Table of Content

1.0 Acknowledgement
2.0 Abstract
3.0 DESCRIPTION OF THE MARKET

3.1 About The Market

Milk is one of most produced and valuable agricultural commodities worldwide. In 2013,
with a total production of 770 billion litres valued at USD 328 billion, milk ranked third
by production tonnage and was the top agricultural commodity in value terms the world
over. Milk contributes 27% to the global value added of livestock and 10% to that of
agriculture.
Milk is a local commodity. It is produced and consumed in basically all world’s countries
and, in most of them, it ranks among the top five agricultural commodities in both
quantity and value term. Whole fresh cow milk represents 82.7% of global milk
production, followed by milk from buffaloes (13.3%), goats (2.3%), sheep (1.3%) and
camels (0.4%).

3.2 Industry Insights

Milk is a global commodity. Milk and dairy products account for about 14% of global
agricultural trade. In particular, whole milk powder (WMP) and skimmed milk powder
(SMP) are the most traded agricultural commodities globally as percentage of production
traded, while fresh dairy products, with less than 1% of production traded, are the least
traded agricultural commodity.
The dairy sector is growing fast: World milk production is projected to increase by 177
million tonnes by 2025, at an average growth rate of 1.8% per annum in the next 10
years. Over the same period, per capita consumption of dairy products is projected to
increase by 0.8% and 1.7% per year in developing countries, and between 0.5% and 1.1%
in developed economies. Because of the sheer size of the dairy industry, these growth
rates can produce big development payoffs for people’s livelihoods, for the environment
and for public health.
3.3 Regional Insights

The world's largest food & beverage company, Switzerland's Nestlé, reigns supreme on
the list, but the gap between number one and number two has narrowed. French Lactalis
swapped places with compatriot Danone and moved into second place, boosted by its
acquisitions of US yoghurt businesses Stonyfield and Siggi’s. Danone slipped to the third
spot, after divesting Stonyfield following the acquisition of whitewave, reducing its stake
in Yakult, and selling its holdings in the Al Safi
Danone joint venture in Saudi Arabia. In India, Danone has decided to focus on nutrition
products, and it has sold its dairy plant to a local player.
New Zealand’s Fonterra moves into fifth place, slightly ahead of Dutch-based
frieslandcampina, which fell to sixth place. Arla Foods remains in the seventh slot,
despite a buyout of the joint venture with sancor and a new joint venture with Indofood.
Saputo leapfrogs Yili and moves into eighth place, helped by the acquisition of
Australia’s Murray Goulburn, along with two acquisitions in the US and Canada.
To achieve their ambition to be leading global companies, the Chinese giants Yili and
Mengniu will need to make international acquisitions. Yili remains the largest
Chinese/Asian player in the Global Dairy Top 20, while Mengniu maintained its number-
ten position. The two Chinese players showed a combined sales growth of 9% YOY in
2017 in US dollar terms, following a more difficult 2016.
German DMK moves up two places, as a result of its restructuring and repositioning at
sthe expense of US-based Kraft Heinz and Japan’s Meiji.
3.4 Application Insights

India has been the leading producer and consumer of dairy products worldwide since
1998 with a sustained growth in the availability of milk and milk products. Dairy
activities form an essential part of the rural Indian economy, serving as an important
source of employment and income. India also has the largest bovine population in the
world. However, the milk production per animal is significantly low as compared to the
other major dairy producers. Moreover, nearly all of the dairy produce in India is
consumed domestically, with the majority of it being sold as fluid milk. On account of
this, the Indian dairy industry holds tremendous potential for value-addition and overall
development. According to the latest report by IMARC Group, the dairy market in India
reached a value of INR 9,168 Billion in 2018.
Both national and international players are entering the dairy industry, attracted by the
size and potential of the Indian market. The focus is being given to value-added products
such as cheese, yogurt, probiotic drinks, etc. They are also introducing innovative
products keeping in mind the specific requirements of the Indian consumers. These
players are also improving their milk procurement network which is further facilitating
the development of the dairy industry in India. Looking forward, the market is expected
to reach a value of INR 21,971 Billion by 2024, exhibiting a CAGR of around 16%
during 2019-2024.
4.0 MARKETING MIX OF THIRUMALA

Marketing Mix constitutes the different choices that organizations can make use to bring a
product to the market. It is an efficient tool to introduce the perfect product at the right place, and
at a price which justifies the value that a consumer derives out of the product.

It is equally valid for evaluating an already existing product.

When it comes to a product, 4 P’s (Product, Place, Price, Promotion) of marketing is an efficient
tool to determine the marketing mix of an organization.

Services include 3 extra P’s in the form of People, Processes, and Physical Evidence.

The 4 P’s of marketing for Thirumala are as follows:

4.1 Product:

Thirumala Dairies has a sea of milk products that caters to a wide range of consumers. A
product should reciprocate with the interests of the consumer.

Different variants in fluid milk make for a refreshing and energetic staple diet of the
entire household. The acquisition of Thirumala by Lactalis Group in 2014 has only added
to its rich value and goodwill.

Président is a brand owned by Lactalis, which is renowned the world over for its butter.
The acquisition of Thirumala by Lactalis paved the way for the introduction of Président
butter in the Indian Subcontinent.

All the Thirumala products and the brand itself are synonymous with purity and richness
in taste. The recent overhaul of the logo of Thirumala only augments its positioning as
pure products, with the new tagline — Purity has a new face.
4.2 Place:

Thirumala is an established brand in the Southern states of India.

Thirumala has a good market presence in many of the cities of the Southern states and is
on the lookout for penetration in newer markets.

Thirumala has a reputation of being one of the purest brands in the dairy sector and it
strives to live up to its expectations in whichever endeavours that it plans to undertake.

Though few areas are yet to be captured by Thirumala, it has overall positive brand
equity.

4.3 Price:

Thirumala has both quality as well as affordability of its products.

Thirumala doesn’t believe in providing cheap products at the expense of its quality.

There are various products that are very cheaper than Thirumala products, however, when
products are priced below than which is justifiable, there can be a compromise in its
quality factor. So, there has to be trade-off between quality and affordability and
Thirumala sure knows that.

4.4 Promotion:

Thirumala has been involved in many promotional activities to increase its awareness.
Thirumala promotes by advertising, wall paintings, banners, etc.

Pamphlets are used to make consumers, retailers aware of the various offers available.

Print and Television media along with online channels are also leveraged to bring forth
the goodness of Thirumala products.

Company is also involved in promotional activities in supermarkets and residential

societies to bring about an increase in awareness and sales.
5.0 SWOT ANALYSIS:

SWOT Analysis is an analysis that every organization makes to ascertain about its internal
strengths and weaknesses as well as its external opportunities and threats.

Strategies have to be developed to convert weaknesses into strengths and threats into
opportunities. This is a process that should be kept up-to-date to be relevant to the environment
that a company operates within.

5.1 Strengths

5.1.1 Good Distribution Network:

Thirumala has a distribution network that is robust in most of the Southern states.

Procuring milk and producing dairy products is one thing, distributing them is quite
another.

Unless there is not an efficient distribution system in place, an organization cannot expect
an increase in its sales.

Thirumala distributes milk to its end consumers through agents, as well as Thirumala
Distribution Centers (TDC).

5.1.2 Lactalis Backed Foreign Investment:

Thirumala Dairies was acquired by Lactalis Group in 2014, the largest dairy company in
the world. Hence, Thirumala is financially stable and can progress efficiently under the
able backing of the Lactalis Group.
5.2 Weaknesses

5.2.1 Packaging Issues:

There have been issues, wherein retailers have reported packaging issues causing
leakages. This is not something that is the case everywhere and that which happens
frequently.

5.2.2 Agent/TDC Row:

Agents and TDCs act as intermediaries during milk distribution.

An agent is a person who stocks up on several brands of milk products, who ultimately
sells to the retailers.

TDCs are owned by agents who sell only Thirumala products. These are backed by the
company. TDCs, apart from having Over-the-Counter sales, also distribute milk to the
retailers.

Some issues between normal Agents and TDC agents over pricing, margins might occur.
5.3 Opportunities

5.3.1 Huge Untapped Market:

Although Thirumala has a presence in many cities in the Southern states of India, there
are several cities where Thirumala can make its presence. There are a multitude of steps
that ought to be taken to venture into a new market.

Initial survey is one such thing and in the coming years it should strive harder to
penetrate into newer markets.

5.3.2 Wider Modern trade Presence:

Modern trade (MT) businesses are on an upswing, thanks to the consumers who are
conscious of equipping with the purchasing practices.

While Kirana stores (GT) have a huge market presence, modern trade outlets such as
supermarkets are also booming. Thirumala, though has a noticeable presence in
supermarkets and presence is less in comparison to its competitors.

So, Thirumala can tap into these modern trade (MT) outlets to an even greater level.
5.4 Threats

5.4.1 Intense Competition:

Dairy sector is booming with many players, and since the deliverables by all the dairy
brands are similar, aggressive pricing is employed by certain companies for a greater
market share.

Apart from that, quality is also an instrumental aspect. So, the only way Thirumala can
achieve strong footholds is by expansion of its distribution reach and by doing
promotional activities.

5.4.2 Aggressive Pricing by Competitors:

Aggressive pricing strategy is one tactic employed by many of the competitors for a
larger piece of market share.

Thirumala is a brand that has been an embodiment of purity and quality. Just because
competitors are taking an aggressive pricing stand, Thirumala cannot do the same, as
decreasing the price of the products beyond a threshold would constitute a compromise in
products’ quality.

This can be tackled by putting a greater emphasis on awareness of Thirumala products

and what it stands for.
5.0 Discriminant Analysis
5.1 Data
5.2 Procedure
5.3 Steps
5.4 Results
5.5 Evaluation & Decision making

6.0 Conclusion

7.0 References