CHAPTER 1

INTRODUCTION

INTRODUCTION TO CONSUMER BUYING PATTERN

1.1 INTRODUCTION

An important part of the marketing process is to understand why a customer or buyer

makes a purchase. Without such an understanding, businesses find it hard to respond to

the customer’s needs and wants. Marketing theory traditionally splits analysis of buyer or

customer behaviour into two broad groups for analysis – Consumer Buyers and Industrial

Buyers

Consumer buyers are those who purchase items for their personal consumption

Industrial buyers are those who purchase items on behalf of their business or

organization. Businesses now spend considerable sums trying to learn about what makes

“customers tick”. The questions they try to understand are:

•Who buys?

•How do they buy?

•When do they buy?

•Where do they buy?

• Why do they buy?

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 For a marketing manager, the challenge is to understand how customers might respond to

the different elements of the marketing mix that are presented to them.

If management can understand these customer responses better than the competition, then

it is a potentially significant source of competitive advantage.

Definition of Buying Behavior

Buying Behavior is the decision processes and acts of people involved in buying and

using products.

Need to understand:

 Why consumers make the purchases that they make?

 What factors influence consumer purchases?

 The changing factors in our society.

A firm needs to analyze Purchase behavior for:

 Buyers reactions to a firms marketing strategy has a great impact on the firms
success.
 The marketing concept stresses that a firm should create a Marketing Mix (MM)
that satisfies (gives utility to) customers, therefore need to analyze the what,
where, when and how consumers buy.
 Marketers can better predict how consumers will respond to marketing strategies.

Stages of the Consumer Buying Process

Six Stages to the Consumer Buying Decision Process (For complex decisions).
Actual purchasing is only one stage of the process. Not all decision processes lead to a
purchase. All consumer decisions do not always include all 6 stages, determined by the
degree of complexity.

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The 6 stages are:

1. Problem Recognition(awareness of need)

Difference between the desired state and the actual condition. Deficit in
assortment of products. Hunger--Food. Hunger stimulates your need to eat.
Can be stimulated by the marketer through product information--did not know you
were deficient? I.E., see a commercial for a new pair of shoes, stimulates your
recognition that you need a new pair of shoes.

2. Information search

o Internal search, memory.

o External search if you need more information. Friends and relatives (word of
mouth). Marketer dominated sources; comparison shopping; public sources etc.
o A successful information search leaves a buyer with possible alternatives, the
evoked set.
o Hungry, want to go out and eat, evoked set is
o Chinese food
o Indian food

3. Evaluation of Alternatives

Need to establish criteria for evaluation, features the buyer wants or does not
want. Rank/weight alternatives or resume search. May decide that you want to eat
something spicy, Indian gets highest rank etc. If not satisfied with your choice then
return to the search phase. Can you think of another restaurant? Look in the yellow

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 pages etc. Information from different sources may be treated differently. Marketers
try to influence by "framing" alternatives.

4. Purchase decision

Choose buying alternative, includes product, package, store, method of purchase

etc.

5. Purchase

May differ from decision, time lapse between 4 & 5, product availability.

6. Post-Purchase Evaluation

Outcome: Satisfaction or Dissatisfaction. Cognitive Dissonance, have you made

the right decision. This can be reduced by warranties, after sales communication etc.
After eating an Indian meal, may think that really you wanted a Chinese meal instead.

Types of Consumer Buying Behavior

Types of consumer buying behavior are determined by:

 Level of Involvement in purchase decision. Importance and intensity of interest in
a product in a particular situation.

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 Buyers level of involvement determines why he/she is motivated to seek
information about a certain products and brands but virtually ignores others.

The four types of consumer buying behavior are:

 Routine Response/Programmed Behavior

Buying low involvement frequently purchased low cost items; need very little
search and decision effort; purchased almost automatically. Examples include soft
drinks, snack foods, milk etc.

 Limited Decision Making

Buying product occasionally. When you need to obtain information about

unfamiliar brand in a familiar product category, perhaps. Requires a moderate amount
of time for information gathering. Examples include Clothes--know product class but
not the brand.

 Extensive Decision Making/Complex high involvement

Unfamiliar, expensive and/or infrequently bought products. High degree of

economic/performance/psychological risk. Examples include cars, homes, computers,
education. Spend a lot of time seeking information and deciding. Information from
the companies MM; friends and relatives, store personnel etc. Go through all six
stages of the buying process.

 Impulse buying, no conscious planning.

The purchase of the same product does not always elicit the same Buying
Behavior. Product can shift from one category to the next.

For example:

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 Going out for dinner for one person may be extensive decision making (for someone
that does not go out often at all), but limited decision making for someone else. The
reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of
friends will also determine the extent of the decision making.

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Factors that influence the Consumer Purchase Decision making Process

A consumer, making a purchase decision will be affected by the following three

factors:
1. Personal
2. Psychological
3. Social

The marketer must be aware of these factors in order to develop an appropriate MM

for its target market.

Personal
Unique to a particular person. Demographic Factors. Sex, Race, Age etc.
Who in the family is responsible for the decision making. Young people purchase things
for different reasons than older people.

Psychological factors

Psychological factors include:

 Motives: A motive is an internal energizing force that orients a person's activities

toward satisfying a need or achieving a goal. Actions are effected by a set of
motives, not just one. If marketers can identify motives then they can better
develop a marketing mix.

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 MASLOW hierarchy of needs!!
o Physiological
o Safety
o Love and Belonging
o Esteem
o Self Actualization

Need to determine what level of the hierarchy the consumers are at to determine
what motivates their purchases. Motives often operate at a subconscious level therefore
are difficult to measure.

 Perception

What do you see? Perception is the process of selecting, organizing and

interpreting information inputs to produce meaning. IE we chose what info we pay
attention to, organize it and interpret it. Information inputs are the sensations received
through sight, taste, hearing, smell and touch.

Selective Exposure

Select inputs to be exposed to our awareness. More likely if it is linked to an

event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion

Changing/twisting current received information, inconsistent with beliefs.

Advertisers that use comparative advertisements (pitching one product against another),
have to be very careful that consumers do not distort the facts and perceive that the
advertisement was for the competitor. A current example...MCI and AT&T...do you ever
get confused?

Selective Retention

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 Remember inputs that support beliefs, forgets those that don't. Average supermarket
shopper is exposed to 17,000 products in a shopping visit lasting 30 minutes-60% of
purchases are unplanned. Exposed to 1,500 advertisements per day. Can't be expected to
be aware of all these inputs, and certainly will not retain many.

 Ability and Knowledge

Need to understand individual’s capacity to learn. Learning, changes in a person's

behavior caused by information and experience. Therefore to change consumers' behavior
about your product, need to give them new information re: product...free sample etc.
When making buying decisions, buyers must process information. Knowledge is the
familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of quality more than those who
have knowledge of a product. Non-alcoholic Beer example: consumers chose the most
expensive six-pack, because they assume that the greater price indicates greater quality.

Learning is the process through which a relatively permanent change in behavior

results from the consequences of past behavior.

 Attitudes

Knowledge and positive and negative feelings about an object or activity-maybe

tangible or intangible, living or non- living.....Drive perceptions

Individual learns attitudes through experience and interaction with other people.
Consumer attitudes toward a firm and its products greatly influence the success or failure
of the firm's marketing strategy.

Attitudes and attitude change are influenced by consumers personality and lifestyle.

Consumers screen information that conflicts with their attitudes. Distort information
to make it consistent and selectively retain information that reinforces our attitudes. IE
brand loyalty.

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There is a difference between attitude and intention to buy (ability to buy).

 Personality

All the internal traits and behaviors that make a person unique, uniqueness arrives
from a person's heredity and personal experience. Examples include:

o Compulsiveness
o Dogmatism
o Self confidence
o Friendliness
o Adaptability
o Ambitiousness
o Authoritarianism
o Introversion
o Extroversion
o Aggressiveness
o Competitiveness.

Traits effect the way people behave. Marketers try to match the store image to the
perceived image of their customers.

There is a weak association between personality and Purchase Behavior, this may be
due to unreliable measures. Nike ads. Consumers buy products that are consistent with
their self concept.

 Lifestyles

Recent US trends in lifestyles are a shift towards personal independence and

individualism and a preference for a healthy, natural lifestyle.

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 Lifestyles are the consistent patterns people follow in their lives.

Example healthy foods for a healthy lifestyle. Sun tan not considered fashionable in
US until 1920's. Now an assault by the American Academy of Dermatology.

Social Factors

Consumer wants, learning, motives etc. are influenced by opinion leaders, person's
family, reference groups, social class and culture.

 Opinion leaders

Spokespeople etc. Marketers try to attract opinion leaders...they actually use (pay)
spokespeople to market their products. Michael Jordon (Nike, McDonalds, Gatorade etc.)
Can be risky...Michael Jackson...OJ Simpson...Chevy Chase

 Roles and Family Influences

Role...things you should do based on the expectations of you from your position
within a group.People have many roles. Husband, father, employer/ee. Individuals role
are continuing to change therefore marketers must continue to update information.

Family is the most basic group a person belongs to. Marketers must understand:
o That many family decisions are made by the family unit
o Consumer behavior starts in the family unit
o Family roles and preferences are the model for children's future family (can
reject/alter/etc)
o Family buying decisions are a mixture of family interactions and individual
decision making

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 o Family acts an interpreter of social and cultural values for the individual.

The Family life cycle: families go through stages, each stage creates different consumer
demands:

o Bachelor stage...most of BUAD301

o Newly married, young, no children...me
o Full nest I, youngest child under 6
o Full nest II, youngest child 6 or over
o Full nest III, older married couples with dependant children
o Empty nest I, older married couples with no children living with them, head in
labor force
o Empty nest II, older married couples, no children living at home, head retired
o Solitary survivor, in labor force
o Solitary survivor, retired
o Modernized life cycle includes divorced and no children.

Reference Groups

Individual identifies with the group to the extent that he takes on many of the values,
attitudes or behaviors of the group members. Families, friends, sororities, civic and
professional organizations. Any group that has a positive or negative influence on a
persons attitude and behavior.

 Social Class

An open group of individuals who have similar social rank. Criteria: Occupation,
Education, Income, Wealth, Race, Ethnic groups and possessions.

Social class influences many aspects of our lives. I.e., upper middle class prefer
luxury cars Mercedes.
o Upper -upper class, .3%, inherited wealth, aristocratic names.

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 o Lower-upper class, 1.2%, newer social elite, from current professionals and
corporate elite
o Upper-middle class, 12.5%, college graduates, managers and professionals
o Middle Americans-middle class, 32%, average pay white collar workers and blue
collar friends
o Working class, 38%, average pay blue collar workers
o Lower Americans-lower class, 9%, working, not on welfare
o Lower-lower class, 7%, on welfare

Social class determines to some extent, the types, quality, and quantity of
products that a person buys or uses.

Lower class people tend to stay close to home when shopping, do not engage in
much prepurchase information gathering. Stores project definite class images.

Family, reference groups and social classes are all social influences on consumer
behavior. All operate within a larger culture.

 Culture and Sub-culture

Culture refers to the set of values, ideas, and attitudes that are accepted by a
homogenous group of people and transmitted to the next generation. Culture also
determines what is acceptable with product advertising. Culture determines what
people wear, eat, reside and travel. Cultural values in the US are good health,
education, individualism and freedom. In American culture time scarcity is a growing
problem. IE change in meals. Big impact on international marketing.

1.2 PROBLEM AND IMPORTANCE OF THE STUDY

India is wide and large country, which is highly concentrated in rural society and spread

over 5, 65,742 villages, which is nearly about 70% of the overall population. Agriculture

is the main income source. Dairying is complementary to Agriculture income and playing

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important role in the stability of rural economy. The cow was adored as the deity

Kamadenu with its milk as nectar for human life.

Milk and its product depute an important and compulsory part of daily life. From early

ages of human life milk is considered as the most significant and complete food among

all the food products. Milk gives energy, body building proteins, bone forming minerals,

vitamins, Lactose, fast and fatty acids, etc. Besides providing certain essential fatty acids,

it contains nutritional components for easy assimilation of food and digestion.

All these properties make milk an important food product in the universe.

As Indian Economy is predominantly agricultural dependent, Dairy and Animal

Husbandry from an important activity of its Economy. This dairying activity constitutes

10% of total G.D.P. Agriculture being a seasonal activity it cannot give regular income

throughout the year certain activities like dairying, sheep rearing, poultry, etc. are taken

up. Major part of the milk is produced in rural areas, but the demand for milk is mainly

from the urban area. Urban consumers receive milk through private milk vendors who

collect milk from rural areas i.e. village.

Dairy in India was not in an organized manner till 1895. There were military dairies until

1940 with modern processing facilities like that of pilot dairy at Anand.

After independence in 1947 greater “Bombay Milk Scheme” was started and Airey milk

colony was established. Milk was supplied from Kaira District Co-operative Milk

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Producer Union known as “Anand Milk Union Limited (AMUL)” to greater Bombay

Milk Scheme.

In 1951, Government started ‘Key Village Scheme’ to improve the productivity intensive

cattle development productivity of milk cattle under Five Year plan Scheme. Productivity

intensive cattle development Project was started through scientific breeding, feeding and

right management practices.

In 1960, under the pattern of greater “Bombay Milk Scheme” some state Governments in

India started milk supply schemes procuring milk from rural areas paying remunerative

price to the milk producers. Then dairying acquired national level recognition.

India has the largest cattle and buffalo population but its share of the milk production is

10% only. In India, the average animal milk capacity per cow is only 150 liters per year

and buffalo 50 liters per year. In some countries due to dairy development activities, the

average milk production per cow is 300 liters to 400 liters per year. In India at present

the level of milk consumption is only 19 ml per head while a healthy person requires at

least 21ml daily.

In India, many problems arise in marketing of the milk. The main problems are lack of

adequate and timely supply of milk, poor quality and adulteration of milk leakage of

packets, high and low discrimination of prices.

Government of India adopts several measures to improve the marketing system, quality

and sales of milk in rural as well as in urban areas. Consequently, today most of the urban

areas covered by Dairy Co-operative Societies of their respective states.

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Recognizing the nature of business, the dairy industry concerted into a commercial

institution of AP Dairy Development Corporation Limited in 1974. With a mission of

industrializing rural dairying, tapping and promoting the dairy industry with greater

development opportunities to the people of Andhra Pradesh.

Because of the changing scenario in the competitive environment in the last five years,

the role of Government and voluntary organization has been limited with a major focus

on private industry. Governing companies like Heritage, Cream line dairy, Ravila etc.

The role of NDDC and SAI Dairy has been subsided.

Keeping this in view and devised an effective marketing strategy for SAI Dairy with a

competitive orientation. “Madurai Milk Producer Co-operative Union Limited” is one of

the unit of Andhra Pradesh Dairy Development Co-operative Federation Limited is

selected.

1.3 OBJECTIVES OF THE STUDY

This project is based on the study on consumer buying behavior towards “ Sai Dairy

Milk”.

 The Main objective of the study is to know the consumer purchase

behavior towards Sai Dairy milk

 The study is to find out the various attributes in a product which results in purchase

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  To identify level of consumer satisfaction and the consumer needs

 To study the factors affecting the consumer buying behavior

 To offer pertinent suggestions to the company in understanding consumer behavior

1.4 SCOPE AND LIMITATION OF THE STUDY

As learning is a human activity and is as natural, as breathing. Despite of the fact that

learning is all pervasive in our lives, psychologists do not agree on how learning takes

place. How individuals learn is a matter of interest to marketers. They want to teach

consumers in their roles as their roles as consumers. They want consumers to learn about

their products, product attributes, potential consumers benefit, how to use, maintain or

even dispose of the product and new ways of behaving that will satisfy not only the

consumer’s needs, but the marketer’s objectives.

The Scope of My study restricts itself to the analysis of consumer buying behavior, with

special reference from “ SAI MILK”, Madurai. The scope of my study is also restricts

itself to Madurai region only. And the study depends on psychological aspects and the

opinions may differ from one consumer to another.

Limitations of the Study:

 The survey is restricted to Madurai tri cities only.

 Since the Sample size is 100 and the data may not represent the accurate results.

 The views expressed by the consumers may not be 100% accurate.

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 The time period of the project is only six weeks, which may not be sufficient for

the study

CHPATER 2

COMPANY PROFILE

DAIRY INDUSTRY

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In the history of world dairying, the year 1998 has been a lucky year for India. We

have just emerged as the highest milk producing country in the world and that too in

the 50th year of our independents. Increasing the annual milk production from 20

million tones in 1970 to around 14 million tones in 1998 is no mean achievement.

Infact, it is unique success story of India’s dairy development contributed by the

small holders.

Our country has the largest bovine population in the world (195 million cattle and 77

million buffaloes). The results of White Revolution are quite visible with our per

capital milk consumption rising to 210 g per day inspite of the ever increasing human

population. All the has largely been a developmental agency of governmental, non-

governmental and cooperative institutions.

Indian deriving has over the years created an identify of its own. It has also

succeeded in having a competitive edge due, to its low-investment, energy-efficient,

cost Effective production system. A recent survey conducted by the Food and

Agriculture Organization (FAO) of the United Nations has declared India as the top

milk producer in the world, surpassing USA. The credit for enabling India to reach

this milestone goes to millions of small and marginal farmers and land less labourers

for their untiring efforts and the institutional support provided by the National Dairy

development board under the Operation flood Programmed. Here, a noteworthy

aspect is that India has achieved this coveted position without giving any incentive or

subsidy to it dairy farmers unlike most of the developed dairying nations.

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 The dairy sector provides round-the-year employment which no other agri

business can do. Besides, it also provides a safety net to the weaker sections of our

society. But unfortunately this sector’s contribution to the Indian economy and its

growth potential have not yet been properly recognized. The industrial sector has been

regularly receiving several forms of subsidies and incentives since independence. The

agriculture sector too has its own share of privileges and subsidies. But, if one goes

through the budgetary allocations of all the plans made so far, dairying’s share is too

insignificant as compared to any other sectors. And, never any special incentive was

given to it. The dairy sector is also deprived of the special banking support as is provided

to the industrial as well as agriculture sectors.

EMERGING WORLD SCENARIO (Dairy Industry)

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Dairy Industry in the Emerging world Scenario:

Dairying has played a prominent role towards household nutrition security and

also in strengthening our rural economy. It has been organized as an instrument to bring

about socio-economic transformation. Also the dairying sector has helped national

economy by emerging as the largest milk producer in the world. The import dependent

Indian dairying soon become not only self sufficient but also poised for an export

oriented dairying nation. This has been primarily attributable to the implementation of the

Operation Flood Programme launched in 1970 under the aegis of the National Dairy

Development Board. The architect of the quite Revolution Dr. Kurien deserves special

compliments.

However, the gains of the White Revolution achieved through the cooperative

networking of the small and marginal farmers, and land less labourers are needed to be

sustained to cope with the rapid transformation that are now taking place consequent to

the GATT Agreement and establishment of the World Trade organization (WTO). In

future, international trade will be strongly regulated by the WTO regime. New ever and

stricgter Sanitary and Phytosanitary Standards are being framed for regulating quality

standards. Under these circumstances, our practices for production and processing milk

cannot stay at variance with the international standards.

EMERGING WORLD SCENARIO:

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The Uruguay Round of Multi-lateral Trade Negotiations signed on 15 th April. 1994 us

well as General Agreement on Tariffs and Trade (GATT) the world economies are

swiftly gearing to adjust with the situation arising due to the withdrawal of trade

subsidies. The major dairying countries of the world, which had heavily relied on these

subsidies, are now readjusting their internal economies in order to produce milk at the

competitive price. One sound economic principle guiding the trade globally is, "if a

commodity cannot be produced at competitive prices, it is wiser to import". Since such

changes were anticipated, most of the European Nations had the acumen of streamlining

their economies long back. The Eastern Europe has consciously reduced production of

milk from 39 MT in 1991 to 35 MT in 1998. In the same period, West Europe has

reduced milk. Production from 129 MT to 126 MT. Several other adverse factors, such as

the perceived image of production has led to a decrease in butter production on a global

basis. The world production of butter has declined from 5.03 MT in 1991 to 5.01 in

1997. Withdrawal of subsidies coupled with reduced demand of skim milk powder has

led to the decline of its production from 1500 MT to 1100 MT. It is paradoxical that as a

global impact of GATT, EU has resorted to conscious reduction of domestic milk

production, even though the demand for cheese and whole milk is rising. Consequently,

to fill up this gap, world trade of cheese has gone up from 950MT to 1300 MT during

1993-96. There has also been an increased from 1050 MT to 1300 MT in the global of

whole milk Powder.

EMERGING TRENDS IN MILK PROCESSING:

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 With the changing declining trends in the domestic/export markets as well as

profits for conventional dairy products, such as milk powder, butter etc., need for product

diversification that permits value addition, long life-cycle and greater income has become

quite obvious. Growing awareness towards the beneficial role of milk and milk products

in maintaining normalcy of human health has led to the development of a new range of

functional floods, also called 'health foods' or 'nutraceutical' or even 'mood

elevating/refreshing foods'. It is widely recognized that components derived from milk

such as immunoglobulin, lactoperoxidase, lactoferrin, lysozyime, vitamin binding

proteins etc, play an 'extra nutritional' which are formed during the passage through

digestive tract. Fermented milk products such as yogurt in particular provide beneficial

microbes, which favorably influence the microbial ecology of the gut-system. These, in

turn, effect various biochemical functions to protect human health. Biotechnology has

been successfully employed to develop genetically modified strains of dairy cultures that

tend to reduce risks of enteric infections, hypercholestemia,, rate of proliferation of an

cancer cells as well as augment immune system besides offering may other health

promoting attributes. The dairy industry in advanced countries is rapidly diversifying its

product mix to produce arrange of dairy foods that is targeted to reduce the role of

medicine in maintaining normalcy of dairy foods that is targeted to reduce the role of

medicine in maintaining normalcy of human health. Japan the world leader in this sector.

where the current market of US$ 5.5 billion is still last growing. In the USA 11 billion.

Hence, biotechnology, Bioengineering and food science offers new opportunities to

Industry, which we must capitalize through, required R&D efforts, both in the public and

private sectors.

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 Dairy industry is also fast diversifying to develop special food ingredients derived

from milk. Which can be deployed advantageously to improve the sensory quality

attributes. These include fractionated casemates whey protein concentrates, enzymatic

hydrolyses prepared by employing innovative energy efficient unit processes. Packaging

is another area, which is receiving intensive R&D inputs for developing low cost,

biodegradable materials to prevent further damage to the environment and ensure greater

food safety.

However, greater challenge lie before the Indian dairy industry in modernizing the

unorganized sector engaged in the preparation of wide range of indigenous milk products.

Intensive scientific, R&D and financial input are necessary to develop industrial

manufacturing and packaging system. Apart from the development of

continuous/mechanized systems for industrial production of ghee, khoa, gulabjamun,

shrikhand and burfi, very little progress had been made in this area. The weakest link is in

developing appropriate packaging systems that may conform to the international

standards of product safety, shelf life and labeling requirements. It is in this context, India

is yet to take advantage of UHT technology, which could otherwise help in minimizing

post-harvest losses and also accord greater physical access in remote and difficult areas.

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INDIA’S CHANGING SCENARIO (Dairy industry)

India's competitiveness:

Livestock sector is the backbone of India's economy in terms of income

employment equality sustainability and foreign exchange earnings. By virtue of

traditional practice of utilizing the crop resides as feed for the milk animals, India has

been able to achieve milk production of 70 million MT at a very competitive 'Farm Gate

Milk Price’ on global basis. India enjoys competitive edge over Newzealand, Australia

and the USA of being able to produce milk at a lower cost. Livestock products have

registered a compound growth rate of 5.26% per annum, during the preceding decade.

Milk and milk products account for 66% of the total value of livestock products. Another

noteworthy feature of Indian dairy scenario is that all the milk is produced by a very large

number of milk animals having low productivity. Thus, only marginal improvement ion

animal productivity is capable of making a substantial impact. On the other hand. in the

technologically advanced countries, even small targets for increased milk production

present major challenge, since animals have already attained their maximum genetic

potential and the production systems have also been optimized.

India has well-organized dairy infrastructure of 7,800 rural milk cooperatives and

a processing capability of abut 12million litre per day in about 280 dairy plants. India has

a strong HRD capability to meet the multi sectoral requirement of the dairy industry.

India has generated very valuable experience and competence in treopical dairying,

which can serve as model for developing countries. In particular, India has developed a

very precious R & D reservoir for buffalo; milk processing. This provides opportunities

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for export of technologies to partner countries through an integrated approach for

accessing remunerative markets.

With the liberalization of world economies, Indian dairy industry has also

ventured to explore the export markets. A rather modest, beginning has been made

through exports of milk powders, being Rs. 318.5 to 22 countries, mainly Bangladesh,

Srilanka, Nepal, UAE, the Philippines and the Netherlands

PROSPECTS OF CHEESE PRODUCTION IN INDIA

Cheese has the potential of emerging as the No. 1 dairy product in India, with its

present estimated demand of 1800 tones projected to rise to 30000 tonnes by 2000 AD.

The global cheese market is also beckoning the Indian producers. For, after the WTO

enforced withdrawal of the milk producer subsidy, European producers would Fine it

difficult to market cheese at competitive prices.

Prospects of cheese production in India is quite bright. This is because of the fact

that cheese has all the attributes of an ideal dairy product. Cheese is a fermented dairy

product. Fermentation has occupied a place of pride in the food preservation practices

from time immential. It improves nutritional value and enriches the flavor, body and

texture of the product. Fermented milk products have been reported to have therapeutic.

Anticarcinogentic and anticariogenic properties.

Cheese represents a balanced food with concentrated from of energy and good

quality? protein. As such, it is only food, which could prove to be an appropriate

substitute to non-vegetrial diet. Cheese has high food and nutritive value. It is an

excellent source of high quality protein, rich source of calcium and phosphorous, an

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excellent source of several fat-soluble vitamins. To consumers, it provides good

nutrition, variety. Convenience for use. Portability, food safety and novelty of flavor and

texture.

Process cheese spread and slices have proved to be an ideal bread-mate. The

consumption of bread is increasing very fast in India. Butter, the traditional spread for

bread, is not avoided because of its high fast content. The other conventional spread like

jam and jelly are considered as junk food. Thus it is the cheese, which can provide

nutritionally sound spread for bread.

STEPS INVOLVED:

Milk is procured from the farmers by the dairy units and goes through various

tests and processed to obtain good satisfactory results from the consumers. It involves the

following steps.

 Testing

 Chilling

 Pasteurization and chilling

 Packaging

TESTING:

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Milk procured undergoes through various tests such as:-

 Ph Test: The Ph value gives the measure of the time acidity of milk. Generally ph

ranges from 6.6-6.8. milk over ph 6.9 is considered as suspicious of disease or

lactation of milk.

 Acidity Test: It is used lo find out the quality and heat stability of

milk and also to check the content of lactic acid present in it.

 Sedimental Test: It presents a rapid and quantitative means indicating the

cleanliness of milk as regards to visible dirt.

 Alcohol Test: It is made to detect whether milk has tendency to curdle during the

sterilization process.

 On Boiling Test (COB): COB test is meant to have final confirmation of the quality

of milk. Since, with high acidity and salt content clots on boiling due to precipitation

of protein it is rejected.

 Fat test: It is conducted to estimate the fat percentage present in the milk

that is procured form the farmers.

CHILLING:

Milk procured from various areas throughout the settle from framers is brought to

their respective dairy units by solo milk tanker, where the milk is chilled. Milk is chilled

to very low temperatures so that it last longer and does not perish. This is very important

for milk storage, as it can be stored at very low temperatures only.

PASTEURIZATION AND CHILLING:

28
 Pasteurization is a process where milk is churned at. high speed and sterilized by

heating at high temperatures. Here the milk is made free from derived amount of fats,

edible oils and also disease causing germs after pasteurization process. Chilling process

takes place for longer storage of milk.

PACKAGING:

It is a technique of using most appropriate container to protect, carry, identify and

merchandise any product. Manufacturer desires his product to reach in safe delivery to

the consumers through the various stages of ; manufacture, storage, transport,

distribution and marketing. The packaging of any product is judged as follow:

 It must protect and preserve the commodity until it reaches the consumers.

 It must be suitable for selling and distribution system.

 It must attractive to the consumer.

 Easy to open, store and dispose.

 Reasonable in cost.

29
ATTRIBUTES

Many products are obtained from milk. They are:

 CREAM: It is obtained from cow or buffalo milk or of a combination there of which

separated from it by means of centrifugal force, where milk is rotated at the high

speed with which, the cream moves away from the axis. This cream is generated

during the rotation and is taken from the sides of the separator. Generally the fat

content in the cream is of the 25% taken from the sides of the separator. Generally the

fat content in the cream is of the 25%.

 BUTTER: Butter is a fat rich product containing about 80% of milk fats while the

rest is a water, salt curd and also colour is added to some types of the butter and

cooking butter.

 GHEE : It is the most important ingredient- in day life of nay Indian. Ghee is the

pure clarified fat derived solely from milk or curd or from desibuytter or from cream

to which no coloring or preservative is added. It is obtained by pre-stratification

method i.e.. Rise in temperature of milk to I 10-120c. the shelf life is 6 months only.

 CHEESE: It is obtained by draining after coagulation of milk with a harmless milk

cultures. It has a minimum of 42% of milk fat. The most common cheese used is the

cheddar cheese. It is hard, ripened cheese made from pasteurized milk to which small

amount of lactic is added. The shelf life of cheese is 4-6 months only.

30
 FROZEN PRODUCTS: The most common frozen products that water one's mouth

arc ice creams, kulfi and choc-bar. These are obtained from cow or buffalo milk or

combination there of or from cream. They have 10% milk fat and are prepared with

mixtures of dry fruits of nuts or both to have an excellent taste. These frozen products

are cooled below 4c only. The shelf life of froze products l-2rnonths only.

INDIGENOUS DAIRY PRODUCTS;

 PANEER: It is obtained from cow or buffalo milk or combination thereof by

precipitation with sour milk and lactic acid. The milk fat content is a minimum of

50% of the product.

 KHOA: It is obtained from cow or buffalo milk or a combination there of by rapid

drying. The milk fat content in a khoa is 20% product.

 DAHI : Dahi or commonly called curd is obtained from boiled milk by souring,

natural or otherwise, by a harmless lactic acid or bacterial culture.

 DRIED MILK : It is milk powder, which is prepared by spray drying of

fresh skimmed milk of cow or buffalo or a mixture thereof. It when mixed with water

becomes milk. Its shelf life is up to a period of 9 months.

31
SALES:

India is currently the second largest milk producer in the world after the USA

milk production has increased from 23 m MT in the years 1972-73 to 58.6 m MT in

1992-93 i.e a rise of 150% over a period of 20 years, this phenomenal rise of the dairy

sector in Indian can largely be attributed to the successful implementation of the

"operation flood" program space under NDDB.

In AP major quantity of milk is procured from Madurai districts. During the

'FLESH' season (SEP-MAR) and 'LEAN' season (Apr-Aug) of every year, maximum and

minimum amount of milk is respectively procured, Finally country's milk export is low

due to exploitation of farmers and improper utilization of sources.

SAI DIARY

PROFILE OF MADURAI DAIRY:

This chapter gives detailed information about the development availability under

taken by Madurai dairy and the existing management system of Madurai Dairy etc.

It is also contains of a fries profile of Madurai Dairy.

In Madurai districts around 60% of the population depends on agriculture of their

livelihood. It also has a tourist with a range of 3.7 lakhs hectors.

In Madurai district different types of cattle breed are found. There are certain

types of buffaloes in the District, according to the Animal husbandry department.

32
The buffalo living in Madurai are apart from production of milk, cattle’s are used for

agricultural purpose.

There is a Dairy plant in Madurai town and foremilk chilling centre. Their milk

chilling centres collect milk from collection centres in the villages. The collected

milk is chilled at the concerned chilling centre and it is transported to the Madurai

Dairy. The processed milk at Madurai Dairy is marketed to the milk consumers in the

tri-city of Madurai in the form of distribution.

Madurai s considered as Municipal Corporation which covers the entire area of

Madurai city and some sub urban, it covers there towns mainly , Dindukal and

Thirumangalam . Madurai is considered the centre of trade while H famous for

Government offices and educational Institutions. The importance was because of it’s

being Railway Junction.

DAIRY DEVELOPMENT ACTIVITIES IN MADURAI DISTRICT:

In Madurai District Organizational attempts to procure and distribute milk in the

year 1968. Milk supply of farmers of Madurai District was formed in Organized Co-

operative sector under the intensive milk supply scheme; these activities were looked

alter by the State Government Department of agriculture and Animal Husbandry.

Under this scheme a medium size of Dairy was sanctioned with a capacity of 12,000

litres per day, when the State Government has established the Dairy development in

1970. Madurai Dairy has bought under its shadow. Again when the state government

established Tamilnadu Dairy Development co-operation limited (APDDC LTD)

Madurai Dairy came under their control. The Government of Andhra Pradesh has

decided to implement operation Flood-II Programme in the state. A.P.Organization

33
structure of APDDCF Ltd., from 1981 onwards. At present Madurai is under the

supervision and control of APDDCF Ltd.

To meet the requirement of procedure as well as consumers in Madurai town, a

bulk cooler is installed at that period with the installation of cooler, milk supply to the

Madurai was started on 10th March 1969. The construction of building and

installation of plant and machinery was completed in 1971. Dairy opening ceremony

was help on September 1971. It was speed over as area of 5 acres and 24 guntas.

The cost of construction was more than Rs. 20 lakhs. An initial stage milk automatic

bulk machine with a capacity of 5,880 bottle per hour was installed. In the year 1982

the pre packed machined was instandand milk is now being supplied in polythene

sachets. At present there are two pre packed machines functioning each with a

capacity of 5000 milk sachets per hour. The milk in Madurai is distributed through

more than 100-booth need over the tri-city of Madurai. In addition to this milk is

also being supplied on credit to instructors like hospitals, hotel, Railways, canteen

and Central Jail etc., Relating to this Madurai Dairy has there Dairy parlors for

selling milk products like whole milk powder, ghee, butter, cheese etc.

34
 OBJECTIVE OF THE MADURAI DAIRY ORGANIZATION:

Madurai Dairy Organization is using “SAI milk” Brand labels to sell their

products to the consumers wherein some other states, the Dairy federation is using

“AGMARK” Brand to market their products.

Madurai Dairy is a District level unit and all the policy decisions are taken at the

head office level. Madurai unit is only a functioning unit, which operates the work to

achieve the objection of Dairy federation.

OBJECTIVES OF MADURAI DAIRY:

 To provide the good market for all rural as well as urban markets.

 To create awareness among Sai brand products like milk.

35
 Supply of pasteurized milk to the people of Madurai and its surroundings at

reasonable price.

 To increase the sales by improving the quantity of Sai brand milk.

 To avoid the distance and convenience of customer.

 To educate people to buy milk (Sai) through advertisement and marketing.

 Fulfillment of social obligation.

DISTRIBUTION METHODS IN MADURAI DAIRY:

Distribution of milk is done through three methods. They are

- Cash Sales method

- Advance Sales method

- Credit Sales method

The milk sales are being conducted in the tri-cities of Madurai through 98 booths is a

Credit Institutions. The sales have reached now up to 15,000 litres per day. For

prompting sales of company product the study of consumer behaviour is inevitable or

compulsory. Marketing manager should take decisions regarding. Brand, discount,

packaging, commission, advertising policy, gifts, free samples etc., by studying

consumer behavior.

MILK AND MILK PRODUCTS:

36
 Today APDDCF offers the widest spectrum of milk products in India, under the

brand name “Sai”. These include Ghee, Bhutter, Processed Cheddar, Chese and

Cheese spread, UHT Milk, flavoured milk, slim milk in Tetra packets, sterilized

Cream, Skim milk powder, Dairy Whitener, cooking butter and ice cream. Several

among these carry the Agmark, an attestation of quality by Government of India and

the ISI mark of Bureau of India standards. The brand “Sai” denotes quality &

quality, which makes it a trusted name in millions of house hold across the country.

In addition, APDDCF also manufactures products such as sterilized favour milk,

apnner, Doodh peda and Dairy parlours and a chain of retailers spread across

Tamilnadu .

ORGANIZATIONAL STRUCTURE:

With a strong desire to develop the dairy industry in the state, involving the milk

procedures in organizing the procurement production, processing and marketing of

the milk produced in rural areas. For this purpose, the Government of Tamilnadu has

taken a decision to convert the Andhra Pradesh Dairy Development Corporation

Limited into Tamilnadu Dairy Co-operative Federation Limited (APDDCF LTD) on

5th September, 1981. For the administrative convenience of APDDCF its

organization structure formed into milk sheds in 25 Districts of Tamilnadu . Each

milk shed is under the charge of a Joint Director or a Deputy Director.

State Level Apex Body

District Level APDDCF Unions

Milk
Unions

37
Village Level
Societies

Milk Producers co-op

societies

Three-tier Dairy Co-operative Structure

In Andhra Pradesh the Co-operative sector is having 3 tiers. It is having societies.

Union and federations. They are,

 At village level, milk producers Co-operative societies.

 At District level, milk producers Co-operative Unions.

 At State level Co-operative milk producers federation.

Out of 38 Districts of Tamilnadu Operating, Flood-II Programmed is being

conducted in 16 districts. This program cannot be adopted in these Districts because

their daily procurement is less than 20,000 liters per day.

Today, Dairy Industry in Tamilnadu has emerged as a powerful instrument of socio-

economic change. There are 63 Dairy units in different parts of the state including 48

milk chilling centres, 9 District Dairies and 6 milk product factories About 6,400

villages co-operative Societies are procuring milk from 11,900 villages among 286

routes. It is estimated that 5 lakhs milk producing families and 24 lakhs consumers

38
are benefited by the activities of the APDDCF. The dairy Industries concentrating on

increasing the procurement was 636 lakh liters. It is increased to 2.52 lakh liters in

the year 1985-1986 and it has increase enormously in 1992, 1993 to the effort of

8,000 lakh liters per day. In the present year 2006-07, the dairy industries

concerning on the increasing procurement was above 50, 000, 00 lakh liters per day.

39
40
41
 CHAPTER 3

REVIEW OF LITERATURE

1.Philip Kotler, “Marketing Management”, Pearson Publishers, 12th Edition, New

Delhi.

The author illustrates about the general methodologies over marketing management of

the products.

2.Leon Schifman & Lesile Lazer Kanulk, “Consumer Behavior” Eastern Economy

Edition Publishers 8th Edition, New York.

The author illustrates about the general buying pattern of the consumer over the products.

3.C.R. Kotari, “Research methodology”, Kalyani publishers, New Delhi, 1972.

The general process of research methodology was illustrated.

4.S.J. Bedker and G.C. Berry, “Marketing Research” 1st Edition, Oxford

University.

The general process of was Marketing Research illustrated

42
 CHAPTER 4

RESEARCH METHODOLOGY

This chapter describes the methodology of the study. This project is based on

information collected from primary sources. After the detailed study, an attempt has been

made to present comprehensive analysis of consumption of Sai Milk consumed by the

people. The data had been used to cover various aspects like consumption, consumer

buying behaviour and customer’s satisfaction regarding Sai Milk. In collecting requisite

data and information regarding the topic selected, I went to the residents of Madurai and

collected the data.

Survey design:

The study is a cross sectional study because the data were collected at a single point of

time. For the purpose of present study a related sample of population was selected on the

basis of convenience.

Sample Size and Design:

A sample of 100 people was taken on the basis of convenience. The actual consumers

were contacted on the basis of random sampling.

Research Period:

Research work is only carried for 5 or 6 weeks.

43
Research Instrument:

This work is carried out through self-administered questionnaires. The questions included

were open ended, dichotomous and offered multiple choices.

Data Collection:

The data, which is collected for the purpose of study, is divided into 2 bases:

 Primary Source: The primary data comprises information survey of “Consumer

Buying pattern towards Sai Milk”. The data has been collected directly from

respondent with the help of structured questionnaires.

 Secondary source: The secondary data was collected from internet, References

from Library.

44
 CHAPTER 5
DATA ANALYSIS AND INTERPRETATION

Table 5.1

BRAND OF MILK PREFERRED TO PURCHASE

S.No Brands No. of Respondents % of Respondents

1 Sai 35 35%
2 Jersey 15 15%
3 Mulkanoor 40 40%
4 Others 10 10%
Total 100 100%

Others
10%

Sai
35%

Mulkanoor
40%

Jersey
15%

The above graph depicts that majority of respondents (40%) are prefer the Mulkanoor, 35
of respondents are preferring Sai Milk.

45
 Table 5.2
MODE OF PURCHASE

S.No Attributes No. of Respondents % of Respondents

1 Milk Vendors 35 35%
2 Milk Dealers 20 20%
3 Retail Stores 45 45%
4 Others 0 0%
Total 100 100%

Others
0%

Milk Vendors
35%
Retail Stores
45%

Milk Dealers
20%

From the above graph, it is observed that 45% of respondents are buying the Milk from

Retail stores, 35% are buying the Milk from Milk Vendors.

46
 Table 5.3

FORM OF MILK FOR CONSUMPTION

S.No Attributes No. of Respondents % of Respondents

1 Loose Milk 35 35%
2 Packet Milk 48 48%
3 Both 17 17%
Total 100 100%

Both, 17
Loose Milk,
35

Packet
Milk, 48

The above graph shows that 48% of respondents are buying the milk in Packet form, 35%

of respondents are in Loose Milk.

47
 Table 5.4

MODE OF COMMUNICATION

S.No CHANNELS No. of Respondents % of Respondents

1 Advertisement 0 0%
2 Retail Stores 75 75%
3 Neighbors / Friends 25 25%
Total 100 100%

Advertisemen
Neighbors / t
Friends 0%
25%

Retail Stores
75%

From the above graph, it is known that 75% respondents are came to know about Milk

from Retail Stores, 25% of respondents are came to know by Neighbor/Friends and

Advertisement.

48
 Table 5.5

QUANTITY OF MILK CONSUMED (DAILY)

S.No Attributes No. of Respondents % of Respondents

1 ½ Lit 45 45%
2 1 Lit 35 35%
3 1 ½ Lit 8 8%
4 2 Lit 12 12%
Total 100 100%

2 Lit, 12

1 ½ Lit, 8

½ Lit, 45

1 Lit, 35

The graph indicates that 45% of respondents are consuming ½ Ltr Milk, 35% of

respondents are consuming 1 Ltr Milk.

49
 Table 5.6

ATTRIBUTES COMPELLING TO PREFER MILK BRAND

S.No Attributes No. of Respondents % of Respondents

1 Margin 35 35%
2 Quantity 30 30%
3 Demand 10 10%
4 Brand Image 25 25%
Total 100 100%

Brand
Image, 25

Margin, 35

Demand, 10

Quantity, 30

The graph depicts that 35% of respondents are compelled to buy the Milk by Margin as

main attribute, 30% of respondents are Quantity as main Attribute.

50
 Table 5.7

PREFERANCE TO BUY THE SAI BRAND FOR EVER

S.No Options No. of Respondents % of Respondents

1 Yes 65 65%
2 No 35 35%
Total 100 100%

No
35%

Yes
65%

The graph depicts that 65% of respondents are willing to continue the sai Milk forever,

35% of respondents are not willing to continue the sai Milk.

51
 Table 5.8

OPINION ON QUALITY OF SAI BRAND MILK

S.No Opinion No. of Respondents % of Respondents

1 Excellent 15 15%
2 Good 35 35%
3 Average 45 45%
4 Poor 5 5%
Total 100 100%

Poor
Excellent
5%
15%

Average
45%
Good
35%

The above graph shows that 45% of respondents are saying Quality of sai Milk is

Average, 35% are saying well.

52
 Table 5.9

PURPOSE OF CONSUMING THE MILK

S.No Attributes No. of Respondents % of Respondents

1 Tea/Coffee 45 45%
2 Feeding Children 30 30%
3 Curd 15 15%
4 All 10 10%
Total 100 100%

All
10%

Curd
15% Tea/Coffe
e
45%

Feeding
Children
30%

The graph depicts that 45% of respondents using the milk for the purpose of Tea/Coffee,

30% are for the purpose of Feeding Children.

53
 Table 5.10

ROLE OF ADVERTISING IN PROMOTING MILK BRANDS

S.No Options No. of Respondents % of Respondents

1 Yes 65 65%
2 No 35 25%
Total 100 100%

No
35%

Yes
65%

Graph shows that 65% of respondents are saying that advertisement plays a role to

promote the milk brands, 35% are saying no.

54
 Table 5.11

PROBLEMS ENCOUNTERED IN USAGE MILK BRAND

S.No Options No. of Respondents % of Respondents

1 Yes 20 20%
2 No 80 80%
Total 100 100%

Yes
20%

No
80%

The graph shows that 20% respondents are facing the problem while consuming of Milk,

80% of respondents are not facing any problem.

55
 Table 5.12(1)

ADOPTION OF OTHER BRAND

Opinion No. of Respondents % of Respondents

YES 95 95%
NO 05 05%
Total 100 100%

IF YES

Table 5.12(2)
Opinion No. of Respondents % of Respondents
Jersey 30 30%
Mulkanoor 50 50%
Others 20 20%
Total 100 100%

NO
5%

YES
9 5%

Others, 20
Jersey, 30

Mulkanoor,
50

The above graphs depicts that 95% respondents are changing their brand and they will

prefer 50% Mulkanoor and 30% of respondents will prefer Jersey.

56
 Table 5.13

OPINION ON PRICE OF SAI MILK

S.No Reasonable respondents percentage

1 yes 75 75%
2 No 25 25%
total 100 100%

No
25%

yes
75%

Most of the people i.e, 75% of people accepted that sai milk price is reasonable.25% of

the people don’t accept the price of sai milk.

57
 Table 5.14

NEED FOR CHANGES IN SAI BRAND Milk

S.No Change Options No. of Respondents % of Respondents

1 Quantity 0 0%
2 Quality 10 10%
3 price 15 15%
4 Service 75 75%
Total 100 100%

Quantity Quality
0% 10%

price
15%

Service
75%

Most of the people i.e, 75% people want changes in Sai milk product,15% of the people

want change in price of sai milk.

58
 CHAPTER 6
FINDINGS

CONCLUSIONS:

 Majority of the respondents are using packet milk.

 Most of the respondents are prefer to purchase Mulkanoor and Sai.

 Majority of the respondents are consuming milk for tea/coffee and

feeding children.

 Maximum no of respondents consume ½ liter milk.

 Most of the respondents are preferring packet milk.

 Maximum of the respondents are aware of Sai milk through kirana, general

stores and neighbors.

 Most of the respondents accepted that Sai milk price is reasonable.

 Most of the respondents feel that Sai milk is having quality.

 Majority of the respondents change their brand when Sai milk not available in

the market.

 Majority of the respondents want changes in Sai milk product

59
SUGGESTIONS:

1. Sai Dairy should concentrate more on quality to improve the sales of product.

2. The Organization should improve the sales of product, more advertising can be

used.

3. Look out for strategies, which will help in being different from the competitors

like having catchy “ PUNCH LINES” which could attract the customers

4. The Sai Dairy should improve on availability and distribution of milk

5. The Organization can provide the milk booths to convince the customers in

different locality.

6. As Mulkanoor is consumed by many people so the Sai Dairy Milk should

maintain some strategies to improve the Sales in market.

7. Print date of packing on the sachets in order to discourage the supply of old stock

60
 Bibliography

1. Philip Kotler, “Marketing Management”, Pearson Publishers, 12th Edition, New

Delhi.

2. Leon Schifman & Lesile Lazer Kanulk, “Consumer Behavior” Eastern Economy

Edition Publishers 8th Edition, New York.

3. C.R. Kotari, “Research methodology”, Kalyani publishers, New Delhi, 1972.

4. S.J. Bedker and G.C. Berry, “Marketing Research” 1st Edition, Oxford

University.

References :

www.apdairy.com

www.nddb.com

www.apddcf.govt.in

61