CHAPTER 5 ORGANISATION PROFILE 5.1 …shodhganga.inflibnet.ac.in/bitstream/10603/50704/12/12...99...

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CHAPTER 5

ORGANISATION PROFILE

5.1 Introduction –

For the study five dairy organizations were selected. The detailed information

regarding the marketing policies viz. product, price, promotion and distribution

policies of the dairy units were collected by the discussions with the Managing

Director, Marketing Managers and Assistant Marketing Managers of these

organizations.

5.2 Kolhaupur Zilla Sahakari Dudh Utpadak Sangh Ltd.

5.2.1 Introduction –

The Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd., Kolhapur

was established on 16th

March 1963 under Co-operative societies Act. It started

with collecting 700 liters of milk per day from 22 primary co-operative societies.

The basic function of the sangh was to procure the milk and supply it to the

government dairy which was located in Tarabai Park, Kolhapur.

In 1978, the National Dairy Development Board included Kolhapur

District under Operation Flood area. The project was financed by NDDB. Under

this project a 2-lac liters / day capacity dairy plant was constructed at Gokul

Shirgaon, Kolhapur. At Gadhinglaj and Bidri chilling centers of 75,000 & 50,000

liters /day capacity were also constructed under the project.

In 1985, the Government milk scheme, Kolhapur was handed over to

Kolhapur Zilla Sahakari Dudh Utpadak Sangh. During 1985 the average milk

procurement was 1,14,836 liters/day with 676 village level primary co-operative

societies. The production of milk in Kolhapur Zilla Sahakari Dudh Utpadak Sangh

started in 1985 and after one year the production of milk products was started. The

chilling centers were established at Lignnur, Borewadi, Tawarewadi and Gogave

having capacity of 1.25LLPD 1.00 LLPD, 1.00 LLPD & 0.50 LLPD respectively.

In 1987 packing unit, having a capacity of 4.00 LLPD was constructed at Vashi

Mumbai. In 1993, another packing unit of capacity 0.50 LLPD was started in

Manjiri (Pune).

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The milk handling capacity of the Kolhapur Zilla Sahakari Dudh

Utpadak Sangh & chilling centers is 10.75 LLPD. Dudh Sangh covers 3499 village

level dairy co-operative on 210 milk routes for milk procurement. Milk & milk

products are sold under the brand name ‘Gokul.’ The Kolhapur Zilla Sahakari Dudh

Utpadak Sangh is also popularly known as Gokul.

Under guidance and assistance from NDDB & FAO, Gokul implemented

a quality management system, in order to improve the quality of its output. Gokul is

IS/ISO, 9001:2000 and IS: 15000:1998 certified dairy unit. It is also Quality

management and food safety system certified dairy, which is accredited by Export

inspection council.

Dudh sangh has won 12 national awards. Prominently, the first one

was in the year 1988-89 in the category of best Milk Product plants. The second,

for the year 1992-93 in the category of outstanding liquid milk plant. The third

and Fourth was in the year 1993-94 in the category of best Dairy processing

industry and best dairy development and public sector. It has received National

recognition in 1994-95 by winning NPC Award along with two national awards

for best performance in animal feed processing.

Installed plant capacity of the Gokul dairy is given considering Gokulshirgaon plant,

Lingnur chilling Centre, Gadhinglaj, Borawade chilling Centre, Bidri, Tawarewadi

chilling Centre, Chandgad, and Gogavave chilling Centre, Shahuwadi.

Table 5.2.1 Installed plant Capacity –

Plant Capacity (LLPD)

Gokul Dairy Plant, Gokulshirgaon 7.00

Lingnur chilling Centre, Gadhinglaj 1.25

Borawade chilling Centre, Bidri 1.00

Tawarewadi chilling Centre, Chandgad 1.00

Gogavave chilling Centre, Shahuwadi 0.50

(LLPD - Lakh Liters per day)

(Source: Kolhaupr Zilla Sahakari Dudh Utpadak Sangh Ltd., Kolhapur)

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Manufacturing capacity of different products by Gokul is given in the following

table.

Table 5.2.2 Products Manufacturing Capacity

Product Capacity

Skimmed Milk Powder 41 MTPD

Butter 24 MTPD

Ghee 06 MTPD

Table Butter 03 MTPD

Shrikhand 01 MTPD

Curd 02 MTPD

Paneer 01 MTPD

Lassi 02 KTPD

(MTPD - Metric Ton per day)


Milk packing capacity of Gokul at Gokul Dairy, Washi, and Pune are given as

follows.

Table 5.2.3 Milk packing Capacity

Plant Capacity (LLPD)

Milk Pouch Packing - Gokul Dairy 1.00

Milk Pouch Packing - Washi (Mumbai ) 4.00

Milk Processing capacity - Washi (Mumbai) 1.00

Milk Pouch Packing - Manjari (Pune) 0.50

(LLPD - Lack Liters per day)


5.2.2 Objectives –

1) Development of infrastructure for the procurement of milk in rural areas to

ensure an assured market for milk producers through out the year, as well as to

offer the best remunerative prices.

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2) Fulfill the growing needs for milk & milk products of the consumers in

Maharashtra and other territory.

3) Supplement the programme extension & inputs, with particular reference to feed

& fodder production and implement an intensive, breeding programme for milk

animals to increase milk production.

4) Imparting training for developing human resource at rural level for effective

leadership. Management skill and improvement of service to rural milk

producers.

5) Running co-operative development cell to increase awareness and to herald

active women participation for better management of co-operatives and their

positive role in democratic setup.

5.2.3 Extension Activities –

As mentioned in objectives Dudh sangh provides many extension activities as

follows -

1) Cattle Feed Plant -

Kolhapur Zilla Sahakari Dudh Sangh started the production of cattle

feed to meet nutritional requirement of the animals in the year 1982. In the

beginning the capacity was 100 MT which was expanded to 200 MT per day.

The cattle feed is marketed under the brand ‘Mahalaxmi’.

2) Gokul Gram Vikas Yojana -

In 1990 with the help of NDDB, Dudh Sangh implemented Gokul

Gram Vikas Yojana. From 1994, Dudhsangh conducts this programme. This

programme covers Women’s education, Member education, management

committee training, secretary training, Procurement & input training, Youth

group discussion, Women group Discussion, leadership development, Refresher

course etc. Recently, it has also included adoption for villages for development.

Initially, 175 villages were the beneficiaries. This number has now risen to

1027.

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3) Dairy Business & Animal Husbandry Training Centre -

From 1984, Dudh Sangh has started the training centre for its

members and employees. Training regarding the various aspects of dairy

business such as accounting, management, milk testing etc. is provided.

4) Preventive & clinical veterinary services -

A team of 45-trained veterinary graduates operating from 33 different

locations in the district is catering to the preventive farmers. Each veterinarian

looks after about 10 villages and provides these services round the clock at the

farmer’s doorsteps.

It also provides breeding services. Dudh sangh has established 240

artificial insemination centers in its operational area. All the necessary inputs to

these centers such as liquid nitrogen, semen, sheath, cryogenic containers are

made available by the Dudh sangh.

5) Milkotester -

In order to ensure high quality of raw milk received from the villages,

Dudh sangh has supplied Milko Testers to the village Dairy Co-operatives. The

milko Testers are electronically operated machines to determine the fat

percentage of the milk. The milk supplied by every individual milk producer is

tested before acceptance and the payment is made based on the quality of milk.

The Dudh Sangh gives the subsidy of Rs. 3000 /- per milkotester.

6) Fodder Development -

Availability of sufficient quantity of good and nutritious fodder is

essential prerequisite for sustained milk production milk. In view of this, a

team of four agricultural graduates with the assistance of five supervisors is

working under fodder development section of the union. Under this programme

seeds of improved fodder varieties are distributed at 25 % subsidized cost.

About 10 tones of folder seed are distributed annually.

7) HRD Programme -

Quality of the work put out by the individual staff member depends

upon his technical competency as well as his attitude towards working. These

courses are conducted at various levels from workers to managerial cadre.

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5.2.4 Marketing Organization –

In 1988, Dudh sangh started liquid milk marketing in Mumabi.

Initially the sale was 16,000 LPD. To meet the requirements of different

customers four different varieties of milk, Viz Classic (Buffalo) milk, Cow milk,

Tonned milk & Double tonned milk are marketed in Kolhapur , Pune, Mumbai

and other parts of Western and Southern Maharashtra. In Mumbai the total sales

is 3,50,000 LPD and in rest of the areas sales is 1,10,000 LPD. Along with the

liquid milk, Gokul is involved in marketing of the Ghee, Shirkhand, Milk

Powder, Paneer, Butter and dahi.

Figure No. 5.2.1

ORGANIZATION CHART

Board of Directors

Managing Director

Administrative Account Purchase Marekting Labour Welfare Dairy

Dept. Dept. Deptt. Dept. Dept. Dept.

Asst. General Manger Asst.General Manger

(Vashi, Mumabi)

Marketing Manager

Senior Officer (1)

Officers (3)

Clerks (26)


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5.2.5 Product Policy -

Kolhapur Zilla Sahakari Dudh Sangh offers a variety of milk & milk

products.

Figure 5.2.2

PRODUCT MIX

Milk Shrikhand Ghee MilkPowder

(Product Line 1) (Product Line 2) (Product Line 3) (Product Line 4)

Full Cream Milk Shrikhand Ghee (Buffalo)

Tonned Milk Shrikhand (Elaich) Ghee (Buffalo)

Tonned Milk Mango Shrikhan Ghee (Cow)

Double Shrikhand Fruit

Tonned milk

Lassi Dahi Butter Paneer

(Product Line 5) (Product Line 6) (Product Line 7) (Product Line 8)

Cooking Butter

Table Butter


Gokul operates over eight product lines. Milk is available in

polythene bags and in 500 ml, and 1-liter packs. The depth for product line 1 is

seven. Shrikhand is available in polythene bags and cups. It is available in 100

g, 250 gm, and 500 gm sizes. The depth for product line 2 is nine. Ghee is

available in polythene gabs and jars. It is available in 200 ml, 500 ml, and 1

liter, 5 liter and 15-liter sizes. The depth for ghee is 12. Milk powder is

available in polythene bag and carton. It is available in 100 gm, 500 gm, and 1

Kg packs. Its depth is four. Paneer is available in only 200 gm pack Table butter

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is available in 100 gm and 500 gm carton. Cooking butter is available in 500 gm

carton. Lassi is available in 200 ml polythene bag. Dahi is available in 200 gm

and 400 gm packs.

Market area covered by Gokul is Kolhapur, Mumbai, Pune, Sangli,

Satara, Ratnagiri, Kokan, Goa, and Belgaum. They export mainly butter & milk

powder to Middle East and Europe.

5.2.6 Pricing Policy -

Gokul offers the milk and milk products to the customers at

competitive price. The price of the milk is decided based on the fat content. For

milk, the dairy association decides the prices. Therefore, the milk prices are

same as that of the competitors. For milk products, there is the price war in the

industry and price is used as the major promotional tool. Price discounts are

offered to the wholesale buyers.

Table 5.2.4 The prices of the different products as on Dec. 2008

Product Rs. Per lit./ Rs.per kg.

Full Cream Milk 30.00

Tonned milk 19.00

Shrikhand (Ellichi) 80.00

Mango Shrikhand 92.00

Shrikhand Fruit 70.00

Ghee (Buffalo) 200.00

Ghee (Cow) 200.0

Milk Powder 164.00

Paneer 135.00

Table Butter 170.00

Lassi 30.00

Dahi 45.00


The prices of the milk in Satara, Pune, Mumbai & Kokan region are slightly higher

because of the additional transportation cost.

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5.2.7 Promotional Policy -

As Gokul is the oldest dairy in the area, they have maintained the

good public relations. By providing the extension service to the milk producers,

they have earned goodwill in the market. In promotion mix, they depend more

on public relations & publicity. In Gokul they don’t have their advertising

department. They rely on the outside advertising agency for preparing the

advertisement messages and for media buying. The annual advertising budge is

Rs. 60/- Lakh. For setting advertising budget, they use affordability method.

For advertising their products, they use radio newspapers, local TV channels,

Point of purchase material, as the advertising medias. In sales promotion

strategy, they sponsor the local events. They place an advertisement in a

particular media depending upon the media availability. At the time of festivals,

generally they advertise the products.

5.2.8 Distribution Policy -

Gokul has developed a strong distribution network. Gokul distribute

the milk and milk products in Kolhapur, Sangli, Satara, Pune, Mumbai,

Belguam, Goa, Kokan. They have total 450 distributors. Distributors make an

advance payment in the bank and place an order. Packaged milk is send to the

distributor late in the night or early in the morning. Milk is send to the distributor

from manufacturing unit in insulated vans. For Kolhapur region, they have 20

insulated vans. Distributor’s sale the milk and milk products directly to the

customers or to the retailers. Pasteruised Milk is transported to Vashi, Mumbai

Plant, there it gets packed and then it is send to the distributors for sale. The

sales of milk is more in Mumbai and Kolhapur The cost of distribution in

Kolhapur is 40 paisa/liter, Sangli & Satara it is 50 paisa/liter, in Pune it is 80

paisa/liter & in Mumbai Rs. 1/ liter.

Whereas milk products are send to the distributors depending upon

the requirements and payments are made by the distributors after taking the

delivery of the products. Their wholesale buyers are other co-operative and

private dairy units, MNC’s. They also sale milk products directly to the

individual customers in bulk quantity as per the orders.

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Gokul conducts environmental analysis on regular basis. They

conduct customer surveys as well as distributor or retailer surveys to understand

the market situation. They have implemented marketing information system for

the use of decision-making purpose. Their major competitors include warana

milk, Sphurti Products, Yalgud milk, Amul. Their marketing strategy is based

on the customer satisfaction.

Gokul is involved in many extension activities and extending corporate social

Responsibility towards milk producers, employees and society as a whole.

Through its regular market surveys, they found the social changes are taking

place, viz. the customers are becoming more health and hygiene conscious, they

use various packaged milk products at the various occasions, and the

consumption for milk product has increased.

5.2.9 Annual Production of milk and milk products

Milk and milk products annual production of Gokul from the year 1991 to 2009 is

given in the following table.

Table 5.2.5 Annual Production of milk and milk products

Year Milk (Lac

lit)

Shrikhand

(M.T.)

Table

Butter

(M.T.)

Ghee

(M.T.)

Milk

Powder

(M.T.)

Butter

(M.T.)

1991-92 988 - - - - -

1992-93 1246 - - - - -

1993-94 1297 - - - - -

1994-95 1353 - - - - -

1995-96 1420.51 - - - -

1996-97 1597.52 142.62 33.64 302.55 2307.67 2436.45

1997-98 1597.52 94.60 53.43 349.26 1737.74 2140.82

1998-99 1627.79 87.60 69.86 395.50 1497.57 2078.33

1999-00 1545.20 48.3 33.2 370.5 1461.1 2440.3

2000-01 1658.13 44.0 35.3 209.0 1393.0 1862.4

2001-02 1844.28 53.8 22.8 275.7 3110.3 3522.3

2002-03 1902.88 45.4 20.5 432.7 2717.7 3342.7

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2003-04 1839 30.0 97.0 471.0 1856.0 2604.0

2004-05 1892 35.0 102.0 408.0 1597.0 2558.0

2005-06 1909 64.0 76.0 333.0 1623.0 2584.0

2006-07 1946 85.00 703.0 327.0 2077.0 2338.0

2007-08 1784 88.00 187.0 396.0 3221.00 3390.0

2008-09 1860 116.0 497.0 328.0 2705.0 2719.0


Production of milk shows the increasing trend with some exception in 2003-04 and

2004-05. The production of Shrikhand has declined from 142.65 M.T. in 1995-96 to

44.0 M.T. in 2001-02. From 2002-03 it again started increasing. Production of

table butter shows increasing trend with some fluctuations. Ghee production was

almost constant over a period. Milk powder production has increased over a period.

Butter production level was also constant to some extent.

5.2.10 Annual Sales of milk and milk products.

Milk and milk products annual sale of Gokul from the year 1991 to 2009 is given in

the following table.

Table 5.2.6 Annual Sales of milk and milk products.

Year Milk

(Lac lit)

Shrikha

nd

(M.T.)

Table

Butter

(M.T.)

Ghee

(M.T.)

Milk

Powder

(M.T.)

Butter

(M.T.)

Total

sales

(M.T.)

1991-92 988 - - - - - 988

1992-93 1246 - - - - - 1246

1993-94 1297 - - - - - 1297

1994-95 1353 - - - - - 1353

1995-96 1373.05 - - - - - 1373.05

1996-97 1374.08 130.17 36.45 292.29 973.40 2211.00 1410.5

1997-98 1504.26 101.92 52.62 328.39 1812.69 1330.0 1540.5

1998-99 1578.30 87.60 67.93 392.87 1043.54 1807.0 1612.26

1999-00 1565.02 42.4 30.2 370.3 1182.0 1203.0 1593.29

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2000-01 1617.93 42.4 34.3 211.7 457.9 1171.0 1637.08

2001-02 1571.40 55.5 23.6 289.9 1738.3 2564.0 1618.11

2002-03 1658.55 36.5 17.5 429.2 2943.1 3440.0 1727.22

2003-04 1806 30.0 89.00 471.0 1069.0 1503.0 1837.62

2004-05 1811 32.0 100.00 399.00 1281.0 2910.0 1858.22

2005-06 1885 56.0 75.0 363.00 513.0 1235.0 1907.42

2006-07 2086 76.0 647.00 327.0 348.0 1262.0 2112.6

2007-08 2157 83.0 216.0 396.0 1247.0 1712.0 2193.54

2008-09 2256 110.0 517.0 328.0 1698.0 3059.0 2313.12


Graph 5.2.1 Annual Sales of milk and milk products.

Sale of milk has shown an increasing trend with some fluctuations. Sales of

Shrikhand declined from 1996 to 2001 & again from 2002 it has increased with

some fluctuations. Sales of table butter vary over a period. Ghee Sales have

shown an increasing trend over a period. Sales of milk powder increased from

1996 to 2009. Sales of butter have also increased with some variations over a

period.

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5.2.11 Promotional Expenditure –

Annual promotional expenditure of Gokul from the year 1991 to 2009 is as follows.

Table 5.2.7 Annual Promotional Expenditure

Sr. Year Promotional

expenditure (Rs.)

1 1991-92 1,200,000

2 1992-93 1,550,000

3 1993-94 1,600,000

4 1994-95 1,750,000

5 1995-96 2,010,000

6 1996-97 2,200,000

7 1997-98 2,450,000

8 1998-99 2,720,000

9 1999-2000 3,230,000

10 2000-01 3,300,000

11 2001-02 4,050,000

12 2002-03 4,150,000

13 2003-04 4,000,000

14 2004-05 5,010,000

15 2005-06 5,150,000

16 2006-07 5,550,000

17 2007-08 5,809,560

18 2008-09 6,000,000

Graph 5.2.2 Annual Promotional Expenditure

Table 5.2.7 shows that promotional expenditure has increased from 1991 to 2006.

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5.3 Warana Sahkari Dudh Utpadak Prakriya Sangh Ltd; Warana

Nagar

5.3.1 Introduction -

Warana Sahkari Dudh Utpadak Prakriya Sangh Ltd; popularly known as

Warana Dairy was established in 1968, with the purpose of providing an additional

source of income to the farmers from the surrounding villages. The milk is collected

from 78 surrounding villages. The cost of milk procurement is 75 paisa. It also

collects milk from the Karnataka – Maharashtra boundary. 50% milk procurement is

from the Warana Milk and Milk Products and Warana Dairy & Agro that collects

milk from Solapur, Barshi, Karmala and Bhum. Daily milk procurement is 5,00,000

liters. This comprises of cow milk and buffalo milk. Dairy plant has a capacity of

10,00,000 liters. 50% milk is converted in milk products such as Shrikhand, Milk

Powder, Ghee, Cheese, Butter, Lassi etc.

Warana Dairy markets the milk & milk products in the various areas like

Kolhapur, Mumbai, Pune, Sangli, Miraj, and Ichalkaranji etc. It also sale the milk

and milk products to the Defence Department of Indian Government. Warana Dairy

has acquired the ISO 9001-2000 & HACCP Food safety Certificate. Warana Dairy is

also producing Bournvita, Drinking Chocolate & Coaco Powder for Cadbury India

Ltd; 60% of the total production of the Cadbury India Ltd’s Bournvita is produced in

Warana Dairy.

5.3.2 Sister Concern Organisations –

1] Warana Sugar Factory

2] Warana’s Distillery

3] Warana Paper Factory

4] Electricity Generation

5] Warana Education Society

6] WAGPCOS

7] Warana Mahila Udyog

8] Warana Poultry

9] Warana Co-operative Bank

10] Warana Bazar

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5.3.3 Extension Activities –

[1] Cattle Feed Plant –

Warana Dairy has established a Cattle Feed plant to manufacture a

good quality cattle feed and to make it available to the milk producers at afforcable

price. It is distributed through primary milk societies.

[2] Distribution of Milko Tester equipments –

Milko tester is used to check the quality of milk at the time of the

milk collection. Warana Dairy distributes these milko testers to the primary milk

societies.

[3] Training Programmes –

Warana Dairy Organises various training programmes, workshops,

seminars for its employees, primary societies and members regarding the clean milk

production, dairy business etc.

[4] Veterinary Services –

Warana Dairy provides the Veterinary services to the milk producers

through the 27 centres. In addition, they provide the mobile van services. They

provide verterinary services at the subsidised cost with the help of 18 doctors and 45

Attendents.

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Figure 5.3.1

Marketing Organisation Structure

Board of Directors

Chairman

Managing Director

GM Admn. GM Accounts GM Marketing GM Personnel

Sr. Officer Mkt. (2)

Sales Officer officer A/C Kolhapur Center Ichalkaranji Center

Sales supervisor (5) Clerk (3) Sales representative

Clerk (3) Salesman (2) Sales repre. (2)

Labour (24) Sales Asst. Salesman (2)

(Source: Warana Sahkari Dudh Utpadak Prakriya Sangh Ltd; Warana

Nagar, Kolhapur.)

5.3.4 Product Policy –

Warana Dairy produces milk and variety of milk products such as ghee, butter, milk

powder, shrikhand, cheese etc. The product mix of the Warana is as follows –

[1] Milk - Warana Dairy Produces standarsised, pasteurised milk & they sell it in

polythene packages in two sizes i.e. 500ml & 1 liter.

[2] Shrikhand - It produces three varieties of Shrikhand viz. Badam Pista

Shrikhand, Kesar Shrikhand & Mango Shrikhand. Badam Pista Shrikhand is

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available in 50gm, 100gm, 250gm, 500gm and 1kg cup. Mango Shrikhand is

available in 100gm, 200gm cup & 500gm polythene packs.

[3] Tetra Pack Milk - Tonned milk and double tonned milk is available in one-

liter tetra pack. The milk is sterilised at high temperature and packed in tetra pack,

which can be stored for 120 days without refrigeration until opened.

[4] Milk Powder - Warana Dairy produces two types of milk powder viz. Skim

milk powder and full cream milk powder. It is available in 100gm, 500gm, 1 kg

polypacks and 25 kg in craft paper bag with inner polythene bag.

[5] Ghee - Ghee is available in two varieties i.e. buffalo ghee and cow ghee

which is, available in 200ml, 500ml, 1 liter polypack, 1 liter plastic jar, 1 liter and

15 liter Tin and 200ml and 500ml Box packing.

[6] Table butter - Table butter is available in 100gm, 500gm pack and 9.1 gm

chiplet.

[7] Paneer – Paneer is available in 200gm, 500gm and 1 kg poly packs.

[8] Cheese – Cheese is available in two varieties mozerella cheese & processed

cheese. It is available in 100gm, 200gm, 500gm and 1 kg polypacks.

[9] Dahi – Dahi is available in 100gm, 200 gm and 400 gm cup.

[10] Lassi – Lassi is available in 200 ml polybag.

[11] Flavoured Milk – Flavoured milk is available in four varieties viz. Chocolate,

Butter-skotch, Ice-cream soda and milk masala are sale in 200 ml bottle.

Sale of Milk, Shrikhand and Ghee is more in retail. In addition, sale

of skim milk powder, full cream milk powder and butter is more in wholesale.

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5.3.5 Price Policy –

Warana Dairy follows cost based pricing policy. The total cost is calculated

& certain profit margin us added to arrive at a price, which is again, depends upon

competition. Warana Dairy do not use price as a promotional tool, if competitors

lowers its price structure, they believes that customers will purchase quality

products.

The prices of different products are as follows –

Table 5.3.1 Prices of different products

Products Quantity Price (Rs.)

Mango Shrikhand ½ kg. Poly Bags 37

100 gram cup 10

200 gram cup 18

500 gram cup 40

Skim Milk Power 1 kg Poly Pack 88

½ kg Poly Pack 45.50

100 gram Poly Pack 10.50

Kesar Shrikhand 250 gram cup 21.50

500 gram cup 41

Dahi 100 gram cup 4

200 gram cup 7

Mozzarella Cheese 1 kg Poly Bag 135

½ kg Poly Bag 67.5

Paneer 200 gram Poly Bag 21

1 kg Pack 101

Shrikhand – Badam –

Pista

½ kg Poly Bag 34

¼ kg Poly Bag 17.5

100 gram cup 9

250 gram cup 20.5

500 gram cup 39

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Ghee 1 lit. tin 156

½ lit. tin 73

15 lit. tin 2160

200 ml. Poly Pack 30

500 ml. Poly Pack 68

Lassi 200 ml. Poly Bag 5

Process Cheese 100 gram Poly pack 15

200 gram Poly pack 30

500 gram Poly pack 74

Table Butter 100 gram packet 13

500 gram packet 62

(Source: Warana Sahkari Dudh Utpadak Prakriya Sangh Ltd; Warana Nagar,

Kolhapur.)

5.3.6 Promotion Policy -

For promotion of the milk and milk products, Warana Dairy relies on

advertisement. They have advertising department. They mainly display their

advertisements in newspaper, radio and television. They advertise the products in

Mumbai, Pune, Ratnagiri, Goa and local levels and use local Medias at each place.

They take help of advertising agency. In festival season, they advertise their

products heavily. Around 3 to 4, lacs rupees are spend monthly on promotional

activities. In 1991, their advertising budget was Rs. 33 lacs, which has increased

gradually up to 1.3 crore in 2007-08.

Along with the promotion, they use publicity as effective media for

promotion. As they are involved in innovative methods and new product launch,

they use newspapers for publicity. They also employ sales representatives for

persuading the distributors and retailers to push the Warana’s products. In flush

period, they offer discounts to the retailers as a push strategy. They are using the

attractive packs for butter, cheese, ghee, paneer that communicates with the

customers.

The important problem faced by Warana Dairy was the perishbility of milk

& milk products. To overcome this problem they have introduced tetra pack milk

which can remain fresh for 120 days without refrigeration. For long distance

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markets, they use tetra pack milk. As they have an active marketing department,

they conduct environmental analysis through its sales representatives. They have

developed Marketing Information system, which collects information from all the

sources, provides it to the marketing manager. They are aware about their

competitor’s products. Their major competitors are Chitale Dairy, Sphurti products,

Gokul Dairy and Amul Dairy. The thrust of their marketing strategy is customer

satisfaction. Their future plan is to start Warana Dairy and Agro Industries a

multistate union for milk collection.

5.3.7 Distribution Policy –

Warana Dairy Distributes the milk and milk products through distributors

and retailers. They distribute the products in four states viz. Goa, Karnataka,

Maharashtra and Andharapradesh. In Karnataka, they cover Belgaum, Hubli,

Dharwad, Bagalkot, Vijapur area. In Andhra Pradesh, they distribute the products in

Hyderabad. In Maharashtra, they market their products in Mumbai, Ichalkaranji,

Sangli, Miraj, Mumbai, Pune, Aurangabad, Jalgao, Solapur.

Their distribution network is as follows –

Warana Dairy

Mumbai Region Local Area Other

Warana Dairy’s Retailers Distributors

Own Depo

(Packing unit) Consumer Retailer

Distributor Consumer

Retailer

Consumer


Kolhapur.)

118

In Mumbai Warana Dairy have their own depot. The milk and milk

products are transported in insulated vans and packed in the Mumbai depot. From

there it goes through the distributor and retailers to the customers. In local area, they

distribute milk and milk products through retailers. In other areas such as Sangli,

Ichalkaranji, Miraj, Pune, Aurangabad, Jalgao, they send the products to the

distributor. Distributor gives it to the retailes and retailers distribute the products to

final customers.

Warana Dairy has insulated vans for delivery of milk & milk

products, which they take on, hire basis.

The number of delivery vehicles is as follows-

Table 5.3.2 Number of delivery vehicles

Capacity No. of vehicles

8 ton 04

6 ton 03

4 ton 04

3 ton 02


Kolhapur.)

Along with these vehicles they have their own two small vehicles

which are used to distribute products in local areas. In addition, they have 12

insulated tankers, which are used for the distribution of milk. The cost of

distribution of milk at local level is 24 paisa / liter & it varies depending upon the

distance. On average, the cost of distribution of milk products is Rs. 1.50 per kg.

They have seven retail outlets. One retail outlet is situated in

Kolhapur, 4 retail outlets are in Mumbai and 2 retail outlets are in Ichalkaranji.

They provide point of purchase material such as boards, in shop

material to the retailers, to promote the products. Their wholesale buyers include the

other dairy units located in Hyderabad, which purchase skim Milk Powder, and

butter in bulk. In addition, they export their products in Gulf countries like Kuwait,

119

Saudi Arabia & Sharjah, African Countries, Bangladesh and China. Now they are

trying to export the milk products to US, UK, Russia, South Africa & Bahrain.

Mainly they export Skim Milk Powder, full cream milk powder and tetra pack milk,

Ghee, Cream. In 2007-08 they exported the products worth Rs. 35,75,000. Their

exports amount for 7-8 per cent of total sales. They also supply to the Indian army

through its Misamari and Tejpur depots, which are located in Assam. They supply

tetra pack milk, ghee and milk powder to Indian army.

5.3.8 Contribution of each product to sales-

Contribution of milk and milk products such as ghee, shrikhand, SMP, curd, butter,

cheese, paneer of Warana Dairy are given in the following table.

Table 5.3.3 Contribution of each product to sales

Year Milk

(Lac

lits)

Ghee

(ton)

Shrikhan

d (ton)

Milk

Powder

(ton)

Dahi &

Lassi (ton)

Butter

(ton)

Cheese

(ton)

Paneer Total

Sales

(Lacs

lit.)

1991-92 633 425 1023 612 730 - - 660.9

1992-93 499 510 1140 590 945 - - 530.85

1993-94 478 546 1168 826 1522 348 - 522.1

1994-95 473 552 1475 989 1493 543 - 523.52

1995-96 493 567 1602 953 2145 208 - 547.75

1996-97 557 799.2 1788 1328 2317 119 1 - 620.522

1997-98 558 694 2035 1602 2852 362 1.2 - 633.462

1998-99 599 647 2340 1499 2344 366 7.2 - 671.032

1999-

2000

685 666 2204 1819 2334 301 8.4 - 758.324

2000-01 643 625 2470 2033 2989 378 23 13 728.31

2001-02 721 742 2027 2695 3031 391 28 - 810.14

2002-03 781 920 2011 2521 2988 653 32 31 872.56

2003-04 791 1,030 1986 - 2566 578 16 41 853.17

2004-05 773 854 1940 1717 2226 203 26 66 843.32

2005-06 744 893 2307 5700 2508 1895 51 103 878.52

2006-07 870 1119 2260 5109 3048 1185 38 138 998.97

2007-08 1024 1452 2286 7156 3017 1764 60 233 1183.68

2008-09 934 1546 2679 4752 3308 2632 66 272 1086.55


Kolhapur.)

120

Graph 5.3.1 Contribution of each product to sales

Table 5.3.3 shows the sales of milk and milk products. Sales of milk as well as

milk products ghee, shrikhand, milk powder, lassi, dahi, butter, cheese, and paneer

has increased over the years from 1991 to 2008-09. Butter has introduced in market

in 1993-94. Manufacturing of cheese has started in 1996-97. Dahi production started

in 2000-01. Panneer production started in 2001-02. All the products are having the

up ward demand.


Warana’s promotional expenditure from the year 1991 to 2009 is given in the

following table.

Table 5.3.4 Year wise promotional expenditure

Sr. Year Promotional

expenditure (Rs.)

1 1991-92 3,330,000

2 1992-93 3,600,000

3 1993-94 3,750,000

4 1994-95 3,900,000

5 1995-96 4,010,000

121

6 1996-97 4,070,000

7 1997-98 4,300,000

8 1998-99 4,700,000

9 1999-2000 5,100,000

10 2000-01 5,800,000

11 2001-02 6,420,000

12 2002-03 8,170,000

13 2003-04 9,630,000

14 2004-05 11,000,000

15 2005-06 11,350,000

16 2006-07 12,000,000

17 2007-08 13,000,000

18 2008-09 14,100,000


Kolhapur.)

Graph 5.3.2 Year wise promotional expenditure

Table 5.3.4 shows that promotional expenditure has shown an increasing trend from

the year 1991 to 2009.

122

5.4 Shri Hanuman Sahakari Dudh Vyavasaik and Krushipurak

Sewa Sanstha Ltd., Yalgud, Kolhapur


Shri Hanuman Sahakari Dudh Vyavasaik and Krushipurak Sewa Sanstha Ltd. was

established on 14th

July 1967 primarily to collect milk from milk producers and to

supply milk to the government milk scheme. Its main objective is to aid and provide

assets in the form of milch animals to farmers and landless laborers to undertake

Dairy activities and to raise their standard of living in particular and of the village

population in general & to improve dairy industry and to increase milk production.

Currently 50 primary milk societies supply milk to Shri Hanuman

Sahakari Dudh Vyavasaik and Krushipurak Seva Sanstha Ltd; Popularly known as

Yalgud. 6000 to 7000 liters of milk is collected from these 50 societies. There are

total 797 members of the society. Milk procured by Yalgud is supplied to Kolhapur

Zilla Sahakari Dudh Utpadak sangh Ltd; (Gokul) as Yalgud is a primary society of

the Gokul. The 50 primary societies are located nearby Yalgud. They distribute

milk & milk products in Kolhapur, Ichalkaranji, Miraj, Nipani, Jat and

Kawathemahankal. Daily milk collection has increased from 5585 liters in 2003-04

to 7395 liters in 2008-09.

5.4.2 Sister Concern Organisations -

Its Sister Concern organisation includes –

a) Sahakar Maharshi Late Tatyasaheb Mohite Sahakari Lift Irrigation

Sanstha Ltd; Yalgud.

b) Shri Hanuman Sahakari Lift Irrigation Sanstha Ltd; Yalgud.

c) Shri Mahalaxmi Nagari sahakari Pat Sanstha Ltd; Yalgud.

d) Shri Govind Sahakari Poultry Vyavasaik Sanstha Ltd; Yalgud.

e) Shri Hanuman Grahak Sahakari Sanstha Ltd; Yalgud

f) Shri Sumangal Mahila Audyogik Sahakari Sanstha Ltd; Yalgud

g) Shri Hanuman Sahakari Vahatuk Sanstha Ltd;

h) Sahakar Ratna Vaantrao Mohite Sahakari Housing Society Ltd; Yalgud

i) Shri Swami vivekanand Charitable Trust, Yalgud

123

j) Shri Shetakari Sahakari Dudh Utpadak Sangh Ltd; Nipani – Chikodi.

k) Sahakar Ratna Vasantrao Mohite Krishi Abhivrudhi Sangh Ltd; Nipani

l) Sahakar Maharshi Tatyso Mohite Vikas Sewa Society Ltd; Yalgud

Yalgud has received financial assistance of Rs. 40.60 lakh for dairy

development from the National Co-operative Development Corporation, New Delhi.

In addition, they have received Rs. 20 lakhs as subsidy and concession in sales tax

for 6 years from Western Maharashtra Development Corporation, Pune under

special incentive scheme 1988 of Maharashtra. It has got food safety management

system certificate ISO 22000: 2005 for dairy products.

5.4.3 Facilities provided to members –

Yalgud provides free veterinary aid through qualified staff of the society to

all the producer members in the form of preventive medicines, artificial

insemination etc. The society provides financial assistance for purchasing improved

varieties of milk cattle to farmers and landless labourers to enable them to undertake

Dairy business & improve their economic conditions.

Figure 5.4.1 Organisation Structure

Chairman

Managing Director

Secretary

Accounts Marketing Production Purchase

Manager Manager Manager Manager

Marketing Marketing

Executives Executive

(Source: Shri Hanuman Sahakari Dudh Vyavasaik and Krushipurak Sewa Sanstha

Ltd., Yalgud, Kolhapur)

124

Marketing Policies -

Dairy products manufactured by the Yalgud are marketed in Kolhapur,

Sangli, Satara, Ratnagiri and Belgaum District through their retail outlets or through

the agency system.


Yalgud under its dairy project offers milk and milk products to the

customers. They mainly involved in marketing of standardised pasteurised milk. In

milk products, they offer variety of products such as Shrikhand, Mango Shrikhand,

Basundi, Ghee, Lassi, Dahi, Paneer, flavoured milk, Pedhe, burfi, milk powder, ice

cream. The sale for milk is more in the product mix.

This is the one organised dairy unit in Kolhapur district, which offers

different traditional milk products to the customers such as pedha, burfi, khoa,

kunda, modak etc.

Figure 5.4.2 Product Mix

The product mix is as follows –

Yalgud (Dairy Project)

Milk Milk Products Ice-Cream

(Product line 1) (Product line 2) (Product line 3)

* Pasteurized milk * Shrikhand * Venilla

* Tonned milk * Amrakhand * Strawberry

* Double Tonned milk * Basundi * Pineapple

* Flavoured milk * Pedha * Pista

* High fat milk * Burfi (Khoa & Mango) * Mango

* Kunda * Trutifruity

* Cream * Butter scotch

* Loni * Chocolate

* Modak * Keshar Pista

* Ghee * Choco Bar

* Khawa * Mango Bar

125

* Chakka * Orange Bar

* Paneer

* Milk powder

* Lassi

* Dahi



The production of different milk & milk products–

Consistently they are manufacturing pasteurised milk, Sumadhur milk, Shrikhand,

Basundi, Pedha, Burfi & Ghee.In 1997-98 Yalgud started manufacturing

Amrakhand & till to date they are manufacturing it and getting good revenue. They

stop producing Kunda from 2002-03 because, the demand was continuously

decreasing. Manufacturing of milk powder and cream has started in 1995-96, which

are used as the ingredients in many other products. Since 1997-98, they started

producing Lassi and the figures shows that they have increased its production.

Between the periods of 1996-97 to 2005-06, they were manufacturing tonned and

double tonned milk but they stop it because the demand was fluctuating. From the

year 1994-95, they started production of ice cream in various flavors up to 1999-

2000 they increased continuously production but in 2003-04, they stopped

manufacturing ice cream, as many Indian as well as Multinational companies have

entered into the market with the variety of flavours & mixes with new technology

and they implemented aggressive marketing strategy. From 1991 to 2008 the sales

was high for milk and shrikhand.

5.4.5 Princing Policy -

For milk & milk, products Yalgud implements cost based pricing and competitive

pricing methods. At the first step, they calculate the total cost, then through market

survey, analyse the competitor’s price and then arrive at a price, which is same or

slightly higher than the prices of the competitors. They do not use price as a

promotional tool. They do not compromise for the quality. For milk, the prices are

same. For milk products, prices vary depending upon the market conditions.

126

5.4.6 Promotion Policy – Mainly they use advertisement and personal selling for

promotion of the milk & milk products. As they directly sell the products to the

retailers, the delivery person performs the task of personal selling. In addition, the

retailers work as the sales people. They use print media i.e. local newspaper and

magazine for advertising their products. The advertisements are prepared by the

advertising agency. There is no pre-determined advertising budget; they spend as per

the opinion of the management.

5.4.7 Distribution Policy - Yalgud mainly distributes milk & milk products in

Kolhapur, Miraj, Sangli, Satara, Ratnagiri, Nipani, and Belgaum. They market the

products directly through retailers. They have 224 retailers all over the market area.

They have their own 12 retail outlets in Kolhapur, Sangli and Nipani viz. Central

Bus stand, Dabholkar Corner, Bhaskar Plaza, Shahupuri, Takala Road, SIBER Road,

Shivaji Stadium, Tarabai Road, Shahu Naka, Kagal Bus stand etc.

The retailers place an order in Kolhapur Head Office and then these are

forwarded through internet to Yalgud Plant. Then the orders are directly delivered to

the retailers with the help of 17 delivery vehicles. They supply products regularly to

retailers through 10 regular routes in Kolhapur. In other areas through 7 routes on

alternate days.

They provide some small hoardings to the retailers. They supply fresh and

quality products to retailers in time. Yalgud do not export the milk and milk

products.

Yalgud do not have Marketing Information System. They conduct some

opinion surveys of their regular customers to assess their requirement. Their major

competitors are Gokul, Sphurti, and unorganised dairies. They are aware about their

competitor’s product and always compare their own products with competitor

products for quality improvement.

127

5.4.8 Sale of Milk and Milk Products –

Sale of different milk and milk products of Yalgud from 1991 to 2009 is given in the following table.

5.4.1 Sale of milk and milk products

Sr.

No. Products

1991-

92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

1999-

2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

1 Shrikhand (kg) 32141 32123 53816 58102 69142 74680 61764 55206 63349 73016 61840 63202 60766 63328 63852 69948 76489 91881

2 Amrakhand (kg) - - - - - - 6707 9947 8751 13491 9780 12233 16940 19145 19674 22758 27510 35051

3 Basundi (kg) 15048 14322 21454 22604 22038 25616 31810 38004 41605 49601 41430 39442 36390 36919 42297 47228 5119 59118

4 Pedha (kg) 18008 13202 23504 30405 30634 33167 35023 39378 46456 44612 35391 29934 29559 30988 31717 37385 30541 31688

5 Khoa Burfi (kg) 1024 546 854 1184 795 1601 1041 1067 1154 1155 769 784 933 972 1109 1405 1324 1357

6 Mango Burfi (kg) 1072 530 1016 901 955 959 665 649 740 745 506 632 748 793 952 1189 1020 1289

7 Kunda (kg) 696 383 565 543 551 613 477 366 495 250 52 - - - - - - -

8 Milk Powder

(kg) - - - - 8085 12611 27271 6769 29959 20124 24578 25808 18796 13718 15544 23743 3634 -

9 Cream (kg) - - - - 1120 31428 63237 42481 101545 36803 33111 27436 37242 39825 34576 45303 25627 -

10 Loni (kg) - 1500 - - - 8249 20237 1300 18891 10126 14316 16304 15547 11915 13222 20699 3055 -

11 Modak (kg) - - 280 311 492 759 1365 1847 1901 1901 1754 1714 2063 1685 1636 1389 1407 1938

12 Ghee (kg) - 5510 9186 4247 7542 25301 36063 21477 43097 14461 19324 17007 15373 15517 15820 13490 15066 13042

13 Milk Mithai (kg) 149 181 - - - 127 - - - - - - - - - - - -

14 Khawa (kg) 61 - 173 - 325 3612 3918 3398 - - - - - - - - - -

15 Chakka (kg) 41 - - - 284 1440 2222 2134 - - - 35 35 - - - - -

16 Malai Paneer

(kg) - - - - - - - - - - - - 531 1174 2018 2430 2607 2945

Toatal (kg) 68240 68297 110848 118297 141963 220163 291800 224023 357943 266285 242851 234530 234923 235979 242417 280967 239399 238309

17 Sumadhur Milk

(200ml) lit. 68110 43463 68892 76325 92046 94383 85574 82671 88833 90363 71590 68643 78137 81955 83744 89208 96774 97852

18 Lassi (200ml) lit. - - - - - - 2990 30404 40383 70371 35197 39309 52232 54818 57352 66638 63076 65175

128

19 Scheme milk

(lit.) - - - - - 259315 594510 410775 865443 307554 272690 226609 308415 275455 299071 423502 256574 -

Total conversion

(lit)

68110 43463 68892 76325 92046 353698 683074 523850 994659 468288 379477 334561 438784 412228 440467 579348 416424 163027

20 Pasteirised

milk(lit.) 957740 1250146 1653349 1513776 1467988 2071323 1806850 1784678 1450018 1191847 1078862 1016207 1274938 1377489 1539493 1408740 1407641 1615293

21 Tonned milk (lit.) - - - - - - - 562710 694234 264964 23480 2968 22418 94904 29822 - - -

22 Double Tonned

milk (lit) - - - - - 397173 1785745 1457731 1324494 732680 83129 103453 93402 - - - - -

23 Dahi (lit) - - - - - - - - - - - - - 9789 16291 14368 15507 20043

Total (lit.) 957740 1250146 1653349 1513776 1467988 2468496 3592595 3805119 3468746 2189491 1185471 1122628 1390758 1482182 1585606 1423108 1423148 1635336

24 Ice cream (lit) - - - 6166 13919 13004 14597 8927 9125 5230 5308 7223 1953 - - 107 - -

Total per Annum 1E+06 1361906 1833089 1714564 1715916 3055361 4582066 4561919 4830473 2929294 1813107 1698942 2066418 2130389 2268190 2.3E+07 2078971 2036672

129

From the table 5.4.1, it can be inferred that sales of milk and all milk products has

gradually increased from 2001-02 to 2008-09.

Graph 5.4.1 Annual Total Sales


The promotional expenditure of Yalgud from 1991 to 2009 is as follows –

Table 5.4.2 Year wise promotional expenditure

Year

Promotional Expenditure (Rs.)

1990-91 28,088

1991-92 34,861

1992-93 61,954

1993-94 1,63,810

1994-95 1,47,294

1995-96 2,43,070

1996-97 2,73,368

1997-98 2,17,630

1998-99 2,40,626

130

1999-2000 1,89,134

2000-01 2,10,748

2001-02 2,38,375

2002-03 2,42,394

2003-04 2,69,045

2004-05 3,53,917

2005-06 2,23,309

2006-07 2,21,068

2007-08 1,46,539

2008-09 3,03,734




Table 5.4.2 shows that the promotional budget has grown steadily from 1991-92 to

2008- 09.

131

5.5 Bharat Dairy-

5.5.1 Introduction –

Mehta brothers started Bharat Dairy in 1947. It is a family owned business.

At the initial stage, Mehta has served for the other dairy units for 2 years. Then they

started collection and distribution of milk like a milkman. After some period, they

also started distribution of Dahi, Chakka, Loni. In 1985, the milk pasteurizing plant

was set up at Mangalwar Peth, Kolhapur with 200-liter capacity of milk handling.

Bharat Dairy is the first dairy to offer milk packed in polythene bags. In 1990, they

set up a plant in Gokul Shirgao MIDC with capacity of 4,000 liter per day. Their

current capacity is 40,000 liter per day. In future, they are going to expand the

capacity to 1,50,000 liter per day. In addition, they are going to establish Skim Milk

Powder Plant with higher capacity.

5.5.2 Procurement –

Bharat Dairy procures milk mainly from Karnataka State. Some quantity of

milk is procured from the villages located on the Karnataka- Maharashtra boundary

in Maharashtra state. They have two chilling centers one is at Nasalapur and other is

at Khemlapur located in Karnataka state. They also collect milk from four milk

cooperative societies. Everyday 40,000-liter milk is collected from Karnataka and

10,000-liter milk is collected from Maharashtra.

For milk procurement, they offer different payment rates to the milk producers

depending upon flush and lean season. Regular rate for milk containing 6.0 percent

fat is Rs. 14.20. Rate for milk containing 6.5 percent fat is Rs.15.20. The cost of

chilling is Rs. 2.00 per liter. Thus, their total cost of milk procurement is Rs. 17.20.

132

Organisation Structure –

This is a partnership firm.

Figure 5.5.1 Organisation Structure

SUPERVISOR ACCOUNTANT CLERK

LABOURER

(Source: Bharat Dairy, Kolhapur.)

Figure 5.5.2 Organisation Structure of Marketing Department –

MD Marketing

Area sales Manager ( Kolhapur, Pune. Mumbai)

Sales booking officer


There are 35 people working in marketing department.

Total number of employees in the organization is 80. Out of which 35 are working

in processing unit, 35 are working in marketing department and 10 are working in

retail outlet.

FOUR PARTNERS

GENERAL MANAGER

MANAGER

ss

133


Bharat Dairy believes in quality products and innovation. Their product mix consists

of different product lines such as milk, skim milk powder, curd, shrikhand, basundi,

paneer, butter/ ghee. They market their products under the brand name ‘Sphurti’.

Under each product line, they offer various products as follows –

1) Milk – Milk is available in 500 ml and 1-liter packages. They offer toned

milk, double toned milk and standardized milk. Both cow milk and buffalo

milk is available. Milk processing capacity is 50,000 to 55,000 liter per day.

2) Skim Milk Powder – In flush period when milk supply is more, at that time

milk is converted into SMP. Depending on the excess milk, availability 200

to 700-ton SMP is produced per month. Generally, SMP is procured from the

other dairy unit as per the requirements.

3) Curd – 2000 to 3000 liter curd is produced every day. Curd is having 15 days

shelf life with refrigeration. Bharat Dairy is the first in Maharashtra to

market curd in packed form after Amul. At the beginning, curd is sold in

loose form, then it is sold in polythene bags and now cups are used to pack

the curd. For curd market, they are the market leader.

4) Shrikhand – Bharat Dairy produces 15 to 30 ton shrikhand per month.

Shrikhand is available in 250gm, 500 gm pouches, 100 gm, and 500 gm

cups. It is available in four varieties viz. kesar elaichi, mango, badam pista

and fruitkhand.

5) Basundi – 5 to 8 ton of basundi is produced per month. It is available in 250

gm and 500 gm pouches.

6) Paneer – 2 to 3 ton paneer is produced per month. It is available in 100gm,

200 gm and 500 gm pouch.

7) Butter / Ghee – 10 to 12-ton ghee are manufactured per month. It is available

in 200 ml, 500 ml and 1-liter pouch as well as in jar.

134

5.5.4 Price Policy –

Price of the milk is decided by the association of milk unions. They offer the milk

products at competitive rates. They use marginal costing and reverse costing for

calculating the prices for the products. They do not use price as a promotional tool.

5.5.5 Promotion Policy –

Bharat Dairy has fixed their advertising budget at 6 to 7 percent of the sales. They

use radio, local television cannels, newspaper, and POP material for advertising their

products. They promote their products regularly. At the time of festivals, they

concentrate on heavy advertisements. Their sales representatives visit to the

distributors and retailers to promote the products. They offer cash discounts to

wholesale distributers like customers who are purchasing for the functions, caterers,

and other dairy units. In addition, they sell butter to the small producers to produce

ghee.


Bharat Dairy distributes various milk and milk products with the help of 30

distributors in Maharashtra and Karnataka. These 30 distributors distribute milk and

milk products to the retailers and retailers sell it to final consumers. In Mumbai, they

are having a super stockiest who distributes the products in Mumbai. In Kolhapur

city, they have the company retail outlet for direct distribution of the products to the

final customers. Thus, they use zero level, one level, two levels and three level

channels in different markets for smooth distribution of the products. They are

pioneer in distributing milk and milk products in Kolhapur, Sangli, Satara and

Karad. Recently they started distributing in malls. Their market area covers

Kolhapur, Sangli, Karad, Satara, Pune, Solapur, Nashik, Mumbai, Belgaum, Hubli,

Dharwad, Dawangiri, Gadag, Ratnagiri, Panjim, Vasco, Karwar.

135

5.5.7 Annual Sales and promotional expenditure of the Bharat Dairy –

Annual sales and promotional expenditure of Bharat Dairy from 1991 to 2010 are

given below.

Table 5.5.1 Annual Sales and promotional expenditure


Year Annual Sales (in Rs.

crores)

Promotional Expenditure

(in Rs. crores)

1991-92 1.75 0.11

1992-93 2.50 0.15

1993-94 3.5 0.21

1994-95 4.0 0.24

1995-96 5.0 0.30

1996-97 5.6 0.34

1997-98 6.6 0.40

1998-99 7.2 0.43

1999-2000 8.5 0.51

2000-01 9.0 0.54

2001-02 10.5 0.63

2002-03 12.0 0.72

2003-04 13.0 0.78

2004-05 16.0 0.96

2005-06 18.0 1.1

2006-07 25.0 1.5

2007-08 35.0 2.1

2008-09 42.0 2.50

2009-10 50 3

136

Graph 5.5.1 Annual Sales and promotional expenditure

The sales figure shows the increasing trend mainly because of the consistent quality

products and marketing. Every year they have made expenditure of 6 to 7 percent of

last year sales on promotional activities. Therefore, it also shows the increasing

trend.

Bharat Dairy conducts market survey like consumer survey, retailer’s survey

through their sales representatives. Moreover, they use the collected information for

marketing decision making. Their main competitor is Chitale Dairy, Pune. They

always keep the product quality high to beat the competitors. Their marketing

strategy relies on customer satisfaction. According to them, there are social

developments in the target market. The customers prefer packaged and branded

products.

137

5.6 Sahyadri Dudh Utpadak Sangh Ltd; Shinoli, Chandgad.


Sahyadri Dudh Utpadak Sangh Ltd; was established in the year 2000. The

founder Chairman, Mr. Dajiba Desai has started the dudh sangh at the Maharashtra –

Karnataka boundary only for the benefit of the milk producers situated in boundary

area. Because of Maharashtra – Karnataka border conflict, Karnataka Milk

Federation do not provide milk procurement facilities in the border area. For the

dairy units situated in Maharashtra, specifically in Kolhapur, the cost of milk

procurement in this area is more. Therefore, Sahyadri Dudh Sangh started procuring

milk from these areas. The cost of milk procurement is Rs. 17.70 per liter with

addition of 65 paisa as management charges per liter for 6.0 to 9.0 percent fat

content. Mainly, the raw milk is collected from the 282 milk societies situated in

Belgaum border area. The milk pasteurization capacity was 500 lit / day at the

beginning. Currently pasteurization capacity is 3000 lit./day.

Because of the natural climatic conditions the fat percent of milk is more (i.e.

7.5 to 9%) than the other areas. Therefore, the private dairy units such as Chitale

dairy, Pune Maskate dairy, Hyderabad and other dairies from Mumbai purchase

milk from the Sahyadri dudh Sangh to manufacture the various milk products. Their

market area covers Belgaum, Goa, Kankawali, Sawantwadi.

Figure 5.6.1 Oraganisation Structure –

Board of Directors

Chairman

Managing Director

General Manager

General Manager

Dairy Manager Marketing Officer

(Source: Sahyadri Dudh Utpadak Sangh Ltd; Shinoli, Chandgad.)

138

As the milk handling capacity is less, one dairy manager looks after all the

production & quality control procedures. Marketing Officer works directly under

general manager, as they do not have separate marketing department. Marketing

Officer visits to the various distributors and retailers to market the milk and milk

products. Sahyadri Dudh Sangh does not employ marketing information system and

they do not conduct environmental analysis. The dairy unit is well aware about its

competitors. Their major competitors are Karnataka Milk Federation, Hatson and

Aditya Milk.

Sadhyadri Dudh Sangh provides extension activities to the milk producers.

They provide financial assistance to milk producers through Sahyadri Co-operative

Society. In addition, they provide veterinary services for the cattle. They provide the

employment opportunities to the people residing in the border area.


Sahydri Dudh Utpadak Sangh Ltd; manufactures liquid milk,

Shrikhand, Mango Shrikhand, Lassi, Dahi and Ghee. However, the sales are more

for liquid milk. The milk products are manufactured in very less quantity. Milk is

available in only one variety i.e. standardised pasteurized milk. It is available in

500ml & 1-liter Packages. Shrikhand and Mango Shrikhand are available in 250 mg

and 500mg cups lassi is available in 250 ml pouches. Ghee is available in 250ml,

500ml & 1 liter Packets. Milk and Milk products are sold under the brand name

‘Sahyadri’.

5.6.3 Pricing Policy –

They use competitive pricing policy for milk and milk products. As they are

comparatively new in the market they sale the milk & milk products at competitive

prices. They use cost plus pricing method & competitive pricing method to arrive a

price. Profit margin is 15 paise / lit. They offer the different prices to the wholesale

buyers who purchase loose milk for further production of milk products. As the

quality of milk is good because of the natural climatic conditions, they do not use

price as the promotional tool. Customers prefer Sahyadri Milk because of its quality

and taste.

139

Prices of the milk & milk products –

Milk - Rs. 30 per liter

Ghee - Rs. 200 per kg

Shrikhand - Rs. 85 per kg


5.6.4 Promotion Policy –

As such, they have not formulated any promotion policy. They only

give some advertisements in local newspapers and in some local magazines,

depending upon the festival seasons. They do not decide any advertising budget or

media plan. They spent a very few amount on advertisement. They do not go for any

sales promotion activities not for customers as well as not for distributors / retailers.

Marketing officer visits to the distributors & retailers to collect the orders. Only

because of its rich quality and taste customers demand for milk & milk products of

Sahyadri Dudh Sangh.


Sahyadri Dudh Sangh sales the milk and milk products in Belgaum,

Goa, Kankavali, Sawantwadi. Their sales are more in Goa. They deliver the milk &

milk products with the help of three – owned insulated Vans. They use 407 trucks

for procurement as well as for distribution of milk. The cost of distribution is Rs. 1/

liter. They do not have any retail outlet. The Sahyadri Dudh Sangh sales the milk

and milk products in Belgaum, Goa, Kankavali, Sawantwadi in Goa are 15. In

Kankawali and Sawantwadi they have 2 distributors each.

They do not provide any marketing assistance to the distributors or retailers.

As small dairy unit, they do not export the products. They get a bulk order for loose

milk from Chitale dairy, Pune, Maskate dairy, Hyderabad, and Bombay. They take

the milk from Sahyadri Dudh Sangh because of its high fat content, which is used to

produce the other milk products. They directly purchase milk from Sahyadri Dudh

Sangh & send their insulated vans for transportation of the liquid milk.

140

5.6.6 Annual Sales of Milk & Milk Products –

Milk and milk products annual sale of Sahyadri Dairy from the year 2001 to 2009 is

given in the following table.

Table 5.6.1 Annual Sales of Milk & Milk Products

Year Sale of Milk (Rs.) Sale of Milk products (Rs.) Total Sales (Rs.)

2001-02 2,25,32,362 10,82,560 23614922

2002-03 6,55,25,668 49,950 65575618

2003-04 9,68,95,904 18,15,335 98711239

2004-05 10,39,35,045 -- 103935045

2005-06 10,47,97,384 10,469 104807853

2006-07 10,83,67,110 10,660 108377770

2007-08 12,26,81,615 -- 122681615

2008-09 13,51,23,399 5,89,673 135713072


Graph 5.6.1 Total Annual Sales

Table 5.6.1 shows that sales of liquid milk has increased steadily over a

period. This pattern is not found in milk products sale. The main reason is the

irregularity in availability of raw milk and more demand for the liquid milk.

141

5.6.7 Annual Promotional Expenditure

Milk and milk products annual promotional expenditure of Sahyadri Dairy from the

year 2001 to 2009 is given in the following table.

Table 5.6.2 Annual Promotional Expenditure

Year Promotional Expenditure (Rs.)

2001-02 77,985

2002-03 73,436

2003-04 88,925

2004-05 25,841

2005-06 90,753

2006-07 91,308

2007-08 19,712

2008-09 17,190



Table 5.6.2 shows that promotional expenditure has shown increasing trend

except in the year 2004-05. In year 2007-08 & 2008-09, the promotional

expenditure was low because of the lower profit margin.

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5.7 Conclusion –

The surveyed dairy organizations focus on the pasteurization of milk

products. Their sale is concentrated on the sale of liquid milk. These dairy

organizations mainly produce the milk products like ghee, shrikhand, curd,

butter, lassi, milk powder and paneer. They offer milk and milk products at

competitive prices. There is a very little vaiation in the prices of the

products. The dairy organizations distribute the milk and milk products with

the help of the distributors and retailers. The main market area is the

Kolhapur, Sangli, Satara, Pune, Mumbai, Belgaum, Goa and Kokan. These

dairy organizations make the use of local television, radio channels, and

local news papers for advertising their products.

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