A PROJECT REPORT

ON

Study of new launched Arokya curd, Factors hindering its

success and solutions to increase customer awareness and
establish the brand
AT

HATSUN AGRO PRODUCTS

SIP project report submitted in partial fulfilment of the requirements for the PGDM

Program

BY: ISHITA AGRAWAL

ROLL NO: 201600219

Company Supervisor: Mr. Vikas & Mr. Lakshmi Nara

Faculty Supervisor: Prof Veena Pailwar

INSTITUTE OF MANAGEMENT TECHNOLOGY, NAGPUR.

2016-2018

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 ACKNOWLEDGEMENT

I feel great satisfaction and pleasure to present this report on Study of new launched Arokya
curd, Factors hindering its success and solutions to increase customer awareness and
establish the brand at Hatsun agro product. I take this opportunity to thank all those who
were involved during the process at some or other point of time.

Firstly I would like to thank Hatsun agro product Ltd for giving the opportunity to
pursue my project in the organization. I mention my sincere thanks to my institute,
Institute of Management Technology (IMT), Nagpur, for giving me this opportunity.
I am grateful to my Company Supervisor, Mr.Vikas & Mr. Lakshmi Narayan, Senior
brand Executive at Hatsun Agro for the encouragement, motivation and guidelines
that they have provided throughout the internship period.

I would also like to thank the sales team of Hatsun for their support and guidance, without
which this project would not have been possible. I would also like to express my most
sincere gratitude towards Prof. Veena Pailwar, my faculty Supervisor who has constantly
guided me on the project and has also been a great source of Motivation. This
acknowledgement can never be complete without thanking the distributors and the retailers
of Hatsun Agro with whom I have worked.

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CERTIFICATE

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Table of Contents

Sr. No. Content Page No.

1 Introduction 5
2 Objective 7
3 Company Analysis 8
4 Methodology/Concepts 11
5 Activities Performed/Results 13
6 Conclusions 19
7 Recommendations/Scope for future 20
improvement
8 Limitations of the study 22
9 Bibliography 23

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Introduction

The project was associated with Arokya zip lock curd which was launched in February 2017 with
new SKU by Hatsun Agro Product. The journey of the company began in 1978 with Arun ice
creams founded by R. G. Chandramogan and later in 1986 Hatsun agro product was formed.
Hatsun is a dairy company Nothing added Nothing removed connecting to the old values getting
the dairy directly from the cow. It is also stretching its arms in ready to eat product mix by the
name of the brand Oyalo.

Hatsun Understands that its strength lies in consolidating its source the dairy farmer,
development policies are always based on building a strong bond with the farmer. The company
segment is food and beverages and they target households, restaurants, caterers and hotels. Hatsun
has smartly positioned itself at showing a genuine care for the consumers which has worked
wonderfully for them.

Over the years, Hatsun has been recognized for its ingenious strategies to deliver premium quality
products processed using avant-garde technologies. Hatsun's state of the art processing units
handle 2 million litres of milk per day. Its units have modern laboratories equipped for intensive
quality control. Hatsun established an extremely efficient supply chain management, superior
logistics and a widespread distribution network spearheaded by exclusive franchisee outlets.
Hatsun's procures fresh milk directly from the farmers. To facilitate it in this process Hatsun has
around 4,500 'Hatsun Milk Banks' (HMBs) covering over 8,000 villages. Everyday 3 lakh plus
farmers pour their milk at these HMBs

During my internship at Hatsun I was assigned Arokya zip lock curd as mentioned it was launched
newly and was facing establishment problems as it was not doing well in the market which was
disappointing because the launch of same curd in new SKU was to increase the demand and make
consumption easier.

The company has two brands of curd which is Hatsun curd and Arokya curd. They were already
selling Arokya earlier in different SKU but after a market research they changed just the SKU to
zip lock

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The difference between Hatsun curd and Arokya curd was the quality of taste and thickness and
the SKU. Hatsun curd is thicker and little sweet compared to Arokya and Hatsun curd comes in
both pouch and box but Arokya comes only in pouch.

Since Arokya was not clearing the shelf I was assigned the work of finding out the reason and
giving appropriate solution for the same and try to apply and check the results.

Fig 1. Old SKU Fig 2. New SKU

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 OBJECTIVE
The major objective was to increase the sale and customer awareness of the product by finding out
and providing solutions for the following. As they are the assumed possible reasons hindering the
products success

- Current customer awareness

- Market penetration of the product
- How effective was the promotional activities.
- Is the retailer supporting the growth of the product?
- Is the supply up to the optimum requirement?
- Is Hatsun curd eating away the sales of Arokya curd.

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 COMPANY ANALYSIS

Hatsun Agro Products is the largest private sector dairy Company in India based in Chennai. It
was founded by R. G. Chandramogan in 1986. The Company was awarded "The Fastest Growing
Asian Dairy Company". The Dairy product maker has been bagging the Golden Trophy from the
Indian Government for largest dairy products exporter for the last many years.

The company has tripled its total turnover over the past 3 years and is set to become the fastest
growing Dairy company in the world, with a record growth rate of 116% over the past 3
successive Quarters.

Procurement

The company makes sure only the freshest of milk goes into all their products. Thats why they go
straight to the source, the farmers. Hatsun has around 8,700 Hatsun Milk Banks covering over
10,000 villages. Over 3 lakh farmers provide milk to these banks every day. With the help of EKO
milk analysers installed, the HMB tests the quality of milk from each farmer using Fat and SNF
parameters.

Milk is collected from HMBs and taken to the Hatsun Milk Chilling centre, where it is tested for
quality standards. Only after the milk samples match our stringent quality norms are they sent to
the dairy. At the dairy, the milk is put through more tests before being taken up for further
processing.

Processing

After procurement, the milk is taken for the all-important quality testing and weight checks.
Hatsun has state-of-the-art plants for processing and packaging in both Tamil Nadu and Karnataka.
Some of the facilities are in Salem, Kanchipuram, Madurai, Belgaum and Honnali.

The company employs at least two types of testing: Gerber Method and Eko Milk Analysers. The
milk is then subjected to pasteurization, homogenization and bacteria clarification - all performed
by a staff of professionals with the single minded goal of adhering to the highest standards of
quality.

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Distribution

Hatsun has an efficient and large cold-chain network to ensure that consumers get fresh milk every
day. The puff-insulated trucks travel around 2,00,000 kms on a day-to-day basis, carrying milk
across Tamil Nadu, Karnataka, Goa and parts of Andhra Pradesh.

They also have a strong logistics and distribution network for other products, with over 2305 Arun
Ice creams parlours in Tamil Nadu, and parts of Karnataka and Andhra Pradesh. The company has
14 strategically-located cold room distribution points.

Fig 3. Distribution Diagram

Hatsun has 2 categories of outlets especially for dairy products. Some of these are owned by the
company itself and others are taken as franchise

Hatsun daily fresh: These stores majorly aim at occupying their shelves with products of less life
span which is milk and curd, and rest with other products.

Hatsun daily: These stores keep all the other product apart from milk and curd.

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 BRANDS/ PRODUCTS

AROKYA: This brand serves curd, milk, and milk based refreshments

HATSUN: This brand serves curd, paneer, butter, ghee, dairy whitener, and skimmed milk
powder

ARUN ICE CREAMS: One of the major ice cream brands found in Tamilnadu.

IBACO: Ice cream parlour

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 CONCEPTS USED IN THE STUDY

Customer Perceived value: This marketing concept says that the difference between the
evaluation of all the offers and the benefits of the offerings and the alternatives must be done so
as to provide customers the best possible product.

This was evident in Hatsuns case as Hatsuns products were purely targeted towards providing
end customers the benefits. As their tag line says Nothing added Nothing removed it is
completely pure. According to Indian culture consumers were used to getting their dairy directly
from the cows so they want to maintain the same nutrition and secure the same feeling among
customers.

Personalizing Marketing: With the widespread use of internet company must ensure that the
product is marketed to each and every customer in the market so as to have maximum reach in
the market. The concept also focuses on the fact that no two customers are identical.

Interacting with the customers: The Company should more and more interact with the
customers so as to listen to their problems and suggestions too.

Consumer Behaviour: This is the study of how customers, groups, retailers, organizations
use, buy, or dispose of goods to satisfy their needs and wants.

The project also involved the study of consumer behaviour of customers so as to treat them in a
better manner. And there is a survey further below done to find out customer behaviour

Points of Difference: These are the attributes or benefits that customers normally relate with a
particular brand and which are not present in the competitive brands.

The project involved communicating to the customers the PODs of Hatsun curd and Arokya
curd differentiating taste and Quality and purpose of use.

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 Points of Parity: These are the attributes or benefits that need not be different from the
competitive brands but the brand share these with them.In case of Hatsun, The points of parity
were the fat and SNF content.

Pull strategy: It is when a specific products interest is itself generated in the market and the
product is not needed to be taken to the customers. Milk and curd is a basic necessity, hence its
demand is automatically generated. So, consumers are to be educated about the brand and then
they demand the same product.

Segmentation: Segmentation is the technique of segregating products according to the price, type
of customer etc. in market. For example the company has priced Arokya curd Rs. 28/- for 400
grams for middle class working crowd and Hatsun curd for Rs. 40/- little more niche segment

Positioning: Position itself as Nothing added Nothing removed. Their message is purity of
product and that has given them an edge over their main competitor Heritage which deals in curd
and milk they the two top brands of Tamil Nadu especially in milk

Sales Promotion: The Chennai market is extremely competitive. So it becomes extremely

important for the companies to adopt measures to boost their sales. Market visits on regular basis
are important in this segment; so that one never loses touch with the retailers else the competitors
may take advantage.

Retail Management: No matter how big a brand is or how much a company invest in
advertisement; its of no use if it is not reaching the end customers. Thats why retailers in this
field plays a vital role. There needs to be a healthy and good relation with the retailers.

Pricing: Hatsun focuses more on quality and end users rather than spending much on
advertisement. They adopt pricing strategy which makes the product available at cheapest cost to
the customer, other than their competitors. Thats the reason why Hatsun is able to be the market
leader in this industry especially in Tamil Nadu and parts of South India.

Consumer Relationship Management: Hatsun emphasizes much on customer satisfaction. It

tends to provide all the SKUs keeping in mind the taste, preference and affordability of the end
users. Reason behind Hatsun success is its relation with customer, build on trust, quality which
make customer loyal to the brand.
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Activities Performed/ RESULTS

I worked in different regions of Chennai. The areas had different scenarios in various aspects
such as Market size, Competitor Sales, Brand Preference, Consumer Awareness, etc. The details
of the areas assigned to me are as follows: Categorised by area and agency names that I visited:

AMBATTUR : NATARAJAN AGENCIES , PAVITHRA MILK

ANNA NAGAR: BAALA ABIRAMI AGENCIES , SRI VELAN ICE CREAM
CHOOLAIMEDU : AROKYAM AGENCY , POOJA SRI MILK
MUGAPAIR : A.R CREAM WORLD , DEEPAN MILK CENTRE
M R NAGAR: K.S.M MILK AGENCIES
MEDAVAKKAM : ASOTHAI MILK AGENCIES
NUNGAMBAKKAM : BALAMURUGAN MILK AGENCY , PAPPU S DAILY FRESH
PARRYS : LAKSHYA AGENCIES
POONAMALLE: P.M.S MILK AGENCY , SRI SAI MILK DISTRIBUTOR
SAIDAPET : SRIDHAR MILK
SHENOY NAGAR: SRI SAAI AGENCY
ST THOMAS MOUNT : THIRUMURUGA MILK AGENCY
T.NAGAR : LINGAM AGENCY , RSP AGENCY
TARAMANI: ELUMALAI MILK AGENCY
THIRUMANGALAM : BHARATHI MILK CENTER
VADAPALANI : SRI BALA MILK CENTER
VILLIWAKKAM : ANBU AGENCY

I visited these distribution centres and asked them following questions

- How many retail outlet they supply to

- Quantity supplied to every super market
- Duration of refilling
- Has there been an instance when they were not able to fulfil the requirement? If yes how
many times and what was the reason behind it.

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 - What is the feedback they got of the product from the retailer?
- Has there been an instance when the retailer asked them to take back the stock? If yes how
many times and what was the reason given by them?

After collecting this information I visited at least two retailers or supermarkets in each area to
where these distributors supplied to and asked them following questions:

- Their view on the product and the reason according to them the product is not clearing the
shelf.
- Their view on the effectiveness of promotional activities.
- Feedback they received from the customers.
- Did they always have adequate stock?
- Had they ever had to incur loss on this product?
- Suggestion for improvement

During my visit to the stores on every encounter with the customers there I questioned them on
their experience with the product and the following:

- Which curd brand they buy and the reason?

- How did they come to know about this new product?
- What is their view on it?
- What do they look for when they buy curd from the market?
- Why do they prefer to buy curd rather than make it at home?
- Has this new SKU given pleasant experience with preserving and handling of curd?
- Are they able to secure the freshness of the curd when they are not using all at once?
- Their expectations and suggestions

The company has two brands of curd which is Hatsun curd and Arokya curd so the company was
worried what if Hatsun curd was eating away the sales of Arokya curd

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When the company had launched Arokya curd they had done promotional activities across
Chennai city in super markets where they had given offers in which they sold the curd Rs.8
below its MRP which was Rs.28 to attract the customer and bring the product to their notice.
The also did BTL advertising with fliers and banners.

During the period of promotional activity customer brought the product. But later on they didnt
during the above survey these were the finding.

All the responses were same and there were no deviation to test the hypothesis.

Fig 4. Promotional Offer

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 FINDINGS

DISTRIBUTORS: All the distributors were facing loses in keeping this product and they were
not able to push the product to the retailers so they didnt want to keep the product. Reason
being they got a lot of returns from the retailers that they were either in loss or it was a wash and
since it is a product of a very less life span before they could return it to the company they were
spoilt and the company didnt accept it. According to them they company gave minimum of 42
units at once and they could maximum sell 24 units and on each unit the margin was Rs.2 so it
was total wash for them or mostly their incurred loss. They said they can receive the order of
maximum 24 units till the sale is increased. They said they have never faced problems with the
supplies and few retail outs have asked them for they product but quantity was not good enough
to place an order and also the demand for the product was not consistent which was
understandable since the product was new and has not made its place in the market still.

RETAILERS: They said until the offer was going from the promotional activities the product
was selling but after that it was not so they didnt place the order and very few customers have
asked for it. According to them sometimes the distributor refuses to take back the dead store that
they incur loss. And there already enough brands of curd which customers are buying so there is
no need felt for this. They have always received supplies on time.

CONSUMERS: Most of the consumer preferred Heritage curd and Hatsun curd. While buying
curd from the they look for quality of the curd in terms of thickness and taste. I had no
encounter with any customer who knew about the product.

ANALYSIS ON FINDING

Competitor: Heritage curd is priced at Rs.25 per unit of 450 grams and it is more thicker than
Arokya curd which is priced Rs.28 per unit of 400 grams hence the consumers are not more
inquisitive about Arokya curd. And Hatsun Curd is actually not the competitor of Arokya
because it is priced and segmented at different level.

Consumer Awareness: There is no consumer awareness of the product this clear from my
encounter with 57 customers. And as it is a new product unless there is a continues offers,
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 advertisement or at least the product is visible in the shelf of stores it is impossible to know
about a new product.

Distributors and Retailers: Distributors are not pushing the product as they are not benefited by
the product on the other hand they are facing loses. There is not much margin for retailers and
even customers are also not asking for it so they too have no motive to push the product.

Solution and Activities to be performed:

INCREASE THE AWARENESS: To increase the awareness of the product, the product has to
sit in the retail outlet and then it will be noticed by the customers.

FOR WHOLESALERS TO SUPPORT IT: For the test period of 2 months wholesalers should
be given this offer that they can return the product which they are not able sell and company bears
the loses. Through this the product will a get a chance to be selected by the customer.

QUALITY and PRICE: Arokya curd has more of liquid content and it cost more for lesser
quantity compared to Heritage that is one of the reason for the preference of Heritage curd over
Arokya. Price is reduced till the customer starts preferring Arokya and the brand is established for
also its additional benefit of comfortable SKU then the price can be slowly increased.

MARKETS CONNECT: In selected few areas promotional activities can be done by the
company where there is minimum product reach to increase the awareness. And for the test period
of 2 months the customers can be given the offer of buy 1 get 1 free.

Right now the major problem is of awareness among the customers thats the reason why the
product is not moving from the selves and hence wholesalers are also becoming non supportive.
So with the given solutions the company may incur losses for the test period of 2 months. But
definitely the awareness problem will be solved; the customers would have tried the product. And
even after that the product is not selling then the company will know that the product needs
alteration.

POSITIONING & TARGETING OF AROKYA CURD

Apart from these studies I also studied the cultural and geographical environment of the product.
As the product is around South India where curd is used to make curd rice, dosa, utthapam, or ate
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with meals which is rice. In all these cases curd is used in a very liquid form which is the actual
texture of Arokya curd instead of making it thick they can position it in way that this message goes
to the consumer and it becomes a added benefit with reduced price. And they should especially
target the local household South Indian consumers.

The above mentioned activities where not performed due to lack of time but some of these
activities will be performed by the company in time to come.

Range Selling

This activity was conducted in the sixth week of the internship. Range selling as the name
suggests was about placing the product range at the outlets. I visited the retail outlets and
enquired about the range of products the retailer keeps. Once the product range of all the retailers
was known, I introduced the retailers to the products that they were not keeping. I tried to
convince the retailer about other products, various SKUs about the products and their details and
benefits to them in terms of margin and shelf life.

Gap Analysis

In this activity, I visited all the outlets in the region who are not selling Arokya curd to check the
number of outlets that sell curd of competitor's and not Arokya curd. And also to find out if they
had Hatsun curd and not Arokya curd. This was done for analysing the gap in the market by
identifying the potential outlets for Arokya curd hence increasing availability of the brand in the
market.

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 CONCLUSIONS

Working with Hatsun opened in numerous gateways of learning. Working on the ground level
helped me to understand how demanding and versatile the FMCG market is and what are the
essential tactics required to be a market leader in FMCG segment.

Pricing plays a very significant role in FMCG market. It is also important to understand that how
pricing to retailers is more important than pricing to customers as distributors and retailers have
a crucial role in the sale and promotion of products. They are the ones who directly interact with
the customers and hence would help in pushing the product to the market if they are given proper
margins.

At the time of a new Product launch, Creating brand awareness and taking customer
feedback is very important. This helps in knowing the status of the product and improving
the product at the earlier stages if need be.

The relationship between the participants in the market also plays an important role. We have
seen how competitor's members help each other in distribution process. Activeness and agility of
the distributor to the retailers affects the sales and the brand name. Proper distribution strategy
must be followed by the company across all layers.

For a brand like Hatsun, which has a well-established brand name, Consistent performance is
very necessary. Any variation in the quality may not be accepted by the customers and the
market.

Price cutting and schemes defines the market for some retailers. As most of the retailers are from
lower middle class background, small margins and schemes mean a lot to them. Hence the
company need to take care of the same so that the retailers help the company to grow.

In FMCG market, even small orders from the retailers are crucial for market reach. Distributors
need to consider small orders as well since these small orders would soon turn to larger orders
once the market is tapped and the customers would be aware of the product and this will lead to
the increase in the demand as well.

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 RECOMMENDATIONS

Quality Improvement: Arokya curd has more of liquid content which seems watery and
that is the reason for the preference Hatsun curd over Arokya. So if the quality is improved
in that manner Arokya curd will get a fair chance to compete. And the Company needs to
consider the customer and retailer feedback and try to improve the quality of product. This
helps in satisfying the needs of the customers as well as reaching the larger market.

Brand Awareness: It was found that the customers were not aware of the product. To
increase the awareness of a new launched product, the product has to sit in the retail outlet
and then it will get noticed by the customers because in this segment alternatives are easily
available.

Schemes and Incentives: For normal Retailers, since they have all the brands it highly
depends on them as to what brands they want to push to customers. This directly depends
on margins they get by selling each product. So if they dont get good enough margin they
sell only to the loyal customers who ask only Arokya and not convert the non Arokya to
Arokya as they dont benefit. And for the test period of 2 months wholesalers should be
given this offer that they can return the product which they are not able sell and company
bears the loses. Through this the product will a get a chance to be selected by the
customer. Because wholesalers are bearing loses and that is why they have stopped
buying this particular product from Hatsun.

Reaching to the Retailers Directly: It has been observed that at times the distributor
does not inform the retailer about the schemes that the company is providing. In that case
the retailer is not aware of the schemes if any have been introduced by the company for
the retailers and current availability of the products. To solve this, the company should
message the schemes and new products to retailers directly on their phones so that all the
retailers are informed about the schemes and everybody has the same information as it
does not get altered on its way.

Brand Visibility: Placement of POP material should be done at every outlet. Banners,
Boards and Danglers should be provided to all the Hatsun product selling outlets, so that
brand visibility is taken care of. Also wall paintings should be done at public places and
outside the shops wherever possible. Specially the new launched product.

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 Target Sales: Retailers as well as distributors should be given yearly targets for the
amount of sales and should be provided incentives on meeting the targets. This would
help in the overall increase in the sales of the products. And for the new product
monthly targets should be given to increase the sales and establish the brand.

Bundling of products: The products should be provided in a cartel in order to increase

the sale of the products which are not doing well in the market. In this case, since the
retailer would receive the product along with other products whose demand is high, he
will try to push this product as well so as to get benefits from the bundling scheme.

Training and Workshops: Proper training to distributors & retailers about the target
customer- and company at new product launch. Training should also be provided in
regards of handling the product, storage of the product, usage of the product, unpacking
etc to distributors and retailer

Cause marketing: Hatsun should tie up with some NGO or any social cause group and
start donating some part of the income to them. This would help in sharing the part in the
CSR activities and would also create an even better image in the minds of the customers of
the brand. This would also help in increasing Sales as people usually tend to give some
contribution towards some cause for the betterment of mankind.

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 LIMITATIONS FOR THE STUDY

The time duration for the study was less. If more time would have been given for the study,
we would have been able to perform some of the recommended activities and see the
results.

As suggested for promotional activities for Arokya at least in 5 locations of Chennai Anna
nagar, Adyar, Pursawalkam, Ashoknagar , and Parrys but it was not possible due to lack
of time.

The limitation of the study was also observed in the case of matching the data with
distributor and all the retailer under that distributor.

Also, on encountering the customers proper response was not received.

Clarity of thinking of both the retailers and the customers would have helped in better planning
of the activities.

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 BIBLIOGRAPHY

http://www.mbaskool.com
https://en.wikipedia.org/wiki/Hatsun_Agro_Product
http://hap.in/

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