INTRODUCTION

This project is being carried out as a part of the academic curriculum, Master of
Business Administration, under Mahatma Gandhi University. This work is submitted in
partial fulfillment of the requirements for the award of the degree of Master of Business
Administration. As per the curriculum the final project work should be a specialization in
any one of the areas viz Marketing Management and Human Resource Management. A
report based on the project done is to be submitted and this is treated as a course carrying
300 marks. The organization selected by me is MILMA, THIRUVANANTHAPURAM
DAIRY. The period of study is for 45 days, from May 15th to June 30th.

Survival of the fittest’ as in the case of war had ever been the trend that ruled the
markets. To be the fittest in the Market, being the aim of each and every company,
competition becomes inevitable and unavoidable part of every business. Privatizations and
Globalization being the slogan of the day, companies cannot survive by simply doing a
good job. They must do an excellent job if they are to succeed in the increasingly
competitive global market place. With the recent liberalization of economy and the
globalization of markets, the business atmosphere in India has gone through a sea change.
Restapism and beurocracy which has been the ban of our country, has now vanished from
the scene.

RELEVANCE OF PRESENT RESEARCH

Though Milma have been in the milk market for a quite long time, it does not
know is detail about the other milk brands in Thiruvananthapuram dairy. This marketing
research tries to highlights the threats and the position of the other milk brands. Though
the Milma is in a strong position compared to the other milk brands it is useful to Milma,
to know about details of the other milk brands for improving its provision. The stringent
competition in the milk market urged the organization for an independent view of the
market and compels them to find out why people prefer other brands, and how can they be
made loyal customers of Milma.

1
 OBJECTIVES OF STUDY

 To identify the competitors of Milma in Thiruvananthapuram Dairy.

 To determine the factors which affect the competitiveness in the dairy industry.

 To analyze the influence of Sales Promotion on sales of milk.

 To ascertain the influence of Commission on sales of milk.

RESEARCH METHODOLOGY

Research is defined as human activity based on intellectual application in the

investigation of matter. The primary aim for applied research is discovering, interpreting,
and the development of methods and systems for the advancement of human knowledge
on a wide variety of scientific matters of our world and the universe. Scientific research
relies on the application of the scientific method, a harnessing of curiosity. This research
provides scientific information and theories for the explanation of the nature and the
properties of the world around us.

METHODS OF DATA COLLECTION

PRIMARY DATA

Primary data was collected through personnel interview and seeks answer to a set
of preconceived questions in a structural way. (Primary data are the actual information,
which are received by researcher for study from the actual field of research). The data
collected through interview and observation called primary data because the researcher
attains them from the field of research directly and for the first time. For this research the
researcher uses the following methods:-

 Personal Interview

2
  Schedule

SECONDARY DATA

Secondary data are the information, which are attained indirectly. The researcher
does not attain them himself or directly. Secondary data are generally attained from
published and unpublished materials. They can gathered from public documents such as
diaries, letters or they can gathered from public documents such as books, manuscripts,
records and census reports. Secondary data were collected also from the other sources like
company journals, company web site, company brouchers and internet.

SAMPLE UNIT

The sample unit consists of milk dealers of Thiruvananthapuram Dairy

(Attingal to Parasala).

SAMPLE SIZE

A sample size of 100 milk dealers of Thiruvananthapuram Dairy.

SAMPLING METHOD

The sampling method adopted was Simple random sampling.

RESEARCH TOOL

 Pie Diagram and Bar Charts

 Simple Percentage Analysis

 Chi Square Test

3
SIMPLE PERCENTAGE ANALYSIS

Percentage refers to a special kind of ratio. Percentages are used in making

comparison between two or more variables to find the efficacy of each variable.
Percentages are used to describe relationships among them replacing the common base
say (100) so that comparisons can be made easy and meaning full.

PERCENTAGE = NO. OF RESPONDENTS × 100

TOTAL NO OF RESPONDENTS

CHI- SQUARE ANALYSIS

Chi-square test was first used by Karl Pierson in the year 1990; the quantity x 2

describes the magnitude of discrepancy between theory and observation. It is defined as,

CHI – SQUARE TEST (X2) = (O – E) 2 / E

DEGREES OF FREEDOM = V = (R – 1) (C -1)

Were,
‘O’ = Observed Frequency
‘E’ = Expected Frequency
‘R’ = Number of Rows
‘C’ = Number of Columns

4
LIMITATION OF STUDY

 Since the research study has to be completed within a specified period, a small
segment of the dealers has been taken.

 The data were collected from respondents directly. The respondents have answered
the questions based on their state of perception at that point of time. This could
have led to slight variations in the data.
 Hesitations from the part of respondents to give information.

5
 CONCEPTS USED

COMMISSION

The payment of commission as remuneration for services rendered or products

sold is a common way to reward sales people. Payments often will be calculated on the
basis of a percentage of the goods sold. This is a way for firms to solve the principal-agent
problem, by attempting to realign employee’s interests with those of the firm.
Commission rates are generally based upon the achievement of specific targets which
have been agreed between management and the salesperson in question. Offering
monetary compensation in the form of commission alone, or commission in addition to
salary rather than simply a fixed salary, is intended to create a strong incentive for
employees to invest maximum effort into their work. Common industries where
commission is used include car sales, property sales, insurance broking and many other
sales jobs. A side effect of commissions is that in some cases, they can result to sales
people resorting to dishonest and fraudulent business practices in order to increase their
sales.

SALES PROMOTION

Sales promotion aims directly at inducing purchaser to buy a product. It involves

demonstrations, contest, price off, coupons, free samples, special packaging and money
refund offer. Sales promotion activities are designed to encourage resellers and sales
people to sell the product. Sales promotion is a non recurrent in nature and is for a short
period.

6
OBJECTIVES OF SALES PROMOTION

The fundamental objectives are Informing, Persuading and Reminding.

INFORMING

Informing is to educate the consumers about the product. They must have some
knowledge about the product offered by the producer. They should, therefore be informed
of the product. Free cases may be distributed to leading retailers who may be a source of
advertisement for other prospective consumers.

PERSUADING

Sales persons persuade consumers to buy products. They develop or reinforce a

favorable set of attitudes and influence their buying behavior. They supply comparative
information on various products so that consumers may be willing to purchase the
products promoted by them.

REMINDING

Reminding leads the firm to reinforce the previously satisfactory behavior of the
consumers. For this purpose, it provides suitable knowledge for recollection. Reminding
the consumers of their past satisfaction will persuade them to stay with the products and
prevent them from shifting to competitors.

7
 DAIRY INDUSTRY

The dairy industry is recognized as one of the largest and most important of food
industries. The dairy industry exists for one purpose – to provide, at a reasonable cost,
milk and milk products that satisfy the consumer’s needs and fulfills his nutritional
requirements. The industry means different things to the different participant- the
producers, the dairy handlers and consumers.

The word “Dairy” was derived from the Middle English word, “deirie” meaning
day or maid servant worked. Dairy now connotes a wide range of activities starting with
the production of milk in the farm to the point it reaches the consumer in the form of
liquid together by a diverse field of disciplines such as dairy science, animal husbandry,
crop husbandry, and dairy engineering. Management science is applicable in each of
these disciplines and integrates them, to achieve the objective of providing milk to the
consumer by making an optimum use of Earth’s renewable resources for production of
milk.

The importance of dairying stems from the role of milk in human nutrition. Food
serves two major functions in human nutrition, to provide energy and to furnish the
elements essential for growth and replacement of body tissues. All the three main forms
of food-carbo-hydrates, fats and proteins provide the energy, but only proteins can supply
nitrogen and amino-acids essential for growth and replacement of tissues. In planning for
human nutrition, there are two possible stages the first has a limited objective of holding
back hunger while the second is achieved by providing a balanced diet which includes a
certain quantity of animal protein to include the essential amino-acids in the diet. The
developed countries have achieved the second stage. The developed countries need to plan
their agriculture for providing adequate balanced nutrition from the available resources
with in the country. The relevance of the dairy industry, at this stage of planning for food,
is in promoting supply of balanced diet to the population.

In terms of biological value human nutrition egg protein is the most important,
followed by the protein from milk. Egg or milk protein can furnish all the amino-acids
essential for normal growth and healthy life processes, provided that they are consumed in

8
adequate amounts. Fish, meat and poultry products are also high in the scale of biological
value. Vegetable protein from wheat, maize, rice, beans and nuts are of low biological
value, particularly when it represents the only source of protein. The essential amino-
acids are not provided in sufficient quantities. In many of the developing countries, more
so in India, milk may form the only source of animal protein. “One quart (approximately
on litre) of milk furnishes approximately all the fat, calcium, phosphorus and riboflavin;
half the protein; one third of the vitamin A, acetic acid and thiamin; one fourth the calories
and with the expectation of iron, copper, magnesium and manganese, all the minerals
needed daily considerable amounts of nicotinic and choline are also provided”. Milk is
the secretion of mammary glands, produced primarily for feeding the young. All
mammals produce milk. However, milk is obtained for commercial consumption
purposes from domestic animals, particularly the cow. The milk of different species
essentially contains the same constituents. The composition may, however vary from
species to species in minor proposition. The variation in milk composition is likely to
occur within the species due to a number of factors like breed, age, stage of lactation,
individual variation, seasonal variation, variation from lactation to lactation, interval
between milking, first and last milk, fitness of the animal and feed provided to the animal.
Milk and cream are the main products of dairying. The other products are derived from
these principle products.

The industry faced with some general characteristics peculiar to dairying. The
production of milk is seasonal mainly because of the nature and purpose of milk
production. Milk is produced for the young calf and is, therefore, depended on the calving
season. However, the demand for milk and milk products remain the same throughout the
year. Milk is bulky and highly perishable. The milk handlers, therefore, have to process
the milk and store it under refrigeration or reduce the bulk by drying before storage.

Agriculture and allied industries account for nearly half the gross national income
of India, one fourth of which is from dairy. The national economy of certain European
countries like Denmark and Sweden are depended almost entirely on animal husbandry of
which dairying is a major industry. In the US, dairy industry alone contributes to one fifth
of the total agricultural income. Moreover, the consumer spends a fifth of his food

9
expenses on milk and milk and milk products. Apart from the contribution, dairing needs
to the economy and nutritional status of any country, the industry provides employments
to thousands of people. In the US, over a quarter million people were employed by the
diary industry in 2000. In the tropics, where dairying is less developed, millions earn there
income either partly or wholly from the dairy industry.

DAIRY INDUSTRY IN INDIA

10
 In India, dairying has been practiced as a rural cottage industry since the remote
past. Semi-commercial dairying started with the establishment of military dairy farms
and co-operative milk unions throughout the country towards the end of the nineteenth
century.

During the earlier years, each household in those countries maintained its ‘family
cow’ or secured milk from its neighbour who supplied those living close by. As the
urban population increased, fewer households could keep a cow for private use. The high
cost of milk production, problems of sanitation etc., restricted the practice; and gradually
the family cow in the city was eliminated and city cattle were all sent back to the rural
areas.

Gradually farmers within easy driving distance began delivering milk over regular
routes in the cities. This was the beginning of the fluid milk-sheds which surround the
large cities of today. Prior to the 1850s most milk was necessarily produced within a
short distance of the place of consumption because of lack of suitable means of
transportation and refrigeration.

The Indian Dairy Industry has made rapid progress since Independence. A large
number of modern milk plants and product factories have since been established. These
organized dairies have been successfully engaged in the routine commercial production
of pasteurized bottled milk and various Western and Indian dairy products. With modern
knowledge of the protection of milk during transportation, it became possible to locate
dairies where land was less expensive and crops could be grown more economically. In
India, the market milk technology may be considered to have commenced in 1950, with
the functioning of the Central Dairy of Aarey Milk Colony, and milk product technology
in 1956 with the establishment of AMUL Dairy, Anand. The industry is still in its
infancy and barely 10% of our total milk production under goes organized handling.

HISTORY OF INDIAN MARKET MILK INDUSTRY

11
 Beginning in organized milk handling was made in India with the establishment of
Military Dairy Farms.

 Handling of milk in Co-operative Milk Unions established all over the country on a
small scale in the early stages.
 Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945
 Pasteurization and bottling of milk on a large scale for organized distribution was
started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961),
Madras (1963).
 Establishment of Milk Plants under the Five-Year Plans for Dairy Development all
over India. These were taken up with the dual object of increasing the national level
of milk consumption and ensuing better returns to the primary milk producer. Their
main aim was to produce more, better and cheaper milk.

DAIRY INDUSTRY IN KERALA

12
 Milk is an unavoidable element in the life of Keralites. In olden days, Kerala was
far ahead in production of milk. But due to several reasons the production of milk is
defined. Milk producers in Kerala are in the grip of a major crisis following the flow of
large quantity of milk from outside the State at lower prices. According to a survey, the
state produces 20.61 lakhs tons of milk per annum. The production, according to market
sources, is insufficient to meet the demand of the state’s population. As a result, Kerala
has become a major market for milk produced in neighboring States. Supplies from Tamil
Nadu meet around 60% of the daily demand milk.

Rapid increase in milk processing and marketing companies has resulted in tough
competition leading to cut in prices. Thus, availability of milk at low prices from other
States has created a crisis for the milk producers in the State farmers said. A dairy expert
told Business Line that the only solution to the crisis was production of “good and pure
milk” by which the Kerala milk producers could compete and recapture the market Dairy
Development Board was created in 1962. The livestock Development and Milk Marketing
Board for milk procurement and marketing was set up, followed by the Kerala Co-
operative Milk Marketing Federation. But all these have failed to save the dairy sector
and the farmers.

One of the major problems being encountered is the non-availability of modern

facilities to process and stock the entire milk produced during the peak season (in the
rainy months). As a result, during these months, not only are restriction imposed on the
quantity procured but there is a cut in the prices by the co-operatives. The State has over
2,972 milk marketing their functioning unfavourable to the development of the sector.
When the societies run by NGOs procure milk at Rs.1o per litre from the farmers by
providing subsidy for cattle feeds, in Kerala they were being discouraged with taxes.
Kerala requires 68.5 lakh tons of cattle fodder, of which they only 40 tons are available
within the State. Non-availability of land and improved variety of fodder grass has
become major impediments.

13
 COMPANY PROFILE

"Milma" is the popular name given to Kerala Co-operative Milk Marketing

Federation (KCMMF). Milma started its operation in 1980 with its head office at
Thiruvananthapuram. It was started under the Indo-Swiss project. The project was
launched in 1963 on the basis of a bilateral agreement executed between the Swiss
Confederation and the Government of India. The project has made great strides in the
improvement of livestock farming in the state. One of them is the development of Swiss
Brown, a cross breed suited for the state's conditions. The project is now managed by the
Kerala Livestock Development and Milk Marketing Board. It main motive was to
implement the Operation Flood programme started by the National Dairy Development
Board (NDDB) in Kerala.

The project impact was so widespread that close to about 83 % of the adult cattle
of the state got converted to the new breed – Sunandini-, the milk production increased
by over ten times and the per capita availability of milk increased by over 7 times with
over a million families dependant on milk production. The project has succeeded in
integrating better technology and management to the traditional small holder production
system. It also demonstrated how the high productive, semi stall fed cows led to a
spontaneous decline in the total bovine population of the state from 34.6 lakh in 1977 to
21.86 lakh in 2003 when the total bovine population of India went through an upsurge.
This contributed immensely to environmental sustainability. By demonstrating a growth
model for productivity enhancement, the project not only impacted the million small
livestock holders in Kerala, but also millions outside the state.

The project demonstrated revolutionary institutional changes beginning with the

Indo Swiss project of Kerala, an autonomous institution under the govt. of Kerala to the
Livestock Development and Milk Marketing Board and then to the present autonomous
company - the Kerala Livestock Development Board, with the formidable dairy
cooperative system under the Kerala Cooperative Milk Marketing Federation (MILMA),

14
 under the able guidance of its first managing director S. Nagarajan IAS, spun off as
successful an independent entity.

The name milma represents:-

• 2,702 primary milk co-operative societies.

• 7.78 lakhs farmer members.
• Three Regional Co-operative Milk Producers' Union.
• Eleven Dairies capable of handling 9.90 lakhs litres of milk per day.
• Thirteen Milk Chilling Centers.
• Two Cattle Feed Plants with cumulative capacity of 600MT per day.
• One Milk Powder Plant of 10MT per day capacity.
• A well established Training Centre.
• 5,200 retail outlets.
• Over 32,000 people working either directly or indirectly for the functioning of
milma.

Apart from these we serve millions of consumers day-in and day-out.

MISSION

“Farmer’s prosperity through consumer satisfaction”

OBJECTIVES

 To channelize marketable surplus milk from the rural areas to urban deficit areas
to maximize the returns to the producer and provide quality milk and milk
products to the consumers.
 To carryout activities for promoting Production, Procurement, Processing and
Marketing of milk and milk products for economic development of the farming
community.
 To build up a viable dairy industry in the State.
 To provide constant market and stable price to the dairy farmers for their produce.

15
NETWORK

The Motto of Co-operation of "of the people, by the people and for the people" is
the foundation of the "three tier system" followed by the organization. At the village
level we have the Village Milk Co-operative Societies which have the local milk
producers as its members. These Village Co-operatives unite at the Regional level and
form Regional Co-operative Milk Producers' Unions. These Unions are federated at the
State level to form State Federation namely Kerala Co-operative Milk Marketing
Federation (KCMMF).

ASSOCIATES

Milma is in constant touch with other organizations in this sector. It is only

through this active exchange that milma grew from a small dairy co-operative to the
position it holds in Kerala today.

The Company’s Chief Associates are:-

• NATIONAL DAIRY DEVELOPMENT BOARD (NDDB):

NDDB, under Dr.V.Kurien’s guidance set up KCMMF in 1980. Ever since

then, there has been a very close co-operation between NDDB and the Federation.
NDDB are the originators of the Operation Flood Programme and have been our
funding agent for the Operation Flood Projects in Kerala.

• AMUL:

The Dairy Co-operatives of Gujarat have been the inspiration for the
development of such a vast network of dairy co-operatives in Kerala. Among the
co-operatives in Gujarat, the Kaira District Co-operative Milk Producers Union
(AMUL) is the fist in this sector. Our Co-operatives are called “Anand Pattern
Co-operative Societies” following the illustrious lineage of “AMUL”.

16
 • GOVERNMENT OF KERALA:

The phenomenal success of the Dairy Co-operatives in Kerala could not

have been achieved, without the foundation of animal husbandry activities, led by
the Animal Husbandry Department, Dairy Development Department and Kerala
Livestock Development Board, of the Government of Kerala.

KERALA COOPERATIVE MILK MARKETING FEDERATION FOLLOWS A

THREE TIER SYSTEM

KERALA CO-OPERATIVE MILK MAREKTING FEDERATION

THIRUVANANTHAPURAM ERNAKULAM REGIONAL MALAPURAM REGIONAL

REGIONAL CO-PERATIVE CO-OPERATIVE MILK CO-OPERATIVE MILK
MILK PRODUCER’S PRODUCER’S UNION PRODUCER’S UNION
UNION

THIRUVANANTHAPURAM
REGIONAL CO-OPERATIVE
ERNAKULAM, POVAKOD,
MILK PRODUCER’S UNION,
KOTTAYAM, KOZHIKODE,
KOLLAM,
THRISSUR, IDUKKI KANNUR, WAYANAD
PATHANAMTHITTA,
ALAPPUZHA

SOCIETIES (APCOS)

FARMERS
MILK PROCESSING
17
 The milk which is being collected from the primary societies is tested before the
milk is sent to the chilling centre or to the dairy.

The tests are:

1. Organoleptic tests

2. Fat%

3. SNF%

At the chilling centre that is in the dairy the sample of individual co-operative
society is tested for the following tests: -

1. Organoleptic

2. Temperature

3. Cloton Boiling

4. Acidity% (as lactic acid)

5. Fat%

6. SNF%

It is essential to check acidity and temperature of pooled milk before dispatching

to the dairy plant.

At milk plant the sample of each society is testes for following tests.

1. Organoleptic tests

2. Temperature At raw milk reception dock

1. Fat%

18
 2. SNF% In Laboratory

3. Acidity%

4. COB

The Toned Milk having 3.00% fat and 8.50% SNF, sugar and cardamom/Cocoa
powder/Coffee powder as flavoring agents. After dong all the tests which s essential, the
milk is pasteurized. After pasteurizing the milk is packed and stored in freezers.
According to the demand from the market, it is distributed.

FIG – 2.1

FLOW DIAGRAM OF MILK PROCESSING

RAW MATERIAL

DUMP TANK

CLARIFICATION

COOLING AND STORING

PREHEATING

STANDARDIZATION

LIQUID MILK (OPTIONAL)

CREAM BUTTER

HOMOGENIZATION
GHEE

PASTEURIZATION

PACKING

19
 COLD STORAGE

DISTRIBUTION

WHOLE MILK

STANDARD MILK

TONED MILK

DOUBLE TONED
MILK
PRODUCT PROFILE

Milma has a range of products. A marketing chain consisting of nearly 4000 retail
outlets, across the state ensures availability of milma's products to consumers. Milma with
its motto your health is our concern has become synonymous with assured quality of
milk and milk products. Milma's spectrums of products adhere to the PFA rules and are
released for distribution only after stringent quality checks.

Some of the main products that Milma has are:-

1. PASTEURASIZED MILK:

Milma market liquid milk in pasteurized form. The pasteurized milk contains
vitamin A. This pasteurized milk contains vitamin A. This enriched milk comes in three
varieties.

 Fat free milk

 Toned milk which contains 3% fat and 8.5% of SNF

 Standardized milk which contains .5% fat 9% SNF

Conveniently packed in 500 ml and 1 litre sachets, the fat content range of Milma’s Milk
has made it the popular health drink of young and old alike.

2. ICE-CREAM

20
 Milma ice-cream is available in a range of lip smacking flavours: vanilla,
chocolate, mango, strawberry and fruit & nut. In addition, our Ernakulam Union also
produces and distributes delicious "kulfi" and cream rolls. The only ice-cream in Kerala
market which is manufactured in a dairy and hence most fresh ice cream.

3. SAMBHARAM

Sambharam (butter milk) a favorite beverage of Kerala. Milma Sambharam, the

only product of its kind in the market, is very popular throughout the State. It comes in
convenient 200ml throw away sachets.

4. CURD

It is a fermented product prepared from pasteurized skim milk using Curd Culture
from National Dairy Research Institute (NDRI). It is delicious, tasty, free from
cholesterol and available in 500ml and bulk.

5. LASSI

It is a sweetened and flavored product prepared from curd. It is available in 200ml

pack and is a very good health drink for all age group.

GHEE

Ghee is a key ingredient in most Indian delicacies. Milma produces good quality,
pure ghee from butter or cream at all dairies. The ghee is available in convenient packs of
100gm to 15Kg.

BUTTER

Milma Butter prepared from the cream of milk contains 81% fat and less than
15.6% water. This is available in convenient 100gm, 200gm and 500gm family packs.
Available in salted and unsalted varieties.

21
TETRAPACK FLAVOURED MILK

Milma offers a range of flavoured health drinks in hygienic tetrapacks.

Cardamom milk has already captured the market and are available at all milma outlets.

REFRESH

In addition to milk drinks, milma also has a mango drink in the market. Refresh,
milma's mango drink is a favourite in the fruit drink sector.

PEDA

An indigenous milk product manufactured by evaporating water content from

wholesome cow's milk and sweetened with cane sugar. It is a nutritious and delicious
sweet bite for children. It is available in 25gm and 250gm cartons.

CREAM ROLL

Mixture of tasty ice-cream and tooty fruity encircled with oven fresh spong cake.
It is a delicious snack rich in milma cream.

MILMA SIP

Made from pasteurized skim milk, sweetened and flavoured. Available in 25ml
polyethylene tube in flavours like vanila, pineapple, strawberry, mango, and rose etc...
And served in chilled condition. It is a safe and nutritious substitute to all other sip-ups.

CATTLE FEED

Balanced cattle feed is the major input provided to the dairy farmers of the State
from the Federation. There is a high level of acceptability for this product in the market.
Milma is now producing 600MT cattle feed a day. It produces both mash and pellet form
of cattle feed. In addition to augment the balanced feed and to support vitamin level in

22
milk animal, milma has come out with milma mineral mixture - "milma min". The cattle
feed is distributed to farmers at reasonable rate through Apcos, Dealers and Government.

DEPARTMENTS

KCMMF HEAD OFFICE

Provides Staff Management functions to support its Units & Regional Milk
Unions. KCMMF Head Office has well established Marketing, Purchase, Quality Control,
Finance, Project, Systems and HRD departments.

MARKETING

• Brand Management
• Lean Flush Management
• Bulk trading of surplus products
• Institutional supply contracts
• Co-ordinate promotional activities
• Packaging & Product Development
• Procurement & Consumer Pricing

PURCHASE

• Centralized purchase of Dairy consumables

23
 • Purchase of Raw Materials for Cattle Feed Plants
• Purchase functions of KCMMF Head Office

QUALITY CONTROL

• Render technical & legal assistance to primary dairy co-operatives and Regional
Milk Unions
• Liaison and maintain quality of milk and milk products as per the standards
• Liaison with statutory authorities for bringing in suitable amendments in statutes
• Attend to consumer complaints on quality problems

FINANCE

• Financial management of KCMMF and its units

• Liaison with financial institutions for availing loan for creation of infrastructure.
• Liaison with Government for availing Government financial assistance
• Long term repayment and scheduling of loans
• Capital Management Schemes for primary co-operative societies
• Recommend remuneration of APCOS employees

PROJECTS

• Planning and execution of projects for creating infrastructure for Regional Milk
Unions and KCMMF
• Providing consultancy for execution of projects
• Liaisoning with statutory authorities like Factories and Boilers, Electrical
Inspectorate, Dept.of Explosives etc for obtaining approval and implementation of
projects
• Liaisoning with Government for land allocation, water, power and other amenities
• Estate management and assistance in maintenance of Plant & Machinery of
KCMMF Units

COMPUTER

24
 • Maintenance of Systems at KCMMF, Units and Regional Milk Unions
• Development of software’s to support various functions.
• Purchase of Hardware & Software
• Support Management Information System
• Networking
• Conducts Training programs for development of computer skills

HUMAN RESOURCE DEVELOPMENT

• Milma family has 2098 skilled, efficient and qualified personnel and has an
excellent labour relationship
• Takes active role in framing personnel policies and service rules
• Finalize long term wage settlement, bonus etc.
• Placement and career development activities

25
 COMPANY MILESTONES OF THE YEAR 2007-08

 Federation and all the three Regional Milk Unions joined hands with NDDB to be a
part of the national stream to promote co-operative brand. In the wake of competition
from private sector, KCMMF and the Regional Milk Unions readily accepted the well
planned Marketing Strategy of NDDB and the mnemonic symbol of NDDB was
introduced in the milk pouches in the State. Kerala is the first federation to adopt the
mnemonic symbol throughout the State.
 The year 2007 was a landmark year for milk production in the country, which reached
a new high. At over 100 million tonnes, milk output has breached the magical three-
digit level, making India the world’s second largest producer, after the European
Union (154 million tonnes) and accounting for nearly 15 per cent of the world
production of 675 million tonnes. The milk prices in India have been rising primarily
because economic growth and demographic pressure have pushed demand higher.
Prices also edged up because of the countries entry into the international market for
skimmed milk powder. High milk powder prices led the government to even place an
embargo on its export. Being milk deficit State, the year 2007-08 was a turbulent year
to Kerala and our dependency on other States have increased. With the active co-
ordination and involvement of our Regional Milk Unions we could get through the
problems faced by our organization in this front and we could meet the demand for
milk from our esteemed consumers.
 27 years ago, we responded to the challenges that threatened dairying in our State by
implementing the Operation Flood program with the active support and assistance of

26
 the National Dairy Development Board. NDDB guided in taking up us the challenges
with a program that contributed significantly to creating the self-reliant, vibrant dairy
industry that now greatly benefits millions of rural households across the country.
 Though, milk price was increased twice during the financial year and we passed on
nearly 70% of the increased consumer rupee to the farmer s, still our members are
struggling to continue in the profession due to spiraling cost of production. We would
believe that what the milk producer seeks to achieve by engaging his time and energy
in milk production is a remunerative price and a stable round the year market. If these
two needs are fulfilled, then the milk producer would continue in dairying and
perhaps, even expand even expand his business, of course within the boundaries of
other constrains.
 Increasing the selling price of milk and passing on maximum benefit to the farmers is
not the only solution and in long run we have to look for other ways. The choice of
cost plus approach for milk pricing would breed inefficiencies since it would ignore
the demand factor. Similarly this would be an open invitation for large-scale import of
milk from the less priced neighboring states through other channels and ultimately
work to the determent of the milk producers of our State. So also, we have to
appreciate that soaring prices in a shorter period could adversely affect domestic
consumption as many of the households are in the low-income category.
 Healthy growth in milk production can be achieved only through active intervention in
reducing the cost of production at farmer level and sustained investments in animal
feeding, breeding and health care.
 A heavy surge in raw material prices for manufacturing of cattle feed has placed us in
a crisis situation as cattle feed plants are running heavy losses. Though we tried to
keep the cattle feed prices at reasonable levels, the spiraling cost of raw material
forced us to increase the selling price of cattle feed which in turn resulted in increased
cost of production to our farmer members. The situation with regard to the availability
of raw material needed for cattle feed manufacturing was not at all rosy. The oil cakes
are costly and in short supply. Maize is being diverted for the production of ethanol as
bio-fuel due to its better conversion efficiency in the fuel.

27
 Molasses become a scarce material and availability and its price become serious
concern to us. The prices of rice bran have gone up mainly due to ban on export of
rice. Since the ingredient cost is going up regularly, the cost of the compounded feed
is also going up, beyond the reach of a small producer. As the cost of milk production
increases, the margin of profit for the producer decreases. This is quite discouraging
trend, especially for the milk producers who are sometime even forced to quit dairying
as a profession. We feel that it is high time we looked forward for alternative
nutritional technologies, which would help our members to get the nutritional
requirement for their animals. So also efforts to be made by through Government
intervention to cushion the dairy producers against inflation by extending subsidy to
the farmers for purchase of cattle feed at reasonable prices.

HIGHLIGHTS OF THE YEAR 2007-08

 Highest ever turnover achieved. The turnover of Rs.835.12 crores.

 With the active co-ordination and involvement of our Regional Milk Unions we could
get through the problems faced by our organization in this front and we could meet the
demand for milk from our esteemed consumers.
 Moreover, the farmer gets 75% of the consumer price back in his hands, unlike
vegetables and fruits for which the farmer gets only 15% of the value paid by the
consumer. The ensuring of remunerative prices to milk producers and the organization
of an efficient supply chain management system impacted on the milk production of
the State. It is our proud to be Milma acclaimed as the No: 1 brand in the State for the
2nd consecutive year in the survey conducted by Dhanam Magazine which shows the
popularity and consumer belongingness of this household brand.

TABLE NO – 2.1

MILK PROCUREMENT AND SALES (LTRS IN LAKHS)

28
 YEAR PROCUREMENT SALES
2000 2249.33 2308.69
2001 2487.11 2412.83
2002 2418.25 2558.59
2003 2179.73 2698.80
2004 2319.70 2841.21
2005 2630.14 3069.51
2006 2921.14 3340.05
2007 2722.90 3497.43
2008 2694.00 3475.00

(Ten lakhs = 1 million)

COMPANY FUTURE AIMS

• The dairy industry in the country is exposed to various challenges. The management
of lean-flush periods has always been a matter of major concern to Milma and it still
continues to be a key problem to be addressed on top priority. We have to re-dedicate
ourselves to uphold our oft-repeated slogan "Farmers' Prosperity through Consumer
Satisfaction". To keep farmer and consumer contended and happy in chorus is a
difficult task. We have to formulate strategies and plans to accomplish the aforesaid
task. Though a quarter century has elapsed since the drawn of Operation Flood
programme we are yet to achieve self-sufficiency in milk production. At the same time
we can be proud of our achievements in the area of infrastructure development, milk
consumption enhancement and economic and social development of rural dairy
farmers. A joint concerted effort of Milma and other Government agencies in Dairy
Development and Animal Husbandry will go a long way in fulfilling our dreams. We
have to strive to wipe off the accumulated losses and to improve the performance both
on the physical and financial fronts. Your trust, your confidence and your
encouragement will further energize and motivate us in this pursuit.
• Food crisis is a major threat now faced by the world and being the 2nd largest
populated country we are forced to bear the brunt more than others. Our Government
is giving priority to ensure food security to the citizens. To ensure food security we
have to enhance domestic production of agricultural commodities including dairy
products. This can only be achieved through ensuring remunerative prices to their
produce and encouraging them to produce more milk and other agriculture products.

29
 We have to strengthen the hands of our farmers by enhancing their capability to
produce more and thereby ensure the prosperity of our nation.

MARKETING ACTIVITES OF COMPETITORS

KSHEERA MILK

Ksheera milk is a product of Maranallor Ksheera Vyavasaya Sahakarana Sangam

Ltd. It comes under the Dairy Development Department. The plant of Ksheera is located
in Kuvalassery in Thiruvananthapuram District. They processes and markets milk in their
own plant. They markets milk in all areas of Thiruvananthapuram District. They procure
the milk from the local milk farmers and milk societies.

TYPES OF MILK

1. Toned Milk

2. Double Toned Milk

TYPES OF PACKET

1. 500 ml

THE COMPOSITION OF FAT & SNF

30
 1. Toned Milk - 3.0% 8.5%

2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

Rs.10.00/-

COMMISSION STRUCTUR

40 Ps per Packet

No. OF VEHICLES

28 number of Vehicles.

SUPPLY OF MILK

They supply milk during Morning and Evening Session.

QUANTITY OF MILK SUPPLY

10,000 lit/day

SYSTEM OF COLLECTION OF MONEY

The Ksheera collects money in advance. That is one day before issuing the milk
they have to pay the money.

31
CRITERIA FOR AGENCY

The agent has to pay Rs.1000/- in advance for getting Ksheera milk agency. The
presence of refrigerator is needed. They should have interest in selling milk.

No. OF DEALERS

They have 800 dealers in Thiruvananthapuram.

SALES PROMOTION

For the sales promotion they are using boards, banners and even newspapers for
advertisement.

OTHER PRODUCTS

1. Ksheera Sambharam.

2. Ksheera Curd.

3. Ksheera Ghee.

AMBADI MILK

The company has a processing plant in Vellanad, Thiruvananthapuram District.

They collect milk from local farmers and they have a procurement plant in Thenkashi,
Tamil Nadu and they collect milk from their also. They pack and market milk in
Thiruvananthapuram Dairy itself. In Thiruvananthapuram they have 11 main routes. And
they use private vehicles for the supply of milk on a contract basis.

32
TYPES OF MILK

1. Toned Milk

2. Double Toned Milk (is called KANNAN)

TYPES OF PACKET

1. 500 ml

THE COMPOSITION OF FAT & SNF

1. Toned Milk - 3.0% 8.5%

2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

Rs.10.00/-

COMMISSION STRUCTUR

75 Ps per Packet

No. OF VEHICLES

11 number of Vehicles.

SUPPLY OF MILK

33
 They supply milk during Morning and Evening Session.

QUANTITY OF MILK SUPPLY

1300 lit/day

SYSTEM OF COLLECTION OF MONEY

They follow the ready cash payment basis. They have credit facility only for the
institutions.

CRITERIA FOR AGENCY

The agency is given to the people who are interested and experienced in selling
milk.

No. OF DEALERS

They have 500 dealers in Thiruvananthapuram.

SALES PROMOTION

For sales promotion they are using boards, banners and even newspapers for
advertisement.

MAIN CLIENTS

34
 1. Big Bazaar.

2. Reliance.

3. Gokulam Hospital.

OTHER PRODUCTS

1. Ambadi Sambharam.

2. Ambadi Curd.

3. Ambadi Ghee.

A ONE MILK

The company processes and packs milk in its plant Patharam, Kollam District.
They collect milk from the farmers and also from outside the district. The company
mainly focuses on the interior places of Thiruvananthapuram District, where there is no
reach for Milma. That means direct reach to the customer.

TYPES OF MILK

1. Toned Milk

2. Double Toned Milk

TYPES OF PACKETS

35
 1. 250ml

2. 500ml

THE COMPSITION OF FAT & SNF

1. Toned Milk - 3% 8.5%

2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

250ml - Rs.5.00/-

500ml - Rs.10.00/-

COMMISSION STRUTURE

250ml - 25Ps per Packet

500ml - 50Ps per Packet

NO. OF VEHICLES

10 number of vehicles

SUPPLY OF MILK

They supply milk during Morning and Evening. In the morning their 95% of
supplies are done.

QUANTITY OF MILK SUPPLY

1,200 lit/day

SYSTEM OF COLLECTION OF MONEY

They follow ready cash payment basis.

36
CRITERIA FOE AGENCY

The agency is given to the people who are interested and experienced in selling the
milk.

NO. OF DEALERS

They have 450 dealers in Thiruvananthapuram.

SALES PROMOTION

For the sales promotion they are using boards, banners for their advertisement.

OTHER PROUCTS

1. A One Sambharam.

2. A One Curd.

ROYAL MILK

The company processes and markets milk in its plant near to Eramalloor,
Alappuzha District. In Thiruvananthapuram District they have no plant, they have only
the distribution. They procure milk from local milk farmers as well as other states.

TYPES OF MILK

1. Toned Milk

37
 2. Double Toned Milk

TYPES OF PACKET

1. 500 ml

THE COMPOSITION OF FAT & SNF

1. Toned Milk - 1.5% 8.5%

2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

Rs.10.00/-

COMMISSION STRUCTUR

75 Ps per Packet

No. OF VEHICLES

8 number of Vehicles.

SUPPLY OF MILK

They supply milk during Morning and Evening Session.

38
QUANTITY OF MILK SUPPLY

1000 lit/day

SYSTEM OF COLLECTION OF MONEY

They follow ready cash payment basis.

CRITERIA FOR AGENCY

The agency is given to the people who are interested and experienced in selling the
milk.

No. OF DEALERS

They have 400 dealers in Thiruvananthapuram.

SALES PROMOTION

For the sales promotion they are using boards, banners and even newspapers for
advertisement.

OTHER PRODUCTS

1. Royal Sambharam

2. Royal Kattimoru

3. Royal Ghee

39
 HERITAGE MILK

The company has production plant in Dindigul, Tamil Nadu. In

Thiruvananthapuram District they have only milk distribution. They procure milk from
Andhra Pradesh and Karnataka. In Thiruvananthapuram District they mainly focus on
Thiruvananthapuram City. And also they focus the Bakery, Tea shop etc.

TYPES OF MILK

1. Toned Milk

2. Double Toned Milk

TYPES OF PACKET

1. 500 ml

THE COMPOSTIOTN OF FAT &SNF

1. Toned Milk - 3.0% 8.5%

40
 2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

1. Rs.10.50/-

COMMISSION STRUCTURE

Rs.1/- per Packet

NO. OF VEHICLES

4 Numbers of Vehicles

SUPPLY OF MILK

They supply milk during Morning and Evening sessions.

QUANTITY OF MILK SUPPLY

1000 lit/day

SYSTEM OF COLLECTION OF MONEY

They follow ready cash payment basis

CRITERIA FOR AGENCY

The agency is given to the people who are interested and experienced in selling the
milk.

41
No. OF DEALERS

They have 300 dealers in Thiruvananthapuram.

SALES PROMOTION

For the sales promotion they are using boards, banners.

OTHER PRODUCTS

1. Heritage Curd

2. Heritage Ghee

MILMA BID TO COUNTER COMPETITION

42
 The Kerala Cooperative Milk Marketing Federation (Milma) here is gearing up to
face the competition put up by private dairies by introducing new products and
improving its marketing activities. The cooperative is now going about strengthening its
monopoly in the liquid milk market by launching milk in varying constitutions and also
flavoured milk. Milk in 200 ml packs to cater to the low-income group, long-life curd,
ice cream mixes are also in the offing. In Thiruvananthapuram city, Milma's sale is
around 1.1 lakh litres daily, its market share being more than 65 per cent, while the
private dairies sell around an estimated 30,000 litres. In the district alone, there are
several brands of milk available, such as A1, Royal, Ambadi, Shakthi, Soorya, Kairali,
Penta, Heritage and Ksheera.

Dairying is an important source of subsidiary income to small and marginal

farmers and agricultural labourers of Kerala. Being a balanced food, it is an essential part
of the diet of the children and invalids. The changing food habits of the people have
increased the demand for milk and milk products. As per the recommendations, the per
capita consumption of milk will be 240 gm/day, which means that the 333 lakh people of
Kerala need 79.92 lakh litres of milk per day. It is estimated that the State’s production
of milk during 2007 is only 58 lakh litres per day. The demand production gap is nearly
22 lakh litres, which is being met by milk-import from neighbouring States by Milma as
well as by private traders. Out of 58 lakh litres of milk produced within the State, the
organized sector handles only 18 percent. The rest is marketed either directly by the
producer or vendor in the unorganized sector. The major factor affecting enhanced milk
production in the State is the high cost of production compared to that of the
neighbouring States. It is difficult to establish equilibrium between the procurement and
selling prices without hurting both rural producers and urban consumers. The high cost
of production calls for a higher price for the product, but enhancing the selling price will
affect the common man’s budget. Further it will result in the flooding of cheaper milk
from neighbouring States that creates problem for our producers .Milma was formed
with a view to over come the issues pertaining to milk production in the State. Now the
Government has taken earnest steps to reorganize Milma to achieve the goals. The main

43
function of Milma is procuring milk from the Primary Cooperative Societies and its
distribution. It is only a marketing process. Unfortunately, Milma has no role in
production sector. Gradually Milma became a trader. The availability of milk at cheaper
rates from Karnataka and Tamil Nadu federations prompted Milma to collect it, as it was
profitable than local procurement. Now the decrease in production and conversion of
bulk quantity to milk powder has led to a shortage of milk and price hike in the State.
This has put Kerala Cooperative Milk Marketing Federation in a critical state that made
it to incur heavy loss on account of bringing milk from distant places.

(A MARKET STUDY CONDUCTED BY IIM, KOZHIKODE)

TABLE NO – 4.1

44
 TABLE SHOWING THE BRANDS THAT DEALERS DEAL

BRANDS NO.OF DEALERS PERCENTAGE

MILMA 100 100

KSHEERA 30 30

AMBADI 26 26

A ONE 18 18

ROYAL 14 14

HERITAGE 12 12

INTERPRETATION:

The above table reveals that all the dealers are dealing the Milma milk. Along
with the Milma milk they are dealing the other brands milk also.

In the other milk brands 30% of dealers are dealing the Ksheera milk, 26% of
dealers are Ambadi milk, 18% of dealers are A one milk, 14% of dealers are Royal milk
and the last 12% of dealers are dealing the Heritage milk.

FIG – 4.1

THE BRANDS THAT DEALERS DEAL

45
 120
100
100

80

60
N
G
A
R
C
P
E
T

40 30
26
18
20 14 12

0
MILMA KSHEERA AMBADI A ONE ROYAL HERITAGE

BRANDS

TABLE NO – 4.2

TABLE SHOWING THE SALES OF MILK BRAND IN A DAY

SALES PER DAY NO. OF DEALERS PERCENTAGE

BELOW 150 12 12
150-200 26 26
200-250 20 20
250-300 18 18
300-350 14 14
ABOVE 400 10 10

INTERPRETATION:

The above table reveals the dealers sales per day. In the table 12% dealers sales
below 150 packet, 26% dealers are selling between 150 – 200 packets, 20% dealers are
selling 200 – 250 packets, 18% dealers are selling 250 - 300 packets, 14% dealers are

46
selling the 300 – 350 packets and only 10% dealers are selling the above 400 packet per
day.

FIG – 4.2

THE SALES OF MILK BRAND IN A DAY

26
N
G
A
R
C
P
E
T

20
18
14
12
10

BELOW 150 150-200 200-250 250-300 300-350 ABOVE 400

SALESPER DAY (IN PACKETS)

TABLE NO – 4.3

TABLE SHOWING THE REASON FOR BRAND PREFERENCE

VARIABLES RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 RANK 6 TOTAL

PRICE 5 9 15 11 20 40 100

47
QUALITY 24 21 21 9 9 16 100
BRAND IMAGE 2 2 8 33 37 18 100
ADVERTISING 26 28 32 11 1 2 100
AVAILABILITY 43 36 13 6 2 0 100
PACKAGING 0 4 11 30 31 24 100

TABLE NO – 4.3.1

TABLE SHOWING THE RANKIG OF ATTRIBUTES

VARIABLES RANK 1 PERCENTAGE

PRICE 5 5
QUALITY 24 24
BRAND IMAGE 2 2
ADVERTISING 26 26
AVAILABILITY 43 43
PACKAGING 0 0

INTERPRETATION:

The above table reveals that the dealers given importance to the attributes in order
of availability, advertising and quality while the brand preference.

In the ranking the 43% dealers are rank the availability, 26% dealers are rank the
advertising and 24% dealers are the rank the quality.

FIG – 4.3

THE RANKIG OF ATTRIBUTES

48
 0%

5%

PRICE
24% QUALITY
43%
BRAND IMAGE
ADVERTISING
AVAILABILITY
2%
PACKAGING

26%

TABLE NO – 4.4

TABLE SHOWING THE MOST SELLING MILK BARND

BRANDS NO. OF DEALERS PERCENTAGE

MILMA 26 26

KSHEERA 23 23

AMBADI 16 16

A ONE 14 14

ROYAL 12 12

HERITAGE 9 9

INTERPRETATION:

The above table reveals the most selling milk brand. In this table Milma is the
most selling milk brand, 26% dealers are selling this milk. After Milma, Ksheera in the
second selling milk brand, 23% dealers are selling this milk. Then after comes the other
milk brand.

49
 FIG – 4.4

THE MOST SELLING MILK BRAND

9%

26%
12%
MILMA
KSHEERA
AMBADI
A ONE
14%
ROYAL
HERITAGE

23%

16%

TABLE NO – 4.5

TABLE SHOWING THE FACTORS THAT INFLUENCE THE CUSTOMER

FACTORS NO. OF DEALERS PERCETAGE

PRICE 8 8

QUALITY 28 28

AVAILABILITY 32 32

50
 BRAND IMAGE 6 6

ADVERTISING 20 20

PACKAGING 6 6

INTERPRETATION:

The above table reveals the factors that influence customer to purchase the
particular milk brand.

In 32% of dealers saying that the availability of milk brand is the most important
factor that influences the customer. Then 28% of dealers say that the quality of the milk
brand is also another factor for the purchase of the milk brand. The 20% dealers say the
advertising is the other factor for the purchase of the milk brand

FIG – 4.5

THE FACTORS THAT INFLUENCE THE CUSTOMER

51
 6% 8%
20% PRICE
28%
QUALITY
6% AVAILABILITY
BRAND IMAGE
ADVERTISING
32%
PACKAGING

TABLE NO – 4.6

TABLE SHOWING THE MOVEMENT RATE OF MILMA MILK

RESPONSE MOVEMENT RATE PERCENTAGE

GOOD 29 29

AVERAGE 42 42

POOR 29 29

INTERPRETATION:

The above table reveals the movement rate of Milma milk. In this table 42% of
dealer’s response that the Milma milk movement is average. 29% of dealers response that
good, 29% of dealers repose that poor.

52
 FIG – 4.6

MOVEMENT RATE OF MILMA MILK

42
29 29
N
G
A
R
C
P
E
T

GOOD AVERAGE POOR

RESPONSE

TABLE NO - 4.7

TABLE SHOWING THE BRAND WHICH GIVES HIGH COMMISSION

BRANDS NO. OF DEALERS PERCENTAGE

53
 MILMA 10 10

KSHEERA 20 20

AMBADI 25 25

A ONE 15 15

ROYAL 18 18

HERITAGE 12 12

INTERPRETATION:

The above table reveals the brand which gives the high commission. In this table
25% of dealer’s opinion that Ambadi milk gives the high commission. 20% of dealer’s
opinion that the Ksheera mik is second in high commission gives milk brand. 18% of
dealer’s opinion Royal milk is third place in high commission milk.

The commission of Milma milk is very low compare to any other milk brands.

FIG – 4.7

THE BRAND WHICH GIVES HIGH COMMISSION

54
 30

25

20

15
25
N
G
A
R
C
P
E
T

10 20
18
15
12
5 10

0
MILMA KSHEERA AMBADI A ONE ROYAL HERITAGE

BRANDS

TABLE NO - 4.8

TABLE SHOWING THE SATISFACTION LEVEL OF COMMISSION

GIVEN BY MILMA

RESPONSE NO. OF DEALERS PERCENTAGE

YES 60 60

NO 40 40

INTERPRETATION:

The above table reveals the satisfaction level of commission given by Milma.
From the 100 dealers 60% of dealers are satisfied by the commission given by Milma.
And 40% dealers are not satisfied with the commission given by Milma.

55
 FIG – 4.8

SATISFACTION LEVEL OF COMMISSION GIVEN BY MILMA

60
N
G
A
R
C
P
E
T

40

YES
NO

RESPONSE

TABLE NO - 4.9

TABLE SHOWING THE RECOMMENDATION OF DEALERS

BRANDS NO. OF DEALERS PERCENTAGE

56
 MILMA 15 15

KSHEERA 22 22

AMBADI 20 20

A ONE 18 18

ROYAL 14 14

HERITAGE 11 11

INTERPRETATION:

The above table reveals the dealers recommendation of milk brand to the
customer. 22% dealers are recommended the Ksheera milk, 20% of dealers are
recommended the Ambadi milk and 18% dealers are recommended A one milk.

FIG – 4.9

THE RECOMMENDATION OF DEALERS

57
 HERITAGE 11

ROYAL 14

N
D
A
R
B
S A ONE 18

AMBADI 20

KSHEERA 22

MILMA 15

PERCENTAGE

TABLE NO – 4.10

TABLE SHOWING THE SATISFACTION LEVEL OF SALES PROMOTION

GIVEN BY MILMA

RESPONSE NO. OF DEALERS PERCENTAGE

YES 58 58

NO 42 42

INTERPRETATION:

The above table reveals the satisfaction level of sales promotion given by Milma.
From the 100 dealers 58% of dealers are satisfied by the sales promotion given by Milma.
And 42% dealers are not satisfied with the sales promotion given by Milma.

58
 FIG – 4.10

SATISFACTION LEVEL OF SALES PROMOTION GIVEN BY MILMA

70

60
58
50

40
42

30
N
G
A
R
C
P
E
T

20

10

0
YES NO
RESPONSE

TABLE NO - 4. 11

TABLE SHOWING THE BRAND WHICH GIVES HIGH SALES PROMOTION

BRANDS NO. OF DEALERS PERCENTAGE

59
 MILMA 18 18

KSHEERA 25 25

AMBADI 20 20

A ONE 15 15

ROYAL 12 12

HERITAGE 10 10

INTERPRETATION:

The above table reveals the milk brands which gives the high sales promotion. On
this table 25% of dealer’s opinion that the Ksheera milk is providing the high sales
promotion. Then 20% of dealer’s opinion that Ambadi milk is providing the sales
promotion. Only 18% dealer’s are opinion that Milma milk providing the sales promotion

FIG – 4.11

THE BRAND WHICH GIVES HIGH SALES PROMOTION

60
 30

25 25

20 20
18
15 15
12
N
G
A
R
C
P
E
T

10 10

0
MILMA KSHEERA AMBADI A ONE ROYAL HERITAGE

BRANDS

TABLE NO – 4.12

TABLE SHOWING THAT MILMA IS THE TOP MOST MILK BRAND

IN THE DAIRY PRODUCT

RESPONSE NO. OF DEALERS PERCENTAGE

AGREE 68 68

DISAGREE 32 32

INTERPRETATION:

The above table reveals that Milma is the top most milk brand in the dairy product.
68% dealers are agreeing with the opinion because of the brand image of the company.

61
Just 32% of dealers are not agreeing with the opinion because they saying that other dairy
products also available in the market.

FIG – 4.12

MILMA IS THE TOP MOST MILK BRAND IN THE DAIRY PRODUCT

32%

AGREE
DISAGREE

68%

TABLE NO - 4. 13

TABLE SHOWING THE SALES PROMOTIONAL SUPPORT EXPECTED

FROM THE MILK BRANDS

62
 RESPONSE NO. OF DEALERS PERCENTAGE

PRICE OFFS 13 13

CREDIT FACILITY 53 53

DISPLAY ALLOWANCE 27 27

FREE GOODS 7 7

INTERPRETATION:

The above table reveals the dealers expectation of sales promotional support from
the milk brand. In the 100 dealers 53% of dealers are normally expected the credit facility
from the part of milk brands. 27% of dealers are expected the display allowance. 13% of
dealers are expecting price offs and rests of 7% dealers are expecting free goods.

FIG – 4.13

THE SALES PROMOTIONAL SUPPORT EXPECTED

FROM THE MILK BRANDS

63
 FREE GOODS 7

DISPLAYALLOWANCE 27
O
N
R
P
S
E

CREDIT FACILITY 53

PRICE OFFS 13

PERCENTAGE

TABLE NO – 4.14

TABLE SHOWING THE SATISFACTION LEVEL OF TIMELY MILK

SUPPLY OF MILMA

RESPONSE NO. OF DEALERS PERCENTAGE

YES 22 22

NO 78 78

INTERPRETATION:

The above table reveals the timely milk supply of Milma. In 100 dealers 78% of
dealers are not satisfied the timely supply of Milma milk. 22% of dealers are satisfied the
timely supply of Milma milk.

64
 FIG – 4.14

THE SATISFACTION LEVEL OF TIMELY MILK

SUPPLY OF MILMA

78
N
G
A
R
C
P
E
T

22

YES NO

RESPONSE

TABLE NO – 4.15

TABLE SHOWING THE SUGGESTIONS TO IMPROVE THE SALES OF

MILMA MILK

RESPONSE NO. OF DEALERS PERCENTAGE

SUGGESTIONS 32 32

NO SUGGESTIONS 68 68

65
INTERPRETATION:

The above table reveals the suggestions from the dealers for the improvement of
sales of Milma milk. From the 100 dealers 68% dealers have no suggestion and 32% of
dealers have suggestion.

FIG – 4.15

SUGGESTIONS TO IMPROVE THE SALES OF MILMA MILK

78
N
G
A
R
C
P
E
T

22

YES NO

RESPONSE

CHI-SQUARE TEST

Chi-square test is applied to test the goodness of fit, to verify the distribution of
observed data with assumed theoretical distribution. Therefore it is a measure to study the
divergence of actual and expected frequencies; Karl Pearson’s has developed a method to
test the difference between the theoretical (hypothesis) and the observed value.

TEST OF GOODNESS OF FIT

66
 If we have a set of frequencies of a distribution obtained by an experiment and if
we are interested in knowing whether these frequencies are consistent with those which
may be obtained based on some theory (or hypothesis), then we can use X2 test of
goodness of fit for this purpose.

STEPS FOR THE X2 TEST OF GOODNESS OF FIT

1. H0: There is goodness of fir between observed and expected frequencies.

2. Compute the test statistic, X2 = ∑(0 – E)2/ E where ‘O’ stands for observed
frequencies and ‘E’ stands for expected frequencies are to be computed.
3. Degree of freedom = n-r-1 where ‘r’ is the number of independent constraints to be
satisfied by the frequencies. For frequencies distribution, r is the numbers of
parameters computed from the data.
4. Obtain the table value of X2 for the degree of freedom and for the desired level of
significance.
5. If the calculated value of X2 is less than the table value we conclude that there is
goodness of fit.

Chi – square test (X2) = (O – E) 2 / E

Degrees Of Freedom = V = (R – 1) (C -1)

Were,
‘O’ = Observed Frequency
‘E’ = Expected Frequency
‘R’ = Number of Rows
‘C’ = Number of Columns

67
For the chi-square test the table value has taken @ .05% level of significance.

HYPOTHESIS

HO: There is no significant relationship between Sales Promotion and Sales of milk.
H1: There is a significant relationship between Sales Promoting and Sales of milk.

TABLE NO – 4.16

CHI – SQUARE TEST IS CONDUCTED TO ANALYZE THE RELATIONSHIP

BETWEEN SALES PROMOTION AND SALES OF MILK

CROSS TABLE

SALES PROMOTION OF SALES OF MILMA MILK

TOTAL
MILMA GOOD AVERAGE POOR
YES 19 29 10 58
NO 10 13 19 42
TOTAL 29 42 29 100

O E (O – E) (O – E)2 (O – E)2 / E
1 16.8
2.18 4.7524 0.2825
9 2
2 24.3
4.64 21.5296 0.8838
9 6
1 16.8
-6.82 46.5124 2.7653
0 2
1 12.1
-2.18 4.7524 0.3902
0 8
1 17.6
-4.64 21.5296 1.2205
3 4
1 12.1 6.82 46.5124 3.8188

68
 9 8
TOTAL 9.3611

X2 = ∑ (O – E) 2 / E = 9.3611
Degree of freedom = r–1×c–1
= 3–1×2–1
= 2×1
= 2
Level of Significance = .05
Calculated Value = 9.3611
Table Value = 5.9915

INTERPRETATION:

The calculated value is more than the table value. So, the Null hypothesis is
rejected. Hence, there is a significant relationship between Sales Promotion and Sale of
milk.

HYPOTHESIS

HO: There is no significant relationship between Commission and Sales of milk.

H1: There is a significant relationship between Commission and Sale of milk.

TABLE NO – 4.17

CHI – SQUARE TEST IS CONDUCTED TO ANALYZE THE RELATIONSHIP

BETWEEN COMMISSION AND SALES OF MILK

CROSS TABLE
69
 SALES OF MILMA MILK
COMMISSION OF MILMA TOTAL
GOOD AVERAGE POOR
YES 19 30 11 60
NO 10 13 17 40
TOTAL 29 43 28 100

O E (O – E) (O – E)2 (O – E)2 / E
1 17.
1.6 2.56 0.1471
9 4
3 25.
4.2 17.64 0.6837
0 8
1 16.
-5.8 33.64 2.0024
1 8
1 11.
-1.6 2.56 0.2207
0 6
1 17.
-4.2 17.64 1.0256
3 2
1 11.
5.8 33.64 3.0036
7 2
TOTAL 7.0831

X2 = ∑ (O – E) 2 / E = 7.0831
Degree of freedom = r–1×c–1
= 3–1×2–1
= 2×1
= 2
Level of Significance = .05
Calculated Value = 7.0831
Table Value = 5.9915

70
INTERPRETATION:

The calculated value is more than the table value. So, the Null hypothesis is
rejected. Hence, there is a significant relationship between Commission and Sale of milk.

FINDINGS

 The sales promotional activities to the dealers are not effective.

 Though the brands awareness is 100%, the sale of the Milma milk is very poor in
some regions.

 The availability is the main factor that influences the dealers and customers to prefer a
particular milk brand.

 The dealers are not satisfied with the replacement of damaged milk.

71
 The commission structure to the dealers is very low compared to the all other brands.

 The dealers are not satisfied with the quality of the Milma milk.

 The dealers are not satisfied the timely supply of Milma milk.

 The dealers expect the sales promotion support like credit facility, display allowance
but they are not getting it.

 The dealers facing the shortage of Milma milk.

SUGGESTIONS

 The commission to the dealers is less compared to the all other brands in
Thiruvananthapuram Dairy. So Milma has to increase the commission for getting
more sales.

72
 The Milma milk brand has to give attention for the timely supply of milk.

 The availability of Milma milk in the rural area is very less. So the Milma has to
concentrate in the rural area too.

 Milma should offer incentive schemes to dealers for motivating sale of Milma milk.

 There is a growth potential in the market regions like Kattakada, Vembayam and
Neyyatinkara, so Milma should also concentrate on these regions.

 To ensure the prompt replacement of damaged milk.

 To give the credit facility to the regular dealers of Milma milk.

 Ensure the good quality milk to the dealers.

73
 CONCLUSION

Milma, “The goodness Kerala wakes up to” has good image in the minds of
people. Milma is the first and inimitable organization which created a revolution in
Procurement, Processing, Marketing and Distribution of pure milk in the state. “Your
health our concern” has now becomes a synonym for assured quality. The name Milma is
now familiar with each and every house in Kerala.

Though Milma have been in the milk market for a quite long time, it does not
know is detail about the other milk brands in Thiruvananthapuram Dairy. This marketing
research tries to highlights the threats and the position of the other milk brands. Though
the Milma is in a strong position compared to the other milk brands it is useful to Milma,
to know about details of the other milk brands for improving its provision. The stringent
competition in the milk market urged the organization for an independent view of the
market and compels them to find out why people prefer other brands, and how can they be
made loyal customers of Milma.

Even though much efforts have been taken to ensure the credibility of this report it
may be worth while to say that the more areas of this topic could be used for further
research studies.

74
 BIBLIOGRAPHY

PHILIP KOTLER : “MARKETING MANAGEMENT”

PRENTICE HALL OF INDIA (P) LTD,
NEW DELHI.

WILLIAM G. ZIKMUND : “BUSINESS RESEARCH METHODS”

AKASH PUBLISHING HOUSE,
NEW DELHI.

S.C.GUPTA
V.K.KAPOOR : “FUNDAMENTALS OF APPLIED
STATISTICS”
SULTAN CHAND & SONS,
NEW DELHI.

INTERNET SOURCE : www.indiandairy.com

www.milma.com
www.google.com
www.wikipedia.com

75
 SCHEDULE

Dealer’s Name:…………………………...

Location:………………………………….

1. What are the brands that you deal with?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

2. Sales of milk brand in a day?

a) Below 150 b) 150 - 200 c) 200 - 250

d) 250 - 300 e) 300 - 350 f) Above 400

3. Rank the milk brands on the following attributes?

Brand Pric Quali Brand Advertisi Availabil Packagi

Name e ty Image ng ity ng

76
Milma
Ksheera
Ambadi
A One
Royal
Heritage

4. According to you which are the most selling milk brand?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

5. The most important attribute that influence the customer?

a) Price b) Quality c) Availability

d) Brand Image e) Advertising f)

Packaging

6. Identify the Unique Selling Proposition (USP) on each milk brands?

a) Milma ………… b) Ksheera ……………… c) Ambadi ……….

……….

77
 d) A One ………… e) Royal …………………… f) Heritage
……………….

7. How do you rate the sales movement of Milma milk?

a) Good b) Average d) Poor

If less than average specify the

reason............................................................

8. Which milk brand gives the high Commission?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

9. Are you satisfied with the Commission provided by Milma?

Yes No

If no specify the
reasons……………………………………………………………………………
…

78
10. Which milk brand do you recommend to the customer?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

11. Are you satisfied with the Sales promotion activities given by
Milma?

Yes No

If no specify the
reason......................................................................................

12. Which milk brand gives the high sales promotion?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

13. Milma is the most top milk brand in the dairy product? Do
you agree?

Agree Disagree

79
 If disagree specify the
reason………………………………………………………………………

14. What kind of Sales promotional supports do you normally expect

from the milk brands?

a) Price offs b) Credit facility

c) Display allowance d) Free goods

15. Are you satisfied with the timely milk supply of Milma?

Yes No

16. Any other suggestions to improve the sales of Milma milk?

………………………………………………………………………………………
………………………………..

THANK YOU

80