Professional Documents
Culture Documents
SECTION D - MARKETING
GROUP 8
From the time of Independence itself, the Indian dairy industry has been on a
steady path of growth and progression. From a production of 17 million tonnes
in 1951 to a whooping production of 121 million in 2011, shows the evidence to
the statement made above. Today, India ranks as one of the leaders in the
production of milk, in the whole world. This solid progression in the production
of milk in India could be primarily attributed to the structural changes brought
about by the leading dairy cooperatives in the country.
The dairy industry in India reported a market size of USD 48.5 billion in the fiscal
year 2011. Compounded at an annual growth rate of 16 %, it is expected to reach
USD 118 billion till the fiscal year 2017. Coupled up with an increase in the
disposable income of the Indian consumer, by the ongoing trends in the increasing
demand for the dairy products, as well as the customer preferences and trusts in
the domestic brands in the dairy industry, this sector is to see an immense growth,
in the coming 5 years.
Based on the cultural mindset, the consuming pattern of the dairy products is quite
unique when compared to some of the western countries. Consumption pattern as
of now, is skewed towards the traditional dairy products but the western products
are gaining momentum in the urban areas, at a high pace. Interesting enough, the
buffalo milk accounts for the highest share of the milk produced in the country.
Since the fat content of the milk decides the pricing scheme of the milk, i.e. higher
the fat content, higher the price of the milk variant, it is evident that buffalo milk
is comparatively a better margin producer on a per litre basis of milk, in
comparison to cow milk. But the recent trends show that the Indian consumers,
particularly in urban areas, are moving towards, healthier choices of life, thus an
increase in the demand of the cow milk and other milk variants containing lower
amount of fat, such as Toned milk, Double Toned milk or Ultra lite milk.
The all so highly fragmented Indian dairy sector is dominated by the unorganised
sector comprising of about 70 million rural households. At 289.4 grams per day
in 2014, the per capita milk availability in India is expected or anticipated to reach
336 grams per day at the end of the fiscal year 2017.Even as one of the largest
milk producing countries in the world, India contributes a negligible share of
trade because of the higher consumption in the domestic market itself. The all so
increasing domestic demand for the milk and milk products in the country, could
lead India to be a net importer of the dairy products, because of the ever-
increasing demand-supply gap, in the near future.
With the changing mindset of consumers from aerated and carbonated
refreshment drinks to healthier refreshments, there lies a huge opportunity for the
dairy industry. It opens new areas of possibilities and opportunities for the
companies.
MOTHER DAIRY
Set up in 1974, under the Operation Flood, Mother Dairy is a wholly owned
subsidiary of National Dairy Development Board (NDDB). Approximately
selling around 3.6 million litres of milk in Delhi and NCR regions, it has a market
share of 62% and undertakes its marketing operations through 1400 retail outlets
and over 1000 exclusive brand outlets of the company. The company initially
focused on Delhi and the NCR regions as its markets, but later expanded to other
parts of the country.
Ensures that the key stakeholder in the process, the farmers get the most of
the profit created along the way, in an attempt at providing them a better
lifestyle and honour their efforts in farming their produce. This is ensured
by providing the farmers, around 85% of the capital gained by the sales of
the produce.
The company has a unique distribution network of bulk vending milk booths,
retail outlets and mobile units which give it a competitive advantage over the
other brands. Mother Dairy ice creams were launched in the year 1995 and have
shown a continuous in the growth trend, empowering the Value-Added Products’
category which has become an asset worth 1000 crores and today promises of
around 62% market share in Delhi and Delhi NCR. The wide portfolio of dairy
products by Mother Dairy includes offerings such as Butter, Mishti Doi, Paneer,
Dahi, Ghee, Cheese, Yogurt, UHT milk, Probiotic products, Lassi and Flavoured
milk having a pan India presence, for most of these.
The organized Fruit & Vegetable retail business by Mother Dairy, named as Safal
is the market leader in this business having a prominent presence in Delhi NCR
and other parts of the country. It has a network of 350+ exclusive retail outlets
through which it has a sale of around 300MT per day, under the brand name Safal/
Safal Pure Veg, empowered by a State-of-the-Art, central distribution facilities
with the biggest one being in Delhi having an annual capacity of handling and
processing 2,00,000 MT of fresh fruits and vegetables. Safal, today operates as
the largest brand in terms of number of F&V Stores in Delhi and other parts of
the country and has further expansion plans in place, for a pan India presence.
Safal also has a prominent presence across 40 countries viz., USA, Europe,
Russia, Middle East, Asia and Africa in the export market of Fresh Fruits &
Vegetables (Grapes, Banana, Gherkin, Onion, etc.), Fruit Pulp & Concentrate,
Frozen Fruits & Vegetables, etc. Through its quality ensuring, state of the art
fruit pulp processing plant, set in Mumbai which has an annual capacity of 15000
MT, Safal provides high quality fruit pulp to these international markets.
Realizing the increase in demand, another such plant has been set up in Bangalore
with a processing and handling capacity of around 50,000 MT annually.
The other subsidiary brand owned by Mother Dairy is known as Dhara, which
produces, edible cooking oils. The brand emphasizes on the purity of its products
and delivers the message of the everyday festivity in an Indian family through
cooking. The brand currently offers the following variants: Refined Vegetable
oil, Refined Soybean oil, Refined Sunflower oil, Refined Rice Bran oil, Kachchi
Ghani Mustard oil and Filtered Groundnut oil.
In total, there are five Strategic Business Units of the company namely Milk,
Value added dairy products, Retail Safal, Value added Safal and Dhara. Milk and
value added dairy products are marketed under the brand name of Mother Dairy.
Dairy products can be further classified into three divisions; Short shelf life
products, Long shelf life products and Ice creams. Retail Safal and value added
Safal are marketed under the brand name Safal and Dhara, the vegetable oil
division of company is marketed under the same name.
OBJECTIVES OF THE STUDY
Dairy Products are from the rare category of products which have an expiry of a
single day or some few days, thus understanding sales of company like this was
very interesting
Also, we wanted to know how Mother Dairy competes with competitors like
Amul which have a nation-wide presence. Also what were the different sales
strategies used by Mother Dairy to increase and retain its market share
6. REACH- We also studied how the various products are made available to the
customers
INSIGHTS ON SALES AND DISTRIBUTION SYSTEMS
AND PROCESSES
Mother
BH: Safal BH: Dhara
Dairy
BH:
BH: Milk
Products
NSM: Ice
Cream
Business Head
Business development
executive
At the top of the Organizational hierarchy sits the Managing Director of the
company. Mr. S Nagarajan is the current MD of Mother Dairy Fruit and
Vegetables Pvt. Ltd. Under the M.D. are Business Heads of different SBUs.
Under the Business Head are the heads of different departments namely Sales,
Marketing, H.R. etc. Under the Sales Head who is also the National Sales
Manager is the Regional Sales Manager. The Area Sales Manager reports to the
R.S.M. and the Sales executive report to the A.S.M. The Sales Executives can be
further divided into three categories; Junior Executive, Executive and Senior
Executive. Similar structures are present in the other SBUs.
The company procures milk from Milk unions and farmers spread in different
areas. The milk reaches the company plant where the value added products are
manufactured. From the plant, the products are supplied to distributors who
distribute the products to retailers and through retailers, the products finally reach
the end consumer.
There are a total of nine product lines under the ambit of the project. They are as
follows:
1. Set Curd
2. Poly Curd
3. Lassi
4. Probiotic drink Nutrifit
5. Flavored Milk
6. Chachh
7. Paneer
8. Yoghurt
9. Mishti Doi
NORTH
CENTRAL EAST
The area considered in the project is Delhi NCR which is strategically divided
into 6 parts, namely Central, East, South, North, Gurugram and Faridabad and
UPNCR (Ghaziabad, Noida and Greater Noida). 16,000 stores exist is the area of
Delhi NCR which is covered by 185 distributors which is managed by 73 total
sales force, which includes 48 on payroll of mother dairy and the other 25 off
payroll of mother dairy. This makes mother dairy’s sales force very effective as
a large number of stores can be calculated on each sales men.
PROJECT IMPLEMENTATION
We had extensive discussions with Mr. Charanjot Bhatia, Area Sales Manager
(ASM), UPNCR region to understand roles and responsibilities and the
functioning of the Sales vertical.
- Group Discussion
- Personal Interview
- Result Sharing
Key in-charge of one of the sale territories under the Regional Office
Works in co-ordination with ASM for daily and monthly sales achievement
Places order indent for the next day and makes payment (Cash business)
Logistics
Finance
Sales target per ASM for Mother Dairy is around 1 lac/day. The same is
distributed over the Business Development Executives under the ASM.
Margins in the business depends on the demand, incentives passed on to the
subsequent partner down the chain and quantity of goods ordered. The Table
below gives the range of margin per stage of business.
DISTRIBUTOR 5-15%
RETAILERS 10-20%
COMPENSATION STRUCTURE
SALESFORCE EVALUATION
These objectives are used as parameters to assess the salesforce and give them
guiding directions.
In addition to these employees also had a mentor system which was intended to
help employees in their respective fields.
Economies of Scale
Plant Location – Freight Charges
Supplier geography
State wise taxes
While Mother Dairy holds the price advantage over AMUL in most of the
products, AMUL, owing to its large scale production holds advantage in some
categories.
Since the plant location is in Gujarat, AMUL, in Delhi Region, focuses only on
products with Shelf life over 2 weeks.
A price comparison of products available in Delhi NCR under the SSL category
is given below.
MOTHER DAIRY AMUL
Set Curd(400gm) 50 40
Poly Curd (1 Kg) 55 -
Bottle Lassi (200ml) 20 15
Nutrifit(80ml) 10 -
Flavoured Milk (250ml) 25 25
Chachh (200ml) 10 10
Paneer (200gm) 75 75
Yoghurt (100GM) 20 20
Mishti Doi (85 gm) 20 20
CHANNEL EVALUATION
While talking with Mr Charanjot Bhatia about the various channels that Mother
Dairy uses, we came to know the following facts:
· Quality circles: The local channel members meet each month to discuss
achievements and the issues of the channel members. This is a continuous
activity aided by the company offices in various locations; this allows the
channel members to learn together and reduces the conflicts among the WDs.
· Scheduled Sales: The WD’s provides the schedule of the distribution to the
salesmen and to the retailers so that the retailers and salesmen can plan out and
place the orders in advance.
MERCHANDISING
Mother Dairy uses careful and smart merchandising to spread the message of
healthy living. During our visit to retail outlets, shopkeepers informed that they
themselves decide the shelf organisation. Company is sends the decorative items
but the setting up is as per retailer’s discretion.
Fig4. Mother Dairy Merchandising
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