CHAPTER-I INDUSTRY PROFILE

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INDUSTRY PROFILE
The production of milk on dairy farms and the processing of milk and milk products at dairy plants make up the dairy industry. Along with producing many kinds of milk, the industry makes butter, cheese, yogurt, and ice cream. Dairying produces food products that form a regular part of many people's diets, and in many parts of the world it is a big business and major employer. A dairy is a facility for the extraction and processing of animal milk mostly from goats or cows, but also from buffalo, sheep, horses or camels for human consumption. Typically it is a farm or section of a farm that is concerned with the production of milk, butter and cheese. Terminology differs slightly between countries. In particular, in the U.S. a dairy can also be a facility that processes, distributes and sells dairy products, or a room, building or establishment where milk is kept and butter or cheese is made. In New Zealand English a dairy means a corner convenience store . As an attributive, the word dairy refers to milk-based products, derivatives and processes, and the animals and workers involved in their production. A dairy farm produces milk and a dairy factory processes it into a variety of dairy products. These establishments constitute the dairy industry, a component of the food industry Milk producing animals have been domesticated for thousands of years. Initially they were part of the subsistence farming that nomads engaged in. As the community moved about the country so did their animals accompany them. Protecting and feeding the animals were a big part of the symbiotic relationship between the animal and the herder In the more recent past, people in agricultural societies owned dairy animals that they milked for domestic and local consumption, a typical example of a cottage industry. 2

The animals might serve multiple purposes. In this case the animals were normally milked by hand and the herd size was quite small so that all of the animals could be milked in less than an hour about 10 per milker. These tasks were performed by a dairyman. With industrialization and urbanization the supply of milk became a commercial industry with specialised breeds of cow being developed for dairy, as distinct from beef or draught animals. Initially more people were employed as milkers but it soon turned to mechanisation with machines designed to do the milking. Historically, the milking and the processing took place close together in space and time on a dairy farm. People milked the animals by hand; on farms where only small numbers are kept hand-milking may still be practiced. At the processing plant, the milk is pumped into temporary holding tanks. It is then weighed, and samples are sent to the laboratory where tests are made for odor and flavor, bacteria, sediment, and milk protein and fat content. Milk of inferior quality may be rejected. Only the highest-quality raw milk, usually designated “Grade A,” is used for fresh fluid milk. Dairy plants control the fat content of their products with separators, which extract the desired percentage of butterfat, or cream, from the milk. The milk remaining after the cream has been removed is known as skim. The dairy may sell it for cattle feed, convert it into powdered skim milk, or package it for sale for human use as liquid skim milk. Almost all milk and most milk products sold today are pasteurized, or processed with heat to kill harmful bacteria. The process is named for the French scientist Louis Pasteur, who first developed it to prevent spoilage of other food products. Cream used in making butter is pasteurized before churning. Ice cream is always pasteurized. In the homogenized the milk is forced under high pressure through many tiny holes. This breaks up the fat globules into minute particles. They do not rise to the top as cream, making the shaking of milk, as was once common, unnecessary. Homogenized milk also yields an improved body and texture in many dairy products. 3

Fluid milk may be packaged in plastic containers, glass bottles, or in cardboard cartons that are coated with paraffin wax to make them leakproof. Filled containers then go to a refrigerated room to remain until the delivery trucks pick them up. Humans have been drinking animals' milk since ancient times. Sanskrit records mentioned milk 6,000 years ago. The Bible describes the promised land as “a land flowing with milk and honey.” Some 2,300 years ago, the Greek physician Hippocrates recommended milk as a medicine. Christopher Columbus brought cattle to the New World on his second voyage. Cows were brought from Europe.

Indian dairy Industry:
The dairy industry in India engages in the production and processing of milk and cream. It is also involved in the manufacture of other dairy products like cheese, curd, and many more. The dairy industry specializes in the procurement, production, processing, storage and distribution of dairy products. India stands the first place in its share of dairy production in the international scenario. It contributes about Rs 1,15,970 in the national economy. This ever-expanding industry provides gainful employment to a vast majority of the rural households. It employs about 8.47 million people on yearly basis out of which 71% are women. Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and fastest growing markets for milk and milk products. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world. As he expands his overseas operations to India many profitable options await him. He may transfer technology, sign joint ventures or use India as a sourcing center for regional exports. The liberalization of the Indian economy beckons to MNC's and foreign investors alike. India’s dairy sector is expected to triple its production in the next 10 years in view of expanding potential for export to Europe and the West. Moreover with WTO regulations expected to come into force in coming years all the developed countries 4

which are among big exporters today would have to withdraw the support and subsidy to their domestic milk products sector. India today is the lowest cost producer of per liter of milk in the world, at 27 cents, compared with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest cost of milk production and increasing production in the country multinational companies are planning to expand their activities here. Some of these milk producers have already obtained quality standard certificates from the authorities. This will help them in marketing their products in foreign countries in processed form. The urban market for milk products is expected to grow at an accelerated pace of around 33% per annum to around Rs.43, 500 crores by year 2005. This growth is going to come from the greater emphasis on the processed foods sector and also by increase in the conversion of milk into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10,00,000 million. Presently the market is valued at around Rs7,00,000mn. Background: India with 134mn cows and 125mn buffaloes has the largest population of cattle in the world. Total cattle population in the country as on October'00 stood at 313mn. More than fifty percent of the buffaloes and twenty percent of the cattle in the world are found in India and most of these are milch cows and milch buffaloes. Indian dairy sector contributes the large share in agricultural gross domestic products. Presently there are around 70,000 village dairy cooperatives across the country. The co-operative societies are federated into 170 district milk producers unions, which is turn has 22-state cooperative dairy federation. Milk production gives employment to more than 72mn dairy farmers. In terms of total production, India is the leading producer of milk in the world followed by USA. The milk production in 1999-00 is estimated at 78mn MT as compared to 74.5mn MT in the previous year. This production is expected to increase to 81mn MT by 2000-01. Of this total produce of 78mn cows' milk constitute 36mn MT while rest is from other cattle.

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While world milk production declined by 2 per cent in the last three years. Indian production has increased by 4 per cent. The milk production in India accounts for more than 13% of the total world output and 57% of total Asia's production. The top five milk producing nations in the world are India ,USA, Russia, Germany and France. Although milk production has grown at a fast pace during the last three decades milk yield per animal is very low. The main reasons for the low yield are: • • • Lack of use of scientific practices in milching. Inadequate availability of fodder in all seasons. Unavailability of veterinary health services.

Production of milk in India:

Year 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01

Production in million MT 48.4 51.4 53.7 56.3 58.6 61.2 63.5 65 68.5 70.8 74.7 78.1 81.0

World's major milk producers: (Million MTs) Country India USA Russia 1997-98 71 71 34 1998-99 ( Approx.) 74.5 71 33 6

Germany 27 France 24 Pakistan 21 Brazil 21 UK 14 Ukraine 15 Poland 12 New Zealand 11 Netherlands 11 Italy 10 Australia 9 Operation Flood:

27 24 22 27 14 14 12 12 11 10 10

The transition of the Indian milk industry from a situation of net import to that of surplus has been led by the efforts of National Dairy Development Board's Operation Flood programmers under the aegis of the former Chairman of the board Dr. Kurien. Launched in 1970, Operation Flood has led to the modernization of India's dairy sector and created a strong network for procurement processing and distribution of milk by the co-operative sector. Per capita availability of milk has increased from 132 gm per day in 1950 to over 220 gm per day in 1998. The main thrust of Operation Flood was to organize dairy cooperatives in the milk shed areas of the village, and to link them to the four Metro cities, which are the main markets for milk. The efforts undertaken by NDDB have not only led to enhanced production, improvement in methods of processing and development of a strong marketing network, but have also led to the emergence of dairying as an important source of employment and income generation in the rural areas. It has also led to an improvement in yields, longer lactation periods, shorter calving intervals, etc through the use of modern breeding techniques. Establishment of milk collection centers and chilling centers has enhanced life of raw milk and enabled minimization of wastage due to spoilage of milk.

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Operation Flood has been one of the world's largest dairy development programmers and looking at the success achieved in India by adopting the co-operative route, a few other countries have also replicated the model of India's White Revolution. Per Capita availability of milk

Year 1950 1960 1968 1973 1980* 1990 1992 1996 1997 1998 1999 2000 2001E 2002P

gm/day 132 127 113 111 128 178 192 198 200 202 203 212 225 250

Fresh Milk: Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk. The buffalo milk contribution to total milk produce is expected to be 54% in 2000. Buffalo milk has 3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water whereas cow milk has 3.5% protein, 3.7% fat, 4.9% milk sugar, 0.7% ash and 87% water. While presently the price of Buffalo milk is ruling at $261-313 per MT that of cow is ruling at $170-267 per MT. Fresh pasteurized milk is available in packaged form. However, a large part of milk consumed in India is not pasteurized, and is sold in loose form by vendors. Sterilized milk is scarcely available in India. Packaged milk can be divided according to fat content as follows: Whole (full cream) milk - 6% fat 8

Standardized (toned) milk - 4.5% fat Doubled toned (low fat) milk - 3% fat Another category of milk, which has a small market, is flavoured milk. The Indian Market: Milk has been an integral part of Indian food for centuries. The per capita availability of milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and 203 gm in 1998-99.This is expected to increase to 212gms for 1999-00. However a large part of the population cannot afford milk. At this per capita consumption it is below the world average of 285 gm and even less than 220 gm recommended by the Nutritional Advisory Committee of the Indian Council of Medical Research. There are regional disparities in production and consumption also. The per capita availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day. This disparity is due to concentration of milk production in some pockets and high cost of transportation. Also the output of milk in cereal growing areas is much higher than elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which have a high food value for milch animals. In India about 46 per cent of the total milk produced is consumed in liquid form and 47 per cent is converted into traditional products like cottage butter, ghee, paneer, khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like milk powders, processed butter and processed cheese. The remaining 54% is utilized for conversion to milk products. Among the milk products manufactured by the organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed milk infants foods etc. Of these ghee alone accounts for 85%. It is estimated that around 20% of the total milk produced in the country is consumed at producer-household level and remaining is marketed through various 9

cooperatives, private dairies and vendors. Also of the total produce more than 50% is procured by cooperatives and other private dairies. While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is used for manufacturing processed value added dairy products; for private dairies only 45% is marketed in fluid form and rest is processed into value added dairy products like ghee, makhan etc. Still, several consumers in urban areas prefer to buy loose milk from vendors due to the strong perception that loose milk is fresh. Also, the current level of processing and packaging capacity limits the availability of packaged milk. The preferred dairy animal in India is buffalo unlike the majority of the world market, which is dominated by cow milk. As high as 98% of milk is produced in rural India, which caters to 72% of the total population, whereas the urban sector with 28% population consumes 56% of total milk produced. Even in urban India, as high as 83% of the consumed milk comes from the unorganized traditional sector. Presently only 12% of the milk market is represented by packaged and branded pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk sold by unorganized sector however is inconsistent and so is the price across the season in local areas. Also these vendors add water and caustic soda, which makes the milk unhygienic. India's dairy market is multi-layered. It's shaped like a pyramid with the base made up of a vast market for low-cost milk. The bulk of the demand for milk is among the poor in urban areas whose individual requirement is small, maybe a glassful for use as whitener for their tea and coffee. Nevertheless, it adds up to a sizable volume - millions of liters per day. In the major cities lies an immense growth potential for the modern sector. Presently, barely 778 out of 3,700 cities and towns are served by its milk distribution network, dispensing hygienically packed wholesome, quality pasteurized milk. According to one estimate, the packed milk segment would double in the next five years, giving both strength and volume to the modern sector. The narrow tip at the top is a small but affluent market for western type milk products. Growing Volumes 10

The effective milk market is largely confined to urban areas, inhabited by over 25 per cent of the country's population. An estimated 50 per cent of the total milk produced is consumed here. By the end of the twentieth century, the urban population is expected to increase by more than 100 million to touch 364 million in 2000 a growth of about 40 per cent. The expected rise in urban population would be a boon to Indian dairying. Presently, the organized sector both cooperative and private and the traditional sector cater to this market. The consumer access has become easier with the information revolution. The number of households with TV has increased from 23 million in 1989 to 45 million in 1995. About 34 per cent of these households in urban India have access to satellite television channel. Potential for further growth Of the three A's of marketing - availability, acceptability and affordability, Indian dairying is already endowed with the first two. People in India love to drink milk. Hence no efforts are needed to make it acceptable. Its availability is not a limitation either, because of the ample scope for increasing milk production, given the prevailing low yields from dairy cattle. It leaves the third vital marketing factor affordability. How to make milk affordable for the large majority with limited purchasing power? That is essence of the challenge. One practical way is to pack milk in small quantities of 250 ml or less in polythene sachets. Already, the glass bottle for retailing milk has given way to single-use sachets which are more economical. Another viable alternative is to sell small quantities of milk powder in mini-sachets, adequate for two cups of tea or coffee. Marketing Strategy for 2000 AD Two key elements of marketing strategy for 2000 AD are: Focus on strong brands and, product mix expansion to include UHT milk, cheese, ice creams and spreads. The changing marketing trends will see the shift from generic products to the packaged quasi, regular and premium brands. The national brands will gradually edge out the regional brands or reduce their presence. The brand image can do wonders to a product's marketing as is evident from the words of Perfume Princess Coco Channel.

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Penetration of milk products Western table spreads such as butter, margarine and jams are not very popular in

India. All India penetration of butter/ margarine is only 4%. This is also largely represented by urban areas, where penetration is higher at 9%. In rural areas, butter/ margarine have penetrated in 2.1% of households only. The use of these products in the large metros is higher, with penetration at 15%. Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per capita consumption even among the cheese-consuming households is a poor 2.4kg pa as compared to over 20kg in USA. The lower penetration is due to peculiar food habits, relatively expensive products and also non-availability in many parts of the country. Butter, margarine and cheese products are mainly manufactured by organized sector. Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to 31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is 24.1%. In relative terms, penetration of ghee is significantly higher in North and West, which are milk surplus regions. North accounts for 57% of ghee consumption and West for 23%, South & East together account for the balance 20%. A large part of ghee is made at home and by small/ cottage industry from milk. The relative share of branded products in this category is very low at around 1-2%. Milk powder and condensed milk have not been able to garner any significant consumer acceptance in India as indicated by a very low 4.7% penetration. The penetration is higher at 8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively higher in medium sized towns at 8.5% compared to 7.7% in a large metro. Market Size and Growth Market size for milk is estimated to be 36mn MT valued at Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these 12

milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production. Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under Operation Flood, production growth increased significantly averaging over 5% pa. About 75% of milk is consumed at the household level which is not a part of commercial dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by most consumers. In reality however, it poses a higher risk of adulteration and contamination. Major Players The packaged milk segment is dominated by the dairy cooperatives. Gujarat Cooperative Milk Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives have their local brands for e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc.

Other private players include J K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a leading player in the sector has turned bankrupt and is facing liquidation. Packaging Technology Milk was initially sold door-to-door by the local milkman. When the dairy cooperatives initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over the years, several developments in packaging media have taken place. In the early 80's, plastic pouches replaced the bottles. Plastic pouches made transportation and storage very convenient, besides reducing costs. Milk packed in plastic pouches/bottles have a shelf life of just 1-2 days, that too only if refrigerated. In 1996, Tetra Packs were introduced in India. Tetra Packs are aseptic laminate packs made of aluminum, paper, board and plastic. Milk stored in tetra packs and treated 13

under Ultra High Temperature (UHT) technique can be stored for four months without refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7 compared to plastic pouches. In 1999-00 Nestle launched its UHT milk. Amul too relaunched its Amul Taaza brand of UHT milk. The UHT milk market is expected to grow at a rate of more than 10-12% in coming years. Export Potential India has the potential to become one of the leading players in milk and milk product exports. Locational advantage : India is located amidst major milk deficit countries in Asia and Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all located close to India. Low Cost Of Production : Milk production is scale insensitive and labour intensive. Due to low labour cost, cost of production of milk is significantly lower in India.

What does the Indian Dairy Industry has to Offer to Foreign Investors? India is a land of opportunity for investors looking for new and expanding

markets. Dairy food processing holds immense potential for high returns. Growth prospects in the dairy food sector are termed healthy, according to various studies on the subject. 1. The basic infrastructural elements for a successful enterprise are in place. 2. Key elements of free market system 3. Raw material (milk) availability 4. An established infrastructure of technology 5. Supporting manpower Indian (traditional) Milk Products There are a large variety of traditional Indian milk products such as 14

Makkhan - unsalted butter. Ghee - butter oil prepared by heat clarification, for longer shelf life. Kheer - a sweet mix of boiled milk, sugar and rice. Basundi - milk and sugar boiled down till it thickens. Rabri - sweetened cream. Dahi - a type of curd. Lassi - curd mixed with water and sugar/ salt. Channa/Paneer - milk mixed with lactic acid to coagulate. Khoa - evaporated milk, used as a base to produce sweet meats. • Major players in Indian market The major players are Amul, Britannia, and Dabon International dominating the market. Other major brands were Vijaya, Verka and Nandini (all brands of various regional dairy cooperatives) and Vadilal. The heavy advertising and promotions being undertaken by these new entrants is expected to lead to strong 20% growth in the segment. Amul has also become more aggressive with launch of new variants such as Mozzarella cheese (used in Pizza), cheese powder, etc. The entry of new players and increased marketing activity is expected to expand the market. All the major players are expanding their capacities. Capacity expansion in Cheese

Company

Brands

State

Capacity 15

Dynamix Group GCMMF APDDCF •

Manufactures Britannia Amul Vijaya

for Maharashtra Gujarat

35

tons

per per per

day 20 tons

day Andhra Pradesh 10 tons day

Major dairy products manufacturers

Company Nestle Limited Milkfood Limited SmithKline Beecham Limited Indodan Industries Limited Gujarat operative Marketing Federation Limited H.J.

Brands India Milkmaid,Cerelac, Milo, Everyday Milkfood

Major Products Lactogen, Sweetened condensed

milk,

malted

foods, milk powder and Dairy whitener Ghee, ice cream, and other milk products Malted Milkfood, ghee, butter,

Horlicks, Maltova, Viva

powdered milk, milk fluid and other Indana milk based baby foods. Condensed milk, skimmed milk powder, whole milk powder, dairy milk whitener, Co- Amul milk chilled and processed milk Butter, cheese and other milk products

Heinz Farex,

Complan,

Glactose, Infant Milkfood, malted Milkfood 16

Limited Britannia Cadbury

Bonniemix, Vitamilk Milkman Bournvita Flavoured milk, cheese, Milk Powder, Ghee Malted food

Future Prospects India is the world's highest milk producer and all set to become the world's largest food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and Foreign investors to find this country a place for the mammoth investment projects. Be it investors, researchers, entrepreneurs, or the merely curious – Indian Dairy sector has something for everyone. Milk production is relatively efficient way of converting vegetable material into animal food. Dairy cows buffaloes goats and sheep can eat fodder and crop by products which are not eaten by humans. Yet the loss of nutrients energy and equipment required in milk handling inevitably make milk comparatively expensive food. Also if dairying is to play its part in rural development policies , the price to milk producers has to be remunerative. In a situation of increased international prices, low availabilities of food aid and foreign exchange constraints, large scale subsidization of milk conception will be difficult in the majority of developing countries. Hence in the foreseeable future, in most of developing countries milk and milk products will not play the same roll in nutrition as in the affluent societies of developed countries. Effective demand will come mainly from middle and high income consumers in urban areas. There are ways to mitigate the effects of unequal distribution of incomes. In Cuba where the Government attaches high priority to milk in its food and nutrition policy, all pre-school children receive a daily ration of almost a litre of milk fat the reduced price. Cheap milk and milk products are made available to certain other vulnerable groups, by milk products outside the rationing system are sold price which is well above the cost 17

level. Until recently, most fresh milk in the big cities of China was a reserved for infants and hospitals, but with the increase in supply, rationing has been relaxed.

In other countries dairy industries have attempted to reach lower income consumers by variation of compositional quality or packaging and distribution methods or blending milk in vegetable ingredients in formula foods for vulnerable groups. For instance, pricing of products rich in butter fat or in more luxury packaging above cost level so as to enable sales of high protein milk products at a some what a reduced price has been widely practiced in developing countries. This policies need to be brought in Indian Dairy scenario.

COMPANY PROFILE

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HERITAGE FOODS INDIA LTD
The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of the fastest growing Private Sector Enterprises in India, with three-business divisions viz., Dairy, Retail and Agri under its flagship Company Heritage Foods (India) Limited. Heritage recognized one of India’s largest and most successful dairy for the last 16 years. Based in Hyderabad with and existing brand presence in Andhra Pradesh, Tamilnadu, Karnataka, Kerala and Maharastra. Heritage is known for its high quality standards and premium range of mil and milk products and following high quality standards. Heritage is having 12 Packing stations, 74 chilling centers/bulk coolers with operationally safe process equipments. Heritage brand is seen in 8.0 lakh households today.

With an objective of "Bringing prosperity into the rural families through cooperative efforts", he along with a few like-minded, friends and associates promoted "Heritage Foods" in the year 1992 taking opportunity from the Industrial Policy, 1991 of Government of India and he has been successful in his endeavourer. At present, Heritage has market presence in the states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Maharastra. More than three thousand villages and three lakh farmers are being benefited in these states. On the other side, Heritage is serving millions of customers needs, employing more than 5000 employees and generating indirect employment opportunities to more than 10000 people. Beginning with a humble annual turnover of Rs.4.38 crores in 1993-94, the sales. Turn over has reached close to Rs.350 crores during the financial year 2006-2007

Mission & Vision
Mission 19

Bringing prosperity into rural families of India through co-operative efforts and providing customers with hygienic, affordable and convenient supply of " Fresh and Healthy " food products.

Vision
To be a progressive billion-dollar organization with a pan India footprint by 2012. To achieve this by delighting customers with "Fresh and Healthy" food products, those are a benchmark for quality in the industry. We are committed to enhanced prosperity and the empowerment of the farming community through our unique "Relationship Farming" Model. To be a preferred employer by nurturing entrepreneurship, managing career aspirations and providing innovative avenues for enhanced employee prosperity

BOARD OF DIRECTORS:

Sri D. Seetharamiah is the chairman of this company. Smt N. Buvaneswari is the vice-chairman& managing director. Another persons namely Dr. V Nagaraja Naidu, Sri N.P Ramakrishna, Dr. N.R Sivaswamy, Dr. A. Apparao are directors of this company. Sri Nara lokesh is a Executive director of this company

LOGO:

SUBSIDIARIES: Heritage Finalease Limited Heritage International Limited 20

 

Heritage Agro Marine Private Limited

HERITAGE SOLOGAN: When you are healthy, we are healthy When you are happy, we are happy We live for your “HEALTH &HAPPINESS”

“Don’t ask for milk Demand Heritage”

ANNUAL TURNOVER: The company beginning with a humble annual turnover of Rs.4.38 Crores in the year of 1993-94. The sales turnover reaches close to Rs.558 crores during the financial year 2007-2008. The target of Heritage Foods India ltd aiming for Rs.700 crores during the year 200-09. MARKET SHARE: HFIL went to a public issue to raise resources which was over subscribed 54 times and its shares are listed under”B1” category on BSE & NSE .the face value of share is Rs.10. Ex: Time Prev Close Mkt Cap (Rs Cr) Last traded QUALITYPOLICY: 21 06 Feb (15:10:32) 60 71.30 62.00

 “We are committed to achieve customer satisfaction through hygienically processed and packed mil and milk products we strive to continually improve the quality of products and services through up gradation of technology and system” FOOD SAFETY POLICY:  We are committed to procure, process & supply safe & whole some milk & milk products to our valued customers through Implementation of food safety Management system in raw material selection Continual up gradation of technology, system & services Ensuring bests Hygiene & sanitation practices by complying with statutory & regulatory requirements Providing resources to achieve measurable objectives through continual improvement

  

ISO-22000-2005:
 Heritage is the fastest growing company in dairy industry with turnover of 700 crores from milk & milk products 200 crores from allied business with highest return on Investment  It is a preferred brand delighting the customers with safe & wholesome milk & milk products of high quality &service at competitive price  It excels in benchmark business practices in Indian dairy industry  Heritage is a team of highly motivated committed, professionals. Who act as like entrepreneurs practicing innovation, integrity & honesty.

BENEFITS OF ISO 22000-2005:
 To make products more acceptable internationally, as there is a nearly unanimous worldwide acceptance of the ISO-22000 series the food safety management system standards  To reduce risk of product & service liability claims  To enable the company to export to worldwide where ISO22000 certification is expected. 22

 To enhance the communication between organization both up stream & down stream in the food chain Identify that all relevant food safety hazards are identified & ad equably controlled at each step with in food chain, delivering safe product PRODUCT PROFILE Heritage milk a naturally nutritive rich fresh- wholesome food par excellence with self-contained productive food characteristic. Hygienically procured, pasteurized and poly packaged under PFA standards. Heritage milk is a complete food for any age, be it children. Teenagers, adults, expecting mothers as older citizen’s rich with just about allessential nutrients. Heritage milk is full of strength building proteins, energy giving carbohydrates & fats, bone & teeth building calcium & phosphorus and the essential life giving vitamins

Milk Products Of Heritage Dairy:
Milk: Toned Milk, Double Toned Milk, Whole Milk, Cow Milk, Full cream milk UHT Milk In Tetra packs: Toned milk, Double Toned Milk, STD Milk, Slim Milk, Fresh cream.

BY PRODUCTS: Butter Milk Skim Milk Powder

Flavoured Milk (Vanilla, Curd (cup & pouch) Pineapple, Elaichi, Badam, Pista, Chocolate, Ice-Creams Strawberry) Breads Doodh peda Lassi (fruit & sweet) Cooking Butter Honey Panner Buffalo Ghee Cookies 23 Cow Ghee Biscuits

Marketing of Milk and Milk products: One of the most crucial links in the marketing of milk and some of milk products is that, it is highly perishable commodity. It cannot be stored in its original state for more than four hours and therefore billing and packing is required for increasing its keeping quality. Further it is chemical saving fat and also essential proteins, minerals, vitamins and water as its main ingredients. Therefore it can be suitable concerted into butter, ghee, milk powder and reconverted into milk powder and reconverted into milk, when required thus these things will, be kept in mind, while planning effective.

Information Technology:
Heritage Company using like “SAP”, “ERP” latest packages, connecting easily to all IT departments in each plant. Therefore the main advantage of these packages is we have easily access the data from different plants and easily to enter the data and modified the data.

Heritage Network: TotalCenters-62
Chilling centers-50 Major chilling ceters-22 Mini chilling centers-12 Ice Plants -5 Packing Stations-11 Andhra Pradesh -8 Karnataka Maharastra Tamilnadu Bulk cooling Units -11 -1 -1 -2

Total farmers

8 lakhs 24

Daily Collection of Milk Milk Collections Centers Total Employees (Directly & Indirectly) FUTURE ENHANCEMENT • • • • • • • •

8 Lakhs liters 8784 5000

To enhance supplies to meet the growing demand. To enhance productivity of the cattle and the capacity of farmers. To establish and integrate and cold chain, packaging and transportation Facilities of more milk in unadulterated form village collection sites to the length and breadth of the company. To take advantage of the international market under the regime of reduced subsidies is multi-faceted and necessary This is the exciting challenge, which Heritage grids itself to take in its purest to add value to its existence To cover Uncovered markets and to grab more sales Exploring Possibilities to export the products to most of them foreign countries

MARKETING DEPARTMENT:

 To ensure 100% delivery of milk packets to Agents before 5.00AM Daily  To increase sales turnover by10%  To maintain customer satisfaction index not less than 80%. The marketing department covers all the activities related to supply of milk & milk products in the states of AP, Karnataka, and Tamilnadu & Kerala. It operates through its sales office (11), Distributing agents is 2582. Presently company supplies 6lacks liters of milk per day on average. There are 6 varieties of milk & 14 milk products and 3 Variants of UHT milk On the whole company and sales offices together focus on identifying customer needs through regular feedback surveys and making supplies according to their needs. 25

Marketing departments works with a comprehensive objective of supplying safe healthy product to customer forever. Sales offices involve in day-to-day operations of supplying milk & milk products and reports to the corporate office regularly on the need of customer feedback and their needs at corporate office strategies are formulated and sent to sales offices for their execution.

“Be a Partner in our Growth”
HERITAGE PARLOUR: • • • • • Join Franchisee Chain Expansion of Heritage and create profitable Franchisee partnership with Heritage parlours. Excellent Business Model for New Entrepreneurs/ Business owners No Franchisee fee during 2008-09 Willingness to invest Rs.1.0-1.5 Lakhs Earn Rs.10000/- to Rs.20000/- Per Month

Retail division
Rural Retail Heritage Foods India ltd started the Rural Retail business with the objective of reaching FMCG products to villages with population of less than 5000
• • • • • Strengths Efficiencies of centralized procurement Large network of milk collection agents, at most interior villages, who are franchisees of the “Heritage Store" Large network of farmers who supply milk to Heritage two times a day Rural customers have the option of purchasing FMCG and other products against their milk account, thus easing rural liquidity

Opportunity Large Untapped rural market.

26

The Vendor led distribution network does not cover most of the villages. High dependence on the wholesale market at the closest town for all the FMCG needs. Format Brand “Heritage Store“. Avg. floor area of 100 sq-ft. Franchise arrangement with the milk collection agents. As on date Heritage operates over 1800 stores across Andhra Pradesh.

Agri Division
Value proposition for farmers Annual Crop calendar that would ensure much higher annual income per unit area. Technical guidance- Agri advisory services, regular training of farmers, credit linkage and input supply. Package of improved farm practices for better productivity & quality. Assured Market at doorstep. Assured timely payments. Transparency in operations. Vegetables and seasonal fruits are produced through contract farmers and reach pack houses via collection centers strategically located in identified villages for washing, sorting, grading and packing and dispatch to the retail stores through DCs

CHAPTER-II
27

OBJECTIVES AND METHODOLOGY

NEED FOR THE STUDY:
Most organizations struggle to operate manage and improve their efficiency in order to satisfy the customer and at the same time to deliver quality products. Organizations to concentrate on variety of needs and wants of the customer where one is able use or enjoy the product. Hence it has become a dire need rather than mere academic interest in order to study the satisfaction levels of customers using heritage milk. Therefore this study has been undertaken to assess the perception level of customers of heritage milk.

IMPROTANCE OF THE STUDY:
Marketing touches all of us everyday of our lives. We wake up to an alaram.Then we brush our teeth with “Colgate” shave with “Gillette” Use other Toiletries and appliances, which are being used for our daily activities. Computer, which is used for printing. All are produced, and marketed by manufacturers around the world

28

In addition to range of items normally considered as goods and services, what is being marketed may be ideas, such as reducing air pollution or contributing to the united way people ,such as industrial plant sites or a place to go for variation. Marketing is the business function that identifies needs and wants defined and measures their magnitude, determines which target markets the organization can best serve, besides as appropriate products service and programs to serve these markets and calls up on every one in the organization to “think and serve the customer” from as a social point of views, marketing is the force that harnesses a nations industrial capacities to meet the society’s material wants. William Davidow observed. “While great devices are invented in the laboratory, great products are invented in the marketing departments. How ever, the new trends as the government levels of rearing controls is bound to result in increasing competition and a change over in many more products to a buyer’s market. Ordinarily marketing is considered as an activity or function performed by business firms. However, marketing also can be carried out by other organization or even by individuals. Whenever we try to persuade somebody to do something, you are performing marketing.

OBJECTIVES OF THE STUDY
 To study the customer perception levels of Heritage milk  To study the socio-economic back ground of customers.  To know the rate of consumption per day.  To learn about the type of milk and usage rate of Heritage milk by consumers.  To study about the customer opinion regarding price, quality, availability of Heritage milk  To identify the dissatisfaction levels, that might be their in customer satisfaction.  To know the positive factor of Heritage milk.  To know the awareness of Heritage parlours. .

Methodology:
29

Data Sources: The study is descriptive in nature; two types of data are collected for the study. 1. Primary data. 2. Secondary data. a) Sources of primary data: It is the data which is collected for the first time for the study. Primary data is also called as original data. In this study primary data is collected from Heritage consumers with the help of Questionnaire consists of 13 closed ended questions. Some of the information were verified and supplemented through personal observations. The study is carried out during the period Jan, Feb-2009 a sample of 142 consumers was chosen to collect the data for the study. Out of the primary data total population of150

b) Sources of secondary data: The secondary data was collected from the magazines, journals, and Internet etc., published by the organization.

LIMITATION OF THE STUDY:
• • • The study was confined only to the Hyderabad city. Primary data is surely depends on the opinion of the respondents. The response of the customer depends on the various factors like experience, motivational factors like experience, motivational factors, personal feeling etc. • The present study is confined to sample of customers using heritage milk. 30

31

CHAPTER-III THEORITICAL FRAME WORK

Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms. Organizations are increasingly interested in retaining existing customers while targeting non-customers; measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. 32

Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement, although a large quantity of research in this area has recently been developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and Innovation. These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zenithal and Berry (Leonard L) [3]between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance. The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Customersatisfaction.com is your single, best resource for improving your customer service, sales, and telemarketing and negotiation capabilities We offer special seminars, conference and convention programs, customer service training, sales and telemarketing classes, one-to-one coaching, management training, webinars, audio & video learning products, original articles, books, and e-letters. We also offer a range of consulting and research services that include: customer service & sales outsourcing, employee and customer satisfaction surveys, service level monitoring, mystery shopping, unobtrusive measurement, benchmarking, and focus groups. By teaming with us, you’ll be able to access uniquely effective protocols for improving customer service, sales, and telemarketing productivity, making customer transactions shorter, and more cost-effective. You’ll discover leading-edge ways to monitor, measure, and manage your service and sales functions, and overall customer satisfaction. Our methods have been recognized as the "Best" of the "Best Practices in Customer Care." More important, our clients win prestigious industry awards, enabling them to and sustain positions of leader ship &respect. we also give customers new forums, including blogs, where they can Rant & Rave, praising excellent service providers while alerting us to those who fail to meet expectations. By doing so, we hope to improve customer satisfaction at large, while creating a significant feedback loop between businesses and those who are served by them. 33

It's a well known fact that no business can exist without customers. In the business of Website design, it's important to work closely with your customers to make sure the site or system you create for them is as close to their requirements as you can manage. Because it's critical that you form a close working relationship with your client, customer service is of vital importance. What follows are a selection of tips that will make your clients feel valued, wanted and loved.
1. Encourage

Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a customer. If you're not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. It's important to meet your customers face to face at least once or even twice during the course of a project. My experience has shown that a client finds it easier to relate to and work with someone they've actually met in person, rather than a voice on the phone or someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe that if a potential client spends over half the meeting doing the talking, you're well on your way to a sale.
2.

Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers' queries within the space of a few hours, but at least email or call them back and let them know you've received their message and you'll contact them about it as soon as possible. Even if you're not able to solve a problem right away, let the customer know you're working on it. A good example of this is my Web host. They've had some trouble with server hardware which has caused a fair bit of downtime lately. At every step along the way I was emailed and told exactly what was going on, why things were going wrong, and how long it would be before they were working again. They also apologized repeatedly, which was nice. Now if they server had just gone down with no explanation I think I'd have been pretty annoyed and may have moved my business elsewhere. But because they took time to keep me informed, it didn't seem so bad, and I at least knew they were doing something about the problems. That to me is a prime example of customer service.
3. Be

Friendly and Approachable

A fellow Site Pointer once told me that you can hear a smile through the phone. This is very true. It's very important to be friendly, courteous and to make your clients feel like you're their friend and you're there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object - it happens to all of us. It's vital that you keep a clear head, respond to your clients' wishes as best you can, and at all times remain polite and courteous.
4. Have

a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesn't work, then what? 34

Should they contact different people for billing and technical enquiries? If they're not satisfied with any aspect of your customer service, who should they tell? There's nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site -- and anywhere else it may be useful.
5. Attention

to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalized sign-up confirmation email for a service that you could tell was typed from scratch? These little niceties can be time consuming and aren't always cost effective, but remember to do them. Even if it's as small as sending a Happy Holidays email to all your customers, it's something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued.
6. Anticipate

Your Client's Needs & Go Out Of Your Way to Help Them Out

Sometimes this is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship. Take this as an example: you're working on the front-end for your client's exciting new ecommerce Endeavour. You have all the images, originals and files backed up on your desktop computer and the site is going really well. During a meeting with your client he/she happens to mention a hard-copy brochure their internal marketing people are developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep complete with high resolution versions of all the images you've used on the site. A note accompanies it which reads: "Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide you with large-scale copies of the graphics I've used on the site. Hopefully you'll be able to make use of some in your brochure." Your client is heartily impressed, and remarks to his colleagues and friends how very helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy customer will send several referrals your way.
7. Hon

our Your Promises

It's possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project delivery dates. Clients don't like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late, technology can fail and sub-contractors don't always deliver on time. In this case a quick apology and assurance it'll be ready ASAP wouldn't go amiss. 35

Perception is the process through which a person forms an opinion about the various stimuli he receives from his sensory organs. In marketing, perception is concerned with understanding how the consumer views a product or service. The five senses of a person help him in this process. The marketer uses various props to stimulate the consumer, that is, through the use of colors, sound, touch, taste, or smell, to observe the product. The marketer must distinguish his message from the competitor’s message. This is when Just Noticeable difference (JND) comes to their aid. JND is the minimum difference that the consumer can detect between two stimuli he receives. It helps the consumer to distinguish changes in prices among purchase alternatives. Marketers thus use stimuli to grab customers’ attention and most often these efforts are clearly visible and known to the customer. Consumer behavior is the study of when, why, how, where and what people do or do not buy products. It blends elements from psychology, sociology, social psychology, anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. Belch and Belch define consumer behavior as 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'.

Information search Once the consumer has recognized a problem, they search for information on products and services that can solve that problem. Belch and Belch (2007) explain that consumers undertake both an internal (memory) and an external search. Sources of information include:
• • • •

Personal sources Commercial sources Public sources Personal experience

The relevant internal psychological process that is associated with information search is perception. Perception is defined as 'the process by which an individual receives, selects, organizes, and interprets information to create a meaningful picture of the world' The selective perception process • Selective exposure consumers select which promotional messages they will expose themselves to. 36

• • • •

Selective attention consumers select which promotional messages they will pay attention to Selective comprehension consumer interpret messages in line with their beliefs, attitudes, motives and experiences Selective retention consumers remember messages that are more meaningful or important to them The implications of this process help develop an effective promotional strategy, and select which sources of information are more effective for the brand.

Information evaluation At this time the consumer compares the brands and products that are in their evoked set. How can the marketing organization increase the likelihood that their brand is part of the consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the functional and psychological benefits that they offer. The marketing organization needs to understand what benefits consumers are seeking and therefore which attributes are most important in terms of making a decision. Purchase decision Once the alternatives have been evaluated, the consumer is ready to make a purchase decision. Sometimes purchase intention does not result in an actual purchase. The marketing organization must facilitate the consumer to act on their purchase intention. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration.

Post purchase evaluation The EKB model was further developed by Rice (1993) which suggested there should be a feedback loop, Foxall (2005) further suggests the importance of the post purchase evaluation and that the post purchase evaluation is key due to its influences on future purchase patterns. Internal influences Consumer behavior is influenced by: demographics, psychographics (lifestyle), personality, motivation, knowledge, attitudes, beliefs, and feelings

External influences Consumer behavior is influenced by: culture, locality, royalty, ethnicity, family, social class, reference groups, lifestyle, and market mix factors. 37

38

CHAPTER-IV DATA ANALYSIS

Relational table- I: Age and variants of milk: Age

15-30
Variants of milk Toned milk Whole milk Double toned milk Total

30-50 18 27 3 48

Above 50 4 21 2 27

Total 79 52 11 142

57 4 6 67

39

INTERPRETATION: The above table it is very clear that out of 142 respondents 55.63% of the total respondents are using toned milk of which about 47.18.% these are in age group of 15 to 30.where as 36.61.% of respondents are using whole milk which about 19.01%these are in age group 30 to 50. Why because in the age group 15-30 like young age as well as growing stage of people. So youngsters are wants most energy food. So Toned milk has high Fat and NSF so it occupies the first place compared to the other variants of milks. Here least respondents namely 7.746% of the total respondents of the of Double toned milk which about 0.014% these are in age group of above 50.Why because in this age the people need not want high calories milk. Because of diabetes, bold pressures patients are very high. So they want to low calories of milk that is whole milk.

Relational Table- II: Family size and Consumption rate:

Family size Consumption rate 0.5liters 1-1.5 liters 2 and above Total
INTERPRETATION:

Below 4

4 to 6

Above 6

Total

17 6 3 26

6 43 10 59

2 21 34 57

25 70 47 142

The above table it is clear that out of 142 total respondents 18.30% are 4 or less than 4 members. It means small family size. So the consumption rate of milk is 11.97% is very low. Because the usage rate of milk is limited. Where as family size 4 to 6 the 40

consumption 1-1.5 liters of milk. I.e. rate is 49.29% is very high. Because of increasing the family size consumption rate also increases. Here the family size above 6 the usage rate of milk is 40.14% is very high because they purchase more milk for their daily usage rate.

AWARENESS ABOUT HERITAGE MILK:

Table: 1 showing sources of knowledge about Heritage milk Source No of Respondents Percentage (%) Advertisements 22 16 Friends 10 7 Retailers 39 27 Point of purchase 71 50 Total 142 100

Fig: 1 showing sources of knowledge about Heritage milk

41

60 No of respondence(%) 50 40 30 20 10 0 Advertisements Friends Source Retailers 16 7 27

50

Point of Purchase

Source: Primary data INTERPRETATION: The above table shows that 50% of the respondents know about the Heritage milk through point of purchase display, containing wall paintings, display of the milk packets in front of the shop and display of milk credits by the company. 27% through retailers 16% of the respondents know about the company through advertisements, 7% through friends.

TIME BEING USED HERITAGE MILK:

Table: 2 showing time being used Heritage milk Time period Days Months Years Total No. Of respondents Percentage (%) 33 23 38 27 71 50 142 100

42

Fig: 2 showing time being used Heritage milk
80 70 60 50 40 30 20 10 0 No.of respondents(%) 50 27

23

Days

Months Time period

Years

Source: Primary data INTERPRETATION: From the above table show that 50%respondents are regular customer of Heritage milk from the past so many years, where as 27%respondents are using few months. And 23% respondents are started using heritage milk in past days.

CONSUMPTION PER DAY:

Table: 3 showing customers consumption per day Liters 0.5liters 1liters 1.5 liters 2 and more above Total No. Of respondents 24 67 30 21 142 Percentage (%) 17 48 21 14 100

43

Fig: 3 showing customers consumption per day
80 No.of respondents(%) 70 60 50 40 30 20 10 0 0.5liters 1liters 1.5 liters Liters 2 and more above 17 21 14 48

Source: Primary data INTERPRETATION: From the above table show that 48%are consuming one- liter, 21% are consuming one half-liter 17% of the respondents are consuming half-liter milk per day, and only 14% are consuming 2 or more than two liters. Because the consumption is depending upon the family size

VARIANTS OF MILK USED BY CUSTOMER:

Table: 4 showing variants of milk consumed by the consumers Type of milk Toned milk Whole milk Double toned milk Cow milk Total No. Of respondents Percentage (%) 101 71 20 14 17 12 4 3 142 100 44

Attributes Price Quality Brand name Total

No. Of respondents 5 110 27 142

Percentage (%) 3 78 19 100

Fig: 4 showing variants of milk consumed by the consumers

120
No.of respondents(%)

100 80 60 40 20 0

71

14

12 3

Toned milk Whole milk

Double toned milk

Cow milk

Milk
Source: Primary data

INTERPRETATION: From the above table shows that 71%of the respondents are preferred toned milk 14% of the respondents are using whole milk 12% are using Double toned milk, only 3% of respondents prefers Cow milk. According to the customers tastes and preference they are chosen different variants of milk. Another reason is that these variants of milk are packed with different Fat, NSF percentages. Thus, Customers prefer Toned milk mostly for their consumption. CONSIDARABLE FEATURES OF CONSUMERS: Table: 5 showing considerable features of consumers

45

Fig: 5 showing considerable features of consumers

120
No.of respondents(%)

78

100 80 60 40 20 0 3 Price Quallity
Attributes

19

Brand name

Source: Primary data INTERPRETATION: Form the table it is clear that most of the consumers are looking for quality. 78% of the consumer’s preferred quality, 19% respondents considered Brand image, only 3% of respondents considered about prices of milk. Quality refers to the taste, freshness, packing.

INFLUENCE OF PRICE:

Table: 6 showing customer opinions on prices of milk 46

Opinion Low Medium High Total

No. Of respondents 0 83 59 142

Percentage (%) 0 59 41 100

Fig: 6 showing customer opinions on prices of milk
90 NO.of respondents(%) 80 70 60 50 40 30 20 10 0 0 Low Medium Scale High 59 41

Source: Primary data

INTERPRETATION: From the 142 respondents 59% of respondent’s opinion is that the price of the Heritage milk is medium. None of the consumers are of the opinion that the price of milk is low, 41% of the respondents are saying that the prices of Heritage milk are very high. Because as the company is paying maximum support price to the farmers and increase of the transportation cost. So prices of heritage milk are competitive.

47

QUALITY OF MILK: Table: 7 showing customer opinions on quality of Heritage milk Quality Excellent Good Average Poor Total No. Of respondents 84 41 17 0 142 Percentage (%) 60 29 11 0 100

Fig: 7 showing customer opinions on quality of Heritage milk
90 80 No.of respondents(%) 70 60 50 40 30 20 10 0 Excellent Good Quality Average 0 Poor 11 29 60

Source: Primary data INTERPRETATION:

48

From the above table shows that 60% of consumers opined that the quality of Heritage milk is Excellent, 29% respondents that it is good, 11% are average, none of them say poor. Hence, it can be concluded that most of the customers feel Excellent with the quality of Heritage milk.

CONSUMERS OPINION ON FRESH MILK: Table: 8 showing consumers opinion on fresh milk Response Strongly agree Agree Disagree Strongly disagree Total No. Of respondents Percentage (%) 29 20 103 73 10 7 0 0 142 100

Fig: 8 showing customers opinion on fresh milk
No.of respondents(%) 120 100 80 60 40 20 0 Strongly agree Agree disagree 20 7 0 Strongly disagree 73

Freshness of milk

Source: Primary data INTERPRETATION: The table shows that the 93% customers agreed that fresh milk is available in the market it means Heritage foods supply everyday fresh milk with labels display of date, month, year. Only 7% of the customers are not satisfied with freshness of milk

49

Therefore it can be seen from the table that most of the customers feel that Heritage milk is available freshly

AVAILABILITY OF HERITAGE MILK IN THE MARKET:

Table: 9 showing availability of Heritage milk in the market Response Strongly agree Agree Disagree Strongly disagree Total No. Of respondents 10 121 8 3 142 Percentage (%) 7 85 5 2 100

Fig: 9 showing availability of Heritage milk in the market
140 No.of respondents(%) 120 100 80 60 40 20 0 Strongly agree Agree disagree Strongly disagree 7 5 2 85

Opinion of consumers

50

Source: Primary data

INTERPRETATION: The above table show that 85% of respondents are agree with the statement that Heritage milk is easily available in the market,7% strongly agree, 5% respondents disagree agree, Only 2% respondents are strongly disagreeing with the statements. Because of company followed good supply chain process and timings followed exactly. Where as cooperation between top management to lower level management is good.

CUSTOMER OPINION ABOUT CHANNEL OF DISTRIBUTION:

Table: 10 showing customer opinions about channel of Distribution Channel Door delivery Purchase from Retail shop Purchase form Agents Purchase from Company outlets Total No. Of respondents 81 21 34 6 142 Percentage (%) 57 15 23 5 100

Fig: 10 showing customer opinions about channel of Distribution
90 80 70 60 50 40 30 20 10 0 Door delivery 57

No.of respondents(%)

23 15 5 Purchase from Purchase form Purchase from Retail shop Agents Company outlets Channel

Source: Primary data 51

INTERPRETATION: From the above table shows that 57% of the customer preferred the door delivery channel as the best option. Where as 15% opined purchasing from agents, 23% are purchasing in at retail shops, 5% of respondents purchase from company outlets. Because of company have more milk outlets through entire city. Thus, it can be conclude by saying that customers feel door delivery channel as the best option in purchasing milk

ATTRIBUTES OF HERITAGE MILK: Table: 11 Showing Attributes of Heritage milk Factor Flavour Freshness Taste Brand image Total No. Of respondents Percentage (%) 12 8 44 31 57 41 29 20 142 100

Fig: 11 Showing Attributes of Heritage milk
60 50 No.of respondents(%) 40 30 20 8 10 0 Flavour Freshness Factors Taste Brand image 20 41

31

52

Source: Primary data INTERPRETATION: From the above table it is clear that out of 142 respondents 41% respondents are saying that taste is the plus point of Heritage milk, 31% are saying that Freshness is positive factor of Heritage milk, 20% of respond to Brand image of Heritage milk. 8% of respondents to Falvour in milk. Because in customer point of view company have good brand image. Where as milk taste is excellent .because the company take more quality measures like ISO- 9001, 22,000.These are the standards tells the real quality of milk.

CUSTOMERS INTERST IN DAIRY PRODUCT: Table: 12 showing Customers interest in Dairy products Products No. Of respondents Percentage (%) Ice-creams 15 11 Flavoured milk 27 19 Doodhpeda 21 15 Butter milk 11 8 Curd 12 8 Panner 11 8 All the above 45 31 Total 142 100 Fig: 12 indicate the customer interest in Dairy products

53

No.of respondents(% )
Ice-creams

Ice-creams 11 All the above 31 Flavoured milk 19

Flavoured milk Doodh peeda Butter milk Curd

Panner Doodh peeda 8 15 Curd Butter milk 8 8

Panner All the above

INTERPRETATION:

From the above table shows that 31% of customers preferred and interest to use in all dairy products, 19% preferred Flavour milk, 15% prefers Doodh peda, 11% respondents preferred to buy Ice creams 8% responds to Buttermilk, curd, Panner respectively. Because the dairy products are very fresh and healthy. And most of the customers are likely to buy curd and butter milk for their daily needs. Panner is a vegetable items mostly used in cooking purpose. Ice-creams are attracting the children’s. Where as Flavoured milk is a milk which indicates different flavours like sweet, Badam, pista, strawberry etc.

AWARE OF HERITAGE PARLOURS:

Table: 13 showing customers aware of Heritage Parlours Response No. Of respondents Percentage (%) Aware 90 64 Not aware 52 36 Total 142 100

Fig: 13 showing customers aware of Heritage Parlours 54

60 No of respondence(%) 50 40 30 20 10 0

64 36

Aware Response

Not aware

Source: primary data

INTERPRETATION: Form the above table shows that most of the customers (64%) are aware of Heritage parlours, introduced by Heritage Company. Only 36% of customers not aware of Heritage parlours. Because company has less advertisements in the market. They have chosen only print media i.e. is only pamphlets for advertising to promote their products in to the market segments. Because the amount invest on Heritage parlour is very less.

55

CHAPTER-V FINDININGS AND SUGGESTIONS

Summary of Findings, Conclusions& Suggestion: FINDINGS:
 Most of the respondents have come to know about heritage milk through point of Purchase through displaying credits in roadside. Majority of the respondents are regular consumers of Heritage milk for more than a year, remaining customers are using Heritage milk since 6months. Majority of the customers are consuming more than liter per milk daily. Majority of the customers preferred toned milk for their daily needs. Majority of the customers are choosing Heritage milk because of quality. 56

Majority of the customers fell ok with the price of milk available in the market but some of respondents say that the prices of Heritage milk high. Most of the customers satisfied the quality of Heritage milk, remaining of customers given a rating as good. Majority of the customers are agreeing that the availability of milk is on demand of the product. Most of the customers preferred door delivery distribution channel as the best channel. Most of customers experienced that taste is one of the major positive factors in Heritage milk Almost every customer preferred each and every type of new products produced by the company. Most of the customers are Aware of Heritage Parlours

PERSONAL OBSERVATIONS IN SURVEY:

1. According to my observation dealers play a vital role in the consumer decision-making process and in changing the customer perception to wards a particular brand of milk.

2. Some of the consumers think that the price of milk is high. So in future company might think on price reduction.

57

3. As, survey reveals that some of the consumers say that we re using Heritage milk for past so many years, but recently heavy smell is happening in the milk. And another cause is Leakage problem.

4. Company might be thinking about packing as well as quality of milk.

SUGGESTIONS

Heritage milk and milk products need to expansion of the market in different segments

Increase the Advertisements and publicity through Media &News papers regarding Heritage milk& milk parlours is to be done in all effective manners, in ordered to increase the sales

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Distribution channel must be recognized at frequent intervals, so as to reach the product to the customers effectively. Concentration had to be laid on the dealers because they have a great capacity to change the customer’s decision. Company should encourage the dealers (or) Agents in the form of extra benefits; it may increase the sales of our milk &milk products. Company should supply complaint box in every milk booth in order to know public opinion & also their suggestions. Continuous improvement of quality of product and stylish colorful packing design these measures in order to attract new customers Company should conduct a market survey at least once in 3months in order to know the opinion of customers. Avoid the problems that smell in milk. These are discouraging the customer loyalty.

CONCLUSION

From the above findings it is clear and can be concluded saying Heritage milk is the customer’s best preference for consumption & the first choice for consumption.

Heritage has brand image “Don’t ask the milk Demand Heritage”, “Health& Happiness” these captions are very popular in the market .so this image as well as maintain quality of 59

packing, standard price of the milk durability of milk availability of the milk these are strictly followed by the company.

As said customer is a King in the marketing .HFIL treats customers as god by considering the preference of the customer& there by satisfying the customers on all aspects.

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APPENDIX

GUDLAVALLERU ENGINEERING COLLEGE, GUDLAVALLERU SESHADRIRAO KNOWLEDGE VILLAGE (PG DEPARTMENT OF BUSINESS ADMINISTRATION)

“Consumers perception towards Milk and Milk Products” Of Heritage Foods India Limited

Name: Age:

Family Size: Income Level:

1. How did you know about Heritage milk? a) Advertisement b) Friends c) Agents d) Point of Purchase
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2. Since how many days/ months/years are you using Heritage Milk _ _________? 3. How many liters of Milk do you consume Per Day? a) 0.5 Liter b) 1 Liter c) 1.5Liter d) 2and more 4. Which type of milk are you using? a) Toned Milk b) Whole Milk c) Double Tonned Milk d) Cow Milk 5. Rank the features of Heritage Milk: 1 Price Quality Brand Name 2 3

6. What do you feel about the prices of Heritage Milk? a) Low B) Medium c) High

7. How do you rate the quality of Heritage Milk? a) Excellent b) Good c) average d) Poor

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8. Does Heritage Milk is easily available in the Market? a) Strongly agree b) agree c) disagree d) Strongly Disagree 9. Does Heritage sell Fresh Milk? a) Strongly agree b) agree c) disagree

d) Strongly Disagree

10.How are you getting the Milk? a) Door delivery b) Purchase at retail shop d) Purchase from company outlets

c) Purchase from agents

11.According to you what is the positive factor of Heritage Milk? a) Flavour b) Freshness c) Taste d) Brand Image 12.What is your most favorite Product in Heritage Dairy Products? a) Ice-cream b) Panner c) Lassie d) Flavoured Milk e) Curd f) Doodhpeda g) Butter Milk h) All the above 13. Are you aware of Heritage Parlours? a) Yes b) No 14. What suggestion would like to give about Heritage Milk______________________________________________________ ________________________________________________________

Thank You

(

) Signature

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BIBILOGRAPHY

REFERENCE:
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Basic Information

- Questionnaires filled by the customers. (9-02-09 to -20-02-09)

Websites

-

www.heritagefoods.co.in (10-02-09, 12-02-09, 14-02-09) www.wikipedia.com (10-02-09, 12-02-09, 14-02-09) www.google.com (10-02-09, 12-02-09, 14-02-09) www.answers.com (10-02-09, 12-02-09, 14-02-09)

TITTLE OF THE BOOKS:

Marketing Management - (Philip Kotler) Consumer Behavior - (Leon G.schifman& Kaunk)

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