SUMMER TRAINING REPORT

ON
“A Study on Consumer Buying Behaviour Towards
Purchase of Packed and Unpacked Milk”

In partial fulfillment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted by
ADITYA TIWARI
(MBA2210015)

Submitted to
DR. R.K. SINGH
(Professor)

School of Management Sciences,

Varanasi
(An Autonomous College)

Affiliated to

(Dr. A.P.J. Abdul Kalam Technical University, Lucknow)

CERTIFICATE
 DECLARATION
I, ADITYA TIWARI hereby declare that my report entitled “A Study on Consumer Buying
Behaviour Towards Purchase of Packed and Unpacked Milk” is a project work carried out
by me independently. The information presented in the report is correct to the best of my
knowledge and the analysis is as per the norms and guidelines of the report.

I feel extremely exhilarated to have completed this report under the able and inspiring guidance
of Dr. R.K. Singh, Professor. His guidance and timely encouragement has infused courage in
me to complete the work successfully.

I claim this report to be my indigenous work and have not presented it anywhere else for any
purpose.

Aditya Tiwari
MBA II Semester
Roll no.: (MBA 2210015)
 ACKNOWLEDGEMENT
The work on this report has been an inspiring, often exciting, something challenging, but always
an interesting experience.

Bearing in mind, I am using this opportunity to express my deepest gratitude and special thanks
to the School of Management Sciences, Varanasi. I express my deepest thanks to Director, Prof.
P.N. Jha, Coordinator: Dr. Amitabh Pandey of MBA for providing me the valuable chance for
doing the research purpose.

Last but not the least I apologized for my omission & mistakes, as from my side I prepared it by
my best. I perceive this opportunity as a big milestone in my career development. I will strive to
use gained skills & knowledge in the best possible way, & I will continue to work on their
improvement in order to attain the desired career objectives.

Aditya Tiwari
MBA II Semester
Roll no.: (MBA 2210015)
 Table of Content

S. No. Particulars Page No.

1. Preface -
2. Acknowledgement -

3. Declaration -

4 Table of Content 1

5 Introduction 2

6 Literature Review 15

7 Objective 30

8 Research Methodology 35

9 Data Analysis & Interpretation 40

10 Limitations 77

11 Conclusion 95
12 Suggestions & Recommendations 96
13 Annexure 97
13 Bibliography 101
INTRODUCTION
 PREFACE

This study was conducted to identify factors affecting packed and unpacked
fluid milk consumption preferences of households in Wolaita zone. A total
of 194 randomly sampled consumer households of 3 towns of Waliata zone
were studied using semi-structured questionnaire. All the data collected were
analyzed using Multinomial Logit Model. The result obtained indicated that
78.4% of the households consumed only unpacked fluid milk, 7.7% of
households consumed only packed fluid milk and 13.9% of
INTRODUTION
1.1 INTRODUCTION TO THE CONCEPT OF THE
STUDY

Customer satisfaction research is that area of marketing research which focuses on

customers' perceptions with their purchase experience. Customer satisfaction is a
measure of how products and services supplied by a company meet or surpass
customer expectation

Many firms are interested in understanding what their customers thought about their
purchase experience, because finding new customers is generally more costly and
difficult than servicing existing or repeat customers.

Customer satisfaction is defined as "the number of customers, or percentage of

total customers, whose reported experience with a firm, its products, or its services
(ratings) exceeds specified satisfaction goals."
It is also defined as Process of discovering whether or not a company's customers are
happy or satisfied with the products or services received from the company. May be
conducted face to face, over the phone, via email or internet, or on handwritten
forms. Customer answers to questions are then used to analyze whether or not
changes need to be made in business operations to increase overall satisfaction of
customers.

Customer satisfaction is one of the most essential elements of customer retention,

customer loyalty, and product repurchase. The art and science of customer
satisfaction involves strategically focusing on creating and reinforcing pleasurable
experiences.A well executed customer satisfaction survey is the first step toward
gathering the baseline insights for creating and reinforcing pleasurable experiences.

From these insights, companies can start understanding the core experience of
their customers, reflecting their liking of a company‟s business activities, including
products/services, and calibrating big business decisions off of data, instead of
guessing.
1.2 THEORETICAL BACKGROUND OF THE STUDY

Customer satisfaction matters. It matters not only to the customer, but even more so
to the business because it directly impacts a company's bottom line profits.
Furthermore, it is one of
the most important components of a company's positive brand image.

The reason why customer satisfaction directly affects bottom line profitability is quite
simple: it costs far less to retain a happy client than it does to find a new client.
Businesses that have been successful retaining the business of their loyal clients have
shown over time to consistently increase profits from their installed client base. The
impact of customer loyalty is
impossible to overlook. This white paper will examine not only the significance of
customer
satisfaction, also of the factors that need to consider order to
but some businesses in
accurately define, measure, and integrate this concept into practice.
1.2.1 Purpose

A business ideally is continually seeking feedback to improve customer

satisfaction.

"Customer satisfaction provides a leading indicator of consumer purchase intentions

and loyalty." "Customer satisfaction data are among the most frequently collected
indicators of market perceptions. Their principal use is twofold:"
 1. "Within organizations, the collection, analysis and dissemination of these data
send a message about the importance of tending to customers and ensuring that
they have a positive experience with the company‟s goods and services.”
2. "Although sales or market share can indicate how well a firm is performing
currently, satisfaction is perhaps the best indicator of how likely it is that the
firm‟s customers will make further purchases in the future. Much research has
focused on the relationship between customer satisfaction and retention. Studies
indicate that the ramifications of satisfaction are most strongly realized at the
extremes." On a five- point scale, "individuals who rate their satisfaction level
as '5' are likely to become return customers and might even evangelize for the
firm. (A second important metric related to satisfaction is willingness to
recommend. This metric is defined as "The percentage of surveyed customers
who indicate that they would recommend a brand to friends." When a
customer is satisfied with a product, he or she might recommend it to friends,
relatives and colleagues. This can be a powerful marketing advantage.)
"Individuals who rate their satisfaction level as '1,' by contrast, are unlikely to
return. Further, they can hurt the firm by making negative comments about it to
prospective customers. Willingness to recommend is a key metric relating
to customer satisfaction.

1.2.2 Types of research in customer

Many customer satisfaction studies are intentionally or unintentionally only
"descriptive" in nature because they simply provide a snapshot in time of customer
attitudes. If the study instrument is administered to groups of customers periodically,
then a descriptive picture of customer satisfaction through time can be developed (this
is a type of "tracking" study).
Inferential or models-based
research

Beyond documentary types of work are studies that attempt to provide an

understanding of why customers have the perceptions they do and what may be done
to change those perceptions. While models-based studies also provide snapshots of
customer attitudes, the results of these studies are more powerful because
they present the firm with recommendations on how to improve customer
satisfaction. Frequently, these studies also provide firms with a prioritization of the
various recommended actions. Inferential studies can also be conducted as tracking
studies. When this is done, the firm can gain insight into how the drivers of customer
satisfaction are changing in addition to documenting the levels and areas of customer
satisfaction.
1.2.3
Significance

A business can be successful only if the end customers are satisfied. Customers are the
real kings of business so it is very important to keep them happy and give them real
value for money they spend.

It has been proved from various researches and practical experiences that there is
increase in customer dissatisfaction with an increase in the number of products and
services offered by a company. The prime reason of dissatisfaction can be the
increased expectations in terms of customer support.
REVIEW OF LITERATURE
REVIEW OF LITERATURE

A group of researches of the “Centre for the study of social policy

(2007)”conceptualize that satisfaction is based on the customer‟s experience of both
contact with the organisation (the moment of truth) and personal outcomes. According
to these researchers, satisfaction can be experienced in variety of situations and
connected to both goods and services. To another extent, these researchers defined
satisfactions as a “highly personal assessment” that is greatly influenced by
“individual expectations”. The definition view “individuals” element as powerful force
to create satisfaction.

“Oliver,1981;Brady and Robertson, 2001” Conceptualize customer satisfaction as an

individual feeling of pleasure or disappointment resulting from comparing a product‟s
perceived performance(or outcome) in relation to his or her expectations.

“Boulding et al(1993)and Yi and La(2004)” Conclude satisfaction into two general

conceptualizations: transaction-specific satisfaction and cumulative satisfaction.

“Crocin and Taylor, 1992; Boshoff and gray, 2004”Transaction-specific satisfaction is

a customer‟s evaluation of his or her experience and reactions to a particular service
encounter
“Jones and Suh 2000” Cumulative satisfaction refers to customers overall evaluation
of consumption experience to date

The centre for the study of social policy(2007)-“Customer satisfaction: Improving

quality and access to services and supports in vulnerable neighbourhoods”-yearly
research

Brady, M.K, and Robertson, C.J(2001). Searching for consensus on the antecedent role
of service quality and satisfaction: an exploratory cross-national study. Journal of
business research,51(1),53-60
Oliver, R.l(1981) Measurement and evaluation of satisfaction processes in retail
settings. Journal of retailing, 57(3), 25-48

Aavin can introduce its parlors with coffee wending machines and refrigerators in
educational institutions, companies, hospitals, and offices etc., to develop the sales.
Aavin can take steps to advertise its products in visual medias like internet,
televisions etc
Aavin can introduce offers for bulk purchase of its products by this it can develop
its

sales

The organization doesn‟t supplies the actual needs of the customers, though it has
very big market share
Aavin doesn‟t satisfy the and expectations of the customers

The packaging was not attractive and eye catching it is very simple, the packaging
should be colour full and attractive for all age groups
There is no advertisements to develop the sales

There is no offers to its products at purchase

It supplies its own product to its federation for very low cost this is not good for the
organization‟s development
The organization contains additional staffs then the required

The organization‟s profit was not even enough to the salaries of the employees though
it is a service sector so it is not considered as an important issue, but the showed that
variables such as age of household heads, income level of households, households with
at least a child under six years of age and milking cow, households who disagree with
the statement 'packed fluid milk fattens children' and households who disagree with the
statement 'advertisement influences people to buy more packed fluid milk',
significantly affected consumption of unpacked fluid milk. Education status of
household heads, young aged household heads, medical prescription, households
who accept the statement 'sterilized milk contains preservatives' reported to have
consumed packed fluid milk. Moreover, consumers who agree with the statement
'price of packed fluid milk is expensive compared with unpacked fluid milk' were
less likely to consume packed fluid milk. The general implication is that a
significant portion of unpacked fluid milk is reported to be consumed in the
study area without quality and hygienic inspection. This situation seems to warrant the
governments to introduce new policy tools to improve the hygiene and quality of
unpacked fluid milk. Milk producing and processing companies need to design
better pricing, promotion and advertising strategies for fluid milk consumption
to attract consumers. Furthermore, fluid milk processing enterprises and importers
need to improve their processing technological status aimed at reducing cost of
processing and marketing to attract consumers.

There is a significant difference between developed and developing countries in fluid

milk consumption. The per capita fluid milk consumption in developed and developing
countries is reported to be 60-170 and 2-80kg, respectively (USDA, 2007). In
developed countries, low fat milk consumption has shown an increase while per
capita consumption of whole milk showed decreased attribute to health concerns,
aging population, educational status, and income level factors. In contrast, unpacked
fluid milk takes a significant share of fluid milk consumption in Africa and Ethiopia is
not exception to this situation (Alemu et al.,
2000). Cultural, educational, beliefs, attitudes
and economic factors often limit fluid milk consumption. Moreover, the traditional
perception of fluid milk as a product for children alone further limits its consumption
in Ethiopia.
Currently there is a change in market organizational structure of fluid milk in
Ethiopia due to private dairy enterprise development, growth in per capita income,
involvement of foreign investment and access to promotional activities.
Furthermore, the market oriented and liberalized economic policy resulted in increased
importation and per capita consumption of packed fluid milk (FAOSTAT, 2003)
indicating that consumers could make consumption choices among packed and
unpacked fluid milk based on availability. However, household's consumption could
be affected by socioeconomic and demographic characteristics and consumers'
attitudes and beliefs towards price and health effects of the alternatives. Specifically,
household income and size, and educational status, age and gender of the household
head, cow ownership, advertisement, health related issues, medical prescription,
market price, number of children under age six, and chemical composition of milk
are hypothesized to affect household's decision in consumption of either packed
or unpacked fluid milk.
Given the current structure of fluid
milk consumption in Ethiopia, there is a need for empirical study to determine
factors affecting packed and unpacked fluid milk
consumption preferences of households. To date considerable work has been
conducted on factors affecting purchasing and consumption patterns of fluid milk
(Asfaw,
2009; CSA, 2009). Other studies conducted focused on milk and milk products
marketing, role of milk marketing cooperatives, market milk composition, role of
milk in food security in rural and peri- urban economy, role of enzymes in
converting milk into milk products, and role of milk pasteurization in preserving milk
quality (Holloway and Ehui, 2002; Mohamed et al., 2004; Gizachew, 2005; Sintayehu
et al.,
2008; Agged et al., 2010; Mohamed et al.,
2010; Muhammed et al., 2010; Samy et al.,
2010). Therefore, the objective of this study was to identify factors affecting packed
and unpacked fluid milk consumption preferences of households in Wolaita zone,
Ethiopia.
production cost is very high when compared to its competitors
Boulding, W.,Kalra,A.,Staeling,R., and Zeithaml,V.A(1993). A dynamic process
model of service quality: from expectation to behavioural intentions. Journal of
marketing research,30(1),7-27

Y,Y.J., and La,S.N.(2004). What influences the relationship between customer

satisfaction and repurchase intention? Investigating the effect of adjusted expectations
and customer loyalty. Psychology and marketing, 21(5),351-373

Jones,M.A.,and Suh,J.(2000). Transaction-specific satisfaction and overall satisfaction:

An empirical analysis. Journal of services marketing,14(2),147-159

Alvin Ab-rahan and Anil Nain (2003) in their title “Customer statement redesign”
Improving customer satisfaction and reducing cost. Utility companies always target to
provide better services and solutions to their customers. Customer statements in the
utilities industry act as direct interfaces with which the industry interacts with its
customers. This paper provides how the customer statements were redesigned to
provide customer satisfaction through a better look and feel while in the process
proving cost savings to the company

Kelly Whitney (2006), Customer advocacy and customer satisfaction the

typical measurements around customer satisfaction of service delivery are customer
advocacy or customer loyalty is typically very different and there are questions around
willingness to repurchase and willingness to recommend you others. You can make a
customer satisfaction, but they will really recommend you to others, and will they
really repurchase from you again? Unless you ask these questions, you don‟t know.
There is nothing like the voice of customers

Smith Marshal (2000), Customer satisfaction measures the customer perceptions of

how well the company delivers on the critical success factors and dimensions of the
business. These usually include factors like services promptness, staff responsiveness,
and understanding the customer problem

Frank Huber, Andreas Herrmann, Martin Wricke(2006), The goal of this current study
is to extend customer satisfaction research in two important ways. First, it attempts to
demonstrate the relationship between customer satisfaction and price acceptance.

Second, as Voss, Parasuraman and Grewal claim that only a small proportion of
the existent satisfaction research focuses on services, we empirically analyse the
relationship between customer satisfaction and price acceptance in the food industry.
Finally, the implications of the study‟s findings for research into purchasing patterns
and pricing policy are discussed

Alvin ab-rahan and anil nain(2003) Customer statement redesign” works

Kelly whitney(2006)” Customer advocacy and customer satisfaction” in journal of

marketing vol 3, pg-45-48

Smith marshal(2000)” Dimensions of the business” in journal of marketing, vol 3,

pg- 67-79

Frank Hubber, Andreas Herrmann, Martin Wricke”Journal of

product&brand management”2006

Edward U.Bond III, Ross l.Fink(2003), Despite long standing interest in the
quality movement by marketing scholars, marketing managers have not cantered
attention on customer satisfaction. Significant corporate investments in quality
programs suggest that the recent revision of the ISO 9000 standards to focus on
collection and use of customer satisfaction data may provide marketing managers an
invitation to meaningfully enter the quality dialogue. Collaboration between marketing
and quality management is problematic because the two functions are highly
differentiated. This article draws on work in organizational learning and organizational
behaviour to identify criteria for successful collaboration between marketing and
quality management and to propose a process for meeting the new ISO 9000
requirements
M.Mellin, A.Spiller and A.Zuhlsdorf(1997):The importance of direct marketing for
high quality farm products has increased in the last few years. This paper analyses the
impact of customer satisfaction and its driving forces for farmer-to-consumer direct
marketing and is based on a customer survey in 30 organic and conventional on-farm
stores in Germany. The results emphasize the role of the store atmosphere and
customer service as the main influencing factors on customer satisfaction
chael Conklin, Ken Powwaga, Stan Lipovetsky GFK(2004) “Customer satisfaction
analysis: Identification of key drivers European journal of operational research,2004” a
problem in identifying key drivers in customer satisfaction analysis is considered in
relation to Kano theory on the relationship between product quality and customer
satisfaction using tools from cooperative game theory and risk analysis. We use
Shapley value and attributable risk techniques to identify priorities of key drivers of
customer satisfaction, or key dissatisfies and key enhancers

Edward U. Bond III, Ross l.Fink” Journal of business and industrial

marketing”2003

M.Mellin,A.Spiller and A.Zuhlsdorf,(1998)”Farmer to consumer direct marketing for

organic and regional products” Wissens chaftstagung Okologischer Landbau. Beitrag
Archiviertuner http:/orgprints.org/view/projects/wissenschaftstagung-2007
Michael Conklin, Ken Powaga, Stan Lipvetsky GFK(2004) Customer satisfaction
analysis: Identification of key drivers European journal of operational research,2004

STATEMENT OF THE PROBLEM

Today companies are facing their toughest competition of winning the customers and
their satisfaction. Due to stiff competition within the milk industry as new private milk
production are emerging. In the past years AAVIN is serving good to the customers.
Creating awareness is more important to attain more sales. To know the actual
satisfaction of AAVIN with regard to milk in Krishnagiri district this survey is
conducted
OBJECTIVE OF THE STUDY
1. To identify the level of satisfaction of the customers
2. To analyse the awareness level of the customers
3. To understand the main factors influencing the purchase of Aavin
 SCOPE OF THE STUDY

The study is mainly intended to ascertain customer satisfaction and factors

influencing product selection. It is believed that such a study will throw light
on the strength and weakness of the dealer on one hand. The scope is mainly
focused on giving information to the company about what to do or what are the
pitfalls or weakness that the company is presently having. These weaknesses can be
studied in detail and good remedies can be taken to improve the company‟s well
being. The scope also extents about to know what are people‟s opinion about the
company‟s service and product, their awareness, likes and dislikes and the company
can take into consideration the suggestion made by them. Thus findings and other
study may help the service provider to analyse the needs of the people and bring before
them what they needed and moreover to attain a competitive edge over its rival
1.7 COMPETITIVE STRENGTH OF THE COMPANY

STRENGTH:

It is a co operative unit, contains more human

resource
Products are first class quality, agmark and ISI
certified
It gives life to the 430 employees as well as the farmers through the co
operative societies
It has the leading position in the market
It is a public sector it is a service based organization
Organization contains 55 acres, with plant and machineries, storage, and
official buildings etc

WEAKNESS:

It runs in loss for a long time, it is not good for the future of the
organization,
It sells its own products for the federation for very low cost though it has
very big market share in its own region.
Though there is more demand for aavin products in its own region it cannot
supply the needs and fulfill the demand because it sends all the products to
the federation. It is a public/ service sector though heavy loss was not
considered as a big or
important issue, but traveling in this position leads to heavy loss and comes to
decline stage in very short term, and the objectives of organization cannot be
fulfilled.
The organization runs with loss it is not good for the employees and the
farmers in rural areas.
It is a service sector but the production cost is more than its competitors
products
OPPORTUNITIES:

Aavin has more opportunities to develop the

organization
Aavin can extend its parlor throughout the district including rural areas
Aavin can focus on domestic engineers to develop the sales
The management can take steps for development activities like visual and
attractive advertisements and door deliveries of the products
The agents should be appraised according to their performance to develop the
sales
 Aavin can introduce its parlors with coffee wending machines and
refrigerators in educational institutions, companies, hospitals, and offices
etc., to develop the sales.
Aavin can take steps to advertise its products in visual medias like internet,
televisions etc
Aavin can introduce offers for bulk purchase of its products by this it can
develop its
sales

The organization doesn‟t supplies the actual needs of the customers, though
it has very big market share
Aavin doesn‟t satisfy the and expectations of the customers
The packaging was not attractive and eye catching it is very simple, the
packaging should be colour full and attractive for all age groups
There is no advertisements to develop the sales
There is no offers to its products at purchase
It supplies its own product to its federation for very low cost this is not good
for the organization‟s development
The organization contains additional staffs then the required
The organization‟s profit was not even enough to the salaries of the employees
though it is a service sector so it is not considered as an important issue, but the
showed that variables such as age of household heads, income level of
households, households with at least a child under six years of age and milking
cow, households who disagree with the statement 'packed fluid milk fattens
children' and households who disagree with the statement 'advertisement
influences people to buy more packed fluid milk',

significantly affected consumption of unpacked fluid milk. Education status

of household heads, young aged household heads, medical prescription,
households who accept the statement 'sterilized milk contains preservatives'
reported to have consumed packed fluid milk. Moreover, consumers who agree
with the statement 'price of packed fluid milk is expensive compared with
unpacked fluid milk' were less likely to consume packed fluid milk. The
general implication is that a significant portion of unpacked fluid milk is
reported to be consumed in the study area without quality and hygienic
inspection. This situation seems to warrant the governments to introduce new
policy tools to improve the hygiene and quality of unpacked fluid milk. Milk
producing and processing companies need to design better pricing,
promotion and advertising strategies for fluid milk consumption to attract
consumers. Furthermore, fluid milk processing enterprises and importers
need to improve their processing technological status aimed at reducing cost
of processing and marketing to attract consumers.

There is a significant difference between developed and developing countries in

fluid milk consumption. The per capita fluid milk consumption in developed
and developing countries is reported to be 60-170 and 2-80kg, respectively
(USDA, 2007). In developed countries, low fat milk consumption has
shown an increase while per capita consumption of whole milk showed
decreased attribute to health concerns, aging population, educational status, and
income level factors. In contrast, unpacked fluid milk takes a significant share
of fluid milk consumption in Africa and Ethiopia is not exception to this
situation (Alemu et al.,
2000). Cultural, educational, beliefs, attitudes
and economic factors often limit fluid milk consumption. Moreover, the
traditional perception of fluid milk as a product for children alone further limits
its consumption in Ethiopia.

Currently there is a change in market organizational structure of fluid

milk in Ethiopia due to private dairy enterprise development, growth in per
capita income, involvement of foreign investment and access to
promotional activities. Furthermore, the market oriented and liberalized
economic policy resulted in increased importation and per capita consumption
of packed fluid milk (FAOSTAT, 2003) indicating that consumers could
make consumption choices among packed and unpacked fluid milk based on
availability. However, household's consumption could be affected by
socioeconomic and demographic characteristics and consumers' attitudes and
beliefs towards price and health effects of the alternatives. Specifically,
household income and size, and educational status, age and gender of the
household head, cow ownership, advertisement, health related issues, medical
prescription, market price, number of children under age six, and chemical
composition of milk are hypothesized to affect household's decision in
consumption of either packed or unpacked fluid milk.
Given the current structure of fluid
milk consumption in Ethiopia, there is a need for empirical study to
determine factors affecting packed and unpacked fluid milk
consumption preferences of households. To date considerable work has been
conducted on factors affecting purchasing and consumption patterns of fluid
milk (Asfaw,
2009; CSA, 2009). Other studies conducted focused on milk and milk
products marketing, role of milk marketing cooperatives, market milk
composition, role of milk in food security in rural and peri- urban economy,
role of enzymes in converting milk into milk products, and role of milk
pasteurization in preserving milk quality (Holloway and Ehui, 2002; Mohamed
et al., 2004; Gizachew, 2005; Sintayehu et al.,
2008; Agged et al., 2010; Mohamed et al.,
2010; Muhammed et al., 2010; Samy et al.,
2010). Therefore, the objective of this study was to identify factors affecting
packed and unpacked fluid milk consumption preferences of households in
Wolaita zone, Ethiopia.
production cost is very high when compared to its competitors.
ORGANISATION PROFILE

2.1 HISTORY OF THE ORGANISATION

The word co-operation comes from the Latin word Consensio which means
working together for a common purpose. Milk is the standard one of the living of the
farmers. Since the prevailing drought condition push them to go for another source of
loving. Another one is ensuring prompt payment by the co-operation organization
which attracts the milk producers to produce more milk with good quality.

The Dharmapuri District Co-operative Milk Producers Union Ltd, has registered
under Co- operative societies on 29-05-1982 and started its functioning with effect
from 01-06-1982. The Tamil Nadu Co-operative Milk Producers Federation Limited
Chennai has handed over the assets and liabilities to the union on 16-11-1982.

The union consists of three milk chilling centers one is at the own plant (1,50,000
liters per day) and the other two are respectively in Dharmapuri (50,000 liters per
day) And Denkanikottai (10,000 liters per day). The unit is a feeder balancing diary
with the capacity of 1,50,000 liters per day.

Aavin milk started its loose milk supply to the customers in 1977, by government
under the control of dairy development corporation. In the year 1982, it reached its
maturity with the establishment of co operative milk producers union.
The supply of packet milk is introduced in 1986, which had a good welcome among
the customers. Besides the supply of milk to fulfill the needs of the public it also
produces and supplies good quality of ghee, Milk khoa, Skimmed milk
powder,flavoured milk etc.

In dharmapuri district 15,000 liters of milk is supplied to the consumers per day. About
1,40,000 lts of milk have been collected from the dharmapuri district. And about
75,000 lts of milk have been delivered to Chennai daily from the krishnagiri Aavin ltd.

2.1.1 ORIGIN OF THE ORGANIZATION:

Aavin , krishnagiri ( Dharmapuri district co operative milk producers union

limited) was started in the year 1982 and they follow the principles of co
operative laws. It is a feeder balancing diary and it is located at outskirts of
krishnagiri.

The Dharmapuri district co operative milk producers union ltd., has been the
Tamilnadu co operative milk producers federation limited. It has handed over the
assets and liabilities in the union on 16-11-1982.

At the beginning 310 village co operative societies were the members of the union
now it was raised up nearly 860 societies.

The union purchase milk if the following percentage of FAT and SNF present in the

milk. The milk should contains 4.5% of FAT and 8.5% of SNF(solid non fat).
2.2.1 ORGANISATION DETAILS

1. Date of Registration of the DDCMPU ltd, krishnagiri : 29-05-1982

2. Date of Starting of DDCMPU ltd, kishnagiri : 16-11-1982

1. Area of Operation : Dharmapuri and Krishnagiri Revenue Districts

2. Dairy Cooperative Society Status
a) No. of DCS organized : Dharmapuri District 461

3. Share Capital
a) Authorized Capital : Rs.
50,00,000 b) Paid up Capital : Rs.
24,34,800
4. Present milk procurement/ day : 1,10,778 liters
5. Through BMCC Procurement : 53,816 liters
6. Average milk Dispatch to Chennai for FBD/CC/BMCC/day : 77,157 liters
7. Present Average local sales / day : 22,300 liters
8. By-products manufactured : Butter, Ghee, SMP, Khoa, Butter Milk, Curd,
Badam
 2.2.1 ORGANISATION STRUCTURE

CHAIRMAN
(ELECTED)

GENERAL
MANAGER

DEPUTY
GENERAL
MANAGER
(PRODUCTION)

ASSISTANT ASSISTANT ASSISTANT GENERAL

GENERAL GENERAL MANAGER
MANAGER MANAGER (QUALITY
(DAIRY) (ENGINEERING) CONTROL)

MANAGER MANAGER MANAGER (QUALITY

(ENGINEERING) (DAIRY)

MANAGE JM LAB ASSISTANT

R (D)
SENIOR FACTORY ASSISTANTS (SFA)
2.3 PRODUCT PROFILE

2.3.1 PRODUCTS

To satisfy the varying needs of the consumer it is supplied in different quantities

like 250 ml and 500 ml. Milk is delivered to consumers daily at the number of
Aavin parlours both in morning and evening. The cost of one month requirements
of milk has to be remitted as a advance in this office.

Apart from their milk it also produces milk products like Ghee, Butter, Milk khoa,
Skimmed Milk Powder. They are hygienically packed and easy to handle. Due to
its good quality it can attain top place in the market if necessary steps are taken.

Raw materials for the firm are purchased from urban and rural areas of local
district that get reasonable price for their pains. Aavin not only supplies the needs
of the consumer but also provides employment (full time, part time) for a number
of people.

1.
MILK:

Milk is collected from various places with varying fat and nonfat content.
So it is necessary to process the milk to make the fat and nonfat content uniform.
There is an instrument known as cream separator it is used to separate cream from
milk which as high fat content. Based on usage of milk there are various kinds of
milk. Different kinds of milk are produced by altering the fat content.

MILK KHOA:

3. CURD:
Milk is heated and cooled. It is added with starter culture is left
undisturbed until curd is obtained. It is packed and sold.

4. BUTTER MILK:
 Milk is heated and cooled and inoculated with starter culture. After
curdling the curd is churned and then flavoured with coriander leaves,
ginger and salt.

5. SKIMMED MILK POWDER:

The skimmed milk is sent in to the drying plant. At first the milk is sent to
the evaporation plant. Here excess of water is removed and a concentrate is
obtained. The concentrate is sent through the spray drying plant. Here milk
is sprayed through a nozzle as fine droplets. Heat air is blowed in to the
chamber by the radiators. Solid materials settles down and at the bottom
the water vapour is sent out to the exterior. The powder is sent through the
vaccum chamber and then packed.
 6. GHEE:
A part of butter is taken and melted. During this process butter milk is
obtained. It is removed to quicken heating. Then it is passed in to another
furnace and heated up to 120 degree C. it is cooled and filtered and packed
and then stored in tins.
7. BUTTER:
Butter is a mixture of milk fat, butter milk and water. Cream is separated
from milk. It is then sent in to the churner for churning the fat particles
gather as a mass and it is butter. After removal of butter the remaining is
called as the skimmed milk. It is separated and again the butter is churned
with chlorinated water. After
washing the butter is removed from the churn, packed and stored in cooling
cells.

The union is conducting marketing survey with the help of field supervisors and
office staff then and there to know about the customers satisfaction about the
“AAVIN” products. DDCMPU Ltd also sale the products from other diaries and
which is not produced in its krishnagiri plant. Some of those products are:
FLAVOURED MILK:

Double toned milk is used for production of flavoured milk. The fat level is 1.5%
S.N.F. is 8.5% it is added with the desired flavour and 12% sugar. The contents
are boiled and cooled and are bottled.

Flavoured milk is not produced in krishnagiri diary though it has a good market in
this area so it is imported from the other unions and marketed by the krishnagiri
union. Flavoured milk can be available for various flavours according to the
customers need, like venila, strawberry, carrot, apple, banana, pineapple,badam,
pista, chocolate, etc

CONDENSED MILK:
AAVIN SWEETS:

Aavin also markets the sweet items from the other union producers during the
festival season to satisfy the needs of the customers, some various aavin sweet
products are mysore paa, gulab jamun, barfees(with variety of flavours), ice
creams, chocobars etc.,
2.4 MARKET POTENTIAL

Table 2.1 Present status of the industry:

CHILLING PLANTS CAPACITY

Krishnagiri Aavin ltd 1,50,000 lts per day
Dharmapuri 50,000 lts per day
Denkanikottai 10,000 lts per day

Table 2.2 The rate of production of the milk products per month are as follows:-

PRODUCTS RATE OF PRODUCTION (per month)

GHEE 1376 kg
BUTTER 602.5 kg
MILK 376 kg
SKIMMED MILK POWDER 1243 kg

Table 2.3 According to the varying needs of the consumers the products the
products are solid in different quantities.

PRODUCTS QUANTITIES
MILK ½lt, ¼lt packets.
GHEE 200gms, 500gms, 1kg, 5kg, 15kg Tins.
BUTTER 500gms, 20kg To other states.
MILK KHOA 50gms, 100gms, 500gms, 1kg packets.
SKIMMED MILK POWDER 500gms, 1kg, 25kgs.
t occupies the reputed place in the market for its quality, compared to the other players
in the market.

The union selling the milk and milk products in the following major areas:

‘ BANGALORE
‘ HOSUR
‘ KRISHNAGIRI
‘ DHARMAPURI

SALES DATA:

Table 2.4 Sales data during 2011(March) – 2012 (April)

S.NO ABSTRAC SALES IN Rs.

T
1 MILK 1035536506.80
SALES SALES
2 MILK PRODUCT 204973180.98
TOTAL 1240509687.78

PARTICULARS 2011-
: 2012
MILK (in lakhs) 513
:
MILK POWDER (in tons) 1920
:
BUTTER (in tons) 2050
:
GHEE (in tons) 1410
:
Table 2.5 Procurement detail April – 2012

SL.NO NAME OF TARGET ACHIVEMENT SHORTFALL %

THE
TEAM
1 KRISHNAGIRI 53000 38590 14410 27
2 DHARMAPURI 77000 61242 15758 20
3 DENKANIKOTTAI 5000 3357 1643 33
TOTAL 135000 103189 31811 23

Table 2.6 Procurement detail April – 2013

SL.NO NAME OF THE TARGET ACHIVEMEN SHORTFAL %

T L
TEAM
1 KRISHNAGIRI 69000 52824 16176 23
2 DHARMAPURI 84200 70161 14039 17
3 DENKANIKOTTA 6800 5573 1227 18
I
TOTAL 160000 128558 31442 20

2.6 DESCRIPTION OF VARIOUS FUNCTIONAL AREAS

2.6.1 SALES DEPARTMENT

.The union selling the milk and milk products in the following major areas:

‘ BANGALORE
‘ HOSUR
‘ KRISHNAGIRI
‘ DHARMAPURI

The Union Makers

• Card Sales
 • Cash Sales
• Credit Sales

CARD
SALES:

Under the credit sales system one month advance payment received before and
a milk card containing 500ml, 250ml, 750ml, and 1 liters as desired by the
consumers.

CREDIT
SALES:

Under the credit sales milk is supplied on credit based to the major
institution and colleges particularly at HOSUR and another two marketing areas
DHARMAPURI and KRISHNAGIRI.

CASH
SALES:
Under cash the cash is issued on the basis of milk
supplied.

2.6.2 ACCOUNTS
DEPARTMENT

The various books maintained by the concern

are:

¾ Cash Chitta book

¾ Pay book
¾ Sundry debtors
¾ Sundry creditors
¾ Receipt bill
¾ Bank payment
¾ Voucher
¾ Journal
¾ Bank reconcillation statement
¾ Credit note
¾ Debit note
¾ Casual labour engagement register
¾ Salary book
AUDITING:

Accounting year was 01-04 of every year to 31-03 of the next year (ie ., year

ending 31st march). The government and internal auditors sincerely audited
accounts of the every and signed by the auditors.

2.6.3 QUALITY CONTROL

DEPARTMENT: QUALITY CONTROL

LAB:

Quality Control Lab plays a vital role in the diary for producing pure milk and milk
products without and contamination and defaults. The products which are made in
krishnagiri diary is tested here for good quality. The products of “THE
DHARMAPURI DISTRICT CO – OPERATIVE MILK PRODUCERS UNION
LIMITED” Krishnagiri is recognized by “INDIAN STANDARD INSTITUTE” (ISI).

DESCRIPTION OF MILK BY A CHEMIST:

Milk is an emulsion of fat in a watery solution of sugar and mineral salts and with
protein in a colloidal suspension.

COMPOSITION OF MILK:

Water - 87.25%

Dry matter -

12.75% Fat -

3.80%

Protein -

3.50% Sugar

- 4.80% Ash

- 0.65%

MINERAL CONTENTS OF AAVIN MILK IN 100 ml OF

 MILK: Calcium - 125 mg

Sodium - 50 mg

Magnesium - 10 mg
Potassium - 150 mg

Phosphate - 210 mg

Citrate - 200 mg

Chloride – 100 mg

Bicarbonate – 20 mg

Sulphate – 10 mg

2.6.4 PROCUREMENT AND INPUT

SECTION PROCUREMENT AND

INPUTS:

The main process of P & I section in krishnagiri aavin limited is collecting the milk
from the co operative societies to the farmers motivation. These procurements has
been done by some specified routes. It has divided into three teams as

Dharmapuri

Krishnagiri

Denkanikottai

Under the milk production process these section collects and sales the milk to the
diary.

The other main duties of this section are:

Arranging for new societies to the farmers

Maintaining the quality of milk in all
 societies Expanding the production of milk
Buying the best quality of milk and selling for diary
Fixing a target to increase the performance in all the activities
Weekly counseling, meetings and other activities are done by this section

There are number of doctors are working and separating the areas and doing their
works like caring the cattle, supplying good quality of tested cattle feeds, and medical
activities like injecting supplying medicines for cattle etc.,
Accounting year was 01-04 of every year to 31-03 of the next year (ie ., year ending
31st march). The government and internal auditors sincerely audited accounts of the
every and signed by the auditors.

2.6.3 QUALITY CONTROL

DEPARTMENT: QUALITY CONTROL

LAB:

Quality Control Lab plays a vital role in the diary for producing pure milk and milk
products without and contamination and defaults. The products which are made in
krishnagiri diary is tested here for good quality. The products of “THE
DHARMAPURI DISTRICT CO – OPERATIVE MILK PRODUCERS UNION
LIMITED” Krishnagiri is recognized by “INDIAN STANDARD INSTITUTE” (ISI).

DESCRIPTION OF MILK BY A CHEMIST:

Milk is an emulsion of fat in a watery solution of sugar and mineral salts and with
protein in a colloidal suspension.

COMPOSITION OF MILK:

Water - 87.25%

Dry matter -

12.75% Fat -

3.80%

Protein -

3.50% Sugar

- 4.80% Ash

- 0.65%
 Data Analysis
&
Interpretation

Gender.
Data Analysis-From the above data, we got to know that 62% of the
respondents were female and 38% of the respondents were male.

Data Interpretation-From the above data, we may interpret that

most of the respondents were female.
Age group.

Data Analysis-
From the above data, we got to know that 62% of the respondents
were of age group 18-24 years, 25% of the respondents were of age
group 25-34 years, 7% of the respondents were of age group 35-44
years, 4% of the respondents were of age group & 2% of the
respondents were of age group 55-64 years.
Data Interpretation-From the above data, we may interpret that
majority of the respondents were of age group 18-24 years and
minority of the respondents were of age group 55-64 years.
1. What is your current occupation

INTERPRETATION:-
24.8% of peoples of employed, 23% of peoples are self-employed,
23% of peoples are student and 23% of peoples are House wife while
using online payment
 2. Reason of using unpacked milk.

INTERPRETATION:-
30% of peoples are get low price, 40% of peoples says tasty, 20%
of peoples consider for freshness and 10% of peoples are getting
very easy for home delivery 10 % for other reason.
3. Which brand of milk are you using?

Frequency

Strongly Disagree Disagree Neutral Agree Total

INTERPRETATION:-
20% of peoples use AMUL, 30% of peoples are use Mother dairy, 20% of
peoples are use Parag and 10% of peoples are agree management comes
forward when you are facing with critical situation.
7. Form where do you get information regarding the Brand of milk influence yo
purchase decision?
Frequency

Strongly Disagree Disagree Neutral Agree Total

INTERPRETATION:-
30% of peoples are TV 40% of peoples are agree, 20% of peoples are News
Paer30% of peoples are agree comes from Radio.
 LIMITATION

Though the detailed investigation is made in the

present study, it has got the following limitations.
1. This study is restricted only to the Varanasi city only. So,
the results may not be applicable to other areas.
2. This study is based on the prevailing customer
3. As per the population of the study is huge, the researcher
has taken only 100 sample respondents of milk consumers.
4. Generally, the respondents were busy in their work and
were not interested in responding rightly.
Due to human behavior information may be biased
Table 2.7 Milk procurement

Krishnagiri Dharmapuri Total

Diary chilling 1 1 2
centers
Functioning BMCCs 1 13 15
Functional DCS 216 278 494
Members in co 68210 123956 192166
operative
Pouring members 11067 13268 24335
Milk 60698 69701 130399
procurement(LLPD)
Average local sales 18336 5072 23408
(lts)
Total milk 19 10 29
procurement routes

Table 2.8 Input activities:

Krishnagiri Dharmapuri Total

Input routes 6 6 12
DCS covered under 216 278 494
animal health cover
Artificial 54 137 191
inseminatio
n centers
Artificial 3256 8205 n 11461
inseminatio
n
Causes treated
done/month 1852 3031 4883

Government m
State cooperatives and its Offerings

Milk Butter Ghee Buttermilk Lassee Dahi

Ice
Cream
Amul – Gujarat 9 9 9 9 9 9 9

Vijaya – 9 9 9 9 9
Andhra
Pradesh
Nandini ‐ 9 9 9 9 9 9 9
Karnataka

GokulKholhap 9 9 9 9 9 9 9
ur

Verka ‐ Punjab 9 9 9 9 9 9

Milma ‐ Kerala 9 9 9 9 9
Mahanand 9 9 9 9 9
–
Maharasht
ra households consumed
both unpacked and packed fluid milk. Multinomial Logit model results
showed that variables such as age of household heads, income level of
households, households with at least a child under six years of age and
milking cow, households who disagree with the statement 'packed fluid
milk fattens children' and households who disagree with the statement
'advertisement influences people to buy more packed fluid milk',

significantly affected consumption of unpacked fluid milk. Education

status of household heads, young aged household heads, medical
prescription, households who accept the statement 'sterilized milk
contains preservatives' reported to have consumed packed fluid milk.
Moreover, consumers who agree with the statement 'price of packed
fluid milk is expensive compared with unpacked fluid milk' were less
likely to consume packed fluid milk. The general implication is
that a significant portion of unpacked fluid milk is reported to be
consumed in the study area without quality and hygienic inspection.
This situation seems to warrant the governments to introduce new policy
tools to improve the hygiene and quality of unpacked fluid milk. Milk
producing and processing companies need to design better
pricing, promotion and advertising strategies for fluid milk
consumption to attract consumers. Furthermore, fluid milk processing
enterprises and importers need to improve their processing
technological status aimed at reducing cost of processing and marketing
to attract consumers.
There is a significant difference between developed and developing countries
in fluid milk consumption. The per capita fluid milk consumption in
developed and developing countries is reported to be 60-170 and 2-80kg,
respectively (USDA, 2007). In developed countries, low fat milk
consumption has shown an increase while per capita consumption of
whole milk showed decreased attribute to health concerns, aging
population, educational status, and income level factors. In contrast,
unpacked fluid milk takes a significant share of fluid milk consumption in
Africa and Ethiopia is not exception to this situation (Alemu et al.,
2000). Cultural, educational, beliefs, attitudes
and economic factors often limit fluid milk consumption. Moreover, the
traditional perception of fluid milk as a product for children alone further
limits its consumption in Ethiopia.

Currently there is a change in market organizational structure of

fluid milk in Ethiopia due to private dairy enterprise development, growth
in per capita income, involvement of foreign investment and access
to promotional activities. Furthermore, the market oriented and liberalized
economic policy resulted in increased importation and per capita
consumption of packed fluid milk (FAOSTAT, 2003) indicating that
consumers could make consumption choices among packed and unpacked
fluid milk based on availability. However, household's consumption could be
affected by socioeconomic and demographic characteristics and consumers'
attitudes and beliefs towards price and health effects of the alternatives.
Specifically, household income and size, and educational status, age and
gender of the household head, cow ownership, advertisement, health
related issues, medical prescription, market price, number of children under
 age six, and chemical composition of milk are hypothesized to affect
household's decision in consumption of either packed or unpacked fluid
milk.
Given the current structure of fluid
milk consumption in Ethiopia, there is a need for empirical study to
determine factors affecting packed and unpacked fluid milk
consumption preferences of households. To date considerable work has
been conducted on factors affecting purchasing and consumption patterns
of fluid milk (Asfaw,
2009; CSA, 2009). Other studies conducted focused on milk and milk
products marketing, role of milk marketing cooperatives, market milk
composition, role of milk in food security in rural and peri- urban economy,
role of enzymes in converting milk into milk products, and role of milk
pasteurization in preserving milk quality (Holloway and Ehui, 2002;
Mohamed et al., 2004; Gizachew, 2005; Sintayehu et al.,
2008; Agged et al., 2010; Mohamed et al.,
2010; Muhammed et al., 2010; Samy et al.,
2010). Therefore, the objective of this study was to identify factors
affecting packed and unpacked fluid milk consumption preferences of
households in Wolaita zone, Ethiopia.
 Since households' consumption of packed fluid milk is increasing in
Ethiopia, the result of this study provides some relatively new information
about consumers‟ fluid milk consumption preferences. It also provides
adequate information for countries supporting developing countries
through Food Aid Program and HIV/AIDS related supports. In addition, it is
of interest to milk processing firms, milk importing companies, government
agencies that could use the information derived from in determining
consumption strategies and support policy tools.

The major advantage of this sampling method is that it guarantees

questionnaire, trained interviewers asked
each consumer through face to face interview if he/she had been consuming
 packed or unpacked fluid milk during the last one month period. In
addition, interviewers also collected data on household's socioeconomic,
demographic characteristics (age, sex, education, household size,
household
income, occupation). Fluid milk
parameters relating to the explanatory variables to the valuation of k
alternatives

The marginal effects and predicted probabilities are obtained from the logit
regression results by the following equation:

had more than two choices for consuming fluid milk. If there are a finite number
of choices (greater than two), Multinomial Logit estimation is appropriate
to analyze the effect of exogenous variables on choices. The Multinomial Logit
model has been used widely by researchers such as (Schup et al., 1999; Ferto
and Szabo, 2002). It is a simple extension of binary choice model and is the
most frequently used model for nominal outcomes that are often used when the
dependent variable has more than two alternatives. Accordingly, dependent
variables were created from the data, which indicated the consumption of only
unpacked fluid milk (1), only packed fluid milk (2) and both packed and
unpacked fluid milk (3). Since the dependent variable has more than two
choices, Multinomial Logit model is the most suitable to estimate the relationship
between dependent and independent variables. The general form of the
Multinomial Logit model as specified by (McFadden, 1973; Long, 1997):
Where and P represent the parameter and probability, respectively, of
one of the choices. Marginal probability gives better indications and
represents changes in the dependent variable for a given change in a
particular regressor whereas holding other regressors at their sample means.
The models are estimated under maximum likelihood procedures, which
yield consistent, asymptotically normal and efficient estimates.

The independent variables, their

definitions and descriptive statistics (arithmetic means and standard
deviations) are shown in Table 1. It was hypothesized that households
who have at least a child under age six are more likely to consume packed
fluid milk due to child's health. It was hypothesized that households with
large family size were less likely to consume packed fluid milk
because of high expenditure. Household heads whose education status
was higher than sample mean (9.8) were hypothesized more likely to
consume packed fluid milk. It was hypothesized that high income level
households are more likely to consume packed fluid milk. Aged
household heads are traditional and less likely exposed to

information. As a result, it was hypothesized that they consume unpacked fluid

milk. Female headed households were hypothesized to consume packed fluid
milk due to family health. We expect that households who consider price as a
significant factor have propensity to consume unpacked fluid milk. It was
hypothesized that advertisement influences household choice of packed fluid
milk. It was hypothesized that households who believe in the statement
„packed fluid milk fattens children‟ prefer to consume packed fluid milk.
Households who accept the statement „unpacked fluid milk is not healthy‟
were hypothesized to consume packed fluid milk due to family health.
Households who believe that „sterilized milk contains preservatives‟ tended to
consume packed fluid milk. Households who have at least one member medically
prescribed to consume milk were hypothesized to consume packed fluid milk
due to stigma and discrimination. It was hypothesized that households who own
cows are more likely to consume unpacked fluid milk.
The average age of household heads was
42.23 and 76% of households were headed by male. The average household
size was 5.42 which is higher than the average household size (5.06 persons) in
the urban areas of Ethiopia (CSA, 2007). Fifty seven percent of households
consisted of below 5 persons per household suggesting that nucleus family
type was dominant in the study area. About
73% of households had at least a child under
the age of six indicating high demand for fluid milk. About 16, 44 and
40% of household heads were illiterate, completed grades between 1 and 12 and
greater than 12 grades, respectively. The average education level of household
heads was 9.8 and 61% of the heads attended education level more than
sample average. Generally, 84% of household heads had formal schooling. The
major sources of income for households were house rent (10.6%), trading
(29.4%), daily labor (5%) and governmental and

Average monthly income of households was US$1071 of which about

11.6% was spent on fluid milk. About 58% of households belonged to
middle and high income groups. The ratio of fluid milk expenditure in total
expenditure was 21, 29.1 and 50% in low, middle and high income groups,
respectively. Households with low income spent almost 14.2% of their
income on fluid milk consumption, whereas these ratios were
20 and 65.8% in middle and high income
groups, respectively.
The perceived importance of attributes, beliefs, knowledge and
importance ratings are presented in Table 1. About 77% of households
agreed that price of packed fluid milk is expensive compared to unpacked
fluid milk. This was an important attribute influencing consumers‟ choice.
Interestingly, 67% of households believed that packed fluid milk
fattens children while 33% disagreed with this statement. About 74% of
households agreed that advertisement influences people so they buy more
packed fluid milk and 51% of households agreed that sterilized milk
contains preservatives. About 57% of households did not accept the
statement unpacked fluid milk is not healthy but 43% agreed with the
statement and hence had concern to feed hygienic and health milk to their
family. About 11% of households had medical prescription from doctors
to consume milk due to HIV/AIDS and gastritis cases. About 16% of
households owned at least one milking cow.
7.7% of households consumed only packed fluid milk and 13.9% of them
consumed both unpacked and packed fluid milk.

Table 2. Household fluid milk consumption choices

Milk consumption N Marginal

Only unpacked milk 152 78.4
Only packed milk 15 7.7
Percentages
Both unpacked and packed 27 13.9
Total number of 194 100
milk
consumers
The results of Multinomial Logit analysis are presented in Table 3. The
overall model is significant at P<0.01 significance level as indicated by log
pseudo likelihood value of
72.00. Moreover, based on the pseudo R² of
0.384, the model appears to have a good fit, especially for Multinomial
Logit model and when the underlying data are cross sectional (Agged et
al., 2010). Age of household head, income of household, presence of
a child under six years, packed milk fattens children and advertisement
influences people to buy more of packed fluid milk have statistically
significant coefficients for the unpacked fluid milk. Age of household head,
education level of household head, medical prescription, price of packed
milk is expensive compared with unpacked milk and sterilized milk contains
preservatives appeared to have statistically
significant coefficients for packed fluid milk over both choices.

Household size, education level of household head, medical prescription,

packed milk fattens children and cow ownership were found statistically

significant in explaining household choice of packed fluid milk over

unpacked fluid milk. In a similar study conducted in Turkey (Kilic et

al., 2009) it was found out that young aged household heads, smaller

household size, households with employed wife, higher income households,

more educated household heads, and female headed households were more

likely consumed packed fluid milk.

Results indicated that age of household head positively and

significantly affected consumption of packed fluid milk. This shows that

young household heads

consumed packed fluid milk than older aged heads. This is consistent with our

hypothesis that old aged household heads are traditional and consume unpacked

fluid milk. Households who have at least a child under the age of six

consumed both types of fluid milk. This result is inconsistent with our priori

expectations that households who have at least a child under age six

consume packed fluid milk. Education of household head negatively and

significantly affected packed fluid milk consumption. This is inconsistent with

our priori expectations that highly educated household heads consume packed

fluid milk. Income level of household negatively and significantly influenced

consumption of unpacked fluid milk when both categories were taken as a

base category. This indicates that households with higher income level appeared

to consume both unpacked and packed fluid milk. Therefore, our hypothesis
of higher income level households consume packed fluid milk was disproved.

The price variable negatively related to packed fluid milk compared with

unpacked. In fact, results showed that due to price concerns, many households

consumed unpacked and both unpacked and packed fluid.

Regarding medical prescription to

consume fluid milk, households who have at least a member prescribed by

doctor to consume fluid milk consumed packed fluid milk because many of

them were HIV/AIDS victims. They preferred this due to stigma and

discrimination from milk producers and free access to packed fluid milk

through Medhane Act (a non-governmental organization).

However, a few households who had medical prescription also

consumed unpacked fluid milk. The variable packed fluid milk fattens

children significantly and negatively affected consumption of unpacked

fluid milk when both types were taken as base category and positively

affected packed fluid milk when unpacked milk was taken as a reference

category. These signs indicate that households who accept the statement

„packed fluid milk fattens children‟ consumed packed and both

unpacked and packed fluid milk. The variable advertisement influences

packed fluid milk consumption has negative and statistically significant

coefficient to unpacked fluid milk than both unpacked and packed fluid
milk. This shows that households who had exposure to milk advertisement

consume both unpacked and packed fluid milk. The perception that sterilized

milk contains preservatives has positive and statistically significant

coefficients for packed fluid milk in both reference categories. Therefore,

households who accept the statement „sterilized milk contains preservatives‟

consumed packed fluid milk. The insignificant relationship between fluid

milk consumption and gender of household head and health issue of fluid

milk alternatives gives further evidence that fluid milk consumers are not

affected from health and gender issues of milk. This suggests that consumers

themselves are not particularly worried about quality and hygiene of

unpacked fluid milk.

ince marginal effects and predicted probabilities give better indications,

marginal effects are given in Table 4. Having at least a child under the age of

six increased probability of consuming both unpacked and packed fluid milk by

5.28% and decreased probability of consuming only unpacked and only packed

fluid milk by 3.74 and 1.54%, respectively. For household heads who had

education level more than sample average, the probability of consuming both

unpacked and packed fluid milk increased by 17.71% and the probability of

consuming only unpacked and only packed fluid milk decreased by 13.8 and

3.91%, respectively. This finding implies that highly educated households are

more concerned about safety and hygienic conditions of unpacked fluid milk

and price of packed fluid milk, hence, have propensity to consume both

unpacked and packed fluid milk. Income variable indicates that the probability

of consuming only unpacked and only packed fluid milk decreased by 4.59 and

3.25%, respectively, while it increased both unpacked and packed fluid milk

consumption by 7.84%. This finding does not support our prior

expectation that higher income level households have a positive impact

on

consumption of packed fluid milk. It is also inconsistent with the findings

of many workers (Dong and Kaiser, 2001; Bus and Wosely, 2003; Kilic et

al., 2009) who reported that income positively influenced probability that

households consume packed fluid milk. Age of household head was found

positively related with packed fluid milk, implying that being young aged

increases probability of consuming only packed and only unpacked fluid

milk by 0.13 and 0.3%, respectively. Households who had

access to advertisement were by 3% more likely to consume packed

fluid milk. On the other hand, households who accept the statement

„sterilized milk contains preservatives‟ were more likely consumed packed

fluid milk (10.64%) and less likely consumed unpacked fluid milk (5.55%).

Households responded to price difference which increased the probability of

consuming unpacked and both unpacked and packed fluid milk by 10.53 and

12.65%, respectively and decreased probability for packed fluid milk by

2.12%. This confirms the hypothesis that existence of price difference

stimulates households to consume unpacked and both unpacked and packed

fluid milk. Although packed fluid milk consumers understand better

why packed fluid milk is expensive, many believe that they would buy more of

it if the price was lowered. Households who believe in the statement „packed

milk fattens children‟ were 7.19 and 7.55% more likely to consume only

packed and both unpacked and packed fluid milk, respectively and 14.74%

less likely to consume only unpacked fluid milk. For households with at least a

member who consumes milk by medical prescription, the probability of

consuming only packed fluid milk increased by 13.48%, while it deceased the

consumption of only unpacked and both unpacked and packed fluid milk by

12.47 and 1.01%, respectively.

These results suggest that socioeconomic and demographic characteristics,

attributes and beliefs of a household and household head played an important

role in fluid milk consumption preferences among Ethiopian households. Similar

results were reported by different authors (Bus and Wosely, 2003; Wham and

Wosely, 2003; Stavkova and Turcinkova, 2005; Stavkova et al., 2008; Kilic et

al., 2009) in other developing countries. In developed countries, many researches

have been conducted on factors affecting fluid milk consumption behavior

of households. Most of the studies have implied that low-fat milk consumption is

positively related to income and whole milk consumption is negatively affected

by income level. Furthermore, previous studies indicated that household size,

presence of children in household and higher education levels positively affected

low-fat milk purchase (Jensen, 1995; Schmit et al., 2003).

Packed fluid milk Both packed and

milk

unpacked fluid milk

AGE 0.0030 0.00132 0.00434

HSIZE 0.0743 - -0.0454
INCOME -0.0459 - 0.0784
0.0289
GENDER -0.00912 - 0.0416
0.0325
CHILD -0.0374 - 0.0528
0.0325
EDU -0.138 - 0.177
0.0154
DORDER -0.125 0.13 0.0101
0.0391
PRICE 0.105 - -0.127
5
FAT -0.147 0.071 0.0755
0.0212
ADVERT -0.069 0.030 0.0395
9
PRESERV -0.0555 0.10 -0.0510
1
HEALTH -0.0775 0.00591 0.0716
6
COWOWN 0.0241 -0.00773 -0.0164
In conclusion, factors affecting packed and unpacked fluid milk consumption

preferences of households were analyzed using Multinomial logit model. Findings

revealed that better educated household heads, higher income level households,

households with at least a child under six years of age, households who disagree

with the statement „price of packed fluid milk is expensive compared to

unpacked fluid milk‟, households who agree with the statement packed fluid

milk fattens children‟ consumed more of both unpacked and packed fluid

milk. The results showed that young aged

households heads, households with at least a member prescribed by doctor to

consume milk and who agree with the statement „sterilized milk contains

preservatives‟ consumed more of packed fluid milk. The results also revealed

that a significant portion of fluid milk reported to be consumed unpacked

without quality and hygienic inspection. It is suggested that governments should

introduce new policy tools such as providing financial support at lower interest

rate, reducing tax and encouraging investment on quality dairy products

production and marketing. It is hoped that the result obtained could help both

domestic and foreign companies to design pricing, promotion

and advertising strategies for fluid milk consumption. Fluid milk processing

enterprises and importers need to improve their processing technological

status aimed at reducing cost of processing and marketing to attract consumers.

CONCLUSION
 CONCLUSION
The study is a sincere attempt to look and understand buying behavior
of milk consumer and how they make the decision for purchasing milk.
Through our study, we are able to find out those different factors which
are responsible for the formation of consumer preference for
purchasing form of milk. In our study we find that out of 100 sample 73
consumer mostly prefer the unpacked milk because of the freshness of
the milk and they believes that the unpacked milk has pure quality.
Unpacked milk comes without adding any chemical. So, customer
haspositive attitude toward unpacked milk. While out of 100 sample 39
consumer prefer to purchase packed milk because they want a standard
fat level and standard quality of milk. Also out of total sample there are
8 consumers prefer both of the forms of milk due to any contingency
and availability.
ACKNOWLEDGEMENTS

I would like to extend my deepest thanks to German Academic Exchange

Service (DAAD) for sponsoring this research undertaking. I would like to
express my sincere gratitude to International Livestock Research Institute (ILRI)
for facilitating the study. I am also highly indebted to the Ethiopian Institute of
Agricultural Research (EIAR) for letting me carry out the study. Many
thanks are extended to zonal, wereda and kebele administrations and
communities in the study areas for their enthusiasm in sharing knowledge and
experiences with regards to dairy value chain opportunities and challenges.
 QUESTIONAIRE
Name of respondent

Age
0-18
18-30
30-35
50 above

Gender
Male
Female
Other

What is your Occupation?

Student
Business
Service
Other

What prompts you to shop the desired from flipkart?

Brand
Price
Quality
Service
How often you purchase online (frequency)?
Very often
Often
Sometimes
Rarely

When will you online shopping (motivation)?

During offers/promotion
On need
Mood/Desire
Regularly

How often you purchase online(Frequency)?

Almost everyday
Once in a week
Once in a month
Once in six months or more

What are your usual buying patterns of online shopping?

Search offline and buy online
Search online and buy online
Search online and but offline

How the delivery of the products is done usually?

At office/Institution
At home
Through friends
Collect from courier
How do you make the payments during internet shopping (prefered payment mode) ?
Credit card/Debit card
Cash on delivery
Internet banking
e wallets

Average amount in rupees spent for Internet shopping in the last ten months
0-100
100-500
500-2500
2500-10000

What do you but more often from Flipkart?

Books and magazines
Others
Mobile and accessories
Computers

Your past experience with online shopping from flipkart

Satisfied
Neutral
Very much satisfied

What is your reason for online shopping?

Easy payment
No hidden cost
Wide range of products
No travel to shop
Do you think online shopping is risk?
Strongly disagree
Disagree
Neutral
Agree

Do you feel that online shopping makes comparision easy?

Disagree
Neutral
Agree
Strongly agree

Would you are command online shopping at non online products?

Yes
No
REFERENCES
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milk development. Smallholder Milk Development Project (SDDP) in
Ethiopia. In: The role of village milk co-operatives in milk development.
SDDP Proceedings, MOA, Addis Ababa, Ethiopia.
Asfaw, N. 2009. Improving smallholder farmers‟ marketed
supply and market access for dairy products in Arsi Zone, Ethiopia. Research
Report 21. ILRI (International Livestock Research Institute), Nairobi, Kenya.
107 pp.
Bus, A and Wosely, A.2003. Consumers‟ sensory and nutritional perceptions of
three types of Milk. Public Health Nutrition, 6(2): 201-208.
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Authority, Addis Ababa, Ethiopia.
CSA. 2009. Ethiopian sample survey enumeration. Federal
Democratic Republic of Ethiopia. Central Statistical Authority (CSA), Addis
Ababa, Ethiopia.
Dong, D and Kaiser, H. 2001. Dissecting the advertising
effects on household milk purchases. NICPRE Quarterly, 7(4):1-4.
FAOSTAT. 2003. Country time series livestock growth rate database for Ethiopia.
FAO, Rome, Italy.
Ferto, I and Szabo, G. 2002. The choice of supply channels in
Hungarian fruit and vegetable sector. In: Economics of contracts in
agriculture, Second Annual Workshop, Annapolis, MD, 21-23 July.
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Case of Ada‟ Liben district, Eastern Oromia. M.Sc. Thesis, Alemaya
University, Ethiopia.
Holloway, G and Ehui, S. 2002. Expanding market participation among
smallholder livestock producers: A Collection of studies employing Gibbs
sampling and data from the Ethiopian highlands. Socio-economic and
Policy Research Working Paper 48. ILRI, Nairobi, Kenya.
85p.
Jensen, K. 1995. Fluid milk consuming patterns in the South: Effects of
nutrition information use and household characteristics. Journal of
Agricultural and Applied Economics, 27(2), 644-657.
Kilic, O, Akbay, C and Yildiz, T. 2009. Factors affecting packed and unpacked
fluid milk consumption in Turkey. Agricultural Economics-Czech, 55(11):
557-563.
Long, J. 1997. Regression models for categorical and limited dependent variables.
Advanced Quantitative Techniques in Social Sciences. Series 7, SA
gE, London.
McFadden, D. 1973. Conditional logit analysis of qualitative choice behavior.
In: Zarembka P. (ed.): Frontiers in Econometrics. Acad. Press, New York, pp.
105–142.
Mohamed, A, Ahmed, M, Ehui, S and Yemesrach, A. 2004. Milk
development in Ethiopia. EPTD Discussion Paper No.
123. International Food Policy Research Institute, NW Washington, D.C,
U.S.A.
Mohamed Osman Mohamed Abdalla, Dawla Ali Adam Ali and Babiker Elwasila
Mohamed. 2010. Extraction, milk clotting activity measurements and
purification of Solanum dubium Fresen (Gubban) for cheese making. World
Journal of Dairy and Food Sciences 5(2): 152-
159.
Muhammed Khalid Bashir, Muhammed Khalid Naeem and Sajjad Akbar Khan
Niazi, 2010. Rural and peri-urban food security: A Case of district Faisalabad
of Pakistant. World Applied Sciences Journal 9(4):403-411.
Samy, A, El-Behairy and Ezzat Mohamed, A. 2010. Properties of yoghurt made
from fortified buffalo‟s milk with Iron and Zinc salts. World Journal of
Dairy and Food Sciences 5(2): 207-213.
Schmit, T, Chung, C, Dong, D, Kaiser, H and Gould, B. 2003. The Effect of genetic
milk advertising on the household demand for milk and cheese. In
AAEA Annual Meetings Tampa, FL, USA, July 30-August 2.
Schup, A, Gillepsie, J and Reed, D. 1999. Consumer choice among
alternative red meats. Journal of Food Distribution Research, 29(3), 35-43.
Sintayehu, Y, Fekadu, B, Azage, T and Berhanu, G. 2008. Dairy production,
processing and marketing systems of Shashemene–Dilla Area, South Ethiopia.
IPMS (Improving Productivity and Market Success) of Ethiopian Farmers
Project Working Paper 9. ILRI (International Livestock Research Institute),
Nairobi, Kenya. 62 pp.
Stavkova, J and Turcinkova, J. 2005. Consumer choice process when consuming
the staple food. Agricultural Economics- Czech, 51(9): 389-394.
Stävkovä, J, Stejskal, L and Toufarovä, Z. 2008. Factors influencing
consumer behavior when buying food. Agricultural Economics-Czech, 54(6):
276-284.
USDA. 2007. Foreign agricultural service. United States
Department of Agriculture.
Wham, C and Wosely, A. 2003. New Zealanders‟ attitudes to milk:
Implications for public health. Public Health Nutrition, 6(2): 73-78.

Aggad, H, Bridja, M, AEK Bouhari, Benaouali, M and Djiebli, A. 2010. Some

quality aspects of pasteurized milk in Algeria. World Journal of Dairy and
Food Sciences 5(1): 21-24.
 Alemu, G, Mengistu, A, Mulat, D, Seyoum, B and Adugna, T. 2000. Status of
milk development. Smallholder Milk Development Project (SDDP) in
Ethiopia. In: The role of village milk co-operatives in milk development.
SDDP Proceedings, MOA, Addis Ababa, Ethiopia.
Asfaw, N. 2009. Improving smallholder farmers‟ marketed
supply and market access for dairy products in Arsi Zone, Ethiopia. Research
Report 21. ILRI (International Livestock Research Institute), Nairobi, Kenya.
107 pp.
Bus, A and Wosely, A.2003. Consumers‟ sensory and nutritional perceptions of
three types of Milk. Public Health Nutrition, 6(2): 201-208.
Collins, M. 1986. Sampling. In: Worcester R., Downham J.
(eds.): Consumer market research handbook. McGraw-hill, London.
CSA. 2007. Summary and statistical report of 2007 population and housing
census. Federal Democratic Republic of Ethiopia, Central Statistical
Authority, Addis Ababa, Ethiopia.
CSA. 2009. Ethiopian sample survey enumeration. Federal
Democratic Republic of Ethiopia. Central Statistical Authority (CSA), Addis
Ababa, Ethiopia.
Dong, D and Kaiser, H. 2001. Dissecting the advertising
effects on household milk purchases. NICPRE Quarterly, 7(4):1-4.
FAOSTAT. 2003. Country time series livestock growth rate database for Ethiopia.
FAO, Rome, Italy.
Ferto, I and Szabo, G. 2002. The choice of supply channels in
Hungarian fruit and vegetable sector. In: Economics of contracts in
agriculture, Second Annual Workshop, Annapolis, MD, 21-23 July.
Gizachew, G. 2005. Dairy marketing patterns and efficiency: The
Case of Ada‟ Liben district, Eastern Oromia. M.Sc. Thesis, Alemaya
University, Ethiopia.
Holloway, G and Ehui, S. 2002. Expanding market participation among
 smallholder livestock producers: A Collection of studies employing Gibbs
sampling and data from the Ethiopian highlands. Socio-economic and
Policy Research Working Paper 48. ILRI, Nairobi, Kenya.
85p.
Jensen, K. 1995. Fluid milk consuming patterns in the South: Effects of
nutrition information use and household characteristics. Journal of
Agricultural and Applied Economics, 27(2), 644-657.
Kilic, O, Akbay, C and Yildiz, T. 2009. Factors affecting packed and unpacked
fluid milk consumption in Turkey. Agricultural Economics-Czech, 55(11):
557-563.
Long, J. 1997. Regression models for categorical and limited dependent variables.
Advanced Quantitative Techniques in Social Sciences. Series 7, SA
gE, London.
McFadden, D. 1973. Conditional logit analysis of qualitative choice behavior.
In: Zarembka P. (ed.): Frontiers in Econometrics. Acad. Press, New York, pp.
105–142.
Mohamed, A, Ahmed, M, Ehui, S and Yemesrach, A. 2004. Milk
development in Ethiopia. EPTD Discussion Paper No.
123. International Food Policy Research Institute, NW Washington, D.C,
U.S.A.
Mohamed Osman Mohamed Abdalla, Dawla Ali Adam Ali and Babiker Elwasila
Mohamed. 2010. Extraction, milk clotting activity measurements and
purification of Solanum dubium Fresen (Gubban) for cheese making. World
Journal of Dairy and Food Sciences 5(2): 152-
159.
Muhammed Khalid Bashir, Muhammed Khalid Naeem and Sajjad Akbar Khan
Niazi, 2010. Rural and peri-urban food security: A Case of district Faisalabad
of Pakistant. World Applied Sciences Journal 9(4):403-411.
Samy, A, El-Behairy and Ezzat Mohamed, A. 2010. Properties of yoghurt made
 from fortified buffalo‟s milk with Iron and Zinc salts. World Journal of
Dairy and Food Sciences 5(2): 207-213.
Schmit, T, Chung, C, Dong, D, Kaiser, H and Gould, B. 2003. The Effect of genetic
milk advertising on the household demand for milk and cheese. In
AAEA Annual Meetings Tampa, FL, USA, July 30-August 2.
Schup, A, Gillepsie, J and Reed, D. 1999. Consumer choice among
alternative red meats. Journal of Food Distribution Research, 29(3), 35-43.
Sintayehu, Y, Fekadu, B, Azage, T and Berhanu, G. 2008. Dairy production,
processing and marketing systems of Shashemene–Dilla Area, South Ethiopia.
IPMS (Improving Productivity and Market Success) of Ethiopian Farmers
Project Working Paper 9. ILRI (International Livestock Research Institute),
Nairobi, Kenya. 62 pp.
Stavkova, J and Turcinkova, J. 2005. Consumer choice process when consuming
the staple food. Agricultural Economics- Czech, 51(9): 389-394.
Stävkovä, J, Stejskal, L and Toufarovä, Z. 2008. Factors influencing
consumer behavior when buying food. Agricultural Economics-Czech, 54(6):
276-284.
USDA. 2007. Foreign agricultural service. United States
Department of Agriculture.
Wham, C and Wosely, A. 2003. New Zealanders‟ attitudes to milk:
Implications for public health. Public Health Nutrition, 6(2): 73-78.