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

Report on Identifying factors behind decreasing market share and study of consumer behaviour Mother-Dairy-925048061s.jpg Submitted to :Prof. R.J.Masilamani

Submitted by :Arpita Gupta PGDM 09DM024

CERTIFICATE

This is to certify that Miss. Arpita Gupta, has completed her summer internship at Mother Dairy, and has submitted this project report entitled Identifying factors behind decreasing market share and a study of consumer behaviour towards partial fulfilment of the requirements for the award of the Post Graduate Diploma in Business Management . This Report is the result of her own work and to the best of my knowledge no part of it has earlier comprised any other report, monograph, dissertation or book. This project was carried out under my overall supervision.

Date:

Place:

---------------------------------Internal Faculty Guide

ACKNOWLEDGEMENT

The satiation and euphoria that accompany the successful completion of the project would be incomplete without the mention of the people who made it possible. I would like to take the opportunity to thank and express my deep sense of gratitude to my corporate mentor Mr. Dhiman Sen and my faculty mentor Prof. R.J. Masilamani. I am greatly indebted to both of them for providing their valuable guidance at all stages of the study, their advice, constructive suggestions, positive and supportive attitude and continuous encouragement, without which it would have not been possible to complete the project. I would also like to thank Mr. Amar Majumdar (Senior Marketing asst.) who in spite of busy schedule has co-operated with me continuously and indeed, his valuable contribution and guidance have been certainly indispensable for my project work.. I am thankful to Mr.K.P.Boral for giving me the opportunity to work with Mother dairy and learn. I owe my wholehearted thanks and appreciation to the entire staff of the company for their cooperation and assistance during the course of my project. I hope that I can build upon the experience and knowledge that I have gained and make a valuable contribution towards this industry in coming future.

TABLE OF CONTENT

Sl No. Topic Pg No. 1 Executive summary 4 2 Introduction : . Need of the study . Objective of the study 5 3 Organisational Background 7 4 Literature Review : . . . . . Current scenario Supply chain management Distribution channels Processing Quality control

14 5 Competitor Analysis 19 6 Study of distributors and retailers

23 7 Research methodology 35 8 Conclusion 43 9 Limitations 44 10 Recommendations 45 11 References 47 12 Annexure 48

EXECUTIVE SUMMARY

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

INTRODUCTION

Need of the study The project was an attempt to know the reasons behind low sale of milk of Mother dairy in Kolkata. Despite of being the first in the industry,and having the first mover advantage and the brand name, the sale has fallen down incredibly due to competitors like Amul ,Metro dairy , Red Cow and others. There is a need to revamp the company and position it all over again in the mind of the consumers. In doing so firstly the grievances of the distributors and the retailers were required to be solved in order to encourage them for push sales. Secondly a study of consumers decision making factors is required in order to understand their priorities which can be worked upon. For this purpose a research is to undertaken to find out the market scenario. With the help of the responses given by the consumers and data analysis, the company will be able to understand its strengths, weakness , opportunities and threats. The survey report submitted by me will assist the company to take right decisions to increase the turnover and market share.

Objective of the study The objectives of the study are the following :1. The main objective of this project is to probe the reasons for decreasing market share of Mother Dairy and to find out the measures that can be adopted to increase the sales 2. To study the distribution channel in the retail chain of Mother Dairy 3. To identify the issues related to Mother Dairy retailers and distributors 4. To get the retailers feedback from specific regions 5. To add up new retailers in the area

6. To study Mother Dairy positioning in the mind of the consumers vis-vis competitors 7. To find out the factors that affect consumers decision to purchase milk 8. To find out short term problem in every sub-region that can be sorted out 9. Suggesting viable recommendations to be implemented in the area

ORGANISATIONAL BACKGROUND

Mother Dairy was set up in 1974. Mother dairy Kolkata is a government of West Bengal project, was started under Operation Flood II of National Dairy Development Board . It was set up initially to cater to the demand of the Kolkata urban agglomeration spread over the Kolkata Metropolitan area, later it reached out to the consumers of other districts also. The commissioning of the Dairy started in July 1978. Initially, the management of Mother Dairy was looked after by the National Dairy Development Board . On 24th March 1982 , the then Honourable Chief Minister Shri Jyoti Basu dedicated Mother Dairy Calcutta to the rural milk producers and urban milk consumers of West Bengal. Mother Dairy is an IS/ISO 9002, IS 15000 HACCP and IS 14001 EMS certified organization. Moreover, its Quality Assurance Laboratory is certified by National Accreditation Board for Testing and Calibration Laboratory (NABL)Department of Science and Technology, Government of India. At Mother dairy milk is produced by mixing raw milk, white butter and skim milk powder. Skim milk powder is made by mixing cow and buffalo milk obtained during breeding seasons through various co-operatives in West Bengal and converting them into powder in order to store for a longer period. Raw milk is obtained on a daily basis from the co-operatives. It is then stored in chilling plants and transferred to the Mother dairy factory through insulated tanks. While raw milk is stored in the cold chain at 2C skim milk powder and white butter is stored under normal temperature. This milk is then pasteurised at 78 C in order to make it free from germs and then it is homogenised. Mother dairy is presently selling Milk & Milk Products like Khatta Doi , Flavoured Yoghurt, Plain yoghurt, Paneer, Ice cream and Packaged Drinking Water. The entire product mix is shown below :

Each of the product is further discussed in details :-

MILK Varieties in Milk : Sl.No Product Fat content Solid not Fat (SNF) Water 1 Doble Toned Milk 1.5% 9.0% 89.5% 2 Toned Milk 3.0% 8.5% 88.5% 3 Full Cream Milk 6% 9% 75% 4 Cow Milk 3.5%

8.5% 88% 5 Skimmed Milk 0.5% 9.5% 90%

Double toned Milk

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

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

Mother dairy full cream milk - wholesome and healthy. Packed with energy and nutrition thats essential for growing kids. It makes them stronger from within and keeps them active and healthy. So before they go to bed , and after they rise give them Mother dairy full cream milk to keep them healthy and wise and to see them grow faster.. Cow Milk

Mother dairy.s cow milk has a yellowish tinge due to presence of an element called carotene and is a good source of Vitamin A,B-12 and Vitamin D. Cow milk is considered to be easily digestible. Whether poured on breakfast cereal or enjoyed alone as a cold glass of milk, this can be enjoyed year around. Skimmed Milk In skimmed milk , as much of the fat as is possible is removed , yet it continues to supply all the nutrients that full cream milk does. The young at heart would particularly find it a tempting option. So its the best option to remain energetic and young. Margin (per ltrs) : Sl.No Product Distributors Price Retailers Price MRP 1 Doble Toned Milk 19.65 20.00 21.00 2

Toned Milk 20.75 21.10 22.00 3 Full Cream Milk 25.45 25.80 27.00 4 Cow Milk 22.65 23.00 24.00 5 Skimmed Milk 17.65 18.00 19.00

Shelf Life : 2 days under 4C Average Daily Sales (in ltrs) : 335000 lakh

Pattern of sale :

Distribution Network :

OTHER PRODUCTS

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

Mishti Doi Plain Yoghurt Flavoured Yoghurt

Paneer Drinking Water

Margin (per 100 gms) : Sl.No Product Distributors Price Retailers Price MRP 1 Mishti Doi 6.50 7.20 8.00 2 Plain Yoghurt 6.50 7.20 8.00 3 Favoured Yoghurt a) b) c) d) Vanilla Green Mango Chocolate Pineapple

6.50

7.20

8.00 4 Paneer 17.50 18.50 20.00

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

Average Daily Sales : Yoghurt : 3600 Kgs Paneer : 800 Kgs Ice-cream : 1200 kgs

Distribution Network :

LITERATURE REVIEW

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

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

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

Distribution Channels: a) Token Distribution: Also, termed as Lohe ki bhains (metal buffalo), is an automated milk vending machine. b) Distributors: The packaged milk is distributed via the distributor network throughout the city.

Processing At mother dairy, the processing of milk is done by process automation whereby state of the art microprocessor technology is adopted to integrate and completely automate all functions of the milk processing areas to ensure high product quality/reliability and safety. There are four ways of milk processing Firstly, Clarification, in which milk is spun at very high speed, removing all dust particles that are invisible to the naked eye. Secondly, Standardisation which help to maintain uniformity by raising or lowering its fat and SNF (solid not fat) percentage to a desired levels, so as to deliver milk to consumers as per prescribed PFA norms. Thirdly, it is Homogenization which improves palatability of milk and

Finally, Pasteurization, which kills all pathogenic bacteria present in the milk and thus making it safe for consumption. Quality Control Stringent quality control methodologies are employed in Mother Dairy. a) The milk is tested for adulterations and quality at the time of collection from the farmers. b) The Milk that comes from the collection points to the Mother Dairy plant is ensured to have a temperature of not more than 4C and is subjected to 15 product and quality checks. c) The Milk quality is checked repeatedly after each processing phase and the temperature is judiciously maintained less than 4C always. d) Before the milk leaves the plant for the delivery/distribution outlets the milk is tested again. e) The temperature of milk in the delivery trucks is always maintained less than 4C. f) All the trucks that deliver milk have specified guidelines to bring back 100 litres of milk after distribution. This is done in order to test the delivered milk and to ensure that the tankers are not adulterated during distribution. g) Since all the employed processing procedures are automated, no contamination by human hands takes place. h) To ensure milk freshness the collection and distribution points are always chosen such that the travel time between them is always less than 36 hours. Out of the total production about 9% goes directly to the institutions ,23% is the loose token milk and the rest is distributed through LAD.s.

COMPETITOR ANALYSIS

AMUL

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

The varieties of Amul milk available in Kolkata are : . . . . Amul Amul Amul Amul Taaza Toned Milk 3% fat Gold Full Cream Milk 6% fat Slim & Trim Double Toned Milk 1.5% fat Tea Special

At Amul skim milk powder is procured from the cooperatives of Gujarat which is much superior in quality when compared to the cooperatives of West Bengal leading to better quality of products. Price When compared to Mother dairy , the distributors margin of Amul is .50p/ltr whereas Mother dairy gives .30p/ltr .In case of retailers Mother dairy has fixed margin in every part of West Bengal .However Amul gives different margins depending upon the location and sale of the retailer which becomes a great incentive to sale. The price of the milk to the end consumer is however similar to Mother Dairy.

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

Metro Dairy was founded in the year 1994 as a new venture of Keventer Agro Ltd. It was India's first dairy project in public private partnership. A three-way joint venture was signed between West Bengal Milk Federation, Keventer and NDDB, forming 'Benmilk Keventer Limited' to enhance milk supply in Kolkata. The initiative had a strong backbone of: . An ultra-modern, state-of-the-art plant - the most modern plant in Asia. . Fully equipped with complete automation and very high level quality and state-of-the-art control systems.

. The fully automated plant restricts milk is brought out from tankers till . World Bank funded the project under objective of providing fair treatment men.

any hand touch right from the time the point milk is finally packed. Operation Flood, Phase III with the to farmers and eliminating middle

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

STUDY OF DISTRIBUTORS AND RETAILERS

The study of distributors and retailers was conducted on a part of North Kolkata ,ie,Maniktala , Shyambazar , Ahmerst street , Raja Bazar , Malik Bazar, New Market , Dalhousie , Minto Park , Esplanade , Dharamtala , A.J.C.Road . The 3 major distributors in the area were interviewed. They are : Five Star Distributor 40A, W C Banerjee Street Kolkata-700006 Ph : 9831012141

A.S.Milk 2A , Scotland Lane Kolkata-700009 Ph : 9831016732

Jyoti Gupta 133/C , Raja Ram Mohan Sarani Kolkata-700009 Ph : 98319-50986 The method of personal interview and questionnaire was adopted to get the insights. The following mode of operation was found out through interviews : . An agreement is done by the company with the LAD for payment of a security deposit . The LAD will receive the delivery of poly pouch milk at the scheduled place mutually agreed upon and to sell the same to the third party retailers in the area specified by the dairy . The milk shall be sold by the LAD to the retailer already existing in that area and further outlets to be developed by the LAD . The agreement made at the beginning of the contract with the LAD shall remain valid for a specified period of time and shall be terminated on the

expiry of the period unless it is extended or renewed for any further period by mutual agreement . The LAD will take the delivery of the exact quantity of packaged milk supplied by the dairy in its place against the indent placed by the LAD the previous day. The Lad shall pay the cost of milk against the delivery of milk by an account payee cheque or banker.s cheque . The operational area of LAD shall be decided by mutual consent and may be increased or decreased as per the decision of dairy from time to time . The LAD shall increase the sales by at least 10% over and above the present sales within 3 months . The LAD shall be responsible for delivery of milk in good condition and in time to various outlets by his own arrangements of transport and manpower . If at any time the milk is found unfit for human consumption due to mishandling or bad storage by the LAD , strict action will be taken . The LAD is solely responsible for maintaining the sealing , quality , packaging , etc. of the milk packets received from the dairy . The milk once delivered to the LAD shall not be returned to the dairy at anytime and under any circumstances . The LAD shall also be responsible to leverage out the benefits given to the retailers by the company from time to time The results of the questionnaires filled by Lad are given below :-

Findings :

Interpretations : Earlier Mother dairy itself used to distribute milk directly to the local retailers, the distribution of milk through LAD.s started only last year. Since the distributors are new they hardly have any complain regarding retailers drop out within the year of work. However sales were largely affected due to competition from other local brands which are coming up daily with new schemes. According to the distributors, the margin was not sufficient to meet their expenses. Their profit remains negligible. Among the competitors also Mother dairy.s margin is the lowest. Again there is no incentive to work hard. The targets given by the company were not realistic and hence were not achieved. Their view about the quality of milk is also not satisfactory. According to them there is no consistency in the quality, which becomes a major reason of low consumer demand. When it comes to competitiveness Mother dairy lacks behind many brands and especially Amul which has captured the market with its mass advertisements and fine quality of product.

Apart from the survey with the three LADs ,others were also contacted in order to solve their grievances .The report prepared is shown below : SL NO. NATURE OF FEEDBACK LAD NO. 1 Commission is less in comparison to other competitors brand 99102,99003,99406 2 Leakage/Packing/Packaging problem 99102,99002,99105,99404,99104,99211,99219,99307,99203 3 Transport Problem (Vehicles are not reaching in time/Single vehicle supply is wanted by LAD) 99201,99307,99223,99207,99219,99403 4 DTM quality is very bad /thinner as compared to other companies 99003,99102,99219 5 Market visit required jointly with MDC officials for effective outcome 99201,99216,99215,99307 6 Other LADs are infiltrating into the area 99102,99301,99103,99307,99201,99207 7 Lifespan of the product is small compared to other brands 99203,99105

8 Short supply than indented quality on regular interval 99307,99408,99411,99004 9 Interested to distribute other product of MDC but not getting 99203,99101, 10 No free gift products are supplied by MDC on certain amount of sale to LADs as given by other competitor companies 99003 11 No advertisement material given by the company 99404,99102,99405,99201,99402,99305 12 Incentive scheme circular required 99411 13 Banking problem 99409 14 Curdling problem 99211,99002 15 Better incentive plans should be implemented 99104 16 Milk comes in Horizontal position

99211,99218,99219,99408

FEEDBACK REPORT OF LOCAL AREA DISTRIBUTORS OF MOTHER DAIRY CALCUTTA

After the distributors, the retailers were also interviewed in the similar manner. About 50 representative retailers were chosen for the purpose through convenience sampling. Findings:

Interpretations : During the interview most of the retailers were satisfied by their sales considering the location and competition in the market , however few who were not , considered decreasing quality as a reason of loss of sales apart from competition with other brands. Also it was witnessed that their is no competition from local dairy owners because they have a fairly differentiated market. According to the majorty the major competitor is Amul , with its vast marketing strategies , immense brand image and enormous quality of products, it has successfully captured the market.However few of the retailers also believed that the local brands like Red Cow,Thacker dairy,Amrit Fresh,Delight etc are emerging as great competitors .These brands are new and are giving huge margins and incentives , which is leading to push sales.

The margin of amul and Mother dairy is almost same in the area , however when compared to local brands it is quiet less. When it comes to competitiveness according to the retailers Mother dairy is not performing upto the mark.Their strategies does not meet their competitors. Brands like Red Cow offer huge discounts to their retailers whereas Mother dairy has no such schemes. Thus through applying root cause analysis we can come out with the main problems of distributors and retailers leading to decreasing market share. The fish bone diagram demonstrating the reasons is shown below:

Competition from local brands was one of the most contributing factor in decreasing market share. The local brands not only give high margin to the retailers but they also have great incentive schemes available for them thus influencing them for higher sales. Quality is the next major problem. There is no consistency in the colour or smell of the milk .Milk is judged by its thickness, which again has the same issue. Many retailers complained that sometimes the milk has a distinguishable

bad smell which annoys customers. Also there is a concern that the milk gets spoiled very easily compared to Amul. Mother dairy has an incentive plan according to which the distributors are supposed to increase sales incrementally by 1% every month. This target if achieve give the distributors an incentive of .05p/ ltr on their total sales for the year. In order to fulfil the target and increase the sale, the distributors give the retailers a part of their incentive,say .03p/ ltr. But even then it becomes very hard for the retailers to increase sale as the demand in the market is limited. Thus in these cases the only measure left is to increase sale through opening up of new retail points. Here we can see the lack of initiative of the distributors and the company. During the survey it was found that there were a lot of gaps in the area of the distributors. There was an unmet demand in the market. The distributors accept that because of lack of initiative they were unable to meet the requirements. During my project I identified few of them and thus new retail sale points were allotted. The details of the sale points generated are :

SL.No Name of the owner Address Quantity of milk (in ltres) 1 Pal Stores/ Biswajit Pal 177A, A.P.C.Road Kol-4 20 2 Satkari Ghosal

25,Sahitya Parishad St Kol-6 20 3 New Bengal Dairy/ J.P.Jain 274,Rabindra Sarani Kol-7 50 4 Tara Fancy Store/ Sanjay Harsh 242, Rabindra Sarani Kol-7 20

RESEARCH METHODOLOGY Purpose The basic purpose of this research is to find out the factors affecting the decision of the consumer to purchase milk Problem To find out problem is the first stage of the research process. It represents translating the management problem into research problem. It is rightly said, A problem well defined is half solved. Consumers have faith in the brand image of Mother dairy, still its losing share to Amul and other local brands Objectives The objectives of the study are as follows: 1) The objective of the study was to find the actual reason why people are not buying Mother dairy

SAMPLE Sampling Frame: A Sampling frame consists of a list of item from which the sample is to be drawn. The sample frame for this research constitutes the customers visiting retail outlets to purchase milk in North and East Kolkata. Sample Size: The sample size of the research was 315 individuals.

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

KMO: The KMO measures the sampling adequacy which should be greater than 0.5 for a satisfactory factor analysis to proceed. The measure of sampling adequacy (MSA) is .614 for the variables we initially taken for the consideration Bartlett test of sphericity: In accordance with the requirement of the test for principal component analysis, the value should lie well above the significance level. Here in our experiment the value (.00) does lie well above the pre-determined level of significance.

KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .614 Bartlett's Test of Sphericity Approx. Chi-Square 4228.375 Df 300 Sig. .000

Communalities :

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

Communalities

Initial Extraction 1_Decision to purchase milk depends upon the quality of milk 1.000 .705 2_Price is the most important decision making factor when it comes to purchase of milk 1.000 .909 3_Milk purchase is determined by the availability of milk where required

1.000 .669 4_Taste of milk does not affect the purchase decision 1.000 .706 5_Hygiene is an important decision making factor when it comes to purchase of milk 1.000 .621 6_Milk containing smell hampers purchase of milk 1.000 .614 7_Decision to purchase milk depends upon the ease of storage of milk 1.000 .528

8_Price is not an important decision making factor when it comes to purchase of milk 1.000 .923 9_Purchase of milk is determined by the availability of milk when required 1.000 .710 10_Milk containing smell is not at all preferred 1.000 .603 11_Leakage in milk packets hinder purchase decision 1.000 .715 12_Faith in the brand image increases purchase decision of milk 1.000 .782 13_Schemes available on purchase of a particular brand influence decision 1.000 .705 14_Awareness about the availability of milk influences purchase decision 1.000 .669 15_Heavy advertisement increases purchase of a particular variety of milk 1.000

.591 16_Purchase of milk varies with the percentage of fat content 1.000 .672 17_Decision to purchase milk depends upon the packaging of milk 1.000 .790 18_Availability of substitute products does not affect purchase decision 1.000 .883 19_A little increase in price when milk delivered at doorstep is not a major concern 1.000 .763 20_There is a satisfactory no of retailers in the locality 1.000 .583 21_The colour of the milk affects the purchase decision 1.000 .747 22_Decision to purchase milk depends upon the retailer.s reputation 1.000 .681

23_Decision to purchase milk depends upon the inconveniences occurred while purchasing 1.000 .706 24_Taste of milk affects the purchase decision 1.000 .756 25_Availability of substitute products affects purchase decision 1.000 .894 Extraction Method: Principal Component Analysis.

Total Variance Explained:

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

Total Variance Explained

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

Variance Cumulative % Total % of Variance Cumulative % 1 4.423 17.691 17.691 4.423 17.691 17.691 3.901 15.604 15.604 2 3.206 12.824 30.515 3.206 12.824 30.515 2.588 10.353 25.958 3 2.472 9.886

40.401 2.472 9.886 40.401 2.290 9.162 35.119 4 2.076 8.304 48.705 2.076 8.304 48.705 2.288 9.153 44.272 5 1.994 7.976 56.681 1.994 7.976 56.681 1.864 7.458 51.730 6 1.478

5.913 62.594 1.478 5.913 62.594 1.800 7.199 58.929 7 1.250 4.998 67.592 1.250 4.998 67.592 1.626 6.502 65.431 8 1.028 4.112 71.704 1.028 4.112 71.704 1.568 6.273 71.704 9

.918 3.673 75.377

10 .763 3.051 78.428

11 .729 2.914 81.342

12 .697 2.787 84.130

13 .584 2.338 86.467

14 .539 2.155 88.622

15 .459 1.836 90.458

16 .406 1.626 92.084

17 .374 1.495 93.579

18 .343 1.372 94.950

19 .305 1.220 96.171

20 .277 1.106 97.277

21 .246 .985 98.262

22 .190 .759 99.021

23 .132 .527 99.548

24 .081 .324 99.872

25 .032 .128 100.000

Extraction Method: Principal Component Analysis.

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

CONCLUSION

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

LIMITATIONS

The limitations of the project is as follows : 1. The study was conducted in North and Central Kolkata only ,so the limited area of the study may affect the conclusions 2. Some of the respondents could not give their proper response due to lack of time. They at times tend to get biased and project a rosy picture which may affect the reliability and relevance of the study 3. It might also be so that some respondents were not motivated enough to respond properly although full attempt was made to keep it as unbiased as possible. 4. There was no provision of visiting cards for the summer trainees which hinder communication at times 5. The duration of the project was short, so the scope of more in-depth evaluation was not possible

RECOMMENDATIONS

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

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

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

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

. Also it was seen through the survey that price is not a major concern for the consumers when it comes to a necessity like milk so the price can be increased by a rupee or two and the quality can be improved

. Mother Dairy is ISO and HACCP certified. The consumers should be explained about it through advertisements in order to make them aware

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

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

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

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

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

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

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

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

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

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

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

. Factory visits helped consumers a lot in understanding the product.LAD

should organize the same with the help of MDC officials

REFERENCES

http://www.motherdairycalcutta.com/ http://en.wikipedia.org/wiki/Main_Page

ANNEXURE Questionnaire DISTRIBUTOR

1. 2. 3. 4.

Name Address Phone Avg daily sales (in lts):-

. 1500 3500 . 3500 - 5500 . 5500 7500 . 7500 9500 . 9500+

5. How would you rate your retailers drop out? . Satisfactory . Unsatisfactory

6. Which type of milk sells the most?

. . . . .

DTM TM FCM CM SM

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

and 5 as best) :-

Particulars 1 2 3 4 5 Margin

Timeliness

Credit limit

Incentives

Demand of retailers

Quality

Packaging

Hygiene

Competitiveness

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

. YES . NO

9. Suggestions/Complains :

*---------------------------*

RETAILER

1. 2. 3. 4. 5.

Name of shop Address Phone Lad name Avg daily sales (in lts):-

. 10 50

. 50 150 . 150 300 . 300 450 . 450+

6. How would you rate your present sales? . Satisfactory . Unsatisfactory

7. If the answer to the above is unsatisfactory then please choose the reasons from below: . Competition from other brands . Competition from local dairy owners . Others

8. Which type of milk sells the most?

. . . . .

DTM TM FCM CM SM

9. Who is the major competitor of Mother dairy?

. Amul . Metro Dairy . Red Cow . Others

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

Punctuality of distributors

Competitiveness

Quality

Packaging

Awareness

11. Suggestions/Complains :-

*---------------------------* CONSUMER

1. Name 2. Address 3. Avg daily consumption (in lts):a) .5 - 1 b) 1 2 c) 2 3 d) 3 +

4. a) b) c) d) e)

The brand that comes to mind when it comes to purchase of milk Amul Mother Dairy Red Cow Thacker Dairy Others

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

a) YES b) NO

SLR No. Attributes Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree 1 Decision to purchase milk depends upon the quality of milk

2 Price is the most important decision making factor when it comes to purchase of milk

3 Milk purchase is determined by the availability of milk where required

4 Taste of milk does not affect the purchase decision

5 Hygiene is an important decision making factor when it comes to purchase of milk

6 Milk containing smell hampers purchase of milk

Decision to purchase milk depends upon the ease of storage of milk

8 Price is not an important decision making factor when it comes to purchase of milk

9 Purchase of milk is determined by the availability of milk when required

10 Milk containing smell is not at all preferred

11 Leakage in milk packets hinder purchase decision

12 Faith in the brand image increases purchase decision of milk

13 Schemes available on purchase of a particular brand influence decision

14 Awareness about the availability of milk influences purchase decision

15 Heavy advertisement increases purchase of a particular variety of milk

16 Purchase of milk varies with the percentage of fat content

17 Decision to purchase milk depends upon the packaging of milk

18 Availability of substitute products does not affect purchase decision

19 A little increase in price when milk delivered at doorstep is not a major concern

20 There is a satisfactory no of retailers in the locality

21 The colour of the milk affects the purchase decision

22 Decision to purchase milk depends upon the retailer.s reputation

23 Decision to purchase milk depends upon the inconveniences occurred while purchasing

24 Taste of milk affects the purchase decision

25

Availability of substitute products affects purchase decision

*---------------------------*