-1=2 SOURCE OF VARIANCE Between SSC SUM OF SQUARES 105 DEGREE OF FREEDOM 3 MEAN SQUARE MSE=SSC/SSE =105/3 Between SSR 106.2 2 =35 MSR=SSR/SSE = 106.2/2 Error SSE 263.8 6 =53.1 MSE=SSE/SSE =263.8/6 =44 Total 475 11 VARIANCE Fc=MSC/MSE =35/44 =0.8 Fr=MSR/MSE =53.1/44 =1.21

Fc at F0.05% = (3,6) =8.94 Fr F0.05 %=( 2, 6) =19.2 At 5% both the calculation value is lesser than the value so accept the hypothesis. RESULT: There is no significant relation between type of package and reason for preference

QUESTIONNAIRE Occupation: a) Government job b)private job c)self employed d)others 1. Which type of family? a) Joint family b) nuclear family 2. Are you aware of aavin milk? a) Yes b) no 2(a) If yes how did you know about the aavin milk a) Friends b) relatives c) televisions 3. How many liters will you purchase per day? a) 0.5 liters b) 1 liters c) 2 liters d) above 2 liters 4. Which time will you buy the milk? a) Morning b) evening c) both 5. How long are you buying the milk?

a) <5years b) 5-10 years c) >10 years 6. Where you buy the milk daily? a) Agent b) shop c) door step 7. What type of milk did you prefer daily? a) Standardized milk b) tonned milk 8. What type of package did you prefer daily? a) 250ml b) 500ml c) both 9. Mention the reason for preferences? a) Availability b) quality c) brand image d) all the above 10. What are the other products you will prefer? a) Aarokya b) kavins c) appu d) shrudi 11. Do you agree aavin milk is available in time? a) Strongly agree b) agree c) partially agree d) disagree e) strongly disagree 12. What do you feel about the quality of aavin milk? a) Very good b) good c) not bad 13. What do you think about the price level? a) Very high b) high c) moderate d) cheap 14. Are you satisfied with the aavin milk? a) Yes b) no 15. Do you examine the expiry date of aavin milk? a) Always b) sometimes c) often d) never 16. Do you have any complaints in aavin products a) Yes b)no 16(a) If yes are you satisfied with their redressal level a) Highly satisfied b) satisfied c) dissatisfied 16 (b). If yes what you want to change complain about a) Package b) expiry date c) services d) more price 17. Did you like to make any changes in aavin milk? a) quality b) price c) service d) package 18. If the organization accept the complaints a) Yes b) no. BIBLIOGRAPHY BOOKS: 1. Kothari, C.R., Research Methodology - Methods & Techniques Publishers- New Age international (P) Ltd., New Delhi, Second Edition, 2004.

2. Gupta, S.P.,

Statistical Methods, Sultan Chand & Sons Publishers, New Delhi, Thirty Fourth Editions, 2005.

3. Philip kotler.,

Marketing Management PEARSON Publishers, New Delhi, Thirteenth Editions, 2009

WEB SITES: 1. www.yahoo.com 2. www.google.co.in 3. www.aavinmilk.com 4. www.agricultureinformation.com