INTRODUCTION

INTRODUCTION
Custmor satisfaction a business term is measure of how products and services
supplied by a company meat or surpass customer expection. It is seen as a key
performance indicator within business and is part of the four perspective of a balanced
scorecard. Every human being is a consumer of different produces. If there is no
consumer,there is no business. Therefore,customer satisfaction is very important to evary
business person.

Definitions of marketing:
Marketing is a Social and managerial process by which individuals and groups
obtain what they need and want through creating, offering and exchanging products of
value with others.
-

Philip Kotler

Marketing consists of all activities by which a company adopts itself to its

environment creativity and profitability.
-

Ray Corey

The marketing concept:

The marketing concept was born out of the awareness that marketing starts with
the determination of consumer wants and ends with the satisfaction of those wants. The
concepts puts the consumer both at the beginning and at end of the business cycle. It
stipulates that any business should be organized around the marketing function.
A business cannot succeed by supplying products and services that are not
properly designed to serve the needs of the customers. Hence, The entire business has to
be seen from the point of view of the customers.

MARKETING:
Marketing is the process of planning and executing the conception, Pricing,
promotion and distribution of ideas, goods and services to create exchanges that satisfy
individual and organizational needs.
In a most simple and non-technical language, marketing may be explained as a
business function entrusted with the criterion and satisfaction of Customer to achieve the
aims of business itself .In popular usage, marketing refers to the promotion of products,
especially advertising and branding. However in professional usage the term has a wider
meaning. It can be divided into four sections often called as marketing mix and it
consists four Ps. They are:

PRODUCT:
The product management aspect of marketing deals with the specifications of the
actual good or service, and how it relates to the end-user needs and wants.

PRICE:
This refers to the process of setting of the price for the product, including
discounts.

PLACE:
Place or distribution refers to how the product gets to the customer
For example, point of sale of placements or retailing.

PROMOTION:
This includes advertising, Sales promotion, publicity and personal selling, the
various methods of promoting the product, brand or company.

CONSUMER / CUSTOMER SATISFACTION:

The buyers form a judgment of value and acts on it whether the buyer is satisfied
after purchase depends upon the performance in relation to the buyer expectations.

DEFINITION OF CUSTOMER SATISFACTION:

Satisfaction is the level of persons felt state resulting from comparing a products
perceived performance in relation to the persons expectations.
The satisfaction level is a function of the difference between comparing products,
perceived and expecting. An experience of one of the three broad levels of satisfaction.

If the performance falls short of expectations, the customer is dissatisfied.

If the performance matches the expectations, the customer is satisfied.

If the performance exceed the expectations, the customer is highly satisfied,

pleased or delighted.
Today most successful companies are raising expectations and delivering the

performance to match. These companies are aiming for total consumers satisfaction
(TCS).

FOUR BASIC FEATURES OF MODERN MARKETING:

Modern marketing is consumer oriented.
Modern marketing starts and ends with the customer.
Modern marketing preceds and succeeds production.
Modern marketing is the guiding elements of business.

IMPORTANCE OF MARKETING:

A high level of marketing activity is a prerequisite for a high level economic

activity. It has been aptly remarked nothing happens until some body sells something.
At present the urgency is for increased marketing and not merely for increase in
production. This alone shows the importance of marketing as a potential force that
commands high significance for society as a whole.

WHAT IS A BRAND?
Perhaps the most distinctive skill of professional marketers is their ability to
create maintain, project and enhance brands. Marketers say that branding is the art and
cornerstone of marketing.

THE AMERICAN MARKETING ASSOCIATION:

Defines Brand as follows A brand is a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods or services of one seller or group of
sellers and to differentiate them from those of competitors.
It can be a name, trade mark, logo, or other symbol. Under trademark law, the
seller is granted exclusive right to the use brand name in perpetuinity. Brands differ from
other assets such as patents and copyrights, which have expiration dates.
A brand is essentially a sellers promise to deliver a specific set of features, benefits and
services consistently to the buyers. The best brands convey a warranty of quality. But a
brand is an even complex symbol.

IT CAN CONVEY UP TO SIX MEANINGS:

1. ATTRIBUTES:

A brand bring to mind certain attributes. Mercedes suggests expensive, Well

built , well-engineered, high-prestige automobiles.

2. BENEFITS:
Attributes must be translated into functional and emotional benefits. The attributes
durable could translate into functional benefits. There is no need to buy another car for
several years. The attribute expensive translates into the emotional Benefit the car
makes me feel important and admires.

3. VALUES:
The brand also says something about the producers values. Mercedes stands for
high performance, safety and prestige.
4.PERSONALITY:
The brand can project, a certain personality. Mercedes may suggest a non-sense
boss (person), a reigning lion (animal), or an austere place (object).

5. CULTURE:
The brand may represent a certain culture. The Mercedes represents German
culture; organization efficiency, high quality.

6. USERS:
The brand suggests the kind of consumer who buys or uses the product. We would
expect to see a 55-year-old top executive behind the wheel of a Mercedes, not a 20 year
-old secretary.
If company treats a brand only as a name, it missess the point. The branding
challenge is to develop a deep set of positive associations for the brand. Marketers must
decide at which level(s)to fix the brands identity. One mistake would be to promote only

attributes. First, the buyer is not as interested in attributes as in benefits. Secondly,

competitors can easily copy attributes which may become less desirable later.
Promoting the brand is one of the benefits, but it can also be risky. Suppose
Mercedes touts its main benefits as high performance. Then several competitive brands
emerge with performance as compared to other benefits. Mercedes needs the freedom to
maneuver into a new benefits positioning.

Evolution of Customer Satisfaction :

There are a number of reasons why the study of Customer satisfaction developed
as a separate marketing discipline. Marketers had long noted that consumers did not
always act or react as marketing theory suggested they would. The size of the consumer
market in this country is vast and constantly expanding. Lots of money was being spent
on goods and services by tens of millions of people. Consumer preferences were
changing and becoming highly diversified. Even in industrial markets, where needs for
goods and services were always more homogenous than in consumer markets, buyers
were exhibiting diversified preferences and less predictable purchase behavior.
To better meet the needs of specific groups of consumers, most marketers adopted
a policy of market segmentation, which called for the division of their total potential
markets into smaller, homogeneous segments for which they could design specific
products and/or promotional campaigns. They also used promotional techniques to vary
the image of their products so that they would be perceived as better fulfilling the specific
needs of certain target segments- a process not known as positioning. Other reasons for
the developing interest in Customer satisfaction included the rate of new product

development, growth of the consumer movement, public policy concerns, environmental

concerns, and the growth of both nonprofit marketing and international marketing.

Indeed, a major stumbling block to many international marketing efforts has been
the general lack of familiarity with the needs, preferences, and consumption habits of
consumers in foreign markets. Marketers now use cross-cultural consumer research
studies as the basis for product development and promotional strategies to meet the needs
of targeted foreign consumers.

Evolution of Marketing Concept:

The field of consumer behavior is rooted in the marketing concept, a marketing
strategy that evolved in the late 1950s, after marketers passed through a series of
marketing approaches referred to as the production concept, the product concept, and the
selling concept.
When World War II ended, marketers found they could sell almost any good they
could produce to consumers who had done without. While the nation's manufacturing
facilities were dedicated to the production of war material. This marketing approach is
called a product orientation its implicit marketing objectives are cheap, efficient
production and intensive distribution. A production orientation is a feasible marketing
strategy when consumers are more interested in obtaining the product than they are in its
specific features.
A production orientation should not be confused with a product orientation, which
assumes that consumers will buy the product that offers them the highest quality, the best
performance, and the most features. A product orientation leads a company to strive

constantly to improve the quality of its product, with a result often referred to as
"marketing myopia" - that is, a focus on the product, rather than on the consumer needs it
presumes to satisfy. A marketer in love with its product may improve it far beyond its
worth to the consumer, passing the cost of unneeded quality or special features on to the
public. In highly competitive market, some companies keep adding unnecessary features
in hopes of attracting buyers.
A natural evolution from both a production orientation and a product orientation is
selling orientation, in which a marketer's primary focus is selling the products that it has
unilaterally decided to produce.
The implicit assumption in the selling orientation is that consumers are unlikely to
buy a product unless they are actively and aggressively persuaded to do so. The problem
with a selling orientation is that it does not take consumer satisfaction into account. When
consumers are induced to buy products that they don't want or need, any resulting
unhappiness is likely to be communicated through negative word-of-mouth that may
dissuade other potential consumers from making a similar purchase.
Furthermore, when the product does not fulfill a consumer need, it is unlikely that
a repeat purchase will be forthcoming. In the late 1950's some marketers began to realize
that they could sell more goods, more easily, if they produce only those goods that they
had predetermined consumers would buy. Instead of trying to persuade customers to buy
what they had already produced, marketing oriented firms endeavored to produce only
products that they had first confirmed consumers would buy. Consumer needs and wants
became the firm's primary focus. This consumer-oriented marketing philosophy came to
be known as the marketing concept. The key assumption underlying the marketing

concept is based on the premise that a marketer should make what it can sell, instead of
trying to sell what it has made. While the selling concept focused on the needs of the
seller, the marketing concept focuses squarely on the needs of the buyer.
The widespread adoption of the marketing concept by American business
provided the impetus for the study of consumer behavior. To identify unsatisfied
consumer needs, companies had to engage in extensive marketing research. In doing so,
they discovered that consumers were highly complex individuals, subject to a variety of
psychological and social needs quite apart from their survival needs. They discovered that
the needs and priorities of different consumer segments differed dramatically and that to
design new products and marketing strategies that would fulfill consumer needs they had
to study consumers and their consumption behavior in depth. Thus, the marketing
concept laid the ground work for the application of consumer behavior principles to
marketing strategy.

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OBJECTIVES OF THE STUDY:

To study customer Awareness of Sangam Milk Products Pvt.Ltd., among
customers in Guntur.
To study the tools used to create awareness among prospective user.
To know the customer satisfaction on performance of dealers.
To know the motivating factors to buy the Sangam Milk Prodcuts Pvt.Ltd.
To know the various factors which influence the customers to switch to Sangam
Milk Products Pvt.Ltd.
To offer suitable suggestions based on the study.

11

METHODOLOGY:
This study is done using the following primary and secondary data sources:

Primary Data:
The primary data was collected by a market survey in Guntur. Questionnaire was
prepared and administrated by talking a sample of 100 consumers' different categories of
consumers like students, businessmen and employees.

Secondary data:
The secondary data comprises of various books, journals, periodicals and other
published magazines. Data was also collected from the company's record and from the
websites

SAMPLE DESIGN:
Sample Size:
A total of 100 respondents were taken for the study
Sample Plan:
The selection of sample was taken from area in and near Guntur and was based on
convenience.
Sample Technique:
Non probabilistic convenience sampling technique has been used.

12

NEED OF THE STUDY:

Customer satisfaction is the key element for the success or failure of an

organization and it is the only element to measure the customer loyalty and
satisfaction.

It helps to offer the Total Quality Product along with price, promotion and place
that satisfies the customer.

It helps to the marketers to collect the information required particularly on

product performance.

Study on customer satisfaction is done to know whether the end user is satisfied
completely or not.

13

SCOPE OF THE STUDY:

The project is aimed to identify how Sangam Milk Products Pvt.Ltd.,. is creating
awareness in the market and to study its position in the market. What factors make
Sangam Milk Products Pvt.Ltd.,. as the best one in the market. The scope of a Local milk
products will depend on the extent and type of housing needs, the level of support for
pursuing particular housing policies, and other local circumstances facing councils.
Councils will need to determine the appropriate approach and directions for their areas
under local conditions.

14

LIMITATIONS OF THE STUDY:

The sample size was comparatively very small compared to the population and
there are chances that it my not represent the whole population.

A few of the question asked was ranking based and hence there was every
possibility of biased user opinion.

The time and cost factors affected the size of the sample.

Since the study is involved in gathering the information from upper to highermiddle class people interaction with them because difficult.

Some respondents did not provide the requisite information.

There may be respondents bias.

15

INDUSTRY PROFILE

16

INDUSTRY PROFILE
INTRODUCTION:
The popular adage nothing succeeds like success is applicable to the dairy
development in India. If the country witnessed the green revolution leading to selfreliance in food grains in the sixties and the seventies, the decades of the eighties and the
nineties witnessed the white revolution. Indian total milk production is ranked first in
the world followed by the United States. Initially dairying was largely an unorganized
activity. By and large land holding farmers kept cattle mainly for bullock production.
Milk was essentially a byproduct. The surplus after domestic consumption was either
converted into conventional products mainly ghee and sold to middle men who cater to
the needs of the market.
As India enters an era of economic reforms, agriculture, particularly the
livestock sector, is positioned to be a major growth area. The fact that dairying could play
a more constructive role in promoting rural welfare and reducing poverty is increasingly
being recognized. For example, milk production alone involves more than 70 million
producers, each raising one or two cows/buffaloes. Cow dung is an important input as
organic fertilizer for crop production and is also widely used as fuel in rural areas. Cattle
also serve as an insurance cover for the poor households, being sold during times of
distress
There was an increasing demand for milk from the urban areas. There arose a need for
the farmers to increase the production of milk. Since the demand in the urban scenario is
rapidly increasing so do the farmers generate the supply? Further the new dairy plant
capacity approved under the Milk and Milk products order (MMPO) has exceeded 100

17

million l/p/d. The new capacity would surpass the projected rural marketable surplus of
milk by about 40 percent by 2005.
EVOLUTION:
The origin of dairy farms under public management dates back to 1886 when the
department of Defense established a few dairy farms in that year to supply milk and milk
products to the British troops. The next step was initiated during the First World War
In 1914, the Department of Defense on the advice of the Board of
Agriculture advised the Government in 1916, to appoint imperial dairy expert. The next
important step was the decision to conduct a census of livestock. The Board of
Agriculture carried out the livestock census in 1919 as a preparatory action for planned
dairy development. In 1920, the imperial expert recommended to the Government for the
establishment of a training center to meet the manpower requirements for managing the
Defiance Dairy Farms. By this time there were three dairy farms and until 1923 the
British Governments approach towards dairying was confined to milk requirements of
the military only. After 1923, diploma course in dairy were started at Bangalore.
Dr. N.C. Wright, Director, Dairy Research institute, Scotland who was
invited to India in 1936 for reviewing the progress of dairying in the country has made
two recommendations: 1. Industry needs have to be solved by developing own technology and technologists in
the country.
2. India is country of villages, of which most inhabitants are small, marginal farmers and
landless laborers. Development should be promoted only on co-operative lines.

18

In 1937, the Lucknow Milk producers co-operative Union limited was

established paving the way for the organization of such union in districts and state.
In 1945, the Famine enquiry commission in its report emphasized the need
for developing fodder supply for increasing milk production and recommended the
adoption of mixed farming with a place for fodder and crop rotation. As a sequel to this,
under the Greater Bombay Milk Scheme, milk was procured from Kaira district, Gujarat
by the private dairy. That gave way to the idea of creating an institutional structure for
dairying on co-operative lines.
THE ROOT CAUSE:
In the forties one firm Polsons dominated the dairy industry. Established
by rather enterprising gentlemen who discovered in Kaira district, of what was then
Bombay presidency, produced a good deal of milk. He established a creamery and for a
while the name poisons was synonymous with butt-much as Amul is today.
One of Paulsons businesses is to supply milk to Bombay. As Karia district
was an abundant source of the commodity, Polson was chosen to procure it from there.
He in turn, entered into an arrangement with a number of contractors who actually went
to the villages and collected the milk. Everyone was happy. Bombay relieved reasonably
good quality milk and Polson made a handsome profit. The contractors too manage to
earn large margins by over quoting the farmers. It was only the poor farmers who were
unhappy for it. They invested in the animal feed and fodder and they put in their labor;
yet, it was they who received the smallest share of the Bombay consumers rupee. The
arrangement benefited everyone but them.

19

THE FIRST STEPS FORMATION OF KARIA UNION

Realizing that something needed to be done about the unequal balance of
wealth, they turned to Sardar Vallabhai Patel for advice. Sardar Patel knew that their only
chance of earning a decent income was when they themselves gain control over the
resources they created. He also knew that the co-operatives offered them the nest chance
of gaining that control. So he advised them to stop selling milk to Polson and form a cooperative milk producers union (AMUL) was born in 1946
The co-operative then passed through some very difficult times and eventually
become a model of co-operative dairying throughout the world.
The AMUL co-operative was started by a handful of members initially handling
only 250lt milk a day. Over the years, this union has grown from strength to strength and
today AMUL handles over 80,000 it of milk per day. There are 91 village Milk
cooperative societies. In 1988-89 the turnovers were 1,700 million and its assets were
Rs.200 millions.
The focus of the union was on production by the masses, not mass production.
By the early sixties, the modest experiment in Kaira had not only become a success,
people began to recognize it as such. Farmers from all parts of Gujarat came to learn it.
They went back to their own districts and started their own cooperatives. The resulttogether, the district milk producers unions of Gujarat own the Gujarat co-operative Milk
marketing federation which markets the milk and milk products manufactured by its
owners. Last year the federations turnover was over Rs1700 cores making it the largest
in the food industry? Besides the dairy plant, the AMUL owns cattle feed plant producing

20

over 400 tons of balanced cattle feed a day. It manufactures a wide range of products,
including milk power, butter, cheese, chocolates and malted beverages.
ESTABLISHMENT OF NATIONAL DAIRY DEVELOPMENT BOARD (NDDB):
The Government of India had established the National Dairy Development Board
(NDDB), an autonomous body headquartered at Anands Co-operative in India. In order
to develop dairy in India, NDDB drew plans for operation flood.
THE NEXT ACHIEVEMENT: OPERATION FLOOD
In the late sixties, the board drew up a project called Operation Flood (OF)
meant to create a flood of milk in Indias villages with funds mobilized from foreign
donations. Producers co-operatives, which sought to link dairy development with milk
marketing, were central plank of this project. The Operation Flood, which started in 1970,
concludes its third phase in 1996 and has to its credit these significant results:
The enormous urban market stimulus has led to sustained
Production increases, raising per capita availability of milk to early 200 grams
per day.
The dependence on commercial imports of milk solids are alone away with.
Modernization and expansion of the dairy industry and its infrastructure,
activating milk grid.
Marketing expanded to supply hygienic and fair priced milk to some 300
million consumers in 550 cities and towns.
A nationwide network of multi-tier producers co-operative, democratic in
structure and professionally managed, has come into existence. Millions of

21

small producers participate in an economic enterprise and improve the quality

of their life and environment.
OPERATION FLOOD:
A recent World Bank audit shows that of the Rs.200 crores bit invested in
Operation Flood 2, the net return into the rural economy has been a whopping Rs.24, 000
cores per year over a period of ten years, or a total of Rs.40, 000 cores in all. No other
major development program has matched this input-output ratio. Operation Flood,
launched in 1970, has been instrumental in helping the farmers mould their own
development. Thus helping reach milk consumers in 700 towns and cities though a
National Milk Grid It also helped eradicate the need for middlemen thereby reducing the
seasonal price variations As a result of the co-operative structure the whole exercise of
production and distribution of milk products has become economically viable for farmers
to undertake on their own. In this manner the farmer himself can enjoy the fruits of his
own labor, instead of surrendering a majority of the profit to corrupt middlemen.
THREE PHASES OF DEVELOPMENT
The scheme sought to establish milk produces co-operatives in the villages and
make modern technology available to them. The broad objectives are to increase milk
productions (a flood of milk) augment rural incomes and transfer to milk producers the
profits of milk producers the profits of milk, marketing which are hitherto enjoyed by
well-to-do-middlemen.
PHASE1:
Phase 1 of Operation Flood was financed by the sale within India of
skimmed milk powder and butter oil gifted by the EC countries via the world food

22

program. As founder-chairman of the National Dairy Development Board (NDDB) of

India Dr. Kurien finalized the plans and negotiated the details of EEC assistance. He
looked after the administration of the scheme as found-chairman of the erstwhile Indian
Dairy Co-operation, the project authority for Operation Flood. During its first phase, the
project aimed at linking Indias 18 best milk sheds with the milk markets of the four
metropolitan cities of Delhi, Mumbai, Calcutta and Madras.
PHASE2:
Phase 2 of the project, implemented during 1981-85 raised this to some 136
milk sheds linked to over 290 urban markets. The seed capital rose from the sale of
WFP/EEC gift products and World Bank loan had created, by end 1985, a self-sustaining
system of 43,000 villages co-operatives covering 4.25 million milk producers. Milk
powder production went up from 22,000 tons in the pre project year to 1, 40,000 tons in
1989, thanks to dairies set up und Operation Flood. The EEV gifts thus helped to promote
self-reliance. Direct marketing of milk by producers co-operatives resulting inn the
transfer of profits from milk contracts increased by several million liters per day.
PHASE3:
Phase 3 of Operation Flood (1985-1996) enabled dairy co-operatives to
rapidly build to the basic up the basic infrastructure required to procure and market more
and more milk daily. Facilities were created by the co-operatives to provide better
veterinary first-aid health care services to their producers members.
ACHIEVEMENTS UNDER OPERATION FLOOD:
The main objective of Operation Flood was achieved by vertical integration
of milk procurement, processing and marketing through a three-tier co-operative structure

23

by organizing 60,280 village co-operative societies (VCS) in 173 milk shed having 6.61
million farmers by September 1989. Not only that, there are today, 1230 rural milk
processing plants of 13.9 MLPE (million liters per day) capacities.
The milk production has increased from 20.74 million tons in 1969-70 to 4807
million tons in 1988-89 while consumption capacity increased from 107 Kg/ days in 168
Kg/day. The increase in milk production was 6.6 per annum without altering the basic
land-holding structure, farming system and ownership of cattle.
The infrastructure build to link producers directly with the urban consumers
had helped to transfer 75% of the consumption price to the producer which was the main
incentive to increase milk production. Payments received by the farmers rose from
Rs.1.75 billion during 1980-81 to over Rs.8 billion by 1988-89
The milk grid was developed to link good milk producing areas with the four
metropolitan city milk plants by rail milk tankers and road milk tankers. Today milk is
transported from one part of the country to another by rail tankers.
With increase in local production of milk powder and butte, the import of
commodities has been significantly reduced. The import accounted for 60% of the milk
throughout the mid fifties. While it had dropped to 6% by the mid-eighties
There is no more rationing and quota card system, for the purchase of milk for
consumers convenience. UHT tanned shelf milk was introduced in the mid-eighties
which are slowly gained in Popularity. Operation Flood was successful because the
Project was based on a sound and successful model of the Anand dairy cooperative. The efficient handling of the gifted commodity was the land mark of success of
Operation Flood.

24

DEVELOPMENT OF DAIRY IN NINTIES:

The momentum gained in the dairy through co-operatives during the last 20 years
will now take India into nineties as major dairying country of the world. The countrys
milk production in the early sixties which was about 20 million tons has touched a record
of 56 million tons. It is likely to reach about 80 million tons by 2000 AD. India which one
time was dependant on other countries for products such as milk powder, table butter and
cheese has now become self sufficient. It has even started exporting some of them in
small quantities simultaneously efforts are made to expand milk procurement, processing
and marketing to meet the growing demand for milk products.
DAIRY CO-OPERATIVES:
In our country, the co-operative movement owes its development to the initiative
of the Government. It is only during 1950s that Tamil Nadu, Gujarat and Uttar Pradesh
took some important steps in organizing Dairy Co-operative sector, provided a model for
the milk producers. Co-operatives in Gujarat and other states provided guidance and
policy direction. State level federations of Dairy Co-operatives have been formed in
different states.
The entire institutional network of the co-operatives comprises of 22 Federations,
173 unions, 75 thousand Dairy Co-operative societies and over 7 million farmers.
Members during 1989-90 collected an average 10 million it of milk in a day and paid
about 1200 cores of rupees in a year.

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MAIN AIM OF DAIRY INDUSTRY IN CO-OPERATIVE SECTOR

Formation of co-operative units of milk producers in every village.

To improve cattle wealth of goods breed which are imported for milk production?

To avoid contaminated diseases buy using proper medicines and injunctions.

Providing the availability of good breed seeds so as to improve the cattle feed.

Industry mobile hospitals to provide free medical facilities to cattle of the

dairy and avoid diseases.
So from the above aims of the co-operative unions, it is crystal clear that the co-

operative sector would be instrumental in increasing the milk production.

To put the above programmers to action in our district with the co-operation of
National Dairy Development Board, a Three-Tier programmed was started in 1980. In
relation to it 198 milk producers co-operative unions have been set up at village level.
THE THREE-TIER SYSTEM:
The Three-Tier system consists of:
1. Primary Dairy Co-operative societies at village level
2. Co-operative Unions district level.
3. Federation at state level.
MILK SHEDS/UNIONS:
Operation flood programmer has been identified into milk sheds/unions.
NO
1
2
3
4
5
6
7
8
9

MILK SHEDS/UNIONS
Visakha
Godavari
Krishna
Guntur-Prakasam
Chittor
Kuddapha
Kurnool
Nalgonda-Ranga reddy
Medak-Nizamabad

DISTRICTS
Srikakulam, Vizianagaram, Vizag
East and West Godavari
Krishna
Guntur-Prakasam
Chittor
Kuddapaha
Kurnool
Nalgonda-rangareddy
Medak-Nizamabad

26

COOPERATIVE MARKETING:
Cooperative dairy societies have played a major role in the marketing of milk in
India. Major quantity of milk is produced in the rural area while the profitable market for
milk and milk products is largely in urban areas. However the quantity of milk available
for sale for an individual farmer is very less. It becomes difficult for them to send such a
small quantity to urban markets on their own. They face a number of problems such as
inadequate transport facilities and absence of proper marketing. Therefore the role played
by the dairy Cooperatives in building.
Addition to the arrangement of sale of milk, the dairy cooperative are also expected to
provide veterinary aids, supply cattle needs and arrange for the supply of credit for
related purpose.
LOAN TO MEMBERS:
The milk cooperatives cannot extend loans to the farmers directly. Instead they can
offer guarantee to the amount borrowed by the farmer. It was observed that from small
size societies about 7 members received loans amounting to Rs.42, 000. The loan was
mainly offered for the purpose of purchase of cross-breed cows. In
Medium, purpose of purchase of cross-breed cows and 29 members
Got the loan worth Rs.7, 50,000 for purchase of buffaloes
GAINS TO THE MEMBERS:
The co-operative society provides loans, fertilizers, and fodder, seeds, breeding and
veterinary facilities to augment the milk production. At present there are 238 dairy plants
in India comprising of public co-operatives and private sectors.

27

Co-operative milk societies are organizations of producers and the not only arrange
marketing of surplus milk but also supplement the income of the producers, who are
generally agriculturists, mainly in rural areas. These societies also help the consumers to
have pure and unadulterated milk at reasonable price.
Co-operative marketing may be defined as a co-operative association formed to
perform one or more of the marketing functions relating to the marketing association or
an agricultural co-operative marketing society, need not necessarily perform all the
marketing functions. Normally these functions include services such as selling agents,
supply of accurate market information, standardization storage, assembling, packing and
processing services.
The primary objective of the co-operative is to maximize the income of its
members as much as possible. To achieve this primer
Objective co-operative marketing aims at obtaining higher prices for the
producers and minimizing the costs of marketing.
To obtain higher prices for its members a co-operative marketing society tries to
achieve the following:
1. Development of orderly marketing.
2. Adoption of better selling methods.
3. Improvement of quality.
4. Elimination of trade abuses.
5. Improved bargaining position for the members as sellers.
6. Improvement of standardization and grading.

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CREDIT SUPPLY AND TECHNOLOGY MISSION FOR DAIRY

DEVELOPMENT:
The national co-operative development co-operation has been providing financing
assistant to dairy co-operatives for organizing medium and small size dairy processing
plant and milk filling centers. The co-operation has sanctioned a total loan for dairy
units.
In addition small farmers development agency (SFDA), marginal farmers and
agricultural labor agency (MFLA), INTEGRATED RURAL DEVELOPMESNT
SCHEMES (IRDS) and integrated tribunal development agency b have their own tasks of
providing incentives of dairy.
NATIONAL MILK GRID:
In the seventies the national milk grid was a distant dream. But the next decade
saw it taking shape. The benefits from such an arrangement are for both consumers and
producers.
The development of national milk grid mainly took place for solving the problems
of the producers. The producers form high milk producing districts not only suffered loss
because there were no tankers for the extra quantity of milk available during the flush
season were lower than those paid during the les/a season. The gird solves the problem
of the producers.
From the consumers side also this Grid is useful. In 1951 there were 20,900
towns and in 1971 this number has risen to 62,360. During this period the urban
population has increased from 62.4 million to 109.1 million, a growth of 74.8% there was

29

demand for milk from the urban consumer and they also had the necessary purchasing
power.
The demand was felt in the four metropolitan cities of India i.e., Bombay,
Calcutta, Madras and Delhi which have a combined population of around 16 million
(1971). City milk traders brought the milk by bus, trains and vans. But they could not
maintain adequate supply of milk with a growing demand from urban consumers. The
grid brought more supply of milk to the consumer. The grid brought more supply of milk
to the consumer throughout the year at rational prices.
In order to increase the milk supply and to prevent migration of cattle to the cities
Plans were drawn to establish. Cattle colonies, but this city cattle colony project was
not successful. Later, five-year plans were drawn to increase milk production. Between
1950 and 1970 the total investment was around 11,400 million.

NEED FOR DIARY DEVELOPMENT

In India, the land mass is 304.8 million hectares (1987-88) while the gross irrigated
areas as a percentage of cropped area is 32.8%.
In 1950, the cow and buffalo population was 196 million and had increased to 247
million by 1985. It has reached above 300 millions in 1994. The country has the largest
cattle and buffalo populations in the world accounting for more than one-sixth of the
worlds cow and more than one-half of the worlds buffalo population.
In 1988, the human population was about 800 million and this has been growing at
2.2% per annum. Such a large human and cattle population has to be sustained on a
limited landmass, which has led to intensive farming. The serious constraint that the

30

Indian agriculture faces is the problem of disguised unemployment and the resultant
problem of poverty and inequality of income distribution. Hence development plans
have to prepare for efficient utilization of human, cattle resources for maximum
productivity of land for creating employment opportunities channeling the unemployed
and under-employed into productive works, dairy farming is much important in serving
this purpose. Dairy farming can also absorb large number of agricultural laborers and
those people who migrated from rural to urban areas in search of employment
opportunities throughout the year. The dairy industry plays a vital role in improving the
rural economy which is mainly agricultural based.
ADVANTAGE OF DAIRY INDUSTRY:
o Strong procurement.
o Infrastructure.
o Presence of highly skilled manpower and cheap labors.
o Large number of processing and allied facilities.
o Milk production pattern.
INDIA: WORLDS LARGEST MILK PROCUDER
India has become the worlds no.1 milk producing countries, with output in 1992000 (marketing year ending March 2000) forecasted at 78 million tones. United States,
where the milk production is anticipated to grow only marginally at 71 million tons,
occupied the top slot till 1997. In the year 1997, Indias milk production was on par with
U.S. at 71 million tones. The world milk products in 1988 at 557 million tons would
continue the steady progress in recent years. Furthermore, the annual rate of growth in
milk production I India is between 5-6 percent, against the worlds at 1%. The steep rise

31

in the growth pattern has been attributed to a sustained expansion in domestic demand,
although per capita consumption in modest-at 70 Kg of milk equivalent.
ANNUAL MILK PRODUCTION HAS TREBLED
Indias annual milk production has more than trebled in the last 30 years, rinsing
from 21 million tons in 1968 to an anticipated 80 million tons in 2001. This rapid growth
and modernization is largely credited to the contribution of dairy cooperatives, under the
Operation flood (OF) project, assisted by many multi-lateral agencies, including the
European Union, the world bank, FAO and WFP (world food program). In the India n
context of poverty and malnutrition advantages as well as providing supplementary
income to some 70 million farmers in over 500,000 remote villages.

Milk Production in India

Year
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

Milk Production
(Million tons)
85.72
88.92
91.54
95.87
100.10
115.15
130.52
127.5

32

Worlds top milk producers:

Countries
India
U.S.
Russian federation
Pakistan
Brazil
World

2009
74
71
33
22
22
557

2010
71
71
34
21
21
549

2011
68
70
36
20
19
542

2012
65
68
33
18
18
539

DAIRY DEVELOPMENT IN ANDHRA PRADESH

During industry programs were primarily initiated with the help of United Nations
International Childrens Emergency Fund and Agricultural Organization and freedom
from Hunger campaign organization of U.K. these organizations helped a lot in the
establishment of dairy units at Hyderabad and Vijayawada in 1967 and 1969 respectively,
which led to pioneer dairy development in Andhra Pradesh.
With the implementation of operation flood II program in Andhra Pradesh, the
tempo of dairy development has gained momentum, providing a new thrust for the
eradication of poverty and unemployment in rural areas and brought greater awakening
and confidence among milk producers to manage their own affairs through dairy cooperatives in Andhra Pradesh.

33

MILK POTENTIAL:
Andhra Pradesh has excellent potential for milk production with progressive
farmers who are more receptive to the new technology and scientific practices. The
estimated milk production is 40lakh its per day. Today a strong wave of white revolution
is sweeping creating a new hope of eliminating socio-economic balance. Andhra Pradesh
is poised to be the dairy land of India playing an importance role in National Milk Grid.
GENESIS OF ANDHRA PRADESH DAIRY INDUSTRY
Planning for organized dairy industry in Andhra Pradesh was conceived in 1956
and a pilot milk supply scheme was started in 1960-61 as preclude for an integrated milk
project at Hyderabad and Vijayawada.
Rs.1crore.

UNICEF provided dairy equipment worth

The main objective is linking up and supplying surplus milk from the

producing area to the consuming area.

Andhra Pradesh Dairy Development Corporation was formed on 24 th February,
1974 as a stage government undertaking for the mission of industrializing rural dairying.
Extensive information was developed to produce milk from every nook and corner of the
state and to tap the untapped milk sector within the main objective of generating
employment and opportunities to rural people. It paved a way providing employment to
nearly 15,000 employees and organizes as many as 87 dairy units including 7 milk
product factories, 13 district dairies, and 22 chilling centers.
More than 3.5 million producers get Rs.20crores per annum for supplying milk of
which 69% of total beneficiaries belong to small and marginal farmers, agricultural labor
and other working section of rural community. Every day 8.2 lakh its of milk is
collected. Every tenth liter of milk produced in the country comes from Andhra Pradesh.

34

MAIN AIM OF SETTING UP OF DAIRY INDUSTRY IN ANDHRA PRADESH:

The majority of area in Guntur district in our state is having agriculture as the main
source of livelihood. Dairy industry occupies second place in the earning the livelihood,
next only to agriculture. Dairy industry now has stepped into the cooperative sector to
help the small and backward farmers by making them as partners. This fact is also
lucidly explained by the then government of Andhra Pradesh.
The expansion of this is to meet the needs of the people and help the farmers
and villages because milk and cattle are among the prime sources of income for them.

35

NECESSARY CONDITIONS FOR THE SUCCESS OF CO-OPERATIVE

MARKITING:

Effective control of the organization must remain in the hands of the farmer
members selling their produce through it.

Members must remain loyal to the organization and as a proof of their loyalty
they should sell their products through the organization only.

Expenses incurred and profits earned by the organization must be distributed

amongst members on fair and equitable basis.

There should be efficient and cost effective transport facilities for the distribution
of milk and milk products to laces where there is good demand.

The processes involved should be innovative, both in the production and the
distribution of the dairy product

36

COMPANY PROFILE

37

COMPANY PROFILE
INTRODUCTION:
Under the operation flood I programs, Guntur district was selected to develop
dairy activities on annual patterns keeping in view the three-tier system of village dairy
cooperative society at the village level, managed by the elected representatives of milk
producers, a co-operative union Ltd., was registered under A.P. Co-operative societies
act 1964 with registration no: 83DD dated 23/02/1997 with 81 affiliated Milk producers
cooperative societies.

Later the Union has converted into AP Mutually Aided co-

operative society Act 1995 with a registration number: AMC/GNT/DCI/97/28 DT 1-21997. It is the first union Registered Under model act in India.
ORGANIZATION SET-UP OF SANGAM DAIRY
--- Senior manager (procurement & Inputs manager)
--- Senior manager (senior accounts officer)
---Senior manager (dairy engineer)
--- Senior manager (production manager)
Managing Director

--- Other managers

--- Labors welfare officer
--- Manager for materials
--- Quality control manager
--- Marketing manager

Source:

Sangam Dairy, Vadlamudi.

38

FARMERS CONTRIBUTION
Milk producers of Krishna, Guntur and west Godavari district have generously
donated for the purchase of 34.46 acres of land at the cost of Rs.15lahs before initiating
this project, during 1973-74. Further 53 acres of land was purchased for the location of
technical inputs and staff quarters.
ANAND PATTERN
The Anand Pattern advocated an integrated approach to the dairy development
under Co-operative sector by providing necessary technical inputs for the raid progress of
Dairy Industry. In this pattern the real involvement of producers are to be seen, where the
village Dairy cooperative societies as well as the district union are managed by the
producers themselves.

The producers have got a say in determining the price of

commodity they produce. This idea is really a fantastic approach and a boon to the
farmers. The new outlook in Anand pattern is to provide incentive (inputs) to the farmers
to increase the production, maintaining good cattle by improved practices of breeding,
feeding and management through farmers induction programmed which is also part of
Anand pattern. Viability of the village Dairy Co-operative societies will also be taken
care in this pattern.
Sangam Dairy Logo

39

OPERATION FLOOD PROGRAMM

OPERATION FLOOD-I:
Dairy plant handling capacity of 1.5 lakh liters of milk per day, besides facilities to
manufacture 12 months tons of skimmed milk powder, 8 tons of button, 2 tons of Ghee
and casein from milk, was established with a cost of Rs. 2.88 crore.
Facilities to provide technical inputs like free veterinary aid: cattle insurance and
artificial insemination were provided. Fodder development and cattle feed on a no profit;
no loss basis was created with an expenditure of 1.2 crores.

OPERATION FLOOD-II:
Under Of-II, the dairy processing capacity had been increased from 1.5 to 2.5 lakh
per day with an expenditure or Rs 3.6 crores.
OPERATION FLOOD-III:
Crores of rupees were allotted to the milk shed for the expansion and
improvement of the dairy plant Chilling centers and technical input activities. All the
above finance is 70% loan 30% grant. In addition to this our government gave an amount
of Rs. 81 lakhs towards the construction of quarters, technical inputs building, which is
treated as share capital of the government. The total value of assets of this dairy as on
today is Rs. 21.6 crores.
ASEPTIC PACKAGING STATION:
Popularly known as tetra-pack milk this was established at the Dairy with a cost of
Rs. 2.5 crores. With this, milk can be packed in a special type of laminated paper bags,
which can preserve milk for months at room temperature.

40

ASCEPTIC PACKAGING STATION: SANGAM DAIRY

VADLAMUDI
Aseptic milk or sterilized long shelf life milk is a unique way of milk
preservation, where the milk is packed in disposable and laminated paper cartoons with 3
months shelf life. The essential features of this pack are to provide milk packed as a
grocery item, to store it for future usage, which offers convenience to the consumer.
Aspect milk packing station was established initially during the year 1986 with
an established cost of Rs.2.5 crores. The station is very well equipped to pack milk for
future usage.
The packs with 15 days shelf life earlier have been replaced with machinery to
pack milk with 3 months shelf life. The existing capacity is 50,000 Lt/day. After
overcoming the initial setbacks with regards to market identification, etc., now the
products are making a smooth sailing in the cities like Hyderabad, Vizag coal belt areas
of Bhadrachalam, Khammam and Kothagudem, etc. there are plan for future market
expansion in Calcutta and Bangalore cities. Aseptic station to pack novel milk products
like sterilized cream, double milk with high fact and high solids, products with no fat
depending upon the need of the consumers is being planned. The given table gives brief
details of the milk packed in 500 ml. packs from 1986-1999 year (in lack packs).

41

PACKETS IN 500 ML DURING 2004-2011

Production of tetra

Revenue generated

YEAR

Packet milk

(In Rs.laksh)

2005

(Lack packets)
63

526

2006

58

459

2007

65

441

2008

68

479

2009

61

461

2010

71

493

2011

78

530

2012

75

510

SOURCE: Sangam dairy annual reports.

The unit is projecting a capacity of 15% utilization and making a steady progress
towards more efficiency and profitability.
MILK MARKETING: The union is meeting the fluid mill requirements in Guntur town
and other towns in Guntur District. On an average, they sell 40,000 liters per day with in
Guntur District. They are also marketing tetra pack milk in Guntur district, Vizag,
Calcutta, madras.
NATIONAL MILK GRID:
Sangam dairy is supplying milk to mother dairy, Calcutta through milk tankers
since 1980 and is also supplying condensed whole milk to mother dairy, Calcutta since
1989 through rail milk tankers.
MILK PRODUCTS:
Sangam dairy manufactures table butter, white butter, and Ghee skimmed milk
powder and vijaya spray. The details of milk procurement, milk sales and products
manufacture with various capacities of the plant are enclose d here with.

42

EXISTING CAPACITIES:
Milk handling capacity:
Milk powder capacity (two powder
plants, L&T make stain co):
Table butter (4 packing machine /
CBMM and butter chip lets machine):

2.5 lakhs liters/ day

Ghee:
Storage of butter in deep freeze:
Boilers sections:
Refrigeration:
Milk chilling centers:
M.C.C. Narsaraopet:
M.C.C. Gurazala:
M.C.C. vinukonda:
M.C.C. Bhattiprolu:
Cattle fed:
Aseptic packing:
Power
Machinery:
For lighting:
(Source: MIS Sangam Dairy)

10MTs per day

700 MTs per day
2 oil fires boilers,
2 coal fire boilers
350 MTs per day
5000 LPD
5000 LPD
3000 LPD
3000 LPD
100 MTs per day
50,000 MTs per day

22 Mts/day
8 Mts/day

2746 HP+131 KW
122KW

OBJECTIVES

Artificial insemination services.

Animal health.

Fodder development programs.

Fodder shed multiplication programs.

Sylvia pasture scheme.

Distribution of chaff cutters.

Enrichment of paddy straw with urea.

Cattle feed.

By-pass proteins feed.

Distribution of mineral nature on subsidiary basis.

Cattle insurance.

Aid to society buildings.

43

Cross breed heifers subsidiary scheme.

Distribution of cross bred cows.

Training programs.

PRODUCTS OF SANGAM DAIRY:

Essentially the union procures milk from various collection centers located in
Guntur and Prakasam districts. The procured milk will be processed in the dairy and then
converted into different products apart from fluid milk. The union is meeting the fluid
milk requirements in Guntur town and other towns in Guntur district on an average they
sell 40,000 liter per day with in Guntur district.
Under the national milk grid, the milk has been supplied to Mother dairy in
Calcutta through rail milk tankers since 1980.
The milk products of dairy are as follows

Milk butter.

White butter.

Ghee

Skimmed milk powder.

Doodh peda.

Shakthi milk

Table butter.

Whole milk.

Basundhi.

Khala Khanda.

44

Milk cake.

45

BY PRODUCT SECTION
By products section of Sangam Dairy consists of the following products.
1. Butter and ghee section
2. Power section
Frozen products section
Each of the above section are administered and under the control of
dairy manager.
Physical Flow of Milk in Sangam Dairy

Producer

Village level coop, Societies

Procurement transport

46

Sangam Dairy

Transport Vehicles (Distribution)

Commission Agent

Consumer

Board of Directors
Sri. Y. Venkatarao

Founder
Sri. D. Narendra Kumar Chairman, M.L.A.,

Sri. K. Gopinath
Managing Director

47

Sri. G.C. Reddy

- National Dairy Development Board.

Sri. P. Krishna Rao

Sri. A. Marathi Vara Prasad
Sri. V. Dharma Rao
Sri. V. Srikrishna Prasad
Sri. P. Srinivasa Rao
Sri. J. Venkateswarlu
Sri. R. Ramarao
Sri. M. Bapuji
Sri. M. Venkateswarlu
Sri. P. Srinivasa Reddy
Sri. Ch. Narsa Reddy
Sri. S. Venkateswara Rao
Sri. D. Venkateswara Rao
Sri. G. Dhanunjaya Rao

48

THEORETICAL FRAMEWORK

49

THEORETICAL FRAMEWORK
Customer satisfaction, a term frequently used in marketing, is a measure of how
products and services supplied by a company meet or surpass customer expectation.
Customer satisfaction is defined as "the number of customers, or percentage of total
customers, whose reported experience with a firm, its products, or its services (ratings)
exceeds specified satisfaction goals."
It is seen as a key performance indicator within business and is often part of a
balanced scorecard. In a competitive marketplace where businesses compete for
customers, customer satisfaction is seen as a key differentiator and increasingly has
become a key element of business strategy.
Within organizations, customer satisfaction ratings can have powerful effects.
They focus employees on the importance of fulfilling customers expectations.
Furthermore, when these ratings dip, they warn of problems that can affect sales and
profitability. These metrics quantify an important dynamic. When a brand has loyal
customers, it gains positive word-of-mouth marketing, which is both free and highly
effective. Therefore, it is essential for businesses to effectively manage customer
satisfaction. To be able do this, firms need reliable and representative measures of
satisfaction.

In researching satisfaction, firms generally ask customers whether their product or

service has met or exceeded expectations. Thus, expectations are a key factor behind
satisfaction. When customers have high expectations and the reality falls short, they will
be disappointed and will likely rate their experience as less than satisfying. For this

50

reason, a luxury resort, for example, might receive a lower satisfaction rating than a
budget motel even though its facilities and service would be deemed superior in
absolute terms.
The importance of customer satisfaction diminishes when a firm has increased
bargaining power. For example, cell phone plan providers, such as AT&T and Verizon,
participate in an industry that is an oligopoly, where only a few suppliers of a certain
product or service exist.

As such, many cell phone plan contracts have a lot of fine print with provisions
that they would never get away if there were, say, a hundred cell phone plan providers,
because customer satisfaction would be way too low, and customers would easily have
the option of leaving for a better contract offer.

Customer satisfaction:
Customer satisfaction is defined as "the number of customers, or percentage of
total customers, whose reported experience with a firm, its products, or its services
(ratings) exceeds specified satisfaction goals."

Consumer satisfaction:
Satisfaction of a consumer want is an essential part of the marketing operation.
Fundamentally, a person buys (acquires) a product for the satisfaction it will provide.

Purpose:
A business ideally is continually seeking feedback to improve customer
satisfaction.

51

Customer satisfaction provides a leading indicator of consumer purchase

intentions and loyalty. Customer satisfaction data are among the most frequently
collected indicators of market perceptions. Their principal use is twofold:
Within organizations, the collection, analysis and dissemination of these data send
a message about the importance of tending to customers and ensuring that they have a
positive experience with the companys goods and services.
Although sales or market share can indicate how well a firm is performing
currently, satisfaction is an indicator of how likely it is that the firms customers will
make further purchases in the future. Much research has focused on the relationship
between customer satisfaction and retention. Studies indicate that the ramifications of
satisfaction are most strongly realized at the extremes. Willingness to recommend is a key
metric relating to customer satisfaction.

Measuring customer satisfaction:

Organizations need to retain existing customers while targeting non-customers.
Measuring customer satisfaction provides an indication of how successful the
organization is at providing products and/or services to the marketplace.
Customer satisfaction is measured at the individual level, but it is almost always
reported at an aggregate level. It can be, and often is, measured along various
dimensions. As research on consumption experiences grows, evidence suggests that
consumers purchase goods and services for a combination of two types of benefits:
hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential
attributes of the product. Utilitarian benefits of a product are associated with the more
instrumental and functional attributes of the product.

52

Customer satisfaction is an ambiguous and abstract concept and the actual

manifestation of the state of satisfaction will vary from person to person and
product/service to product/service.
The state of satisfaction depends on a number of both psychological and physical
variables which correlate with satisfaction behaviors such as return and recommend rate.
The level of satisfaction can also vary depending on other options the customer may have
and other products against which the customer can compare the organization's products.
The usual measures of customer satisfaction involve a survey with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement and
in term of their perception and expectation of performance of the organization being
measured. Their satisfaction is generally measured on a five-point scale.
Regardless of the scale used, the objective is to measure customers perceived
satisfaction with their experience of a firms offerings. It is essential for firms to
effectively manage customer satisfaction. To be able do this, we need accurate
measurement of satisfaction.
Good quality measures need to have high satisfaction loadings, good reliability,
and low error variances. In an empirical study comparing commonly used satisfaction
measures it was found that two multi-item semantic differential scales performed best
across both hedonic and utilitarian service consumption contexts.
It seems that dependent on a trade-off between length of the questionnaire and
quality of satisfaction measure, these scales seem to be good options for measuring
customer satisfaction in academic and applied studies research alike. All other measures
tested consistently performed worse than the top three measures, and/or their

53

performance varied significantly across the two service contexts in their study. These
results suggest that more careful pretesting would be prudent should these measures be
used.
Finally, all measures captured both affective and cognitive aspects of satisfaction,
independent of their scale anchors. Affective measures capture a consumers attitude
towards a product, which can result from any product information or experience. On the
other hand, cognitive element is defined as an appraisal or conclusion on how the
products performance compared against expectations, was useful, fit the situation, and
exceeded the requirements of the situation.

The core business process includes the following concepts:

The marketing sensing process:
All the activities involved in gathering market intelligence disseminating it with
the organization and acting of information.

The new offering Realization process:

All the activities in research, developing and launching new high quality offerings
quickly and within the budget.

The customer relationship management:

All the activities involved in building deeper understanding relationships and
offerings to individual customers.

The fulfillment management process:

All activities involved in receiving and approving orders, shipping the goods on
time and collecting payment.

54

The value delivery network:

To be successful a firm or an organization also needs to look for competitive
advantage beyond its own operations into the value chains of its supplier distributing and
customers. Many companies today partnered with specific suppliers and distribution to
create a superior value delivery network.

Customer Relationship Management:

The aim for customer relationship management is to produce high customer
equity. Customer equity is the total of the discounted lifetime values of all firms
customers. Clearly, the more loyal the customers the higher the customer equity, value
equity, brand equity and relationship equity.

Value Equity:
Value equity is the customers objective assessment of the utility of an offering
based on perception of its benefits relative to its costs the sub drivers of the value equity
and quality, price and convenience. Each industry has to define the specific factors
underlying each sub driver in order to find programs to improve value equity. An air line
passenger might define equity as seat width; a hotel guest might define equity as room
size. Value equity makes the biggest contribution to consumer equity. When products are
differentiated and when they are more complex and need to be evaluated. Value equity
especially drives customer equity in business market.

Brand Equity:
Brand equity is the customers subjective and intangible assessment of the brand
above and beyond its objectivity perceived value. The sub drivers of brand equity and
customer brand awareness, customer attitude towards the brand and customer perception

55

of brand ethics. Companies use advertising, public relations and other communication
tools to affect these sub drivers. Brand equity is more important than the other drivers of
customer equity where products are less differentiated and have more emotional impact.

Relationship Equity:
Relationship equity is the customers tendency to stick with brand above and
beyond objective and subjective assessment of its worth. Sub drivers of relationship
equity include loyalty programs, special recognition and treatment program, community
building programs. Relationship equity is especially important where personal
relationship count for a lot and where customers tend to continue with supplier out of
habit.
Some customers inevitably become inactive or dropout. The challenge is to
reactive dissatisfied customers through win-back strategies. It is often easy to attract excustomers than to find new ones. The key is to analyze the causes of customer detection
through exit interviews and lost customer surveys. The aim is to win back only those
customers who have strong profit potential.

Forming strong customer brands:

The basic companies that want to form strong relationship need to attend the
following basics:

Get cross departmental participation in planning and managing customer

satisfaction and retention process.

Integrate the voice of the customer in all business decisions.

Create superior product, services and experience for the target market.

56

Organize and make accessible a database of information on individual customer

needs preferences, contacts, purchase frequency and satisfaction.

Make it easy for customers to reach appropriate company personnel and express
their needs, perception and complaints.

Run award programs recognizing outstanding employers.

There are 3 relation building approaches. They are as follows:

Adding Financial Benefits

Adding Social Benefits

Adding Structural Benefits

Adding Financial Benefits

The two financial benefits that companies can offer are frequency programs and

club marketing programs. Frequency programs are designed to provide rewards to

customer who buy frequently and in substantial amounts. Frequency is an
acknowledgment of the fact that 20% of a customers customer might account for 80% of
the business.

Adding Social Benefits:

Company personnel work on increasingly social bonds with customers by
individually and personalizing customer relationships. Customers may be nameless to the
institution, but eliminated cannot be nameless. Customers are served as a part of larger
segments. Clients are served by individual basis. Customers are served by anyone who
happen to be available, who know to explain the details of the product or service.

57

Adding Structural Benefits:

Company can supply customers with special equipments or computer linkages
that help customer manage orders, payroll and inventory.
People can be loyal to their country, family and beliefs bur less to their toothpaste, soap
or even better. The marketer should aim at increasing the consumers productivity to
repurchase the companys brands.

Rationale Of The Study:

Customer satisfaction is one of the most important functions of marketing. In the
present globalization era, it is very important for any organization. So, effective
maintenance of customer satisfaction is needed for every organization. Thus Sangam
Dairy., should follow the best methods of customer satisfaction to increase their sales as
well as brand image in the market.
For every organization maintaining best customer satisfaction is the first step. If
this foundation is strong then there is a lot of chance for the organization to increase their
effectiveness at key points. So, finally customer satisfaction becomes heart of particular
organization.
So, studying is made to understand the customer satisfaction activities in the
organization and to know what extent their activities have been successful in organization
development.

58

DATA ANALYSIS
AND
INTERPRETATION

59

DATA ANALYSIS AND INTERPRETATION

1. Awareness about Sangam Milk Products Pvt.Ltd?
Table 4.1:PARAMETERS

NO. OF RESPONDENTS

% OF RESPONDENTS

Paper adds
T.v adds
Hoardings
Friends and relatives
Others
Total

4
11
4
64
17
100

4
11
4
64
17
100

Interpretation :From the above table , it is clear that out of 100 respondents 64% of respondents
gained awareness about Sangam Milk Products Pvt. Ltd., from friends and relatives, 17%
of respondents from others like their own experience ,11% of customers from t.v adds,
4% of respondents from paper adds and the remaining 4% from hoardings.
2. Opinion about preference for Sangam Milk Products Pvt.Ltd?
Table 4.2:-

60

PERAMETERS
Brand image
Price
Healthy
Tasty
Total

NO. OF RESPONDENTS
27
10
25
38
100

% OF RESPONDENTS
27
10
25
38
100

Interpretation:From the above table it is clear that, 38% of respondents give preference to
Tasty, 27% of respondents gave preference to brand image , 25% of respondents gave
preference to Healthy and the remaining 10% of the respondents gave preference to price
of the Sangam Milk Products Pvt. Ltd.,

3. Which factors influence to purchase Sangam Milk Products Pvt.Ltd?

Table 4.3:
PERAMETERS

NO.OF RESPONDENTS

% OF RESPONDENTS

61

Sales executives
Family members
Friends and relatives
Self influence
Total

3
17
19
61
100

3
17
19
61
100

Interpretation :From the above table it is clear that , 61% of the respondents were self-influenced,
19% of the respondents influenced by friends and relatives, 17% of the respondents
influenced by family members and the remaining 3% of the respondents purchase
Sangam Milk Products Pvt. Ltd., due to the influence of the sales executives.

62

4. Duration of using Sangam Milk Products Pvt.Ltd.,?

Table 4.4:PERAMETERS

NO.OF RESPONDENTS

% OF RESPONDENTS

< 1 year
1-2 years
2-5 years
Above 5 years
Total

2
25
37
36
100

2
25
37
36
100

Interpretation:From the above table, it is clear that out of 100 respondents , 37% of respondents
were using since five years, 36% of respondents were using above five years, 25% of
respondents were using since two years and the remaining 2% of respondents were using
Sangam Milk Products Pvt. Ltd., since one year .

5. Opinion about cost of Sangam Milk Products Pvt.Ltd.,?

Table 4.5:-

63

PARAMETERS

NO.OF RESPONDENTS

% OF RESPONDENTS

Satisfied
Dissatisfied
Total

91
9
100

91
9
100

Interpretation:From the above table, it is clear that the cost of Sangam Milk Products Pvt.
Ltd.,

were reasonable when compare to other company products because out of 100

respondents 91% of the respondents were responded as satisfied and the remaining 9%
of the respondents were responded as dissatisfied.

6. Opinion about after sales service?

Table 4.6:PARAMETERS

NO. OF RESPONDENTS

% OF RESPONDENTS

64

Excellent
Good
Average
Poor
Total

11
48
28
13
100

11
48
28
13
100

Interpretation:From the above table, it is clear that out of 100 respondents

48% of the

respondents responded as good ,28% of the respondents as average and 13% were
responded as poor and the remaining 11% of the respondents gave their opinion as
excellent towards the sales provided by the dealers of the Sangam Milk Products Pvt.
Ltd.,.
7. Opinion about recommend others to purchase the Sangam Milk

Products Pvt.Ltd.,?
Table 4.7:OPINION

NO. OF RESPONDENTS

% OF RESPONDENTS

Yes
No

92
8

92
8

65

Total

100

100

Interpretation:From the above table , it is clear that out of 100 respondents 92% of respondents
responded as yes towards recommended others to purchase the milk products and the
remaining 8% of the respondents were responded as no . So most of the customer showed
interest towards recommended others to purchase the Milk Products.

8. How often do you drink milk?

Table 4.8:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Daily
2-3 days
1-2 weeks
Monthly
Others

50
30
10
5
5

50
30
10
5
5

66

Total

100

100

Interpretation:According to the above table 50% respondents are drink milk daily and the 30%
respondents are drink milk products 2-3 days in a week, 10% respondents are drink 1-2
weeks and 5% of respondents are drink milk products monthly and at the same time
others will be also.

67

9. What type of milk products do you buy?

Table 4.9:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Fresh Milk
Milk powder
Box milk
Yogurt
Ice cream
Cheese
Others
Total

38
12
15
10
10
8
7
100

38
12
15
10
10
8
7
100

Interpretation:From the above table , it is clear that out of 100 respondents 38% of respondents
interested to buy a Fresh Milk, 15% of respondents are buy a milk powder, and 12% of
respondents are interested to purchase a box milk and 10% of respondents are interested
to buy a Yogutt and Ice cream, 8% of respondents are Cheese and 7% respondents are
Others to be purchased.

68

10. Which brands of milk do you always buy?

Table 4.10:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Sangam
Tirumala
Vijaya
Visakha
Others
Total

40
30
15
10
5
100

40
30
15
10
5
100

Interpretation:From the above table , it is clear that out of 100 respondents 40% of respondents
are purchased Sangam Milk Products Pvt. Ltd., and 30% of respondents are interested to
Tirumala, 15% of respondents are interested to purchased a Vijaya & Visakhar and others
will 5% of respondents.

69

11. Are you satisfied that number of Booths sufficient in your locality?
Table 4.11:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Extremely poor
Below average
Average
Above average
Excellent
Total

5
15
20
25
35
100

5
15
20
25
35
100

Interpretation:From the above table , it is clear that out of 100 respondents 35% of respondents
are saying Sangam services are excellent and 25% respondents are above average, 20%
respondents are average, and 15% respondents are saying Below average, 5%
respondents are extremely poor.

12. Do you feel that home delivery of Sangam Milk Products Pvt. Ltd.,
is made at prescribed time at early morning ?

70

Table 4.12:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Strongly disagree
Disagree neither agree
Agree
Strongly agree
Total

5
15
25
55
100

5
15
25
55
100

Interpretation:From the above table , it is clear that out of 100 respondents 55% of respondents
responded as strongly agree and the 25% of respondents are agree, 15% of respondents
are disagree neither agree and remaining 5% of respondents strongly disagree.

71

13. Essential elements which is to be added to satisfy customers?

Table 4.13:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

35
30
20
15
100

35
30
20
15
100

Subsidiary product
New dairy varieties
Cost reduction
Discount
Total

Interpretation:From the above table , it is clear that out of 100 respondents 35% of respondents
responded to satisfy the subsidiary products and 30% of respondents are satisfy the New
dairy varieties are need and cost reduction respondents are 20% and remaining 15%
respondents are satisfied with Discount.

72

14. Which product of Sangam Milk Products Pvt.Ltd., has mostly

attracted towards customer?
Table 4.14:PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Milk
Ghee varieties
Skimmed milk powder
Flavored milk
Total

40
30
15
15
100

40
30
15
15
100

Interpretation:From the above table , it is clear that out of 100 respondents 40% of respondents
responded to attracted with milk products and 30% of respondents are interested a Ghee
varieties and Skimmed milk powder product and flavored milk is interested 15% out of
remaining.

15. Which Sangam Milk Product Pvt.ltd., has maximum demand ?

Table 4.15:-

73

PARTICULARS

NO. OF RESPONDENTS

% OF RESPONDENTS

Toned Milk
Double toned milk
Standardized milk
Full cream milk
Total

30
20
20
30
100

30
20
20
30
100

Interpretation:From the above table, it is clear that out of 100 respondents 30% of respondents
responded to demand a toned milk and Full cream milk and remaining 20% respondents
are demanded double toned milk and standardized milk

74

FINDINGS, SUGESTION
&
CONCLUSION

75

FINDINGS:

The study reveals that the majority of the customers gained awareness about their
Sangam Milk Products Pvt.Ltd., from friends and relatives when compared to
News papers, Hoardings and others.

It is observed that the Sangam Milk Products Pvt.Ltd., are mainly preferred
because of good for health.

Majority of the customers were self influenced to purchase Sangam Milk Products
Pvt.Ltd,.

Majority of the customers rated good for service offered by the Sangam Milk
Products Pvt. Ltd.,

It is observed that 60% of the customers of Sangam Milk Products Pvt. Ltd., were
satisfied with the performance.

76

SUGGESTIONS:

Sangam Milk Products Pvt. Ltd., should try to give more advertisements in news
papers and hoardings to attract more customers because the reason here is most of
the customers gained awareness about Sangam Milk Products Pvt. Ltd., from
friends and relatives.

The cost of Products of Sangam Milk Products Pvt. Ltd., should be reduced.

Sangam Milk Products Pvt. Ltd., needs maintain a good supply chain where it can
make its products available.

The company has to develop new incentive system to motivate the sales
executives.

Sangam Milk Products Pvt. Ltd., has to develop new products to increase the sales
for need of customers.

It has been suggested that some customers of Milk Products responded as the
cost of Sangam Milk Products Pvt. Ltd., are little bit high when compared to
other company Products . So it is the considerable one to reduce the cost of
Products.

77

CONCLUSION:
After the findings have been enumerated the following conclusion has been
drawn. By these findings we can say that majority of the customers of Sangam Milk
Products Pvt. Ltd., were satisfied with the New products provided by the company.
Customer satisfaction is most important to maintain this growth in the future. In this
study customers were satisfied in the areas of low maintenance cost, after sales service,
reasonable price of the Sangam Milk Products Pvt. Ltd.,. Finally, the company should
understand the customers problems and listen the suggestions to improve sales.

78

QUESTIONNAIRE

79

QUESTIONNAIRE
Customer Satisfaction and awareness of Milk Products of the Sangam Milk
Products Pvt.Ltd.
Name : .
Age :
Sex (M/F)
Occupation .
Address ..

1. Awareness About Sangam Milk Products Pvt.Ltd?

a. Paper adds b. T.V adds

c. Hoardings

d. Friends and relatives

e. Others

2. Opinion About Preference For Sangam Milk Products Pvt.Ltd?

a. Brand image

b. Price

c. Healthy

d. Tasty

3. Factors influence to purchase Sangam Milk Products Pvt.Ltd?

a. Sales executives

b. Family members

c. Friends and relatives

d. Self influence

4. Duration of using Sangam Milk Products Pvt.Ltd?

a. < 1 year

b. 1-2 years

c. 2-5 years

d. Above 5 years

5. Opinion about cost of Sangam Milk Products Pvt.Ltd?

a. Satisfied

b. Dissatisfied

6. Opinion about after sales service ?

a. Excellent

b. Good

c. Average

d. Poor

80

7. Opinion about recommend others to purchase the Sangam Milk

Products Pvt.Ltd ?
a. Yes

b. No

8. How often do you Drink Milk?

a. Daily

b. 2-3 days

d. Monthly

e. Others

c. 1-2 weeks

9. What type of milk products do you buy?

a. Fresh Milk

b. Milk powder

c. Box milk

d. Yogurt

e. Ice cream

f. Cheese

g. Others

10. Which brands of milk do you always buy?

a. Sangam

b. Sangam

d. Visakha

e. Others

c. Vijaya

11. Are you satisfied that number of Booths sufficient in your locality?
a. Extremely poor

b. Below average

d. Above average

e. Excellent

c. Average

12. Do you feel that home delivery of Sangam Milk is made at

prescribed time at early morning ?
a. Strongly disagree
c. Agree

b. Disagree neither agree

d. Strongly agree

13. Essential elements which is to be added to satisfy customers?

a. Subsidiary product b. New dairy varieties
c. Cost reduction

d. Discount

81

14. Which product of Sangam Milk has mostly attracted towards

customer?
a. Milk

b. Ghee varieties

c. Skimmed milk powder

d. Flavored milk

15. Which Sangam Milk Product Pvt.Ltd has maximum demand?

a. Toned Milk

b. Double toned milk

c. Standardized milk

d. Full cream milk

82

BIBLIOGRAPHY

83

BIBLIOGRAPHY

CONSUMER BEHAVIOR-LEON G. SCHIFFMAN, LESLIE LAZAR KANUK

PRINCIPLES OF MARKETING PHILIP KOTLER GARY ARMSTRONG

RESEARCH METHODOLOGY KOTHARI C.R BUSINESS STATISTICS

SHARMA J.K

INDUSTRIAL MARKETING - KRISH .K.H

WEBSITES:

www.google.com

www.Sangamdairy.com

MAGAZINES:

Business World

Business Today

84