PROJECT
RESEARCH
REPORT
on
Study of Identifying
factors behind
decreasing market share
and study of consumer
behaviour

SUBMITTED FOR
PARTIAL FULFILMENT
OF THE DEGREE

OF

MASTER OF
 

Supply Chain Management

1) Milk Procurement: - Mother Dairy sources its requirement of liquid milk 

from dairy co-operatives and producer institutions. Milk is received from farmer 
cooperatives through insulated tankers at 2  temperature in order to retain its
°

freshness.

2) Milk distri!ution: -"ankers in the morning and in the evening !ring in milk 
from the regional collection centres. #fter collection the same tankers are
utili$ed for the delivery of the processed milk to the distri!utors. Mother Dairy
‟
has a!out %1 Distri!utors in the city of Delhi. &ach of these '#D s('ocal area
distri!utor ) place their demand !y raising an invoice one day in advance. "he
‟
demand is also calculated using the alendar *cheme+ in this depending on
the pre-calculated seasonal demands the outlets place their orders accordingly.
,n order to satisfy immediate demand+ 2 to 2% tankers are provided ith a
 !uffer stock of % litres each day so that they can !e mo!ili$ed to cater the
demand in an area. "o coordinate its operations all the tankers are equipped ith
/#M radios.

 | 17
 

Distribution Channels:

a) "oken Distri!ution: #lso+ termed as 0 Lohe ki bhains (metal !uffalo)+ is an

automated milk vending machine.

 !) Distri!utors: "he packaged milk is distri!uted via the distri!utor netork 
throughout the city.

Processing

#t mother dairy+ the processing of milk is done !y process automation here!y

state of the art microprocessor technology is adopted to integrate and
completely automate all functions of the milk processing areas to ensure high
 product qualityrelia!ility and safety. "here are four ays of milk processing 3 

4irstly+ larification+ in hich milk is spun at very high speed+ removing all
dust particles that are invisi!le to the naked eye.

*econdly+ *tandardisation hich help to maintain uniformity !y raising or 

loering its fat and *54 (solid not fat) percentage to a desired levels+ so as to
deliver milk to consumers as per prescri!ed P4# norms.

"hirdly+ it is /omogeni$ation hich improves palata!ility of milk and

 | 18
 

4inally+ Pasteuri$ation+ hich kills all pathogenic !acteria present in the milk
and thus making it safe for consumption.

Quality Control

*tringent quality control methodologies are employed in Mother Dairy.

a) "he milk is tested for adulterations and quality at the time of collection from the
farmers.

 !) "he Milk that comes from the collection points to the Mother Dairy plant is
ensured to have a temperature of not more than 67 and is su!8ected to 1%
 product and quality checks.

c) "he Milk quality is checked repeatedly after each processing phase and the
temperature is 8udiciously maintained less than 67 alays.

d) 9efore the milk leaves the plant for the deliverydistri!ution outlets the milk is
tested again.

e) "he temperature of milk in the delivery trucks is alays maintained less than
67.

f) #ll the trucks that deliver milk have specified guidelines to !ring !ack 1 litres
of milk after distri!ution. "his is done in order to test the delivered milk and to
ensure that the tankers are not adulterated during distri!ution.

g) *ince all the employed processing procedures are automated+ no contamination

 !y human hands takes place.

h) "o ensure milk freshness the collection and distri!ution points are alays
chosen such that the travel time !eteen them is alays less than ; hours.

<ut of the total production a!out => goes directly to the institutions +2> is
‟
the loose token milk and the rest is distri!uted through '#D s.

MBA 2012-14| 19
 

COMPETITOR ANALYSIS

AM!

  #mul  is the acronym for #nand Milk ?nion 'imited+ a dairy cooperative
company in @u8arat+  ,ndia that markets a ide range of products including
milk poders+ milk+ !utter+ ghee+ cheese+ chocolate+ *hrikhand+ @ula! Aamun+
ice cream+ cream+ and others making it the largest food !rand in ,ndia. #mul has
spurred the Bhite Cevolution  of ,ndia+ hich has made ,ndia the largest
 producer of milk and milk products in the orld. ,t is one of the !est eamples
of co-operative achievement in the developing economy. #mul entered the
 pouched milk market in Delhi in 2% and then onards giving a tough
competition to Mother dairy .Presently #mul has a 6 > market share in the
 !randed milk segment.

Product 20
 

"he varieties of #mul milk availa!le in Delhi are :

• #mul "aa$a "oned Milk > fat
• #mul @old 4ull ream Milk ;> fat
• #mul *lim E "rim Dou!le "oned Milk 1.%> fat
• #mul "ea *pecial

#t #mul skim milk poder is procured from the cooperatives of @u8arat hich
is much superior in quality hen compared to the cooperatives of Best 9engal
leading to !etter quality of products.

Price

Bhen compared to Mother dairy + the distri!utors margin of #mul is .%pltr 

hereas Mother dairy gives .pltr .,n case of retailers Mother dairy has fied
margin in every part of Best 9engal ./oever #mul gives different margins
depending upon the location and sale of the retailer hich !ecomes a great
incentive to sale. "he price of the milk to the end consumer is hoever similar 
to Mother Dairy.

21

Place

"he availa!ility of milk is a ma8or concern among the consumers. #mul ith its
vast distri!ution netork has enhanced the market and is responsi!le for its
groth. #mul has made pouched milk availa!le in almost all su!ur!s of Best
9engal here e cannot find Mother dairy even today. Mother dairy is not a!le
to cater to those markets !ecause their si$e is comparatively small and ith the
current retailers and distri!utors margin there is hardly any profit left to them
 !ecause the ependiture is much more.

Promotion

#mul has a great !rand image in the mind of the customer ."heir epert
marketing and advertising strategies add all the more to the sales.
 

23

STUDY OF DISTRIBUTORS AND RETAILERS

"he study of distri!utors and retailers as conducted on a part of 5orth Delhi
+ie+Maniktala + *hyam!a$ar + #hmerst street + Ca8a 9a$ar + Malik 9a$ar+ 5e
Market + Dalhousie + Minto Park + &splanade + Dharamtala + #.A..Coad . "he 
ma8or distri!utors in the area ere intervieed. "hey are :

4ive *tar Distri!utor 

6#+ B  9aner8ee *treet
Delhi-F;

#.*.Milk 
2# + *cotland 'ane
Delhi-F=

Ayoti @upta
1 + Ca8a Cam Mohan *arani
Delhi-F=
Ph : =G1=-%=G;

"he method of personal intervie and questionnaire as adopted to get the
insights. "he folloing mode of operation as found out through intervies :


#n agreement is done !y the company ith the '#D for payment of a security
deposit


"he '#D ill receive the delivery of poly pouch milk at the scheduled
 place mutually agreed upon and to sell the same to the third party retailers
in the area specified !y the dairy


"he milk shall !e sold !y the '#D to the retailer already eisting in that area and
further outlets to !e developed !y the '#D


"he agreement made at the !eginning of the contract ith the '#D shall remain
valid for a specified period of time and shall !e terminated on the

MBA 2012-14| 24
 

epiry of the period unless it is etended or reneed for any further

 period !y mutual agreement


"he '#D ill take the delivery of the eact quantity of packaged milk 
supplied !y the dairy in its place against the indent placed !y the '#D
the previous day. "he 'ad shall pay the cost of milk against the delivery
‟
of milk !y an account payee cheque or !anker s cheque


"he operational area of '#D shall !e decided !y mutual consent and may !e
increased or decreased as per the decision of dairy from time to time


"he '#D shall increase the sales !y at least 1> over and a!ove the present sales
ithin  months


"he '#D shall !e responsi!le for delivery of milk in good condition and
in time to various outlets !y his on arrangements of transport and
manpoer


,f at any time the milk is found unfit for human consumption due to mishandling
or !ad storage !y the '#D + strict action ill !e taken


"he '#D is solely responsi!le for maintaining the sealing + quality + packaging +
etc. of the milk packets received from the dairy


"he milk once delivered to the '#D shall not !e returned to the dairy at anytime
and under any circumstances


"he '#D shall also !e responsi!le to leverage out the !enefits given to the
retailers !y the company from time to time

"he results of the questionnaires filled !y 'ad are given !elo :-

MBA 2012-14| 25
 

RESEARCH METHODOLOGY
Purpose

"he !asic purpose of this research is to find out the factors affecting the
decision of the consumer to purchase milk 

Problem

"o find out pro!lem is the first stage of the research process. ,t represents
translating the management pro!lem into research pro!lem. ,t is rightly said+ 0#
 pro!lem ell defined is half 3 solved.

onsumers have faith in the !rand image of Mother dairy+ still its losing share
to #mul and other local !rands

"b#ectives

"he o!8ectives of the study are as follos:

1) "he o!8ective of the study as to find the actual reason hy people are
not !uying Mother dairy

SAMP!$

Sampling %rame:

# *ampling frame consists of a list of item from hich the sample is to !e

dran.

"he sample frame for this research constitutes the customers visiting retail
outlets to purchase milk in 5orth and &ast Delhi.

Sample Si&e:

"he sample si$e of the research as 1% individuals.

MBA 2012-14| 3
 

Methodology:

,nitially 2% factors ere identified to carry on the survey through an

analysis. "his as further cleaned into a list of questions in a questionnaire
(refer anneure). <nce framed and properly fragmented+ these ere
individually filled for a process of Descriptive Cesearch. # cross-!oard
survey as undertaken involving consumers of milk in east and north Delhi.
"his gave a congregated set of 16 responses hich ere then segregated
and keyed into *P**. *P** as etensively used to narro don the
factors into components.
 

DA'A I('$)P)$'A'I"(

MBA 2012-14| 2
 

MBA 2012-14| 27
 

Interpretations :

&arlier Mother dairy itself used to distri!ute milk directly to the local retailers+
‟
the distri!ution of milk through '#D s started only last year. *ince the
distri!utors are ne they hardly have any complain regarding retailers drop out
ithin the year of ork. /oever sales ere largely affected due to competition
from other local !rands hich are coming up daily ith ne schemes.

#ccording to the distri!utors+ the margin as not sufficient to meet their 
epenses. "heir profit remains negligi!le. #mong the competitors also Mother 
‟
dairy s margin is the loest. #gain there is no incentive to ork hard. "he
targets given !y the company ere not realistic and hence ere not achieved.

"heir vie a!out the quality of milk is also not satisfactory. #ccording to them
there is no consistency in the quality+ hich !ecomes a ma8or reason of lo
consumer demand. Bhen it comes to competitiveness Mother dairy lacks
 !ehind many !rands and especially #mul hich has captured the market ith its
mass advertisements and fine quality of product.

MBA 2012-14| 28
 

#part from the survey ith the three '#Ds +others ere also
contacted in order to solve their grievances ."he report prepared is
shon !elo :

29

#fter the distri!utors+ the retailers ere also intervieed in the similar manner.
#!out % representative retailers ere chosen for the purpose through
convenience sampling.

Data interpretation

30
31
 

MBA 2012-14| 32
 

Interpretations :

During the intervie most of the retailers ere satisfied !y their sales
considering the location and competition in the market + hoever fe ho ere
not + considered decreasing quality as a reason of loss of sales apart from
competition ith other !rands. #lso it as itnessed that their is no competition
from local dairy oners !ecause they have a fairly differentiated market.

#ccording to the ma8orty the ma8or competitor is #mul + ith its vast marketing
strategies + immense !rand image and enormous quality of products+ it has
successfully captured the market./oever fe of the retailers also !elieved that
the local !rands like Ced o+"hacker dairy+#mrit 4resh+Delight etc are
emerging as great competitors ."hese !rands are ne and are giving huge
margins and incentives + hich is leading to push sales.

MBA 2012-14| 33
 

"he margin of amul and Mother dairy is almost same in the area + hoever 
hen compared to local !rands it is quiet less. Bhen it comes to
competitiveness according to the retailers Mother dairy is not performing upto
the mark."heir strategies does not meet their competitors. 9rands like Ced o
offer huge discounts to their retailers hereas Mother dairy has no such
schemes.

"hus through applying root cause analysis e can come out ith the main
 pro!lems of distri!utors and retailers leading to decreasing market share. "he
fish !one diagram demonstrating the reasons is shon !elo:

ompetition from local !rands as one of the most contri!uting factor in
decreasing market share. "he local !rands not only give high margin to the
retailers !ut they also have great incentive schemes availa!le for them thus
influencing them for higher sales.

Huality is the net ma8or pro!lem. "here is no consistency in the colour or smell
of the milk .Milk is 8udged !y its thickness+ hich again has the same issue.
Many retailers complained that sometimes the milk has a distinguisha!le

MBA 2012-14| 34
 

 !ad smell hich annoys customers. #lso there is a concern that the milk gets
spoiled very easily compared to #mul.

Mother dairy has an incentive plan according to hich the distri!utors are
supposed to increase sales incrementally !y 1> every month. "his target if 
achieve give the distri!utors an incentive of .%p ltr on their total sales for the
year. ,n order to fulfil the target and increase the sale+ the distri!utors give the
retailers a part of their incentive+say .p ltr. 9ut even then it !ecomes very
hard for the retailers to increase sale as the demand in the market is limited.
"hus in these cases the only measure left is to increase sale through opening up
of ne retail points.

/ere e can see the lack of initiative of the distri!utors and the company.
During the survey it as found that there ere a lot of gaps in the area of the
distri!utors. "here as an unmet demand in the market. "he distri!utors accept
that !ecause of lack of initiative they ere una!le to meet the requirements.
During my pro8ect , identified fe of them and thus ne retail sale points ere
allotted.
 

CONCLUSION

"his pro8ect as a!out the milk segment of Mother Dairy hich due to intense
competition from its competitors is continuously losing its market share. *o in
this pro8ect different parameters on hich the sale of Mother Dairy depends are
studied and analysed from the distri!utor+ retailer and consumers perspective.
"he final outcome of the pro8ect is that the parameters hich make decision
regarding the purchase of milk are Price * Quality + Smell  + 'aste *
Advertisement and A+areness. Milk market is a totally unpredicta!le market
and the organisation should !e over-cautious of any complaints that come into
milk as it includes the sentiments of a mother for her kid and she ould not
 prefer to give anything to her kid for hich she is not 1> satisfied. *o the
company should take every step possi!le to contain these pro!lems hich in
some ay or the other affects the sale of Mother Dairy and its retailers.

MBA 2012-14| 44
 

LIMITATIONS

"he limitations of the pro8ect is as follos :

1. "he study as conducted in 5orth and entral Delhi only +so the limited
area of the study may affect the conclusions

2. *ome of the respondents could not give their proper response due to lack 
of time. "hey at times tend to get !iased and pro8ect a rosy picture hich
may affect the relia!ility and relevance of the study

. ,t might also !e so that some respondents ere not motivated enough to

respond properly although full attempt as made to keep it as un!iased as
 possi!le.

6. "here as no provision of visiting cards for the summer trainees hich
hinder communication at times

%. "he duration of the pro8ect as short+ so the scope of more in-depth
evaluation as not possi!le

MBA 2012-14| 45
 

RECOMMENDATIONS

"he recommendations for the company for further groth and profit are as
follos:

• Mother dairy should come up ith schemes for customers along ith
retailers as it ould !e a real !oost to the sales and also it ill help the
company to get !ack its lost customers

• During the survey it as found that many of the retailers ere
uninterested !ecause they ere concerned a!out the storage of milk.
,nstead of refrigerators if dry ice !oes can !e supplied free of cost+ sale
ould !e increased. #lso it ould !e economical and convenient. 'ater+ if 
the retailer drops out + the !o can !e collected !ack.

• ,t as seen that the price of the largest selling variety of Mother dairy
hich is co milk is Cs 26ltr + and the competitor product of #mul is
 priced at Cs 2%ltr. "hus the price can !e increased and there!y margin of 
the retailers can !e increased

• #lso it as seen through the survey that price is not a ma8or concern for 
the consumers hen it comes to a necessity like milk so the price can !e
increased !y a rupee or to and the quality can !e improved

• Mother Dairy is ,*< and /#P certified. "he consumers should !e

eplained a!out it through advertisements in order to make them aare

• "he organisation should schedule these kinds of surveys on a more

regular !asis as at this point of time #mul is really capturing the market
and the organisation should take via!le steps to meet the epectations of 
its customers

• ,f MD can do certain promotions as its competitor #M?' does+ then it

can attract sales. Promotion ith the help of !oards+ hoardings etc. and
also it can advertise in radio

• ,t as found during survey that Mother dairy milk gets spoiled quickly+
thus a preservative knon as costic hich is used !y #mul can !e applied
to produce milk

MBA 2012-14| 4
 

• ,n order to improve and maintain quality+ total quality management

measures should !e appointed. ,t as seen that due to lack of fied
 percentage of ra milk mied+ the quality gets hampered and remain
unsteady. "he etra milk procured should !e used for production of milk 
 products hich are in short supply and ra milk should !e
 proportionately used in milk production

• "he smell in milk is !ecause of the usage of skim milk poder !eyond a
certain point of time+ this should !e looked into !y the manufacturing
department and alternative measure should !e used

• "he company should try to adopt a relatively short period incentive

system in order to make it more friendly and achieva!le

• "he milk re8ected !y Mother dairy due to su!-standard is used !y other 

local dairy oners and hence their quality is much inferior. "his should
 !e advertised

• Mother dairy should come up ith a scheme for consumers like discount
on Mother dairy ,ce cream or any other product on supplying empty
 pouch packets of Mother dairy milk

• Differential margin should !e given !y the '#Ds to the retailers

depending upon the location and sales

• '#Ds should !e directed to supply milk to small retailers according to

their preference of time +sometimes late !y ;. -F.

• '#Ds should supply milk through cycle vans and small trolleys also like
competitors to areas here trucks cannot go

• 4actory visits helped consumers a lot in understanding the product.'#D

should organi$e the same ith the help of MD officials

MBA 2012-14| 47
 

REFERENCES

 !""#$%%&&&'()"!*+,.+/""')( %

 !""#$%%*'&..#*,.')+%&..%M.6P*

MBA 2012-14| 48
 

ANNEURE
Questionnaire

D,*"C,9?"<C 

1. 5ame -
2. #ddress -
. Phone -
6. #vg daily sales (in lts):-

• 1% 3 %
• % - %%
• %% 3 F%
• F% 3 =%
• =%I

%. /o ould you rate your retailers drop outJ

• *atisfactory
• ?nsatisfactory

;. Bhich type of milk sells the mostJ

• D"M
• "M
• 4M
• M
• *M
 

F. Cate Mother dairy on the scale of 1-% on the folloing factors ( 1 as orst and
% as !est) :-

Particulars 1 2  6 %
Margin
"imeliness

redit limit
,ncentives

Demand of
retailers
Huality

Packaging

/ygiene

ompetitiveness

G. ,s there any scope to increase the no of retailers in your area J

• K&*
•  5<

=. *uggestionsomplains :

L---------------------------L
 

C&"#,'&C 

1. 5ame of shop -
2. #ddress -
. Phone -
6. 'ad name -
%. #vg daily sales (in lts):-

• 1-%
• % 3 1%
• 1% 3 
•  3 6%
• 6%

;. /o ould you rate your present salesJ

• *atisfactory
• ?nsatisfactory

F. ,f the anser to the a!ove is unsatisfactory then please choose the reasons
from !elo:

• ompetition from other !rands

• ompetition from local dairy oners
• <thers

G. Bhich type of milk sells the mostJ

• D"M
• "M
• 4M
• M
• *M

=. Bho is the ma8or competitor of Mother dairyJ

• #mul
• Metro Dairy
• Ced o
 

• <thers

11. *uggestionsomplains :-

L---------------------------L

CONSUMER

1. 5ame -
2. #ddress -
. #vg daily consumption (in lts):-

a) .% - 1 !) 1 3 2 c) 2 3  d)  I

6. "he !rand that comes to mind hen it comes to purchase of milk 3 

a) #mul
 !) Mother Dairy
c) Ced o
d) "hacker Dairy
e) <thers

%.Do you get delivery of milk at your home J

a) K&*  !) 5<