CHAPTER 1 SECTION-A INTRODUCTION TO THE TOPIC Dairy market has a great potential in a comparison with other markets of food

d product due to the popularization of this category of products in the recent years. The changes are very dynamic and are mainly affected by the degree with which market offer matches changing preferences of buyers which on the other hand are altering together with a change in lifestyle of consumers that manifests it through: increasing attention to the health and nutritional values of food products, reduce of time spending on household activities, including preparing meals, expectation of the convenience of food products, expectation of the availability of food products. expectation of the facility of preparation,

The consequence of these changes is that consumers choose convenient food and food such as light or diet. Both of these groups include dairy products, especially modern, because modern products on dairy market have a great potential and there exists a low market saturation of this category of products. The highest milk producer in the entire globe India boasts of that status. India is otherwise known as the Oyster of the global dairy industry, with opportunities galore to the entrepreneurs globally. Anyone might want to capitalize on the largest and fastest growing milk and mil products' market. The dairy industry in India has been witnessing rapid growth. The liberalized economy provides more opportunities for MNCs and foreign investors to release the full potential of this industry. Potential for investment in the dairy industry Some areas of Indian dairy industry can be toned up by the evocation of differentiated technologies and equipment from overseas. These include:

1. Raw milk handling: The raw milk handling needs to be elevated in terms of physicochemical and microbiological properties of the milk in a combined manner. The use of clarification and bactofugation in raw milk processing can aid better the quality of the milk products. 2. Milk processing: Better operational ratios are required to amend the yields and abridge wastage, lessen fat/protein losses during processing, control production costs, save energy and broaden shelf life. The adoption of GMP (Good Manufacturing Practices) and HACCP (Hazard Analysis Critical Control Points) would help produce milk products adapting to the international standards. 3. Packaging: Another area that can be improved is the range of packing machines for the manufacture of butter, cheese and alike. Better packaging can assist in retaining the nutritive value of products packed and thus broaden the shelf life. A cold chain distribution system is required for proper storage and transfer of dairy products. 4. Value-added products: There's vast scope for value-added products like desserts, puddings, custards, sauces, mousse, stirred yoghurt, nectars and sherbets to capture the dairy market in India. The Indian dairy industry has aimed at better mananamegemt of the national resources to enhance milk production and upgrade milk processing involving new innovative technologies. Multinational dairy giants can also make their foray in the Indian dairy market in this challenging scenario and create a win-win situation for both. India's Milk Product Mix Fluid Milk Ghee Butter Curd Khoa (Partially Dehydrated Condensed Milk) Milk Powders, including IMF Paneer & Chhana (Cottage Cheese) Others, including Cream, Ice Cream Overview of the Indian Dairy Sector 46.0% 27.5% 6.5% 7.0% 6.5% 3.5% 2.0% 1.0%

The country is the largest milk producer all over the world, around 100 Value of output amounted to ` 1179 billion (in 2004-05) (Approximately 1/5thof the world bovine population Milch animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred Immensely low productivity, around 1000 kg/year (world average 2038 Large no. of unproductive animals, low genetic potency, poor nutrition and There are different regions developed, average, below average (eastern

million MT

equals combined output of paddy and wheat!!)

cows)

kg/year)

lack of services are the main factors for the low productivity

states of Orissa, Bihar and NE region) in the dairy industry. The market size of the dairy industry was $45 billion in 2006-07 and it is estimated to grow to $83 billion by 2015. The processed dairy category accounts for 73 per cent in value terms and 35 per cent in volume terms. The processed market is $32.9 billion in value terms. The organised sector contributes 24 per cent or $7.9 billion to the processed category. Sweets, homemade ghee and yogurt contribute significantly to the organised segment. 1.1 CONSUMER PREFERENCES Consumer preference may be defined as The power or ability to choose one thing over another with the anticipation that the choice will result in greater satisfaction, greater capability or improved performance. The underlying foundation of demand, therefore, is a model of how consumers behave. The individual consumer has a set of preferences and values whose determinations are outside the realm of economics. They are no doubt dependent upon culture, education, and individual tastes, among a plethora of other factors. The measure of these values in this model for a particular good is in terms of the real opportunity cost to the consumer who purchases and consumes the good. If an individual purchases a particular good, then the opportunity cost of that purchase is the forgone goods the consumer could have bought instead. 1.2 THE THEORY OF THE CONSUMER A consumer is someone who buys or uses things (goods) or services.
3

GOODS are things we use like food. SERVICES are things that other people do for us. Service may be defined as an activity or benefit that one party offers to another. It is essentially tangible and does not result in ownership of anything. Its production may or may not be tied to physical products.

The "consumer" is the one who consumes the goods and services produced. Mahatma Gandhi said a customer is the most important visitor in our premises. He is not dependent on us, we are on him. He is not an interruption to our work, he is the purpose of it. Typically when business people talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic profiles andpsycho-graphic profiles of market segments, marketers have started to engage in personalized marketing, permission marketing, and mass customization. Consumer make decisions by allocating their scarce income across all possible goods in order to obtain the greatest satisfaction. Formally, we say that consumers maximize their utility subject to budget constraint. Utility is defined as the satisfaction that a consumer derives from the consumption of a good. As noted above, utilitys determinants are decided by a host of noneconomic factors. Consumer value is measured in terms of the relative utilities between goods. These reflect the consumers preferences. 1.3 THE THEORY OF CONSUMER PREFERENCES Consumer preferences are defined as the subjective (individual) tastes, as measured by utility, of various bundles of goods. They permit the consumer to rank these bundles of goods according to the levels of utility they give the consumer. Note that preferences are independent of income and prices. Ability to purchase goods does not determine a consumers likes or dislikes. One can have a preference for Porsches over Fords but only have the financial means to drive a Ford. 1.4 IMPORTANCE OF CONSUMER PREFERENCE

Consumer preference for a product can make or break a company. If consumers generally like a product, it can stay around for years and sell millions of copies. However, if consumers do not like the product, it could disappear very quickly if the company cannot figure out how to fix the problem. Many consumers choose to buy white cars instead of red or blue no matter what brand the car is, where it was built or how many cup holders it has. This is a consumer preference. Why is white the most popular car colour? Some people say it is because it signifies purity or even technology. The colour of a car has nothing to do with how the car functions, so logic would say that all colours would sell the same amount or car manufacturers would only produce one colour. However, this is not the case. Those manufacturers produce many colours, including twice as many in white, or whichever colour is trendy or popular at the time. 1.5 DIFFERENCE OF OPINION Sometimes, consumer preferences may lead to negative results. Shampoo companies found that their customers associate suds with cleanliness, leading them to add sudsing agents to their products even though the amount of suds has nothing to do with how well the shampoos clean hair. The first company to add more suds to their formula was able to use it as a marketing and promotional advantage. Other companies followed suit, leading to a sudsiness competition. Unfortunately, the more sudsy the lather, the worse the shampoo will clean. This is true for two reasons. According to the Fox Avenue Salon website, "First, the extremely sudsy shampoo takes much longer to rinse out of your hair, resulting in excessive use of water. Secondly, with so many suds the hair doesn't seem to get as clean." So, instead of manufacturers educating customers on how shampoo works, they add chemicals to adjust their products to the consumer preference. 1.6 HOW COMPANIES FIND CONSUMER PREFERENCES Companies routinely test the market to find out what customers like and dislike about their products and competitors' products. This is usually done by an internal marketing department or outsourced to a market research firm. Phone interviews, paper surveys, electronic surveys, focus groups and consumer samplings are common methods for gathering information.
5

Market Research Example Here is a popular example of market research: A customer has finished shopping and paying for merchandise at a local grocery store. Before handing the receipt to her, the cashier points to and explains that she has been invited to participate in a short survey about her visit. If she chooses to participate, she will receive $5 off her next visit and a chance to win a large monetary grand prize. 1.7 HOW COMPANIES USE THIS INFORMATION After gathering information, the next step for the company is to determine what it means. Analysis of the information may lead the company to change the formula, packaging, colour, size or some other feature of the product. In the case of the suds in the shampoo, the manufacturers may find that customers are continuing to prefer and associate the foamy lather with high quality cleanliness, leading them to keep the same formula or decide to add even more of the sudsing agent. 1.8 THE NEED TO UNDERSTAND CUSTOMER PREFERENCE Have you ever wondered why your company often loses relatively satisfied customers? Why is it that customers will often indicate they are satisfied with how they have been treated but then leave for a competitor at the first opportunity? Why is customer defection often unrelated to price? The answers to these and other related questions are found in coming to an understanding of customer preference. The idea that customers prefer one product or one service over another is not new. The ability to identify and measure the elements of such preference decisions with any accuracy and reliability has only recently become available. Research into this area of consumer behavior has brought understanding to some of the major issues with standard customer satisfaction research. Most importantly, we have come to realize that high customer satisfaction does not assure continued customer preference. Satisfaction research over the past fifteen years demonstrates that high satisfaction scores, while a measure of corporate performance on a set of important criteria, do not adequately explain the composition of preference formation and therefore often serve as insufficient predictors of sustained preference or what is normally referred to as customer loyalty.

Loyalty as a concept has also shown itself to be difficult to define. Like beauty, loyalty is truly in the eye of the beholder. We understand there are different types and degrees of loyalty and some of these are not appropriate in describing the relationship between a consumer and a company. However, preference has demonstrated the ability to be effectively measured and to provide meaningful insight into the choices consumers make when selecting one provider over another and when determining to continue a relationship over time. An Example Lets consider an individual considering the purchase of a new automobile. This is, for most people, a highly considered purchase. The potential automobile customer may have a preference profile like the one below with a number of emotive and functional components that must be met for preference to form.

Meaning of Brand

1.9 BRAND A brand is a name, term, sign, symbol or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. For example, Coke, Nestle and Microsoft are well renowned brands. Brands cannot be expected to last forever. Brands today play a number of important roles that improve consumers' lives and enhance the financial value of the firms. A brand can take many forms, including a name, sign, symbol, colour combination or slogan. The word brand began simply as a way to tell one person's cattle from another by means of a hot iron stamp.

Some people distinguish the psychological aspect, brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people, consisting of all the information and expectations associated with a product, service or the company providing them. Brand is the personality that identifies a product, service or company (name, term, sign, symbol, or design, or combination of them) and how it relates to key constituencies: customers, staff, partners, investors etc. Some people distinguish the psychological aspect, brand associations like thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people, consisting of all the information and expectations associated with a product, service or the company(ies) providing them. People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Orientation of the whole organization towards its brand is called brand orientation. Careful brand management seeks to make the product or services relevant to the target audience. Brands should be seen as more than the difference between the actual cost of a product and its selling price - they represent the sum of all valuable qualities of a product to the consumer.

A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font (originally created for Walt Disney's "signature" logo), which it used in the logo for [Link]. 1.10 BRAND POSITIONING Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation and verifiable value. It is important to note that "me too" brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s). Generally, the brand positioning process involves: 1. Identifying the business's direct competition (could include tertiary players that offer your product/service amongst a larger portfolio of solutions) 2. Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.) 3. Documenting the provider's own positioning as it exists today (may not exist if startup business) 4. Comparing the company's positioning to its competitors' to identify viable areas for differentiation 5. Developing a distinctive, differentiating and value-based brand positioning statement, key messages and customer value propositions. 1.10.1 BRAND POSITIONING STRATEGIES Overall strategies Since its introduction, Titan has been positioned as a premium brand, providing high quality products. With its numerous sub-brands catering to different segments, the challenge that Titan faces is to create a strong brand image. It follows different positioning strategies; these strategies can also be analyzed as given below: Attribute Positioning:
9

When the company launched its products, it was the first to bring quartz watches to the Indian market. The company successfully leveraged this to penetrate the market and gain a market share. Raga, Classique and Regalia come under this strategy. Classique has been positioned as elegant corporate wear that leaves a quiet, but definite impression and fusion of function and sophistication. Power dressing now has a new weapon! As Magic in gold and bicolor look, the 'Regalia' range represents the essence of dress-wear. Raga has been differentiated and positioned as exclusive watches for women. The Raga and Silver Raga collection is elegant, delicate and feminine with each piece being truly unique. User Positioning: Titan caters to several user groups- children (the Dash), sportspersons and adventurers (PSI4000 and Fastrack range). The Fastrack range is seen as being contemporary, sturdy and reliable. The advertising, packaging and merchandising of this range is young, vibrant and cool (the ad line says Cool watches by Titan) Benefit Positioning: The Fastrack Digital range offers the customer a functional watch that is also attractive. The digital watch has a techno-geek image, but Titan seeks to differentiate its offering on the basis of superior style and attractiveness. Competitor Positioning: With the entry of several foreign watchmakers into the market, Titan had to counter the threat. Most of the entrants are catering to the upper end of the marketOmega, Tissot, Cartier etc. Titan already had the Tanishq brand in this segment. However, it has tried to reposition this brand by increasing the price range to encourage more customers. Quality or Price Positioning: In the overseas market, especially in Europe where it is competing with Swiss and Japanese watches, it is positioning itself as value- for- money: reasonably priced (less than Swiss watches and higher than Japanese), attractively styled and of good quality. In Indian market, Sonata is a perfect example of Price positioning, titan came up with this segment when it was facing heavy competition from lower end segment.

10

1.11 CONSUMER AND BRANDING Consumers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner. People begin to develop preferences at a very early age. Within any product category, most consumers have a group of brands that comprise their preference set. These are the four or five up market brands the consumer will consider when making a purchase. When building preference, the goal is to first get on the consumers preference sets, and then to move up the sets hierarchy to become the brand consumers prefer the most their upmarket brand. Gaining and maintaining consumer preference is a battle that is never really won. In every product category, consumers have more choices, more information and higher expectations than ever before. To move consumers from trial to preference, brands need to deliver on their value proposition, as well as dislodge someone else from the consumer's existing preference set. Preference is a scale, and brands move up, down and even off that scale with and without a vigilant brand management strategy. Pricing, promotional deals and product availability all have tremendous impact on the position of our brand in the consumers preference set. If all things are equal, the best defence is to make us more relevant to consumers than the competition. The brands potential can only be fulfilled by continually reinforcing its perceived quality, upmarket identity and relevance to the consumer. The same branding activities that drive awareness also drive preference. And, while awareness alone will not sustain preference, it will improve the brands potential for building and maintaining preference. 1.12 FACTORS AFFECTING THE CONSUMER PREFERENCES A consumer's decision to buy a product is the result of interplay of many factors. The process of choosing is a complex phenomenon. Selection of a product or service goes
11

through a set of stages, especially for the selection of durable products. The customer has to spend much time to think, evaluate and choose the desired brand based on his/her requirements. After the opening up of the economy during the 1990s, with proliferation of products and services from global players, the consumers found it very hard to choose the right product or services. (Dharmaraj and Sudhahar, 2010) A number of factors involve consumer choices. In some cases, consumers will be more motivated. For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self. Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented. Personality impacts decisions. Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers offer a money back guarantee. Consumers will tend to change their behavior through learninge.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes. Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle). 1.12.1 Customer involvement Consumer involvement will tend to vary dramatically depending on the type of product. In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumers life in some other way (e.g., a word processing program or acne medication). It is important to consider the consumers motivation for buying products. To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumers self-esteem. A handgun may aim bullets with
12

precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumers family, which achieves the desired end-state of security. In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car. 1.12.2 Attributes In a very frequent buying situation, consumers have to choose among products with very similar intrinsic attributes. Under these conditions they must rely mainly on extrinsic product attributes. Findings indicate: 1) a very strong preference for one of the brands prior the test but the subjects were unable to distinguish their preferred brand from the others in the blind taste test; 2) that subjects are not aware about the factors directing their choice of a product; 3) that differences in subjects' preferences due to brand name are much higher than those they indicate due to beers tastes. There is a strong effect of brand name on consumers' buying intentions. (Urdan et al). The effects of market entry-information and exposure-order on brand preference depend on attribute-type and the time between attribute encoding and preference construction. Market entry-information has no effect on preference and where the second-encountered brand is preferred to the first. (Niedrich et al). 1.12.3 Consumer Perception There are many things that influence the behaviour of the consumer. These influences can be religion, ethnic group, social class, age, gender, values, etc. But what is even more important than the different stimuli itself is how consumers perceive, process, interpret and store the stimuli. This work will describe what perception is, how consumers perceive and how this scheme can be used by marketers. What is perception? In general, perception is gathering information through our senses, which are seeing, hearing, touching, tasting, smelling and sensing. Through these senses we can perceive things, events or relations. But as there are so many different stimuli only a small portion of them are noticed and an even smaller amount can really reach our attention. And thats were it is necessary to talk about the difference between Sensation and perception. Although the distinction between sensation and perception is not that easy as it was believed in former times, a rough distinction can be made. Sensation is the immediate response of our sensory receptors to such basic stimuli as
13

light, colour, etc. Perception is the process by which these stimuli are selected, organized and interpreted. When talking about perception we always have to keep in mind that we perceive the world not as it is, but as we think it is. That means that there are innumerable perceived worlds out there. This statement is based on the fact that every human being relates the observed world to its past experiences, its values, etc. Perception is more than just gathering information about a certain event at a certain time. It involves, recognizing stimuli, processing and storing them. The major challenge for the marketer is to identify the target customer and to find out, how this customer perceives the world. That will help to adjust all marketing activities to the target customer. a) Consumer Perception Theory Consumer perception theory is any attempt to understand how a consumer's perception of a product or service influences their behavior. Those who study consumer perception try to understand why consumers make the decisions they do, and how to influence these decisions. Usually, consumer perception theory is used by marketers when designing a campaign for a product or brand. However, some people study consumer perception in order to understand psychology in a much more general sense. b) Perception In general psychological terms, perception is our ability to make some kind of sense of reality from the external sensory stimuli to which we are exposed. Several factors can influence our perception, causing it to change in certain ways. For example, repeated exposure to one kind of stimuli can either make us oversensitive or desensitized to it. Additionally, the amount of attention we focus on something can cause a change in our perception of it. c) Branding A brand, or a brand name, is the attempt to impose some kind of identifying feature on a product or service so that it is easily recognized by the general public. A brand is oftentimes associated with an image, a set of expectations or recognizable logo. The goal of a brand is to set a product or service apart from others of its kind, and

14

influence the consumers to choose the product over similar products simply because of its associations. d) Positioning, Repositioning or Depositioning Positioning is the process whereby marketers attempt to build a brand. Marketers actively try to create an image which is both recognizable and appeals to a certain group of people or target market. Repositioning is the process of altering this image, usually in order to influence a larger target market and thereby influence the behavior of a greater number of consumers. Depositioning is the practice of trying to devalue alternative, competing brands in the perceptions of a shared target market. e) Value and Quality Value refers to the perceptions a consumer has of a product's benefits when weighed against its cost. Value can be measured both qualitatively--the emotional or psychological pleasure a consumer derives from a product or service--and quantitatively, in terms of the actual financial gain it wins them. Quality can be related to value, and may be taken into account when measuring the value of a product or service. More formally, it refers to the way in which a product or service relates to its competitors, or else conforms to a set of measurable standards. f) Buyer's remorse Buyer's remorse is a strong feeling of regret which occurs after a purchase has been made. It is a specific case of cognitive dissonance, or the psychological state of worry or unease which comes about when attempting to come to terms with conflicting ideas, perceptions or motives. Buyer's remorse usually occurs after a consumer has made a purchase he or she has come to regret. Generally, it involves the realization that the opportunity of purchasing one product or service over another in some way outweighs the value of the purchase. In this regard, it occurs when a consumer's perception of a purchase changes after he or she has already invested in it. 1.12.4 Status Status have additive effects on brand preference such that perceptions of first-inmarket and first-experienced brands are more favorable, suggesting that both explanations are operative. The effects of pioneer status on brand preference are mediated by attitude toward the brand and company credibility, while the effects of
15

experience order on brand preference are mediated by attitude toward the brand and attribute recall. The effect of pioneer status on brand preference is the result of both brand -level and company-level associations. (Niedrich et al). 1.12.5 Brand Preference and Age Groups Young consumers, for instance their approaches to product categorization; their decision-making strategies; and their role in family decision making, considerable work remains to be done to understand how young consumers develop brand loyalty, brand preference and reliance. The findings indicate that product/brand imagery is clearly established among young consumers, particularly for branded fashion sportswear; and the results suggest that research design must take account of both age and gender differences when choosing methods for eliciting data from young consumers. ( Bruce and Hill, 1998) The level of influence varies according to age, predisposition and cultural values. While older customers place more emphasis on perceived brand quality, high on the cultural value of individualism, commitment to brand is found to be a strong contributor to brand preference. Similarly in the groups with a high power distance, brand preference is more influenced by brand initiatives. While brand initiatives make modest improvements to brand preference overall, more substantial impacts occur under situational conditions. (Chomvilailuk and Butcher, 2010) 1.12.6 Values, Attitudes and Perception The role of customer value has been largely recognized over time by the firms as an instrument towards stimulating market share and profit optimization. The customer values for innovative products and unfamiliar brands of firm in competitive markets are determined largely by habits, reinforcement effects, and situational influences than strongly-held attitudes. (Rajgopal, 2006) Consumers recognize brands by building favorable attitude towards them and through the purchase decision process. Brand preference is understood as a measure of brand loyalty in which a consumer exercises his decision to choose a particular brand in presence of competing brands. Brand attributes including emotions, attitudes, personality, image, reputation and trust influence consumer perceptions and temporal

16

association with brands. The study reveals that higher brand relevance and trust build strong the association of consumers with brand in long-run. (Rajgopal, 2004) The credibility of a brand as a signal is defined as the believability of the product position information contained in a brand, which depends on consumer perceptions of the willingness and ability of firms to deliver what they have promised. This term is called moderation phenomenon "preference discrimination," which we conceptualize as the decision makers' capacity to effectively discriminate between products' utilities in choice situations. There is a strong evidence for brand credibility effects and differential mechanisms through which brand credibility's impact materializes on brand choice conditional on choice set, choice set formation and preference discrimination. (Erdem et al, 2006) 1.12.7 Information search and decision making. Consumers engage in both internal and external information search. Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve top of mind awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve ones restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example, the consumer may ask friends opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships. Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in neede.g., through brochures, web sites, or news coverage. 1.12.8 Segmentation and Brand Preference A multi-segmenting methodology is proposed for comparing the segmenting capabilities of segmentation variables and providing complete market segmentation information. Demographic and psychographic variables based on the differentiation of consumer brand preference were used to elicit the characteristics of market segments. The multi-combination variables of demographic segmentation exhibited marketsegmenting capabilities equivalent to those of psychographic segmentation. (Feng Lin, 2004)

17

1.12.9 Behaviour of Consumer Consumer choice behavior has some important prevailing conditions that must be taken into account while studying choice. In the light of the classical problem solving buying behavior, consumers engage in information search before making the actual choice. Consumer decision making process is usually guided by already formed preferences for a particular alternative. This means that consumers are likely to make the choice between alternatives based on limited information search activity (Beatty and Smith, 1987; Moorthy et al, 1997).

18

SECTION-B VERKA MILK PLANT PROFILE 1.13 HISTORY Milking has its advent in the very evolution of exact time placental of is its not mammals. While the appearance

known, the immediate ancestors of modern mammals were much like including platypus. monotremes the Such

animals today produce a milk-like substance from glands on the surface of their skin, but without the nipple, for their offspring to drink after hatching from their eggs. Likewise, marsupials, the closest cousin to placental mammals, produce a milk-like substance from a teat-like organ in their pouches. The earliest immediate ancestor of placental mammals known seems to be eomaia, a small creature superficially resembling rodents that is thought to have lived 125 million years ago, during the Cretaceous era. It almost certainly produced what would be considered milk, in the same way as modern placental mammals. Animal milk is first known to have been used as human food at the beginning of animal domestication. Cow milk was first used as human food in the Middle East Goats and sheep are ruminants: mammals adapted to survive on a diet of dry grass, a food source otherwise useless to humans, and one that is easily stockpiled. The animals dairying proved to be a more efficient way of turning uncultivated grasslands into sustenance: the food value of an animal killed for meat can be matched by perhaps one year's worth of milk from the same animal, which will keep producing milk in convenient daily portions for years.

19

Around 7000 BC, cattle were being herded in parts of Turkey. There is evidence from DNA extraction of skeletons from the Neolithic period that people in northern Europe were missing the necessary genes to process lactase. Scientists claim it is more likely that the genetic mutation allowing the digestion of milk arose at some point after dairy farming began. The use of cheese and butter spread in Europe, parts of Asia and parts of Africa. Milk was first delivered in bottles on January 11, 1878. The day is now remembered as Milk Day and is celebrated annually. The town of Harvard, Illinois also celebrates milk in the summer with a festival known as Milk Days. Theirs is a different tradition meant to celebrate dairy farmers in the "Milk Capital of the World." 1.14 BEHIND VERKA Far away from the din and maddening pace of the city, there rests, near Amritsar sleepy village called Verka. Peaceful in its seclusion, life crawls on its own pace. The cool breeze, rustle of the banyan leaves, the chirruping of the birds, the quite flow of the shimmering water besides those soft folds of lush green, nestling a healthy cattle grazing away to glory. Today, Verka has out-stripped its own boundaries to reach our homes. Verka was there long before it came to MILKFED. But then, it was the difference between being there and making it big. When we at MILKFED took it on, we believed that it had potential to do a lot more. And it did. With little more of a consumer oriented approach, Verka became a brand to reckon with. With its growing outlets and thus easier availability, it reached far and wide across the state and beyond. To people today, Verka is part of their daily lives. 1.15 INTRODUCTION: THE VERKA MILK PLANT LDH.

20

Verka milk plant, Ludhiana is known Ludhiana distt- co-operative milk produce union. It is situated on Ferozepur road. It is fully equipped with modern fluid milk plants facilities. VMP, Ludhiana is a prestigious milk plant of Punjab State famous all over the country and abroad for the supply of quality milk products. It has got first position in Northern Zone. It's functioning stone was laid by Sh. Prakash Singh Badal, the Chief Minister of the Punjab on June 22 1970. This plant was inaugurated by our referred Prime Minister Smt. Indira Gandhi. Milk plant is a co-operative society and farmers (producers) share all its profit and losses. Govt. does not provide any financial assistance to milk plant Ludhiana. But Govt. Supervisor and control is there. Law and policy maker is Punjab Govt. here there is no dishonesty in the milk plant. It is very neat and clean organization. The handling capacity of the milk plant per day is 4 Lac Litre. In the year 1983, PDDC merged into milkfed and control of milk plant transferred to milkfed in year 1983. But the efforts of the Directors and milk producer's control of milk plant transferred to milk union, (union of milk producers). Milk plant Ludhiana produces variety of milk products like Milk cake, cheese, Butter, Ghee skimmed milk powder and standardized milk'. Milk plant sells better quality of

21

pasteurized milk to people. Ghee manufactured by this plant is not only sold in country but also supplied to foreign countries like Nepal, Dubai. The new achievements of this milk plant is to achieve the requires. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Management Responsibility Quality Systems Contract Review Documents and data control Purchasing Purchase- Supplier product Product - Identification and tractability Process Control Inspecting and testing Inspection, Measuring and test equipment Inspection and test status. Control of non conforming products Corrective action Holding, Storage, packaging and delivery Quality Records International Quality Audits Training Statistical Techniques Design and control Servicing Profits of milk plant are distributed to workers and milk produces as increase in rate of fat and SNF and to workers as bonus. In the year 2001-2002 the milk plant achieved the Gross profit (Without Interest & Dep. ) for Rs. 5,7200000 and net profit for Rs. 3,3100000. In milk plant Ludhiana is controlled by Govt. The Govt. does not give any assistance to the milk plant but milk plant can receive loans etc with the guarantee of Govt. policymaker is the Govt. but milk produces spend money.
22

International quality

certificate ISO 9002. To get this ISO -9002 certification the following clauses are

Machinery of best technology has been installed in the milk plant. The machinery is available for the productions of following milk products. 1. Pasteurized fluid milk 2. Sterilized flavoured milk 3. Milk-cake 4. Paneer 5. Lassi 6. Ice Cream 7. Butter 8. Ghee 9. Skimmed powder 10. Whole milk powder 11. Baby food But according to the demands from the open market the following milk products are produced:1. Pasteurized/ Sterlised milk 2. Milk cake 3. Paneer 4. Butter 5. Ghee 6. Skimmed milk powder Lured by high profits some new concerns in private sector also try to set up their own plants. So, the present margin of the milk plant has become less and future is looking hard. The milk plant is still standing ahead and not loosing courage. Normally middlemen and traders dominate the market. The milk plant steadily marched toward fix goal of becoming a strong and viable milk plant and now is at No. 1 in Northern Zone. milk

23

All its officer as well as workers are assets to milk plant Ludhiana who are performing their duties delight and with full zeal and energy. Also the building of milk plant. Ludhiana is nicely planned and maintained. There is great system of work. 1.16 PROFILE Full Name Registered Office Head Office Date Registration Date The Ludhiana Distt, Co- Operative Milk Produces Union Ltd. Ldh. Milk plant, Ferozepur Road, Ludhiana-141004 Punjab State Co- operative milk producers federation Ltd. S.C.O.

153- 155 sector 34-A, Chandigarh. of 1972 with PDDC of 31st Oct. 1974 Feb 1979. Co- Operative Punjab State Central Co-operative Bank. Verka 332 751 823

Inauguration Commencement of production Constitution Bankers Product Brand No. of Milk Agencies No. of Societies No. of employees Milk

Permanent 491 temporary 332 Chilling 6

Centres Milk Handling 4,00,000L/ Per day Capacity Products Marketed by General Manager Deputy Manager Account Manager Production Manager Marketing The Punjab State Co-operative Milk Producers Federation Ltd. Chandigarh. Mr. Harinder Singh Grewal Mr. Amarjeet Singh Mr. A.K. Gupta Mr. G.P. Sharma Mr. Parminder Singh

Manager Quality Control Mr. B.R. Madaan

24

Manager SALIENT FEATURES 1. 2. 3. 4. 5. 6. First milk plant in India to get ISO -9002 International Quality Certificate for milk. Milk rate paid to the producers among all the unions highest in the rate. Milk procurement highest among all the unions in the state. Milk procurements per society one day among all the union highest in the state. 100% milk producers co- operative societies are in profit. Aggregate profit of the societies in any year is the maximum among all the

union state ever since inception, customer satisfaction and consistency in quality are the key- thrust area of this organization. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
18.

Numbers of A.I. cases maximum among all the unions in the state. Number of sick animals treated highest among all the unions in the state. Cattle feed sold to societies is maximum among all the unions in the state. F.M.D. vaccination maximum among the all unions in the state, Milk transportation cost lowest among all the unions in the state. Milk chilling cost lowest among all the unions in the state. Average daily city supply maximum among all the unions in the state. Embryo transfer technology introduced in the field for the first time in northern India. Milk products selling at premium rates and ghee exported to gulf countries and Philippines. Capacity utilization is maximum on yearly basis. Fuel cost per Kg. Milk is lowest among all the union in the state. Electricity cost per Kg. Milk is lowest among all the unions in the state. unions in the state.

19. Annual turnover more than Rs. 100.00 crores of rupees. Highest among all the

20.

Annual profitability highest among all the unions in the state.

1.17 ORGANIZATION STRUCTURE Organization structure is a systematic combination of people, functions and physical facilities. It constitutes a formal structure with defined authority and clear

25

responsibility. Each and every person is given a job and then authority is assigned to him for the job. He is made responsible for the job. The structure and process by which a co-operative group of human beings allocate its task among its members, identifies relationship and integrates its activities towards the common objectives. Thus organizing structure aims and the saying, Each one for a job and job for each one" Organization structure of milk plant, its board consist of 19 Directors, They appoint General Manager and chairman. Then there are different departmental heads like manager Accounts Manager, Production Manager, Purchase and manager marketing etc. These heads have deputies for their assistance. The each department has different employees at departmental level. Verka milk plant is well organized". It helps in efficient 'running of concern. 1.18 MILK PROCUREMENT SECTION Milk procurement business is being looked after mainly by milk union Ludhiana. Procurement section is headed by manager milk procurement who is assisted by technical officers and supporting staff for obtaining the objectives. Milk union Ludhiana procure 1.00 lac liters of milk per day at the time of commissiong of milk plant. But at present milk union procure 4 lacs lit of milk per day. 1.18.1 MILK HANDLING CAPACITY OF THE PLANT: handling capacity in % age is as under:Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Milk handling capacity (utilization) percentage 86.4 92.5 135.9 141.6 168.7 175.2 186.9 219.8
26

Detail of milk

1.18.2 CITY SUPPLY Milk union, Ludhiana in addition to supplying the surplus" milk to national milk and Delhi also meet the social obligation of city supply to urban population of Ludhiana. Four different types of milk that are 1. 2. 3. 4. Pasteurized skimmed milk(SKM) Pasteurised Double tonned milk (DTM) Pasteurized standarised milk (Std.) 0.5% 1.5% 4.5% 8.7% 9.0% 8.5% 8.5%

Pasteurized buffalo / Full cream milk (BM/FCM) 6.0%

These four types of milk are packed in half liter, 1 liter & 5 liter poly [Link] are 21 routes for city supply. Verka milk plant has its own 5 milk bars at different places. Sale or city supply milk during last 8 year is as under:-

Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Sales of milk (Percentage per day) 150.4 135.6 154.3 168.9 184.5 192.8
27

2006-07 2007-08

211.9 240.8

1.18.3 AVERAGE COLLECTION OF MILK PER DAY (000KG) Last 9 years record of average collection of milk per day is listed as under:Year Average Collection (000 kg.) 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 216 179 216 242 269 256.7 261.6 295.5

28

1.19 INCEPTION Milk Production is a very important part of the agricultural economy in the State of Punjab. Punjab is one of the smallest States in Indian Union with a total area of 50,362 Sq. Kms., which is 1.5% of the Indian landmass. Dairy Farming is an age-old subsidiary profession in the rural areas of Punjab. Punjab is the second largest milk producing state in India, producing around 10% of the countries Milk Production i.e. 8 million tones annually. 1. First Milk Plant, of the State was setup at Verka near Amritsar. 2. The brand name of Milk and Milk Products was adopted as Verka. 3. 4. 5. The Foundation stone of Milk Plant, Ludhiana was laid by Hon. S. Parkash Singh Badal, the then Chief Minister of Punjab in 1970. Commissioning of the Plant was done by Punjab Dairy Development Corporation in 1974. Inauguration was done by Late Smt. Indira Gandhi the then Prime Minister of India. 1.20 OBJECTIVES 1. 2. To strengthen dairy sector, Milkfed came into existence in 1978 and Simultaneously Distt. Milk unions were formed. Village level cooperative societies were also formed on "Anand Pattern". The system was run by the farmers, of the farmers and for the farmers.

29

3. 4.

To give remunerative prices to farmers and to ensure permanent market for the whole year. To provide technical inputs like artificial insemination,to improve the breed of animals,animals health services,preventive disease treatment andawareness regarding farm management etc.

5.

To provide ISI marks good quality balanced Cattle feed and fodder seeds to the farmers.

1.21 NECESSITY FOR PRODUCTION ENHANCEMENT 1. 2. Milk production in the area increased manifold with the result. Resultantly started receiving daily 2.50 LPD of milk. To increase the participation of women 120 exclusively women societies are organized with 15300 women members. through Punjab Women Dairy Project a Central Govt. sponsored scheme. 3. Milk Production in the area increased manifold with the result. Resultantly started receiving daily 2.50 Lac LPD of Milk and Peak procurement 4.5 Lac LPD. 4. 5. 6. 7. 8. 9. To cater to the increased demand, necessity of expansion of milk plant arose. Capacity of Milk Plant enhanced from 1 lac to 4 lac litres with additional powder. Plant of 30 MTs . This improved the socio- economic conditions of marginal and poor farmers. The profitability of the plant and turnover of the plant improved a lot. No. of societies increased from 94 to 751 and its membership from 5400 to 78000. All the societies are in net profit and distributing bonus to its members.

1.22 QUALITY OF MILK AND MILK PRODUCTS 1. 2. 3. To improve the quality of raw milk, Clean Milk Production program started in 650 villages and resultantly the quality of products increased. Milk Plant, Ludhiana was the First in India in Dairy Sector to get ISO Certification. Under ISO Certification and HACCP (IS 15000) Milk Union started export of Ghee, SMP to Gulf Countries Philippines, Manila, South Africa, Singapore, Bangla Desh etc. The export is more than 5.5 crore during the last year.
30

4. 5. 6.

To further improve the quality of Raw Milk, Milk Union started 365 Automatic Milk collection Stations at village level. To meet the Challenges of WTO Milk Union started TIFAC program with the help of Ministry of information. 28 model dairy demonstration farms have been established including milking machines in distt. of Ludhiana which has encouraged the farmers to adopted dairy on large scale.

7.

Milk Union, Ludhiana is first in India which has installed Bectoscan worth 70 lacs and Somatic cell count machine have been installed at milk plant, Ludhiana.

8.

Further 23 BMC has been approved under central govt. Scheme on 75% grant to be installed in societies.

1.23 PRESENT STATUS/ ACHIEVEMENTS OF THE PLANT 1. 2. 3. 4. 5. 6. 7. 8. No. of societies increased from 94 to 751 and its membership from 5400 to 78000. Milk Procurement has increased from 10200 LPD to 2,50,000 LPD. Highest milk price is being paid to the milk producers as compare to other plants in the states Products being manufactured by Ludhiana Plant are sold at premium rates through out of the country and in the International Market. City supply has increase from 66000 LPD to 1,60,000 LPD. Turnover the plant touched to 180 crores Profit of the union has increased manifold. Capacity utilization of the plant is more than 80%. Milk products like Ghee,Table Butter,Skimmed Milk Powder,Whole Milk Powder,Curd,Paneer,Milk Cake etc are being manufactured by Milk Plant Ludhiana. Milk Union, Ludhiana is further progressing by leaps and bounds and it is hoped that in the years to come, it will achieve excellent results and will help improve the social and economic condition of the people at large. 1.24 MISSION

31

The milk plant has become less and future is looking hard. The milk plant is still standing ahead and not loosing courage. To meet the global competition milkfed chandigarh has taken steps in the field of advertisement of products and has set aside Rs, 1 crore for this purpose. 1. Providing improved technical input services to farmers. 2. Setting up big commercial farms. 3. More stress on clean milk production programme. 4. Rural women empowerment. 5. Massive women empowerment. 6. Strengthing market base with specific stress on consumer market. 7. Dynamic enhancement in Verka product mix.

32

CHAPTER 2 REVIEW OF LITERATURE

Abreu (2000) has made out that thirty years after Operation Flood, which saw the country awash in milk, another revolution is in the making: the marketing and distribution of packaged milk, both plain and in flavoured form, aimed at the burgeoning Indian middle class. There is a strong rationale behind this surge. On the supply side, milk production in the country has almost doubled from 38.8 million tonnes in 1983-84 to 74 million tonnes in 1998-99. Juxtapose this with the demand side development: A rising number of working couples, nuclear families, need for longer shelf life and changing lifestyles; plus the increased consciousness of global trends. Ayanwale, et al (2005), found that many consumers do not buy whatever is available or affordable if a product is good value for its price, it will command brand loyalty. However, advertising helps in projecting product quality and value before the consumers. The stage a product is in its life cycle is very important to a marketer as it help in determining the type of marketing strategies to be embarked upon in respect of the said product. Bhar and Saxena (2005) developed ARIMA models for forecasting the sales of milk and milk products in the regions of Bokaro and Dhanbad. Based on the data collected from the period from March 2003 to December 2004, they fitted these models and forecasted for the period from January 2005 till June 2005, and concluded that they were valid for forecasting the milk sales and retailer growth of the dairy (with a 95-percentile confidence level), which will help the dairy companies to formulate appropriate marketing and distribution strategies. Botonak (2010) proposed that the increasing importance of convenience in consumer food choices has attracted researchers interest. In the effort to understand how convenience affects consumers food preferences, values are believed to play an important role. The results reveal that convenience food consumption and convenience orientation in the food domain are mainly connected
33

Brunner et al (2010) reported that convenience is one of the big trends in the food business. The demand for convenience food products is steadily increasing. Despite being vital properties of convenience food, saving time and effort have not been very successful constructs for predicting convenience food consumption. The various convenience food products could be categorized into four groups, which we labeled as highly processed food items, moderately processed food items, single components, and salads. Fifteen drivers were found to have a significant impact either on total convenience consumption or on one of the identified categories. Strong predictors were age, concern about naturalness, nutrition knowledge, and cooking skills. Carbonell and Costell (2008) studied the type of information (picture of real package or card with beverage type and nutritional facts) and consumer attitudes (interest in eating healthily and food neophobia) and affect on its hedonic ratings and purchase intention with respect to refrigerated milk and soybean vanilla beverages. Information affected purchase intention to a greater extent. Type of information influencing consumer behaviour was also dependent on some consumer attitudes, such as interest in eating healthily Cardello and Schutz (2004) conducted the analytic studies with civilian and military consumers in order to assess the factors that contribute to the concept of food freshness and the relative importance of freshness to other product variables. Results showed the concept of freshness to be determined primarily by time from harvest/production and food type. Foods that were described as "minimally processed e.g "frozen and thawed" were rated as less fresh than other foods. Gofton and Ness (1991) studied that the twin trends of health and convenience have resulted in changing food consumption patterns. Their Research among consumers confirmed that there is awareness and concern about the relationship between health and diet and the better educated are more food-conscious. Changing lifestyles and the changing role of women are shown to affect food habits. Hlgren et al (2004) reported that food choice is dependent upon beliefs about both the products and consumers. Beliefs about the prototypical attributes of ready meal consumers have been investigated to establish the beliefs that exist and whether
34

they have any actual basis when compared with self-reported behaviours of ready meal consumers. Johnston (1981) proposed that time may be the most important variable in consumer behavior. On one side, the time dimension of consumer behavior is viewed as just beginning to emerge as a major variable of study, on the other side, however, time has been implicitly and explicitly incorporated into consumer behavior theory and marketing strategies for quite some time. Adoption of products by consumers was not characterized by analytic consumption behavior but by risk aversion and preference for incremental changes in the consumption set. Khanona and Aung (2004) proposed that the diverse consumer attitudes towards the safety of food. The diversity among consumers is based on a variety of factors, including demographics and socio-economic status. The relationship between consumer attitudes, knowledge and behaviour regarding food safety is also examined in this paper. It indicates that different attitudes do not necessarily lead to behaviours that increase the safety of the food consumed. Michael et al (2008) studied the factors that influence willingness to buy foods. Data were collected from a representative mail survey in Switzerland .Results suggest that. Health claims were most positively evaluated when attached to a product with a positive health image. Results further show that participants who have trust in the food industry are more likely to buy functional foods compared with participants who do not have trust in the food industry. Older consumers were more interested in functional foods than younger consumers. Parekh (2006) in his research established that, of the total milk produced in the country, nearly 46 per cent is consumed as liquid milk (Table 1) and the balance converted into various dairy products, such as ghee, butter, milk powder, ice cream, cheese, condensed milk and for making various kinds of sweetmeats having distinct regional preferences. Prasad (2006) found in his study that 91.33% of the consumers knew the availability of more than one variety of milk available in the market. He also established that a large majority of respondents 62.33% said that it is the quality that influences the choice of the brand, whereas a meagre 5.67% expressed the view that it
35

is the factor of easy availability that is responsible for the preference of a brand. He found that a majority (about 82.67%) of the respondents were satisfied with the present brand they were using and only 17.33% though otherwise. He further suggested that prompt and regular supply, providing value by way of service rendered by agents and avoidance of adulteration are factors that will count in the success or failure of the milk producers. Sachan (2005) discussed the dairy scenario in India and also highlighted the export potential of this sector. According to him, higher professionalism could be imparted in rearing, milking as also handling during distribution of milk. Lessons could be learnt by individuals and small dairy farms from the cooperative sector. which has managed to impart some amount of professionalism in its operations. Several areas in the dairy industry could be strengthened by induction of state-of theart technologies, transferred from other dairy majors of the world: Operational efficiencies are required, not only to improve yields but also to reduce waste and minimization of losses in fat, protein during milk processing. Sriram et al (2004) found that intrinsic brand preferences have a much bigger effect on the performance of the brand than the inclusive value which reflects model level prices, product attributes, and the length of the brands product line. Further, some brands can increase their advertising expenditures and still increase their profitability. Attributes may be accompanied by higher advertising expenditures. The consumers notice all the changes in the portfolio of models offered by a brand changes. However, due to limited cognitive capacity, it is likely that the consumers only consider the models that are close to their needs and may hence not be affected by the addition or withdrawal of other models. Moreover, it is likely that the retailers do not carry all the models offered by the brand at all times. Sun (2008) proposed the study that addressed how various health concerns might influence not only consumers food choice motives but also consumers subsequent attitudes toward healthy eating. The findings revealed that the consumers with greater health concerns would have different food choice motives and better attitudes toward healthy eating.

36

Tauscher (2002) studied that Consumer demands for high-quality foods with fresh-like characteristics that require only a minimum amount of effort and time for preparation has led to the introduction of convenience foods preserved by mild treatments. Non-thermal methods allow the processing of foods below temperatures used during thermal pasteurisation, so flavours, essential nutrients, and vitamins undergo minimal or no changes. This process is used to create food and food ingredients with new sensory and functional properties including also physiological functionality.

37

CHAPTER 3 RESEARCH METHEDOLOGY Research Methodology is a way to systematically solve the research problem. When we talk about research methodology we not only talk about research methods but also talk about the logic behind the method we use in the context of our research that's why our research results are capable of being evaluated either by the researcher himself or by others. The purpose of this section is to describe the methodology carried out complete the work. The methodology plays a dominant role in any research work. The effectiveness of any research work depends upon the correctness and effectiveness of the research methodology. TOPIC Consumer Preference Regarding Branded and Unbranded Milk-Products OBJECTIVES To understand reason for preference of branded or unbranded milk and milkproducts. To study the satisfaction level of consumers for various features of a particular brand. RESEARCH DESIGN A research design is an arrangement of conditions for collection & analysis of data in a manner that aims to combine relevance to the research purpose with the economy in procedure. It constitutes the blueprint for collection, measurement & analysis of data. I have used convenient, analytical and descriptive method. RESEARCH INSTRUMENTS Questionnaire is most common research instrument in collecting primary data during marketing research. A questionnaire consists of a set of questions presented to respondents. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data. SAMPLING TECHNIQUE

38

In order to take the sample for the study sample technique selected is Random sampling technique. SAMPLE SIZE Sample size of the research was 100. DATA COLLECTION Primary Data It was taken from the randomly selected people from the customers. Secondary Data It was taken from various books, journals, newspapers and various Internet websites. TOOLS OF DATA ANALYSIS Keeping in view the objectives of the research and nature of the data, percentage method for data analysis is used. For the ranking purpose simple interpretation method was used as the results were clear simply by seeing the data. MS Excel was used for calculation purpose. LIMITATIONS While surveying, researchers encountered with some problems like: The sample size was less; therefore this is a big limitation of our study. The survey should have involved a larger sample size otherwise the findings of the survey cannot be generalized. But a larger sample size may increase the time and cost of collecting the primary data with the help of Questionnaire. Many of the respondents were not willing to fill the questionnaire. Another problem which researchers faced was that people were hesitating to give information about their views freely.

39

CHAPTER 4 CONSUMER PREFERENCE ANALYSIS 4.1 TYPE OF MILK PRODUCTS PREFERRED

Table 4.1 Type of Milk Products Preferred

Type Branded Unbranded Total

No of Respondents 78 22 100

Percentage 78 22 100

Graph 4.1 Type of Milk Products Preferred

From the inspection of above table it is clear that 78% of respondents prefer branded milk-products over unbranded milk-products. Only 22% respondents said that they prefer unbranded milk-products. Therefore, we can say that people mostly prefer branded milk products.

40

4.2 Milk Products Used

Table 4.2 Milk Products Used

Milk Products Milk Curd Ice-cream Kheer Lassi Butter Ghee

No of Respondents 93 58 25 59 68 54 34

People mostly use milk. 93% respondents use milk. After that the product most frequently used is lassi, which is used by 68%respondents. After that it comes kheer and Curd. These are used by 59% and 58% respondents respectively. Butter is also used by 54% respondents. 34% people also use ghee. Ice-cream is least used by people. Only 25% respondents use verka ice-cream. Therefore we can say that verka milk, lassi and curd are most frequently used products of verka.

41

4.3 Frequency of Usage

Table 4.3 Frequency of Usage

Option Daily Usually Rarely Do not use Total

No of Respondents 56 23 12 9 100

Graph 4.3 Frequency of Usage

Above table shows that mostly people use milk-products daily. 56% of respondents use milk-products daily. 23% of respondents use milk-products usually. 12% of respondents are such that they use milk-products rarely and there are 9% of respondents who do not use milk-products at all.

42

4.4 Nature of Purchase Decision

Table 4.4 Nature of Purchase Decision

Purchase Decision Impulsive Planned Total

No of Respondents 29 71 100

Percentage 29 71 100

Graph 4.4 Nature of Purchase Decision

Above table shows that 29% of respondents purchase decision is impulsive. 71% of respondents purchase milk-products by planning; therefore, we can say that mostly people have planned purchasing regarding milk-products.

43

4.5 Factors Influencing Purchase

Table 4.5 Factors Influencing Purchase

Factors Price Quality Fat control Relatives Advertisement Health condition Doctors Taste Availability Friends Packaging Others

1 23 22 8 1 2 5 2 26 9 1 1 0

2 27 14 5 2 3 2 1 24 14 2 4 2

3 17 25 9 0 1 2 1 22 20 1 2 0

From the inspection of the above table it is clear that price, quality and taste are the factors which influence the people to buy branded milk-products. These three factors are mostly chosen by respondents as first, second or third priority. After that fat control and availability of products at nearby place also influence the people to buy branded milk-products. After that it comes health condition which influence people to purchase branded milk-products. Any other factor does not have much effect on the purchase decision. .

44

4.6 Major Problems W.R.T. Branded Milk-Product

Table 4.6 Major Problems W.R.T. Branded Milk-Product

Options Lack of awareness High price Non-availability Dislike Low quality Change of taste

1 28 11 26 13 20 2

2 22 15 25 20 17 1

3 18 10 21 17 28 6

4 16 20 16 19 15 14

5 11 16 9 23 14 27

6 5 28 3 8 6 50

The above table shows the major problems w.r.t. branded milk-products. The major problem w.r.t. branded milk product is lack of awareness and non-availability of branded milk-products. Change of taste and high price is not any problem in case of branded products.

45

4.7 Factors Affecting Preference of Branded Products Over Unbranded

Table 4.7 Factors Affecting Preference of Branded Products Over Unbranded

Factors Home delivery Lesser price Quality assurance Security of homogeneous production Safety from perishability Flavour Improved taste Total

No of Respondents 8 4 25 22 20 12 9 100

Graph 4.5 Factors Affecting Preference of Branded Products Over Unbranded

From the inspection of the above table it is clear that quality assurance, security of homogeneous production and safety from perishability are the factors which affect the preference of branded products over unbranded. However home delivery and lesser price are factors which do not effect it.

46

4.8 Source of Information

Table 4.8 Source of Information

Source Friends Advertisement Shop keepers Doctors Relatives Total

No of Respondents 27 12 22 9 30 100

Graph 4.6 Source of Information

Friends and relatives are the most preferred source of information through which people come to know about branded milk products. 30% respondents came to know about branded milk products by their relatives and 27% respondents get information from friends. 22% of respondents came to know about branded milk products from shopkeepers.

47

4.9 Feel of Scarcity in the Market

Table 4.9 Feel of Scarcity in the Market

Option Yes No Total

No of Respondents 24 76 100

Percentage 24 76 100

Graph 4.7 Feel of Scarcity in the Market

76% of respondents feel that there is no scarcity of milk products in market at any point of time and 24% respondents feel that there is scarcity of milk products in market.

48

4.10 Degree of Satisfaction Regarding Branded Milk and Milk-Products

Table 4.10 degree of satisfaction regarding branded milk and milk-products

Characteristics Price Quality Taste Packaging Advertisement

Highly Satisfactory 32 49 37 78 25

Satisfactory 47 36 45 13 32

Less Satisfactory 21 15 18 9 43

People are Highly Satisfactory from the packaging of the branded milk products. 78% respondents rated packaging as highly satisfactory. People are also satisfied by the quality of branded milk-products. Taste and price factor of branded milk-products are also satisfactory. But people are less satisfactory from the advertisement of milk-products.

49

4.11 In case of non-availability of preferred brand

Table 4.11 In case of non-availability of preferred brand

Option Go to another shop Postpone purchase Will buy another brand Will buy unbranded product Total

No of Respondents 51 6 19 24 100

Percentage 51 6 19 24 100

Graph 4.8 In case of non-availability of preferred brand

In case of non availability of desired milk product brand, 51% of respondents go to another shop to buy that product. While 24% respondents will buy another product and 19% of respondents can buy another brand. Only 6% of respondents said that they will postpone purchase if they do not get their desired brand.

50

CHAPTER 5 FINDINGS AND CONCLUSION

Mostly people prefer branded milk and milk products over unbranded branded milk and milk-products. Milk, lassi and curd are most frequently used products of verka. People generally use branded milk and milk-products daily. Mostly people have planned decision to purchase branded milk and milkproducts. Price, taste and quality of the branded milk and milk-products are the features which affect their purchase. The major problems w.r.t. branded products are lack of awareness and nonavailability. Quality assurance and security of homogeneous production are the factors for which people prefer branded products over unbranded. The major source of information about branded milk and milk-products are relatives and friends. Generally people do not feel that there is scarcity of milk-products in the market. People are highly satisfied by packaging and quality of branded milk and milk-products. In case of non availability, people mostly prefer to go to another shop to buy that brand.

CONCLUSION ...............................................................

51

REFERENCES

Abreu, (2000) [Link] Adamczyk, G. (2005). Preferencje konsumentw na rynku warzyw mroonych. W: K. Gutkowska, L. Nawojek (red.) Konsument ywnoci i jego zachowania w warunkach polskiego czonkowstwa w Unii Europejskiej. [Ford consumer and his behaviour in conditions of polish memberships in European Union]. Warszawa: Wyd. SGGW, s. 143-150.

Bhar, Chandan;and Saxena, Amit (2005), "Forecasting of Milk Sales and Retailer Growth of a Dairy using Statistical Technique", Synthesis - The Journal of BLS Institute of Management, Vol. 3, No.1, July - Dec., pp. 29-39.

Chin-Feng Lin, (2002) "Segmenting customer brand preference: demographic or psychographic", Journal of Product & Brand Management, Vol. 11 Iss: 4, pp.249 - 268

Dharmaraj, C. and Sudhahar, J. Clement, Brand Preference Factors of Passenger Cars: An Empirical Assessment (September 28, 2010). The IUP Journal of Brand Management, Vol. VII, No. 3, pp. 18-34, September 2010.

Erdem, Tulin and Swait, Joffre, Characterizing Brand Effects on Choice and Choice Set Formation Under Uncertainty (April 2006).

Niedrich, Ronald W. and Swain, Scott D., The Effects of Exposure-Order and Market Entry-Information on Brand Preference: A Dual Process Mode

Niedrich, Ronald W. and Swain, Scott D., The Influence of Pioneer Status and Experience Order on Consumer Brand Preference: A Mediated-Effects Model.

Parekh, 1. V. (2006), "Milky Ways", Times Food Processing Journal, Oct. Nov.

Prasad, M. V. Rama (2006), "Dairy Products: Consumer Preferences - A Limited Survey of Vishakhapatnam", Journal of Marketing & Communication, Vol. 2, Iss. 2, Sep. - Dec., pp. 63-71.
52

Rajagopal, Dr., Brand Value, Preference and Customer Value Effects of NonConventional Utility Products: An Experimental Analysis in Mexican Market (February 2006). ITESM Working Paper No. 02/2006.

Rajagopal, Dr., Conational Drivers Influencing Brand Preference Among Consumers (April 30, 2009).

Rojanasak Chomvilailuk, Ken Butcher, (2010) "Enhancing brand preference through corporate social responsibility initiatives in the Thai banking sector", Asia Pacific Journal of Marketing and Logistics, Vol. 22 Iss: 3, pp.397 - 418

Sachan, Dharmendra (2005), "Fresh Fruits, Vegetables and Dairy Products: India's Potential for Exports to other Asian Countries", Research Brief No. 89, January, [Link]

Torres Urdan, Flvio and Torres Urdan, Andre, The Effect of Brand Name and Taste on Consumers' Buying Intentions: An Experimental Analysis. Available at SSRN: [Link] or doi:10.2139/ssrn.273841

53

BIBLIOGRAPHY

[Link]

54

ANNEXURE

SURVEY QUESTIONNAIRE FOR CUSTOMER PREFERENCE FOR BRANDED AND UNBRANDED MILK PRODUCTS NameAgeGenderMarital statusOccupation-

Employed Self-employed

Male Female

1) What type of milk and milk-products do you prefer?

Branded

Unbranded

2) Which branded milk and milk-products do you use commonly?

3) How often you use above stated branded milk and milk-products?

Daily Usually Rarely Do not use

4) What is the nature of your purchase decision in case of branded milk and

milk-products?

Impulsive Planned

55

5) Which of the following factor(s) influence(s) you to choose branded milk

and milk-products? (Rank 1-3)

Price Fat control Relatives Advertisement Health condition Doctors

Quality Taste Availability Friends Packaging Others

6) What are the major problems w.r.t. branded milk-products? (Rank 1-6)

Lack of awareness High price Non-availability

dislike low quality change of taste

7) What factors will make you to prefer branded milk and milk-products over unbranded milk and milk-products?

Home delivery Lesser price Quality assurance Security of homogeneous production

8) How did you know this brand?

Safety from perishability Flavour Improved taste

Friends Advertisement Shop keepers

Doctors Relatives Others (Specify)

56

9) Have you ever felt the scarcity of branded milk and milk-products in the market?

Yes

No

10) State the degree of satisfaction regarding branded milk and milk-products in comparison of unbranded milk and milk-products in the following: Characteristics Highly Satisfactory Price Quality Taste Packaging Advertisement Satisfactory Not Satisfactory

11) In case of non-availability of your preferred brand, what will you do?

Go to another shop Postpone purchase Will buy another brand Will buy unbranded product

57