A REPORT ON “THE STUDY ON PENETRATION OF AMUL MILK BEVERAGES IN THE RETAIL OUTLETS OF HYDERABAD CITY” BY: T. Rahul 09PSHYD010 At Gujarat Co-Operative Milk Marketing Federation Ltd. A REPORT ON “THE STUDY ON PENETRATION OF AMUL MILK BEVERAGES IN THE RETAIL OUTLETS OF HYDERABAD CITY” BY: T. Rahul 09PSHYD010 At Gujarat Co-operative Milk Marketing Federation Ltd A report submitted in partial fulfillment of The requirements of MBA program of IBS Hyderabad Company Guide: Mr. S. V. R. Chary (Dy. sales manager) Faculty guide: Dr.
Trilochan tripathy Mr. Kalyan Chakravarthy Senior Executive (Sales) DATE OF SUBMISSION: 14/05/2009 AUTHORIZATION: Dated: 14-05-2010 Dr. Trilochan tripathy, Faculty, Economics Department, IBS Hyderabad To whomsoever it may concern: I, Dr. Trilochan tripathy, here by authorize the submission of the Project work on “THE STUDY ON PENETRATION OF AMUL MILK BEVERAGES IN THE RETAIL OUTLETS OF HYDERABAD CITY”, undertaken by Mr. T. Rahul (Enrollment Number 09PSHYD010) as partial fulfillment of the requirement of MBA Program of IBS Hyderabad.
The Project work and the report were carried on by the student under my guidance and no part of this report has been submitted for any other degree or recognition before. Sincerely, (Dr. Trilochan tripathy) ACKNOWLEDGEMENT: With an enriching experience of Summer Internship in AMUL, Hyderabad, I express my sincere gratitude to Mr. S. V. R Chary, Divisional Manager, AMUL, Hyderabad, who allowed me to do a project in this esteemed organization. The project was successfully shaped under the guidance of Mr. Kalyan chakravarthy, Senior sales executive, AMUL, Hyderabad and I express my sincere appreciation and thanks to him.
I express my sincere gratitude and tribute to Dr. Trilochan tripathy, under whose support and guidance, this project was successfully completed. The support and assistance that I received from the faculty throughout the duration of the project played a key role in molding the project. We would like to thank the administration of ICFAI Business School, Hyderabad, for providing us with the facilities to carry out our project. AUTHORIZATION:……………………………………………………………………………………………………………………. ACKNOWLEDGEMENT: …………………………………………………………………………………………………………… 4 List of tables……………………………………………………………………………………………………………………………….. 7 List of figures ……………………………………………………………………………………………………………………………… 8 Abstract: ………………………………………………………………….. ……………………………………………………………….. 9 1. Introduction ……………………………………………………………………………………………………………………….. 10 1. 1. 1. 2. 1. 3. 2. 2. 1. 2. 2. 2. 3. 2. 4. 2. 5. 3. 3. 1. 3. 2. 3. 3. 3. 4. 3. 5. 3. 6. 3. 7. 4. 4. 1. 4. 2. Indian dairy Industry – a profile …………………………………………………………………………………….. 10 Background ………………………………………………………………………………………………………………… 1 The Indian Market – A Pyramid …………………………………………………………………………………….. 12 Amul: The origin…………………………………………………………………………………………………………. 14 The start of a revolution ……………………………………………………………………………………………….. 14 Milk by products: An excuse to expand………………………………………………………………………….. 5 Amul’s journey towards excellence ……………………………………………………………………………….. 15 Areas of operations: …………………………………………………………………………………………………….. 16 Area of the project: Dairy Industry ………………………………………………………………………………… 17 Project introduction:…………………………………………………………………………………………………….. 7 Objectives: …………………………………………………………………………………………………………………. 17 Purpose of study ………………………………………………………………………………………………………….. 17 Scope: ………………………………………………………………………………………………………………………… 18 Implications: ………………………………………………………………………………………………………………. 8 Limitations of the Study:………………………………………………………………………………………………. 18 Unplanned Buying And In-Store Stimuli In Supermarkets ……………………………………………….. 19 Market Share And Distribution: A Generalization, A Speculation, And Some Implications ….. 19 COMPANY PROFILE: ………………………………………………………………………………………………………. 14 Project details: ……………………………………………………………………………………………………………………. 7 Literature Review: ……………………………………………………………………………………………………………… 19 4. 3. Identifying Consumer Characteristics Associated With Japanese Preferences Towards Milk Products ……………………………………………………………………………………………………………………………….. 20 4. 4. 5. 5. 1. 5. 2. 5. 3. Analysis Of Consumer Behaviour In Regard To Dairy Products In Kosovo ……………………….. 0 Research design: …………………………………………………………………………………………………………. 21 Problem statement:………………………………………………………………………………………………………. 22 Questionnaire design:…………………………………………………………………………………………………… 22 Research methodology: ……………………………………………………………………………………………………….. 21 5. 4. a. b. 5. 5. 5. 6. 5. 7. 6. . 1. a. b. c. d. e. f. g. 6. 2. 7. 8. Data sources: ………………………………………………………………………………………………………………. 23 Primary data collection: ……………………………………………………………………………………………….. 23 Secondary data sources: ……………………………………………………………………………………………….. 23 Sample frame: …………………………………………………………………………………………………………….. 3 Sample selection: ………………………………………………………………………………………………………… 23 Sampling technique ……………………………………………………………………………………………………… 24 Factor Analysis: ………………………………………………………………………………………………………….. 33 SPSS Output interpretation …………………………………………………………………………………………… 3 Correlation matrix ……………………………………………………………………………………………………….. 34 KMO and Bartlett’s test ……………………………………………………………………………………………….. 34 Total Variance Explained……………………………………………………………………………………………… 34 Communalities ……………………………………………………………………………………………………………. 5 Scree Plot …………………………………………………………………………………………………………………… 35 Factor Rotation……………………………………………………………………………………………………………. 36 Hypothesis testing: ………………………………………………………………….. ………………………………….. 38 Analysis of survey: …………………………………………………………………………………………………………….. 5 Findings of the research: ……………………………………………………………………………………………………… 41 Suggestions and Recommendations ………………………………………………………………………………………. 42 ANNEXURE-1: …………………………………………………………………………………………………………………….. 43 ANNEXURE-2: …………………………………………………………………………………………………………………….. 4 ANNEXURE-3: …………………………………………………………………………………………………………………….. 45 ANNEXURE-4: …………………………………………………………………………………………………………………….. 46 ANNEXURE-5: …………………………………………………………………………………………………………………….. 47 ANNEXURE-6: …………………………………………………………………………………………………………………….. 8 ANNEXURE-7: …………………………………………………………………………………………………………………….. 49 ANNEXURE-8: …………………………………………………………………………………………………………………….. 50 ANNEXURE-9: …………………………………………………………………………………………………………………….. 51 ANNEXURE: …………………………………………………………………………………………………………………………… 43 Appendix …………………………………………………………………………………………………………………………………. 61 Appendix-1: ………………………………………………………………………………………………………………………….. 61 Appendix-2: ………………………………………………………………………………………………………………………….. 70 List of tables Table 1: country wise yield of milk per animal ……………………………………………………………………………… 2 Table 2: Sales turn over of Amul from 1994-09 …………………………………………………………………………….. 16 Table 3: Classification of Routing paths and shops ………………………………………………………………………… 43 Table 4: proportionate number of shops to be picked from each routing path ……………………………………. 44 Table 5: Responses of respondents for brand preference along with their weighted means …………………. 45 .
List of figures Figure 1: KMO and Barlett test ………………………………………………………………………………………. 46 Figure 2: Total variance explained ………………………………………………………………………………….. 47 Figure 3: Communalities………………………………………………………………………………………………… 48 Figure 4: snap shot of scree plot ……………………………………………………………………………………… 9 Figure 5: Rotated Component Matrix(a)…………………………………………………………………………… 50 Abstract: Market penetration occurs when a company enters/penetrates a market with current products by gaining competitors’ customers or by making the existing customers to buy more. But over the period of time competition has increased and has became more challenging. Therefore Amul has to deliver outstanding satisfaction to their retailers, so that they can take interest in selling of Amul milk beverages.
So this report on “the study of penetration of Amul milk beverages in the retail outlets of Hyderabad city” will help us to know the percentage of retail outlets who sell Amul milk beverages from the total number of outlets where the Amul products are sold; and thereby investigates into the factors which are influencing the buying decision of retailers and it was found that margin, availability, replacement of leak pouches, quality of the product and timely supply plays a major role in stocking decision of milk beverages.
The project also enlightens on the problems faced by the retailers in selling and stocking and it was found that Retailers are not interested in selling Amul milk beverages because they are not provided with any storage facility like freezer and also because of low profit margin almost all retailers are not interested in Amul milk beverages selling. Finally this report gives some suggestions from the findings to improve the sales of Amul milk beverages. . 1. Introduction The dairy industries companies run mainly on the factors such as availability, service frequency, affordability, taste and marketing.
Availability plays a vital role because purchasing power depend upon availability of that product, in that case, distributors and retailers service matter a lot. A retailer or retail store is any business enterprises whose sales volume comes primarily from retailing. Market penetration is one of the four growth strategies of the Product-Market Growth Matrix defined by Ansoff. Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors’ customers (part of their market share).
Other ways include attracting non-users of your product or convincing current clients to use more of your product/service (by advertising etc). (Source- Marketing management by Philip- Kotler) Therefore it is indispensible on the part of organization to know the retail penetration of their products and take appropriate measures to stay competitive. 1. 1. Indian dairy Industry a profile Today, India is ‘The Oyster’ of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalize on one of the world’s largest and fastest growing markets for milk and milk products.
A bagful of ‘pearls’ awaits the international dairy processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world. As he expands his overseas operations to India many profitable options await him. He may transfer technology, sign joint ventures or use India as a sourcing center for regional exports. The liberalization of the Indian economy beckons to MNC’s and foreign investors alike. India’s dairy sector is expected to triple its production in the next 10 years in view of expanding potential for export to Europe and the West.
Moreover with WTO regulations expected to come into force in coming years all the developed countries which are among big exporters today would have to withdraw the support and subsidy to their domestic milk products sector. Also India today is the lowest cost producer of per litre of milk in the world, at 27 cents, compared with the U. S’ 63 cents, and Japan’s $2. 8 dollars. Also to take advantage of this lowest cost of milk production and increasing production in the country multinational companies are planning to expand their activities here.
Some of these milk producers have already obtained quality standard certificates from the authorities. This will help them in marketing their products in foreign countries in processed form. The urban market for milk products is expected to grow at an accelerated pace of around 33% per annum to around Rs. 43,500 crores by year 2005. This growth is going to come from the greater emphasis on the processed foods sector and also by increase in the conversion of milk into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10,00,000 million.
Presently the market is valued at around Rs7,00,000mn 1. 2. Background India with 134mn cows and 125mn buffaloes has the largest population of cattle in the world. Total cattle population in the country as on October’00 stood at 313mn. More than fifty percent of the buffaloes and twenty percent of the cattle in the world are found in India and most of these are milch cows and milch buffaloes. Indian dairy sector contributes the large share in agricultural gross domestic products. Presently there are around 70,000 village dairy cooperatives across the country.
The co-operative societies are federated into 170 district milk producers unions, which is turn has 22-state cooperative dairy federation. Milk production gives employment to more than 72mn dairy farmers. In terms of total production, India is the leading producer of milk in the world followed by USA. The milk production in 1999-00 is estimated at 78mn MT as compared to 74. 5mn MT in the previous year. This production is expected to increase to 81mn MT by 2000-01. Of this total produce of 78mn cows’ milk constitute 36mn MT while rest is from other cattle.
While world milk production declined by 2 per cent in the last three years, according to FAO estimates, Indian production has increased by 4 per cent. The milk production in India accounts for more than 13% of the total world output and 57% of total Asia’s production. The top five milk producing nations in the world are India, USA, Russia, Germany and France. Although milk production has grown at a fast pace during the last three decades (courtesy: Operation Flood), milk yield per animal is very low. The main reasons for the low yield are Lack of use of scientific practices in mulching.
Inadequate availability of fodder in all seasons. Unavailability of vetinary health services. Table 1: country wise yield of milk per animal Country Milk Yield year) 7002 5417 5348 2976 1052 795 2021 (Kgs per USA UK Canada New Zealand Pakistan India World (Average) (Source: Export prospects for agro-based industries, World Trade Centre, Mumbai. ) 1. 3. The Indian Market A Pyramid Milk has been an integral part of Indian food for centuries. The per capita availability of milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and 203 gm in 199899.
This is expected to increase to 212gms for 1999-00. However a large part of the population cannot afford milk. At this per capita consumption it is below the world average of 285 gm and even less than 220 gm recommended by the Nutritional Advisory Committee of the Indian Council of Medical Research. There are regional disparities in production and consumption also. The per capita availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day. This disparity is due to concentration of milk production in some pockets and high cost of transportation.
Also the output of milk in cereal growing areas is much higher than elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which have a high food value for milch animals. In India about 46 per cent of the total milk produced is consumed in liquid form and 47 per cent is converted into traditional products like cottage butter, ghee, paneer, khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like milk powders, processed butter and processed cheese.
The remaining 54% is utilized for conversion to milk products. Among the milk products manufactured by the organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed milk infants foods etc. Of these ghee alone accounts for 85%. It is estimated that around 20% of the total milk produced in the country is consumed at producer-household level and remaining is marketed through various cooperatives, private dairies and vendors. Also of the total produce more than 50% is procured by cooperatives and other private dairies.
While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is used for manufacturing processed value added dairy products; for private dairies only 45% is marketed in fluid form and rest is processed into value added dairy products like ghee, makhan etc. Still, several consumers in urban areas prefer to buy loose milk from vendors due to the strong perception that loose milk is fresh. Also, the current level of processing and packaging capacity limits the availability of packaged milk. Presently only 12% of the milk market is represented by packaged and branded pasteurized milk, valued at about Rs. ,000 crores. Quality of milk sold by unorganized sector however is inconsistent and so is the price across the season in local areas. Also these vendors add water and caustic soda, which makes the milk unhygienic. India’s dairy market is multi-layered. It’s shaped like a pyramid with the base made up of a vast market for low-cost milk. The bulk of the demand for milk is among the poor in urban areas whose individual requirement is small, maybe a glassful for use as whitener for their tea and coffee. Nevertheless, it adds up to a sizable volume – millions of litres per day.
In the major cities lies an immense growth potential for the modern sector. Presently, barely 778 out of 3,700 cities and towns are served by its milk distribution network, dispensing hygienically packed wholesome, quality pasteurized milk. According to one estimate, the packed milk segment would double in the next five years, giving both strength and volume to the modern sector. The narrow tip at the top is a small but affluent market for western type milk products. 2. COMPANY PROFILE: Business needs ideas, not merely money. Ventures run on just money, but starved of ideas, would eventually fall prey to competition and perish.
And, if ideas are available in abundance, business can overcome other handicaps, including its relative weaker money power, compared to that of its rivals. The success story of the Gujrat Co-operative Milk Marketing Federation (GCMMF) proves this point. 2. 1. Amul: The origin The mighty Ganges at it’s origin is but a tiny stream in the Gangotri ranges of the Himalayas. Similar is the story of Amul which inspired ‘Operation Flood’ and heralded the ‘White Revolution’ in India. It began with two village cooperatives and 250 liters of milk per day, nothing but a trickle compared to the flood it has become today.
Today Amul collects, processes and distributes over a million liters of milk and milk products per day, during the peak, on behalf of more than a thousand village cooperatives owned by half a million farmer members. Further, as Ganga carries the aspirations of generations for moksha, Amul too has become a symbol of the aspirations of millions of farmers. The brand name Amul, sourced from the Sanskrit word Amoolya, means priceless. It was suggested by a quality control expert in Anand. Some cite the origin as an acronym to (Anand Milk Union Limited) (Source- en. wikipedia. org/wiki/Amul). 2. 2. The start of a revolution
The revolution started as awareness among the farmers that grew and matured into a protest movement and the determination to liberate them. Over four decades ago, the life of a farmer in Kaira District was very much like that of his counterpart anywhere else in India. His income was derived almost entirely from seasonal crops. The income from milch buffaloes was undependable. The marketing and distribution system for the milk was controlled by private traders and middlemen. As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often, they had to sell cream and ghee at throwaway prices.
In this situation, the one who gained was the private trader. Gradually, the realization dawned on the farmers that the exploitation by the trader could be checked only if marketed their milk themselves. In order to do that they needed to form some sort of an organization. This realization is what led to the establishment of the Kaira District Cooperative Milk Producers’ Union Limited (popularly known as Amul) which was formally registered on December 14, 1946. The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June 1948. An assured market proved a great incentive to the milk producers of the district.
By the end of 1948, more than 400 farmers joined in more village societies, and the quantity of milk handled by one Union increased from 250 to 5,000 liters a day. 2. 3. Milk by products: An excuse to expand. The response to these provided stimulus for further growth. For example, as the movement spread in the district, it was found that the Bombay Milk Scheme could not absorb the extra milk collected by the Kaira Union in winter, when the production on an average was 2. 5 times more than in summer. Thus, even by 1953, the farmer-members had no assured market for the extra milk produced in winter.
They were again forced to sell a large surplus at low rates to the middlemen. The remedy was to set up a plant to process milk into products like butter and milk powder. An Rs 5 million plant to manufacture milk powder and butter was completed in 1955. In 1958, the factory was expanded to manufacture sweetened condensed milk. Two years later, a new wing was added for the manufacture of 2500 tons of roller-dried baby food and 600 tons of cheese per year, the former based on a formula developed with the assistance of Central Food Technological Research Institute (CFTRI), Mysore.
It was the first time anywhere in the world that cheese or baby food was made from buffalo milk on a large, commercial scale. 2. 4. Amul’s journey towards excellence Amul’s is India’s largest diary producing company with over half the market leading other national companies such as Mother Diary and multinational food product companies such as Nestle India and Hindustan Lever Ltd. Amul demonstrates how careful and consistent product stewardship combined with a deep and intimate understanding of the market leads to consistent growth and success. The company can process nearly 10 million litres of milk each day.
It combined market and social development in an emerging economy. It recognized the inter-linkages between various environments that governed the lives of marginal milk farmers and the unmet needs of consumers. It also changed the supply chain paradigm in order to reduce the cost to the consumer while increasing the return to the supplier. The company started as the Gujarat Cooperative Milk Federation in 1946, collecting just 250 litres of milk a day. The company was formed to give farmers their due and protect them from unscrupulous middlemen.
Since then the company has come a long way but one thing is still the same. From that time also it was by and for the farmers and today also it’s the same. Amul, a brand owned by the 26 lakh milk producers of Gujarat has once again demonstrated that when farmers are given the instruments of development in their hands, they can work wonders. The billion dollar Gujarat Co-operative Milk Marketing Federation, the apex body of 13 district milk producers’ unions has been instrumental in making Amul a brand to reckon with. 2. 5. Areas of operations:
Besides India, AMUL has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African nations. Other potential markets being considered include Sri Lanka. Table 2: Sales turn over of Amul from 1994-09 Sales Turnover 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Rs (million) 11140 13790 15540 18840 22192 22185 22588 23365 27457 28941 29225 37736 42778 52554 67113 US $ (in million) 355 400 450 455 493 493 500 500 575 616 672 850 1050 1325 1504 Source- http://business. mapsofindia. com/sectors/manufacturing/amul. html) 3. Project details: 3. 1. Area of the project: Dairy Industry 3. 2. Project introduction: The project I was assigned is titled “A STUDY ON RETAIL PENETRATION OFAMUL MILK BEVERAGES IN HYDERABAD CITY” 3. 3. Objectives: To find out the penetration level of Amul milk beverages in the retail outlets of Hyderabad city. To find the problems faced by retailers in stocking. To find out various factors influencing the buying decision of retailers. To analyze the 4p’s (i. e. product, place, price and promotion) of Amul milk based beverages. To recommend some suggestions based on the findings to Amul to increase the sales of milk beverages in Hyderabad. 3. 4. Purpose of study Managers are always curious about the position of their company’s products in the market which largely depend upon the company’s goodwill, and the position of their brand. In order to maximize the sale and profit, company must deliver outstanding satisfaction to the retailers so that they could deliver the same to the customers because many companies are aiming for high atisfaction of customers as customers who are just satisfied still find it easy to switch when better offer comes along and those who are highly satisfied are much less ready to switch. Therefore high satisfaction creates an emotional bind with the brand not just a rational preference and the result would be high customer loyalty. So market survey of retailers, chart out the penetration of the Amul milk beverages as compared to the competitors. It helps the organization to find out the brand being sold most by the retailers along with their stocking. 3. 5. Scope:
The scope of this project is limited to the markets visited by the researcher for the purpose of research; this may hence not be a total reflection of the penetration of Amul milk beverages for all the retail outlets in Hyderabad. The survey was conducted during the summer season which is the peak season for ice creams. Hence the data collected is seasonal in nature and cannot be taken true for the complete year. 3. 6. Implications: It helps to know the strengths and weaknesses of the company and company can formulate better strategies to overcome the weak areas.
This project will also find out the penetration level of Amul milk beverages at Hyderabad, hence company can use aggressive strategy in those areas where it is lagging. It will also figure out the important factors influencing the buying decision of retailers. New ideas will be suggested to make better marketing strategies to remain leader in beverage market. 3. 7. Limitations of the Study: Pre-defined parameters cannot be established for designing the Questionnaire in the marketing survey. Because these parameters vary from retailers of one area to another and these variables can only be revealed after the pilot survey.
Hence, it is very difficult to generalize the results statistically. The survey is limited for only 8 wards. Time period of the project is 13 weeks, which may not be enough to understand the whole market. Respondents hesitate to give true response to questions. Lack of proper experience on the part of researcher in conducting such studies in the past. The area of survey is restricted to Hyderabad which is not a true representative of population of India. The study being done during the peak season for the company’s business, the information and the outcome of this study may not be applicable for the complete year. 4. Literature Review: 4. . Unplanned Buying And InStore Stimuli In Supermarkets RUSSEL ABRATT AND STEPHEN DONALD GOODEY (1990) Manufacturers and retailers in industrialized countries spend large sums on advertising and instore promotion in the hope of increasing sales of their merchandise through “impulse” buying. Results are reported in this paper of the unplanned buying behavior of 450 consumers in 15 major supermarkets in South Africa compared with similar studies and the United Kingdom. The findings indicate that unplanned buying is higher in the United States than in South Africa, but the importance of in-store stimuli holds true across cultures. 4. 2.
Market Share And Distribution: A Generalization, A Speculation, And Some Implications DAVID J. REIBSTEIN and PUAL W. FARRIS (1995) The research paper investigates the dynamics and structure of distribution and market share, can help explain many phenomenon’s in marketing. Firstly, market share is both a cause and an affect of distribution and secondly, in a typical convenience goods distribution system there are few large outlets that stock many brands and numerous smaller outlets that stock the leading brands only. Therefore, the observed cross sectional curve relating distribution and share will reflect the retailers stocking decisions.
However a logically consistent model of share based on (1) and (2), when combined with an assumption of low search loyalty, results in customers being willing to switch from preferred to available brands. The implications of this research paper is that marketers should monitor the distribution carefully, as it is the result of combined effects of brand preference, loyalty and “push” programs. With a better understanding of market share/distribution relationship, managers should be in a better position to forecast market place results for a given level of distribution. . 3. Identifying Consumer Characteristics Associated With Japanese Preferences Towards Milk Products Yasuhito Watanabe, Nobuhiro Suzuki, and Harry M Kaiser (1996) This research purpose identifies key characteristics of consumers that are associated with alternative preferences towards milk products in Japan. Specifically, this paper examines whether there are certain demographic, attitudinal, and socioeconomic factors associated with consumers’ degree of preferences for milk products.
Cluster analysis was then used to identify key demographic and socioeconomic characteristics associated with alternative degrees of preference for milk products. Finally, the report classified respondents based on preference to all milk and dairy products. The results indicated that stronger health concerns increased demand for milk and dairy products. Housewives’ knowledge and attitude on health and nutrition were especially important because housewives control food for family members in Japan. 4. 4.
Analysis Of Consumer Behaviour In Regard To Dairy Products In Kosovo Bytyqi Hysen*, Vegara Mensur, Gjonbalaj Muje, Mehmeti Hajrip, Gjergjizi Halim, Miftari Iliriana and Bytyqi Njazi (2008) The objective of study was to possibly identify effect of different variables on consumer decision upon purchase of dairy products. Dairy products were perceived differently at various types of purchasing places. The most important socio-economic variables explaining individual differences in consumer behaviours regarding purchase of dairy products involved were: trust, gender of consumer, quality, origin, and price of product.
Conclusions derived from the analysis can be used as useful barometer for market orientation. The outcomes suggest that assessment of consumer behavior through evaluation criteria can contribute to a better understanding of consumer behaviour in respect of different dairy products. 5. Research methodology: Marketing Research process has the following six steps: Step1: Step2: Step3: Step4: Step5: Step6: To decide/define the objective of the study To develop an approach to fulfill the objective To formulate the research design To conduct field work, this includes data collection To prepare the data for analysis To prepare the research report . 1. Research design: Research design is a framework or blueprint for conducting the marketing research project. It specifies the details of the procedures necessary for obtaining the information needed to structure and solve marketing research problems. When designing research, one is faced with a continual series of trade-offs. Since there are typically numerous design alternatives that will work, the goal is to find the design that enhances the value of the information obtained, while reducing the cost of obtaining it and make it as accurate as possible.
Hence for this project both exploratory and descriptive research designs have been used. The research is proposed to be carried out in three phases. The first phase of any research project is “Problem definition”. The various tasks involved in identifying the problem definition are discussions with company guide, retailers, Secondary data analysis and Qualitative Research. The second phase of the research includes defining population, Questionnaire design, sampling frame consideration, sample size consideration, and the sampling technique pertaining to the survey.
The last phase of the research deals with the Analysis and Discussions phase where the suggestions would be made based on our research findings. 5. 2. Problem statement: The penetration level of Amul milk beverages in the retail outlets is low when compared to other Amul products, which means there are retailers who do not stock Amul milk beverages; it indicates that Amul milk beverages do not have 100% penetration among the retailers.
Therefore company wants to find out the reasons behind the unacceptence of Amul milk beverages by the retailers in the Hyderabad city. 5. 3. Questionnaire design: The questionnaire is designed as per the stated Research objectives. The retailers questionnaire consists of 4 open-ended multiple choice questions, 26 close-ended questions framed using seven point likert scale (Likert scaling is a bipolar scaling method, measuring either positive or negative response to a statement).
Where ‘1’ being highly disagree, and ‘7’ being highly agree, five close ended dichotomous questions (Fixed-alternative question that can only be answered in one of the two indicated ways, such as ‘A’ or ‘B’, Agree or Disagree, True or False, Yes or No) and ‘2’ questions based on ranking mode, these questions are then coded accordingly i. e. , the option which gets 1st rank is coded with higher value and the option which gets last rank with lower value and then a weighted average is taken to reach a conclusion.
The Part‘A’ of the questionnaire covers questions related to penetration of Amul milk beverages in the retail outlets of Hyderabad city, Part‘B’ of the questionnaire covers the various factors influencing the buying decision of Amul milk beverages by the retailers, Part‘C’ covers the various problems faced by the retailers in stocking Amul milk beverages and lastly Part ‘D’ covers the questions related to the analysis of 4p’s of Amul milk beverages. Then, this questionnaire is tested for reliability i. e. if same questions are re –administered to the same respondents it would elicit the same responses. . 4. Data sources: a. Primary data collection: The data collection regarding the various influencing factors and penetration level will be taken from various retailers. There problems and preferences will also be taken into account. The information regarding the distribution system and companies competitors will be done by interviewing the distributors of Amul. b. Secondary data sources: The secondary data collection regarding the marketing strategies used by Amul and various other brands will be done through online journals, Research papers, company sources and Online Blogs.
For the analysis part various other tools will be used. For example factor analysis, hypothesis testing and simple pie charts. 5. 5. Sample frame: All types of outlets that stock and sell Amul products in the markets. The outlets have been classified into as follows Convenience stores: All kinds of shops including bakeries selling Amul products Eateries: All kinds of eating joints selling Amul products Groceries: All grocery shops selling Amul products. 5. 6. Sample selection: The sample size proposed for conducting the survey was 500.
As a rule of thumb, a bare minimum of 10 observations per variable is necessary to avoid computational difficulties (Tabachnick & Fidell , 2001 page 588). So, for retailers survey the number of questions (variables) in the questionnaire are 42 and accordingly the sample size is taken as 500 (with 15% margin, to bring out better results). There are a total of 4 members who are involved in this survey. Since all 4 members were involved in the same survey, each member was required to survey 125 samples. Since the survey has to be conducted in two major regions in the Hyderabad city i. . Secunderabad and Panjagutta by four members, two members have been allotted to Secunderabad area and two with Panjagutta region. I have been assigned to A. H. Distributors who covers eight routing paths (frozen paths of retail outlets decided by the management at the start of financial year, a routing path is formed when a route contains a minimum of 40 retail outlets) in the Secunderabad region. The survey is done along eight routing paths and each path has diverse number of retail outlets, with minimum being 40.
Each routing path has various kinds of shops such as kirana stores, bakeries, supermarkets etc. , as shown in the annexure ‘1’, table ‘3’. So prior to conducting the survey, an unbiased sample has to be picked. For doing so, the sample is picked from the population in a proportionate manner with respect to number of shops in the routing paths and number of various kinds of shops. The table containing the proportion of shops according to routing paths and various kinds of shops is shown in annexure ‘1’, table ‘4’.. 5. . Sampling technique The sampling technique used in the survey is simple random sampling (is a subset of individuals (a sample) chosen from a larger set (a population), Where in each individual is chosen randomly and entirely by chance, such that each individual has the same probability of being chosen at any stage during the sampling process. 6. A Analysis o of survey: 1. D you stock Amul bever Do k rage product t? Yes: Y 78. 2% No: N 21. 8 % Fig. 0 Sale of ic creams 01: ce 1 Yes 2 No 2 22% 2 78% Infe erence: 78. % of retailers in Hyder 2 rabad sell A Amul milk be everages wh here as 21. 8 % of retaile or ers shop owners do not sell Am milk beve p mul erages and k keep other Am product mul ts. 2. If No , then why, Factors low margin Unavailability of freezer No replacement policy Unavailability of credit No proper supply Others Percentage of respondents 40. 7 24. 6 4. 2 5 10. 2 15. 3 factors affecting ratail penetration 15% Low Margin 10% 5% 4% 25% 41% Unavailability of Fridge No Replacement Policy Unavailability of Credit No proper supply Supply Others
Inference: From the above pie chart we can say that the important factor which is affecting the penetration of Amul milk beverages is ‘low margin’ and to some extent the factor unavailability of freezer. So Amul has to primarily focus on these factors to remain competitive. 3. If yes, then which all brands of milk beverages (natural) do you sell? Inference: By surveying this question, we came to know that the immediate competitor for the Amul is Heritage followed by Nestle, Jersey, Vijaya and Masqati.
So Amul has to keep an eye on the Heritage and devise aggressive strategies to remain competitive. 4. Rank the following brands of milk beverages according to your preferences? (1) Amul (3) Masqati (5) Heritage (2) Nestle (4) Jersey (6) Vijaya Brand preference Vijaya Heritage Jersey Masqati Nestle Amul 0 1 2 3 4 5 6 weighted mean Inference: From the above graph, we can say that the brand preference of Amul milk beverages is 4. 84 (i. e. Weighted mean of ranks which are coded) which is higher than its competitors.
Thus we can say that retailers prefer Amul milk beverages than any other milk beverages. 5. Rank the following products of Amul milk beverages in terms of number of units sold? (1) Amul Butter milk (3) Flavored Milk (2) Amul Lassee (4)Amul kool cafe preference of Amul milk beverages Kool Cafe Amul Lassee weighted mean Flavored Milk Buttermilk 0 1 2 3 4 Inference: From the above graph, we can say that the brand preference of Amul milk beverages is 4. 84 (i. e. Weighted mean of ranks which are coded) which is higher than its competitors.
Thus we can say that retailers prefer Amul milk beverages than any other milk beverages. 6. Does Amul provide freezer? Yes No 3. 93 96. 07 15 367 provision of freezer by Amul Yes 4% No 96% Inference: 96. 07% of retailers say that Amul doesn’t provide them with a freezer. Only 3. 93% of people having large supermarkets are provided with a freezer to store Amul milk beverages. 7. D Does it influe ence your sto ocking decision? Yes No 85. .86 14. .14 328 54 Freezer Influ uence Yes No 14% 86% e: Inferenc From the above pie chart, we can say that provision of fr e c n reezer plays a significan role in dec nt ciding whether to stock Am milk be mul everages or not. Around 86% of re d etailers are of the view that w n any cking decisio So Amu should pro on. ul ovide provision of freezer by a compa plays a role in stoc retailers w a freeze with er. 8. D Does Amul provide you a credit limit p t? Yes No 17. 81 82. 19 68 314 Inference e: 82. 19% o retailers say that Amu doesn’t gi credit wh of s ul ive here as other companies such as her s ritage and musq give the credit lim Though 18. 1% of r qati em mit. retailers say that they ar given on c re credit but it is not provide directly fr ed from the com mpany, is pr rovided by t distribut otherwis the the tor se cility is prov vided to only those super market chains who hav got direct dealings wit the y r ve th credit fac company y. Does it influe ence your sto ocking decision? 9. D yes no 72. 77 27. 23 278 104 Influen of Credit nce t 27% Ye es 73% No o Inference e: A whoop ping 73% of retailers sa that there stocking de f ay ecision is in nfluenced by the provisio of y on credit fac cility.
Therefore Amul s should provi retailers, who are co ide , onsistently g getting good sales to the com mpany. So th it could c hat capture more market sha are. 6. 1. Factor Analysis: Factor analysis is a collection of methods used to examine how underlying constructs influence the responses on a number of measured variables. In an EFA (Exploratory Factor analysis), first a set of variables that we want to analyze are identified. SPSS then examines the correlation matrix between those variables to identify those that tend to vary together.
Each of these groups is associated with a factor (although it is possible that a single variable could be part of several groups and several factors). This has a set of factor loadings, which tells us how strongly each variable is related to each factor The primary objectives of an EFA are to determine the number of factors influencing a set of measures and the strength of the relationship between each factor and each observed measure. Through this analysis the major factors that urge the retailer to buy the Amul milk beverages in the market is determined.
Through this analysis which will be the basis of marketing strategy formulation. The retailers play a major role in marketing a product as they provide the shelf space and motivate the customers , to buy a certain product. Hence the preference or the factors which influence them to buy Amul milk beverages is an important derivation. For this there are certain factors chosen from which the retailers choose the important factor. a. SPSS Output interpretation Based on this, the data obtained from the survey conducted over a sample size around 500 respondents are analyzed.
The attributes are identified and coded as follows: X 1 = Quality X 2 = Margin X 3 = Range of flavors X 4 = service X 5 = Replacement policy X 6 = Timely supply X 7 = Brand image X 8 = Credit limit X 9 = Awareness of customers X10 = Packaging X11 = Incentives X12 = Display The outputs obtained from SPSS are as mentioned below along with their interpretation. b. Correlation matrix SPSS Output 1 shows an abridged version of the R-matrix. The top half of this table contains the Pearson correlation coefficient between all pairs of questions whereas the bottom half contains the one-tailed significance of these coefficients.
This correlation matrix is used to check the pattern of relationships. c. KMO and Bartlett’s test SPSS Output 2 shows several very important parts of the output: the Kaiser-Meyer-Olkin measure of sampling adequacy and Bartlett’s test of sphericity. The KMO statistic varies between 0 and 1. A value of 0 indicates that the sum of partial correlations is large relative to the sum of correlations, indicating diffusion in the pattern of correlations (hence, factor analysis is likely to be inappropriate).
A value close to 1 indicates that patterns of correlations are relatively compact and so factor analysis should yield distinct and reliable factors. For the data to be appropriate for factor analysis the value should be more than 0. 5 A significant test tells us that the R-matrix is not an identity matrix; therefore, there are some relationships between the variables included in the analysis. For these data, Bartlett’s test is highly significant (p < 0. 001), and therefore factor analysis is appropriate (Refer to Annexure ‘4’) d. Total Variance Explained
SPSS Output lists the Eigen values associated with each linear component (factor) before extraction, after extraction and after rotation. Before extraction, SPSS has identified 12 linear components within the data set (we know that there should be as many eigenvectors as there are variables and so there will be as many factors as variables). The Eigen values associated with each factor represent the variance explained by that particular linear component and SPSS also displays the eigen value in terms of the percentage of variance explained (so, factor 1 explains 16. 24% of total variance). It is clear that the first few factors explain relatively large amounts of variance (especially factor 1) whereas subsequent factors explain only small amounts of variance. SPSS then extracts all factors with eigen values greater than 1, which leaves us with five factors. The eigen values associated with these factors are again displayed (and the percentage of variance explained) in the columns labeled Extraction Sums of Squared Loadings.
The values in this part of the table are the same as the values before extraction, except that the values for the discarded factors are ignored (hence, the table is blank after the fifth factor). In the final part of the table (labeled Rotation Sums of Squared Loadings), the eigen values of the factors after rotation are displayed. Rotation has the effect of optimizing the factor structure and one consequence for these data is that the relative importance of the five factors is equalized. Before rotation, factor 1 accounted for considerably more variance than the remaining five (16. 2% compared to 12. 85%, 11. 3%, 10. 01%, 9. 69%), however after extraction it accounts for only 14. 43% of variance (compared to 16. 52% respectively). (Refer to Annexure ‘5’) e. Communalities SPSS Output shows the table of communalities before and after extraction. Principal component analysis works on the initial assumption that all variance is common; therefore, before extraction the communalities are all 1. The communalities in the column labeled Extraction reflect the common variance in the data structure. So, for example, we can say that 71. 5% of he variance associated with question 1 is common, or shared variance. Another way to look at these communalities is in terms of the proportion of variance explained by the underlying factors. After extraction some of the factors are discarded and so some information is lost. The amount of variance in each variable that can be explained by the retained factors is represented by the communalities after extraction. (Refer to Annexure ‘6’) f. Scree Plot The scree plot is shown below with arrow indicating the point of inflexion on the curve after four factors before a stable plateau is reached.
Therefore, we could probably justify retaining either four or five factors. Given the large sample, it is probably safe to assume Kaiser’s criterion; however, we could rerun the analysis specifying that SPSS extract only four factors and compare the results. (Refer to Annexure ‘7’) g. Factor Rotation SPSS Output shows the rotated component matrix (also called the rotated factor matrix in factor analysis) which is a matrix of the factor loadings for each variable onto each factor. This matrix contains the same information as the component matrix in SPSS Output 4 except that it is calculated after rotation. Refer to Annexure ‘8’) All the total twelve variables have been reduced into five important factors. Figure 1: Factor Table FACTOR – 1 X1(Quality) X2(Associated margins) FACTOR – 2 X 6 (Timely supply) X7(Brand image) X9(customerAwareness) FACTOR – 3 X11(incentives) X5(Replacement) X12(Packaging) FACTOR-4 X10(Creditlimit) X12 (Display) FACTOR-5 X4 (Service) X3(Flavors) Factor 1 encompasses the major areas which are primarily of much importance to the retailer. The attributes which come under this factor are Quality and associated margins.
In the view of a retailer he should have a supply of good quality of products and provides him a good profit on sale. Factor 2 encompasses variables such as timely supply, brand image, customer awareness. So in view of retailers these variables play a critical role in influencing there buying decision of milk beverages of a particular company. So retailers opt for those companies milk beverages which provide the products on time, which have nation wide presence i. e. good brand image such that customers should be aware of that brand.
Factor 3 The attributes which come under this factor are associated incentives, replacement and packaging. In the view of a retailer he should have a supply of goods with replacement facility for the damaged goods. As Amul does not provide replacements, it would impact the retailers buying decision of milk beverages and also the incentives and proper packaging have an impact on buying decision of Amul milk beverages. Factor 4 encompasses credit facility and display, according to the retailers it is not the prime concern as the influence of credit facility and slotting allowances is very less in making a decision regarding milk beverages.
Factor 5 The attributes which come under this factor are service and flavors. In the view of a retailer the route scheduling has to be followed regularly there by intimating the offers which the company is promoting. Thus from the factor analysis we can say that in the opinion of the retailer, five major factor influences his behavior to sell or stock a particular brand of milk beverage. 6. 2. Hypothesis testing: A. Range of flavours of Amul milk beverages (refer annexure: 9, Solution A) Null Hypothesis Ho: Mean of the population is greater than 4.
Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64 and here value of Z is 1 which is less than 1. 64. Therefore we’ll accept our null hypothesis which is our population mean is greater than 4. Hence people are agreeing on the point which says that Amul provides wide range of flavours. B. promotional offers to consumers (refer annexure:9, Solution B) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is -1. 4 (left tailed) and here value of Z is -1. 428 which is falls in acceptable region. Therefore we’ll accept our null hypothesis which is our population mean is less than 4. Hence people are agreeing on the point which says that Amul provides fewer offers for customers. C. Amul’s promotional offers to retailers (refer annexure:9, Solution C) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is -1. 64 (left tailed) and here value of Z is -1. 17 which is falls in acceptable region. Therefore we’ll accept our null hypothesis which is our population mean is less than 4. Hence retailers are agreeing on the point which says that Amul provides fewer offers for them. D. Price of Amul milk beverages in comparison to competitors (refer annexure: 9, Solution D) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64 (right tailed) and here value of Z is 1. 592 which is falls in acceptable region.
Therefore we’ll accept our null hypothesis which is our population mean is greater than 4. Hence consumers are agreeing on the point which says that Amul beverages price are appropriate as per its quality. E. Amul’s milk beverages quality in comparison to its competitors (refer annexure: 9, Solution E) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64(right tailed) and here value of Z is 1. 604 which is less than 1. 64.
Therefore we’ll accept our null hypothesis which is our population mean is greater than 4. Hence people are agreeing on the point which says that Amul provides good quality beverages. F. WDSM (Wholesale Distributor Sales Man) follows Route Scheduling (refer annexure: 9, Solution F) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64(right tailed) and here value of Z is 1. 630 which is less than 1. 64. Therefore we’ll accept our null ypothesis which is our population mean is greater than 4. Hence retailers are agreeing on the point which says that Amul’s WDSM follow route scheduling properly. G. Availability of Amul milk beverages in different sizes (refer annexure: 9, Solution G) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is -1. 64 (left tailed) and here value of Z is -1. 634 which is falls in acceptable region. Therefore we’ll accept our null hypothesis which is our population mean is less than 4.
Hence people are agreeing on the point which says that with Amul provides fewer availability of different size packs. H. Old dated stock does not come frequently (refer annexure: 9, Solution H) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64 (right tailed) and here value of Z is 10. 88 which is falls out of acceptable region. Therefore we’ll reject our null hypothesis which is our population mean is more than 4.
Hence results shows that customer believe that there is problem of old stock with Amul’s Beverages. I. Amul milk beverages provide best value for money (refer annexure: 9, Solution I) Null Hypothesis Ho: Mean of the population is greater than 4. Alternative Hypothesis H1: Mean of the population is less than 4. Inference: As our critical value is 1. 64 (right tailed) and here value of Z is 1. 623 which falls within acceptable region. Therefore we’ll accept our null hypothesis which is our population mean is more than 4. Hence results shows that customer believe that there is Amul is a value for money.
J. Amul milk beverages enjoys a high consumer awareness (refer annexure: 9, Solution J) Inference: As our critical value is 1. 64 (right tailed) and here value of Z is 1. 637 which is falls within acceptable region. Therefore we’ll accept our null hypothesis which is our population mean is more than 4. Hence results shows that customer adequate awareness about Amul’s Beverages product. 7. Findings of the research: On question, why retailers are not interested in selling of Amul milk, it is found they were not happy with margin, availability and replacement of leak pouches.
Retailers are willing to sell local and non popular brands of milk beverages. Because they were able to receive more margins from these brands then they could get from well known brands. All retailers could get Amul milk beverages from company selected distributors. But some retailers are opting to buy from the market places such as hypermarkets, because they are getting the same milk beverages at cheaper rates than from distributors. Thus it tells us the fact that distributors are not passing through the promotional offers taken up by the company. All retailers were familiar with sales promotion activities undertaken by Amul.
But more of the activities were not communicated by distributors. So it shows that distributors are taking the advantage of such activities. Retailers were also complaining about the supply of the old dated stock, as they are at loss because stock expires in a short span of time and this outdated stock is not preferred by the consumer. At last the retailers have to dump the stock as there is no replacement policy for the left out stock from the company side. Retailers are satisfied with the quality and the range of flavours provided for Amul milk beverages 8. Suggestions and Recommendations
Retailers are not interested in selling Amul milk beverages because they are not provided with any storage facility like freezer, but if company provides them such facility they will sell Amul milk beverages and also because of low profit margin almost all retailers are not interested in Amul milk beverages selling. As organized retailing is increasing in Hyderabad, there is a lot of scope for Amul to increase the sales of milk beverages. Therefore Amul has to deliver outstanding satisfaction to their retailers, so that they can take interest in selling of Amul milk beverages.
This can be done as follows Amul has a relatively good distribution network, but still company is not able to fulfill the demand of outlet in the peak season when demand is very high. Here company should consider on the supply of product in the peak season. Supply should be regular to all the outlets including those that lie in the pocket roads and not just in the outlets which lie on the easily accessible routes. Provide reasonable Margin to retailers as compared to competitors, this motivates them to promote company’s milk beverages.
Improve delivery schedule to provide products on time for the retailers who claim that Amul milk beverages are not available to them on time. Incentives & schemes should be given to the retailers and some scrutiny has to be done at regular intervals to check the scheme being communicated properly by distributors or sales person. Company should provide advertising facility like outside wall painting; provide company’s stand boards, Posters which help to sell Amul milk beverages and also provide them with some slotting allowances.
Provide consistent service to retailers as this will help gain company goodwill in the market. Do not place more than one distributor in same market area. ANNEXURE: ANNEXURE1: Table 3: Classification of Routing paths and shops Routing paths MG Road and PG Road Begumpet Bollaram Kavadiguda Lalbagh Bowenpally Marredpally Monda market No. of shops Shops classification 52 Kirana stores 55 Bakery 49 super markets 47 others 48 48 52 49 No. of shops 259 63 41 37 ANNEXURE2: Table 4: proportionate number of shops to be picked from each routing path
Proportion of sam
