A

REPORT
ON
CHANNEL
MANAGEMENT
OF
OMFED

Submitted by-
Soumita patra(67)
Nishith
goenka(78)
 Shikha sinha(89)
Sreeji s nair(100)
Lalsa kumara(111)
Pritam P. Das(122)

ACKNOWLEDGEMENT

We thank Prof. Krishna Das Gupta who gave us the opportunity to

do this project and made us earn the knowledge of marketing
practically.

We would also like to thank the Marketing Manager of Omfed, Mr.

Raj, owner of Raj Enterprises, and Mr. Rajeev Hans, distributor of
Amul, for providing us the details about the company and its
distribution process and helped in completion of this project without
whose help we could not have completed this project. And our
special thanks to those who directly or indirectly supported us to
complete this project successfully.
 CONTENTS
1. Introduction
1.1 Objective

1.2 Achievement

1.3 Branches of company

2. Product Mix
2.1 Width
2.2 Length
2.3 Depth
2.4 Consistency
3. Methodology

3.1 Findings
3.1.A At retailer level
3.1.B At distributor level
4. Channel Distribution
• OMFED
• Amul

5. Conclusion
6.Recommendation
Appendix I
Appendix II

EXECUTIVE SUMMARY
As per the survey conducted with OMFED, the details on
distribution channel, margins allowed to distributors and retailers,
the product mix, the fast moving and slow moving products were
obtained.

OMFED has two distribution channels – direct distribution to their

booth and though the distributors to the retailers. OMFED
distributes its products through distributors to the retailers. They
allow a margin of about 15% to 20% to the retailers whereas 8%
to 10% to its distributors. The Company does not indulge in
promotion schemes for its existing and fast moving brands.
However, for new brands they have promotion schemes.

Maximum revenue is generated from curd. Fast moving products

are milk, ghee and curd, and slow moving brands are flavored
milk, cold coffee and Delight Juice.

OMFED has a replacement policy for damaged goods provided it

is within the expiry date. The whole process of replacement takes
about 20 days.

Usually distributors of OMFED don’t keep the stock with them.

They directly take products from the company and distribute to
the retailers as per the advance orders received.
Comparing OMFED with Amul, the latter has only one channel of
distribution – distributor to the retailers. The profit margin for the
distributor is 9% and for retailers it is 7.5%. Amulspray generates
maximum revenue and it is also the fast moving brand of Amul.

1. INTRODUCTION
OMFED comes under The Orissa State Co-operative Milk Producers’
Federation Ltd., the present Chairman cum MD is Dr Hrusikesh Panda.
The OMFED product categorizes into milk and milk product,
horticulture product, khandhamal organic product ,cattle fed product,
though OMFED is known as one of the premier milk producer

OMFED marketing area is divided into twelve zones all over Orissa.
The corporate office is in Shahid Nagar, Bhubaneswar and the zones are
in, Rourkela, Sambalpur, Balasore, Dhenkanal, Jaypore, Tangi,
Berhampur, Keonjhar, Tirtol, Cuttack, Bhawanipatna, and the fruit
processing is situated in Samantarapur, Bhubaneswar.

1.1 Objectives
To carry out activities for promoting production, procurement,
processing and marketing of milk & milk products for economic
development of the rural farming community. Development and
expansion of such allied activities as may be conducive for the
promotion of the dairy industry. Improvement and protection of milch
animals and economic betterment of those engaged in milk production.
In particular and without prejudice to the generality of the forgoing
objective, the federation may Purchase and/or erect building, plant
machinery and other ancillary objects to carry out business. Study
problems of mutual interest related to procurement, marketing of dairy
and allied products. Purchase commodities from the members of other
sources without affecting the interest of the members, process,
manufacture, distribute and sell them same, arrange to manufacture /
purchase and distribute balanced cattle feed and for the purpose to set
up Milk collection and chilling centers, Milk Processing Plants,
Product factories etc, in any of the district covered under its area of
operation. Provide veterinary aid and artificial insemination services and
to undertake animal husbandry activities so as to improve animal health
care disease control facilities. Advice, guide and assists the Milk Union
in all respects of management, supervision audit functions. Render
technical, administrative, financial and other necessary assistance to the
member unions and enter in to collaboration agreement with someone, if
the need arises. Advise the member unions on price fixations, public
relation and allied matters

1.2 Achievements:
The year of operation started from 1997 and it achieved great height in
sale of milk &milk product .The organization dcs increased from 1016
to 4387 in the year 2007-08. Farmer membership also increased from
92476 to 236199 from the starting year to 2008 .milk procurement
increased from 76770 to 360256

1.3 Branches of OMFED factory and

its
corporate office.
2. PRODUCTS MIX
Product mix is a combination of products manufactured or traded by the
same business house to reinforce their presence in the market, increase
market share and increase the turnover for more profitability. Normally
the product mix is within the synergy of other products for a medium
size organization. However large groups of Industries may have
diversified products within core competency. One of the realities of
business is that most firms deal with multi-products .This helps a firm
diffuse its risk across different product groups/Also it enables the firm to
appeal to a much larger group of customers or to different needs of the
same customer group .It sought to satisfy the needs of the middle and
upper middle income group of consumers. In other words it’s a
composite of products offered for sale by a firm. And OMFED is very
perfect example of this.
Product mix of OMFED can de determined on the basis its:-

2.1 Width
The width of a product mix refers to how many different product lines
the company carries.
• Milk & Milk Products
• Horticulture Products
• Khandamala Organic Products
• Cattle feed

2.2 Length
The length of a product mix refers to the total number of items in the
mix.
Milk & Milk product
Omfed peda
Skimmed Milk
Cow Milk
Cold Coffee
Sweetened Flavoured Milk
Butter milk
Ghee
Sweet curd
Plain Curd
Milk Curd
Table Butter
Lassi
Chennapod
Cottage Cheese (Paneer)
Kheera
Horticulture Products
Omfed Delight
Lemon Ginger
Squash
Jam
Sauce
Pickle
Kamdhamal Products
Kandhamal Organic Turmeric Powder
Musturd Seed
Honey
Cattle Feed
Cattle Feed
Mineral Mixture

3.3 Depth
The depth of a product mix refers to how many variants are offered of
each product in the line.

Ghee
1 ltr. jar No. 256.0
500 Ml. jar No. 132.0
200 Ml. jar No. 55.00
15 Ltr. jar No. 2950.
 Plain Curd
200 Gram. Plastic One 13.00
cup
500 Gram. Poly Pouch 26.00

Table Butter
500 Gram. Pack No 87.00
100 Gram. Pack No 18.00

Chennapod
500 Gram. V.Pack No 50.00
250 Gram. V.Pack No 27.00
100 Gram. V.Pack No 12.00

Cottage Cheese (Paneer

10 Kg BLOCK No 105.0
500 Gram V.Pack No 60.00
200 Gram V.Pack No 26.00

Omfed Delight (200 ml.)

Pineapple Delight
Pineapple Delight Sachet No. 7.00
Orange Delight Bottle No. 10.00
Orange Delight Sachet No 7.00
Bottle No 10.00

Lemon Ginger

200 Gm. Pouch No 7.00

200 Gm. Bottle No 10.00

Squash (700 ml.)

Orange
Pineapple Pet - bottle No. 54.00
Pet - bottle No. 54.00

Jam
Mixed/Pineapple
Mixed/Pineapple GlassBottle 500gm 52.0
0
GlassBottle 200gm
26.0
0
 Sauce
Tomato 500 Gm.
Tomato 200 Gm. Glass-Bottle No. 45.00
Chilli 500 Gm. Glass-Bottle No. 22.00
Glass-Bottle
Chilli 200 Gm. No. 37.00
Glass-Bottle
No. 20.00

Pickle
Mango/Lemon/Mix/Mango(H&S)
Mango/Lemon/Mix/Mango(H&S) Plastic Jar 400gm 40.00

Mango/Lemon/Mix/Mango(H&S) Plastic Jar 200gm 20.00

Plastic Jar 5 Kg 200.00

Kandhamal Organic Turmeric

Powder
(100 Gm.)
.
(200 Gm.)
Packet No. 11.00
(500 Gm.)
Packet No 20.00
Packet No 45.00

2.4 Consistency
The consistency of the product mix refers to how closely related the
various product lines are in end use, production requirements,
distribution channels, or some other way.
Product Mix of Amul, which is the nearest competitor of OMFED in the
BBSR market. Some of the products are listed below:

Amul Butter 100g Rs.19

500g Rs.92

Amul Pure Ghee 500ml. Pouch Rs.95

1ltr. Tin Rs.190
2ltr. Rs.375
5ltr. Rs.925
Amul Tazza Milk 1ltr. Pkt. Rs.32

Amul Kool 200ml. Rs.12

(Kesar, Elaichi, Rose, Chocolate)
Amul Kool Café 200ml. Rs.15
Powder Milk : Amul Spray infant Milk Food
Instant Full Cream Milk Powder
Sagar skimmed Milk Powder
Sagar Tea Coffee whitener
 Amulaya Dairy whitener
Fresh Milk : Amul Fresh milk
Gold Milk
Tazza Double Toned Milk
Lite Slim & Trim Milk
Fresh Cream
Shakti Tonned Milk
Calci+
Cheese : Pasteurised Processed Cheese
Cheese Spreads
Emmental Cheese
Pizza Mozzarella Cheese
Gouda Cheese
Cooking : Amul sagar Pure Ghee
 1. METHODOLOGY
A preliminary survey was conducted with
A : Marketing Manager, OMFED, BBSR
B : RAJ ENTERPRISES in front of SCHOOL OF TECHNOLOGY,
KIIT, BBSR, Who are distributors as well as retailers of the
OMFED.
C : Mr. Rajeev Hans, Kaluram & Sons(Distributor), Amul.

3.1 Findings
A. At the retailer level:

I. Milk, Ghee and Paneer are the fast moving products of

OMFED. The demand for this products are much above the
company’s production capacity, retailers have to place
orders, especially Ghee well in advance. Plain Curd and
sweet curd are relatively fast moving products all over the
 year, but in the summer season demand is higher. During
summer season, Lassi, Butter Milk, Pouch curd are the most
demanded products. Flavored Milk, Cold Coffee Delight.
Juices are slow moving products as the price is higher sa
compared to its competitors.
Amul spray is the fast moving product of amul.
II. MARGIN : Margin allow the retailer to vary in the range of
15% to 20%. The detailed list of margins on various products
are shown in Appendix I.
Amul the competitor of omfed offers anout 7.5% margin to
the retailers.
III. PROMOTION : The company shows least interest in
promotion of milk & its products as they are unable to meet
the demand however to promote a new brand called
“Delight”, the company is offering two bottles of delight with
one cartoon of flavored milk(1cartoon =24 Bottles) and one
delight with 1 kg of Ghee.
IV. MARGIN COMPARISION TO RIVAL BRANDS : At this
level OMFED gives 15-20% profit margin but in the case of
Amul retailers margin is 7.5%.
V. WINDOW DISPLAY AND MERCHANDIZING : Glow
sign boards & banners are offered at subsidized rate to the
retailers. The company does not believe in window display
through retailer but they encourage it in OMFED Booths.
VI. RECORDING FREQUENCY : As the milk & its products
are temperature controlled refrigerator beyond items,
recording frequency is much higher. In case of flavored
Milk, Cold Coffee & Ghee they have a long shelf life for
which they are organized at a frequency of 1 week.
 VII. PAYMENT TERMS AND CONDITIONS, CREDIT
POLICY : No credit facility is provided to the retailers. The
payment system is cash on delivery.
VIII. CASH AND VOLUME DISCOUNT : No cash & volume
discount are given to retailers.
IX. DAMAGE GOODS POLICY : The company has the policy
of replacing damaged goods if it falls within the expiry date.
After expiry date the loss has to be borne by the retailers. The
whole process of replacing damaged goods which are within
expiry date to 30 days.
A. At the distributer level:

I. MARGIN ALLOWED : Margins allowed to distributor in

low as comaperd to retailer, the range varies from 8%-10%.
The detailed list of margin in shown in Appendix II.
II. NUMBER OF DISTRIBUTORS/CRITERIA: There are 12
distributors in BBSR. The criteria in decided by the
company, and it changes time to time. They look at place of
any existing distributors. Distributors must have there own
salesperson & transportation. The distributor who has the thin
line is given the highest weightage.
III. REORDERING FREQUENCY : normally distributor don’t
stock products with them as they are of perishable nature. So,
they visit factory daily & purchase as per the retailers
demand.
IV. COMPANY SUPPORT : No support is given by the
company. A distributor has to employee a salesperson at his
own cost and also has to keep a vehicle for delivering the
products to the retailers.
V. DISCOUNT ALLOWED : No cash & volume discount are
given to Distributors.
 VI. MANAGING DAMAGE GOODS : Usually they don’t keep
stock with them, in case they keep the product is replaced if it
is within expiry date.
VII. LOCAL PROMOTION : No local promotion is done by the
distributor, they only promote offers given by the company.
VIII. FREIGHT CHARGES : It is borne by the distributor. A
distributor has to collect product from the company and
distribute it to the retailers as per their advance order.

1. CHANNEL DISTRIBUTION OF
OMFED AND AMUL
OMFED has two channels of distribution. They adopt direct distribution
to OMFED booths and through distributors to retailers; whereas Amul
has only one channel of distribution for its entire product, that is, through
distributors to the retailers. The distributor has to bear the transportation
cost for distributing the products to the retailers. They can also supply the
products to exclusive OMFED booths, but the transportation cost has to
be borne by them. The margin allowed to distributors, in case of
OMFED, is less compared to the retailers. But Amul has the policy of
allowing highest margin to the distributors as they have to bear the
transportation cost from the factory, which is situated outside Orissa, to
their godown and then to the retailers’ place. OMFED has 12 distributors
in Bhubaneswar for all its products and 4 exclusive distributors for Ghee.

Channels for exclusively OMFED booth

Channels for other OMFED products, also the same channel followed by
the Amul.

2. CONCLUSION

From this study we have found that how the profit is divided among

different channels and how the profit is calculated. Not only the profit

but we also came to know about how they manage their works such that

the consumers can get the best. Consistently the demand of OMFED is

increasing .Though the production level has been increased, but they
are not able to fulfill the demand of consumers. Another fact that is

deduced is being a local product OMFED as has high market share in

comparison to its rival brands. As it is a local producer so that it is

easily available in rural market too.

3. RECOMMENDATIONS

• The production capacity of the existing plants should be

increased and new plants should be set up in other parts of the
state so that demand can be fulfilled all over the state.
• They should take initiative in promoting animal husbandry to
increase the milk supply.
• Milk can be procured from neighbouring states to fulfill the
demand.
• Develop its network for procuring milk from rural areas.
• Should focus on marketing for its slow moving products.
• Should take initiative in consumer awareness programmes to
promote its products like Juice, Pickles, Honey, and Turmeric
Powder etc.