contemporary marketing in indian dairy industry

1. Indian Dairy Industry

2. INDUSTRY OVERVIEW
 India is the world’s largest
producer of dairy products
 The largest milk-producing
animal population of over
118 million
 The country accounts for
more than 13% of world’s
total milk production
 CAGR of 5% from 138
million tonnes in 2014 to
200 million tonnes in 2022
#DEE

3. DIFFERENT CATEGORY OF
PRODUCTS
#DEE

4. #DEEP

5. #DEEP

6. VISION & MISSION
VISION:
 Amul’s vision is to provide more and more sa
tisfaction to the farmers, their customers,
employees and distributers.
MISSION:
 We at GCMMF endeavour to satisfy the taste
and nutritional requirements of the customers
of the world, through excellence in marketing
by our committed team. Through co-
operative networking, we are committed to
offering quality products that provide best
value for money.
#DEE

7. CRITICAL SUCCESS
FACTORS
 Supply chain
 Competitive and penetrative
pricing
 Distribution
 Acquisition or production of high
quality cattle feed
 High quality raw milk
 Kiosks
 Legal and marketing issues
 Research and technology
#DEE

8. KEY CHALLENGES
Small Holder Level (Farmer level)
 Lack of good quality animal feed.
 Lack of animal health care facilities.
 Low genetic potentiality of animals.
Collection Level (Farmer to Companies)
 Involvement of too many intermediaries.
 Lack of infrastructure.
 Manipulation of quality of milk by farmers.
Processing Level (MANUFACTURING, TETRA PACK)
 Absence of quality standards.
 Adulteration and foods safety.
 Lack of trained and skilled workers.
#DEE

9. KEY CHALLENGES
(CONTD)Storage and Logistics level
 Lack of cold storage facilities
 Gap in cold chain and transport facilities
Co-operative Level
 Less number of member farmers
 Inefficient services
 Insufficient infrastructure
Marketing challenges
 Majority of the market is still unorganized
 Customer base
 Less penetration to the rural market
#DEE

10. SWOT
• Demand profile: Absolutely optimistic.
• Margins: Quite reasonable, even on packed liquid
milk.
• Flexibility of product mix: Tremendous. With
balancing equipment, you can keep on adding to your
product line.
• Availability of raw material: Abundant. Presently,
more than 80 per cent of milk produced is flowing into
the unorganized sector, which requires proper
channelization.
Strengths
• Perish ability: Pasteurization has overcome this
weakness partially. UHT gives milk long life.
• Logistics of procurement: Woes of bad roads
and inadequate transportation facility make milk
procurement problematic.
• Competition: With so many newcomers entering this
industry, competition is becoming tougher day by day.
Weakness

11. • Value addition: There is a phenomenal scope for
innovations in product development, packaging
and presentation. Given below are potential areas
of value addition:
• Steps should be taken to introduce value-added
products like shrikhand, ice creams, paneer,
flavoured milk, dairy sweets, etc.
• A lateral view opens up opportunities in milk
proteins through proteins, further opening
up export opportunities.
• Yet another aspect can be the addition of infant
foods, geriatric foods and nutritionals.
Opportuni
ties
• Milk vendors, the un-organized sector: Today
milk vendors are occupying the pride of place in
the industry. Organized dissemination of
information about the harm that they are doing to
producers and consumers should see a steady
decline in their importance.
• All that needs to be done is: to innovate, convert
products into commercially exploitable ideas. All
the time keep reminding yourself: Benjamin
Franklin discovered electricity, but it was the man
who invented the meter that really made the
money.
Threats

12. SUSTAINABLE BUSINESS
MODEL
 First, it must be commercially
successful
 Second, a sustainable business
model is future ready
 Third, it must be part of a
sustainable society.

13. HOW WE CAN DO THIS
Our consumers
 Through access to safe,
nutritious, high-quality
products.
 We value consumer trust
and relationships, and we
innovate
 To meet the full range of
global dairy consumer
needs.
Our planet
 Through the stewardship and
responsible use of natural
resources. We rely on
ecosystems and are
committed to their health.
 We manage our impacts on
air, biodiversity, land & water
through the conservation of
resources & we strive to
improve our footprint.

14. SUSTAINABLE BUSINESS
MODEL
Our communities
 Through contributing,
participating and investing
 Where we live and
operate. Our businesses
operate safely, maintain
agricultural heritage and
support community health
and development
 Through the provision of
educational, social and
economic opportunities.
Our employees
 Through ensuring a safe
and respectful workplace.
 We value the people on our
team.
 We commit to providing
safe and fair labour
practices and equitable
compensation and
providing employees with
training and development

15. SUSTAINABLE BUSINESS
MODEL
Our businesses
 Through a focus on long-
term economic vitality.
 We manage for risk,
prosperity and quality of
life of our farms, families,
communities and
stakeholders.
 We strive to ensure our
businesses are attractive to
successive generations.
Our cows & buffalos
 Through animal
stewardship.
 Our animals receive the
greatest respect, care, health
and comfort throughout
their lives.
 Dairy farmers understand
that healthy and productive
cows provide high-quality
milk.

16. Different Gaps
 Revamping the cooperative laws
 Recognising federalism in cooperatives
 Introducing integrated food laws
 Adulterations
 Quality and Standards
I. Following TPM, TQM & SIX SIGMA
II. Adopting food laws , environmental standard
III. Adopting HACCP
 Eco friendly measures
 Packaging

17. Different Gaps
 Skill Requirements and Skill Gaps
 storage and transportation
 cold chain facility
 Distribution networks
 Operational aspects( manpower)
 Infrastructural problems
i. plant machinery & components
ii. Industry dependence on imported machinery

18. Different Gaps
 Scientific farms
a. Need to develop “farm culture”( cattle more in numbers)
b. Breed development will lower the milk cost & encourage the
farmers to adopt animal rearing
 Government support
 Elimination of production quotas by the EU

20. IDEA DEVELOPMENT
 The first step in any product development is of course the
idea.
 It’s one thing to have an idea; it’s another altogether to
develop it.
 But once you have your idea well established, there are some
very important steps to pursue, including the design of a
business plan framework which encompasses the development
of procedures, milestones to achieve, estimates of financial aid
required, and an assessment of training needs.

21. PRODUCT DEVELOPMENT
Business Analysis
1. Preliminary evaluation of the market
 Decisions related to regional/global positioning need to be made. Things like format, prices,
quality, packaging and selling points need to be established. Will it be sold in retail stores or
available only to hotels, restaurants and other foodservice institutions?
2. Preliminary technical evaluation
 Following the market assessment is the technical evaluation. A technical pre-feasibility analysis
should be completed, enabling you to establish R&D needs along with defined steps to take, such
as assessing associated risks, and market and regulations alignment..
3. Market analysis and feasibility study
 Based on your preliminary market evaluation, detailed market and feasibility studies are needed.
This will help determine your positioning strategy, evaluating the cost of sale and the profit
margin. As well, it is an important step in establishing a strategy to present the product to
consumers and promoters.
4. Company concept, business model and business plan
 This is the document that brings together all the research and preliminary work done so far,
including a list of stakeholders who have offered their services. The business plan becomes a
guide for the project, a document you refer to and use for information purposes.

22. PRODUCT DEVELOPMENT
Commercialization
1. External product testing: The Consumer
 Testing the product in the lab is an important step, but the one that really counts is
product testing with actual consumers. The consumer buys your product, eats
/drinks your product, and hopefully, recommends your product; therefore, it’s
important to get the consumer’s feedback on every aspect.
2. Marketing Plan
 This is the part that involves the marketing mix: product, positioning, place, price,
promotion. These are key areas to plan for when you are preparing to launch a new
product.
3. Maintenance
 Just because your product is on the market does not mean your job is done.
Maintaining quality control, customer service, and distribution strategies on par
with your objectives should be a constant..

23. PROTOTYPE DEVELOPMENT
1. Prototype development
 Once the idea development process is complete, it’s time to develop the
product, or at least a sample or prototype of the product.
2. Product testing and organization of production
 Now that you know who your market is, how you want to position your
product, what it’s going to cost, and more importantly, what your profit
may be, it’s time to test the product. This involves quality assurance,
quality control, process control, bench top trials, taste-testing and pilot
scale trials.

24. SOME EXAMPLES OF NEW
PRODUCT DEVELOPMENT
 HP Hood launches low sugar, low-cal milk beverage HP Hood
LLC, based in Lynnfield, Mass., introduced a milk beverage
called Milk Wise, available in New England and upstate New
York. The beverage contains fewer calories, less sugar and
more calcium than traditional milk, according to the company.

25. DAIRY INDUSTRY VALUE CHAIN
Stakeholders Key considerations
Feed producers High input feed & grain costs significantly increase the production
variable costs
Short and medium term climatic conditions
Dairy producers High dependence on climatic changes
High input costs associated with production and farm management
as well as volatile retail prices inhibit producers from increasing
production
Dairy
processors
Increased pressure on margins
Alternative supply arrangements by supermarkets (private labels)
leading to supply chain complexities
Dairy product
manufacturers
Large inventories of unallocated dairy produce
Competition from local and private players
Dairy exporters Demand surge in emerging markets
Challenging production conditions and high operational costs
resulting in substitution risks
Retailers Consumers remain value-oriented and are open to considering non-
branded products spurring the growth of private labels
Low food price inflation as retailers continue to compete on price and
focus on private label strategies

26. Marketing
mix
Product
Price
Place
Promotion

27. PRODUCT
 Product description
 Target market and target customers
 Goals
 Features
Traditional
• Paneer
• Butter
• Pure ghee
• Khova
• Cream
• Butter milk/lassie
• Fresh milk
Value Added
• Processed cheese
• Infant food
• UHT/FLV milk
• Dessert mixies
• Ice cream
• Tetra pack/lassie
• Dairy whitener/condensed milk

28. PRICE
 Pricing decisions are ones that could have incredible impact
on marketing organization.
 Price strategies that are not built up under careful
consideration could lead the company to both financial loss
and declined market share.

29. CUSTOMER
SATISFACTION(PRICING)
 The packaged milk industry should create packaging solutions that save on
raw material and reduce the costs
 Pricing of packaged milk compared to loose milk
The price of packaged milk has frequently increased over the last few years. A
litre of full-cream milk now costs Rs 44. Similarly, toned milk prices have
increased to Rs 34 per litre and double-toned milk to Rs 28, while the price of
loose milk ranges between Rs 28 and Rs 32 per litre
 The government’s initiative to improve animal productivity should help in the
long-term
 Factors influencing rising inflation are rising wages, devaluation leading to
increased import prices, increasing raw material prices, declining productivity
and higher taxes.

30. PLACE
 Place (the term does not refer to business location itself but
rather the customers’ location)
 Channels for effective and efficient products distribution
 He early stage of cows importing, herd control, veterinary
care, disease prevention and treatment to milking, the fresh
milk is transported and stored by cooling tank trucks at 2-4
degrees C in order to best preserve the nutrients

31. PROMOTION
 Promotion in exclusive outlets
 Promoting events
 Mass media and print media
 Women oriented promotion such
(mall activities)
(salon and spa)
 Social media

32. MOTHER DAIRY
Objectives
 Increasing brand
awareness among the
targetted audiences
 Increase fan base for
the company
 Increase fan
engagements for the
company

34. MOTHER DAIRY
Results
 The Mother Dairy Ice Creams ‘Ice Truck Grabber’ game application
was live on the Facebook page and ran for a period of 2-3 months.
 During this period, the response was overwhelming, on all parameters,
the campaign was a success. Few important numbers are given below.
 Parameter Time period Number No. of New 3 weeks 12,000+ New
Likes in 3 weeks.
 LIKES No. of entries 3 weeks Over 1,000 entries in all. to the contest 9
winners got Mother Dairy Ice Creams No. of winners 3 weeks Goodies.
 15 Social Media Case Study – Mother Dairy Ice Creams.

35. PRODUCT INNOVATION
 Organic milk
 Adoption of digital technologies (e.g. Ghowardhan)
 Extended shelf life (ESL) products and ultra-high
temperature (UHT) milk,
 Advanced manufacturing processes and technologies
 Develop niche products catering to health conscious
consumers

36. AMUL RECEIVES GREEN GLOBE
FOUNDATION AWARD
 GCMMF received this award for its mass tree plantation drive
and contribution to environment by the milk producers of
Gujarat
 30 lakh milk producers of Gujarat have planted more than 312
lakh trees in 15000 villages
 Amul has shown its concern, awareness and commitment for
betterment of environment
 Has set an example for all the cooperatives and other
institutions to turn India green in the era of global warming and
environmental crisis.

37. NESTLE ECO-FRIENDLY
ALTERNATIVE PACKAGING
(BOTTLE )
 It’s environmentally friendly bottle shape uses at least
15% less plastic
 They are coming up with a newer version that will use
30% less plastic
 The plastic they do use is thinner so it is easier to
recycle these bottles
 The best eco-friendly alternative is a sustainable bottle,
which you fill with water you filtered yourself.