1. Marketing Management
SHIMLA DAIRY PRODUCTS
Group 11
Pranav Gopal Jha (FT 12238)
Harshavardhan Chinchore (FT 12279)
Rajiv Garg (FT 12245
Siddharth Sureka (FT 12258)
Smruti Rekha Padhy (FT 12261)

2. Indian Scenario
 204 million cows and 84 million buffaloes, largest population of
cattle in the world.
 livelihood to 70 million dairy farmers.
 In terms of total milk production, India ranked first with 78
million tonnes in 1999-2000.
 India today is the lowest cost producer per litre of milk in the
world
 Milk yield per animal was very low in India at around 1.5 liters
per day.
 Main reasons for the low yield were
 lack of use of scientific practices in milking,
 inadequate availability of fodder in all seasons
 unavailability of veterinary health services.
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3. Cheese Market
 Indian palate broadly divided into the north and the south.
 North more exposed to cheese through Western food outlets such as
pizza chains and McDonald’s.
 To the south, cheese still a new food item
 International brands began to enter the market-Dutch Gouda, French
Camembert and Italian Parmesan.
 Shimla Dairy Products made local versions of all these cheeses.
 For Camembert, Shimla imported the starter culture and other
materials from Australia and France.
 The branded cheese market was estimated to be 9,000 tones per
annum valued at Rs1.8 billion
 Mainly consumed in urban areas- Four metropolitan cities accounted
>60 % of consumption.
 Per capita consumption, even among the cheese consuming
households, was a poor 2.4 kilograms per annum as compared to over
20 kilograms in the United States.
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4. Competition
 Dynamix –
 current supplier to most leading pizza chains
 processing capacity of 500,000 litres of cows’ milk per day
 GMP ,HACCP,ISO9002
 Gujarat Cooperative Milk Marketing Federation (GCMMF) —
Amul -Turnover: Rs25 billion in 2002
 Milkfed — Verka
 Andhra Pradesh Dairy Development Co-operative Federation
(APDDCF) — Vijaya -Vijaya Dairy Parlours and a chain of
retailers
 Britannia,Dabon
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5. Shimla Dairy Products
 Two plants within 120 kilometres of each other.
 First was located at 5,500 feet altitude while the other was at
a lower elevation.
 Both plants had a total cold storage facility of 12 tonnes.
 Shimla plant -8,000 litre throughput per day, Kiarighat plant
- 2,000 litres
 30 employees two shifts, -365 days a year.
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6. Production vs Consumption
Production
 Peak production season during the monsoons
 Lean production months occurred when there was comparatively much less
rain
 Peak cheese production was 22 tonnes of cheese per month
Sales
 Peak sales seasons directly opposite to peak production seasons.
 Holidays taken during monsoons-taken during the summer months
Storage
 22 tonnes of cheese produced in a month, minimum of 17 tonnes sold.
 Surplus stored to be sold during peak seasons.
 Cheese stored at 4C in the company’s own cold storage space, Capacity 20
tonnes of cheese.
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7. Pricing
 83% output- Cheddar/Mozzarella
 Parmesan imported from Italy-Rs2,500 a kilogram
 Shimla’s Romano - Priced Rs1,000
 Pizza cheese, Priced at Rs125 per kilogram.
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8. Distribution System
Distribution : See Chart
Retailer :
 Tamil Nadu and Karnataka
-Nilgiris ,Food World 85 %
 Kerala – Varkeys Supermarket.
 Hyderabad -Q mart and Giant,
 Bombay -D Mart and F Mart.
Speciality
 ‘The Cheese Shop’ in Shimla
 ‘Cheese and Wine’ shop in
Bangalore
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9.  Hotels:
Segmented under two categories:
 High-end, five-star hotels(90%)
 lower- to mid-end hotels.
 Four main types of restaurants:
 a) Italian restaurants (20 % market);
 b) Continental (15 %);
 c) Chinese (10 %)
 d) Indian (55 %).
 Pizza Chains
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10. Company
 Working Capital : 35 Lakh + Overdraft facility
 Pricing : High end Margin – 20 %
Low end Margin – 15%
 Marketing :
 Word of mouth
 Flyers ,Brochures
 Display at Shops, smaller shopkeepers provided with refrigerators
 Give Aways at Pizza corners
 Experiencing a growth of 15 -20 % in sales per annum as opposed to
7-8% growth for other cheese manufacturing companies
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11. Changes
 Night shift introduced, milk supplied twice
 Regular testing as per HACCP
 Plan to expand second plant by 2005
 Negotiation to become sole supplier to large Pizza chain
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12. Which area should it focus?
 Low End –
 Market very less penetrated, Low Awareness, Consumer not
ready ,Perceives cost as factor.
 North sales – 3000 kg/month (Delhi + Kolkata),Total
22000
 North more exposed to cheese through Western food
outlets such as pizza chains and McDonald’s
 Already following HACCP so easy to get license
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13. Was there a way to streamline operations and make
the production process more efficient?
 Reduce farmer travel, invest in better supply chain.
 Storage capacity to be improved from 20 tonnes.
 Product line consolidation from 29 varieties
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14. With the possibility of growing demand, would the
production facilities need to be expanded?
 Yes
 Dairy sector to triple in 10 yrs
 Army as customer where lucrative- large operations &
economies of scale needed.
 Attainment of Economy of scale – competitive advantage
against new entrants.
 Rate of growth faster than others - 15 -20 % in sales per
annum
 Better Supply chain management
 Processing capacity of competition high –Dynamix
-50000,New players planning to expand.
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15. How could the company market its products better?
Can it create more brand awareness?
 For Long term yes, since India has growing population of 1.2 billion,
good aware customers could be created who would be less price
sensitive.
How it can be done:
 More Specialty shops.
 Product line can be consolidated from 22 varieties since customer was
not very aware.
 Lure youth with western style food attraction.
 Advertisement about 30 years of legacy, HACCP, superior quality
products.
 Go for advertising like Amul.
 Negotiation with Pizza chain to be given prime importance
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16. Product Positioning for different market
segments.?
 Company should focus fast-food chains and restaurants for its
least expensive cheese-mozzarella, as they together
contribute 37% to the total cheese sale.
 Also focus on hotels with Cheddar and mozzarella cheese as
they contribute 40% of the total cheese sales
 Introduce high end cheese in metros where consumption of
cheese is high and enter in new markets with less expensive
variety of cheese.
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17. How to position Shimla to best take
advantage of the growth potential in the
industry
 Establish Brand Equity by implementing new marketing
strategies.
 Focus on products which would yield high profitability and
narrow down the current Product line.
 Capital Sourcing and Cash flow Management.
 Distribution and Promotions
 Increasing the current production capacity
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18. THANK -YOU
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