A REPORT ON

A STUDY ON CUSTOMER LOYALTY OF GOKUL MILK

By:Mr. Amit DumbreMr. Anand MehtaMs. Chaitali GhoshMr. Rahul ChavanMr. Shailendra KumarMr. Tabrez

MBA Program(Class of 2005-2007)ICFAI National CollegeNerul- Navi Mumbai

Gokul MilkKolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.,

Table of Contents

1 Objectives…………………………………..32 Background………………………………...43 Location…………………………………….54 Chairman's

Statement……………………..65 Questionnaire………………………………76 Market share……………………………….87 Logistics…………………………………….98 Products…………………………………….99 Activity……………………………………...1310 Reasons for using    milk

brands…………...1511 Availability…………………………………

15

12 Reasons…………………………………….16

13 Quantity……………………………………17

14 Expectations……………………………….18

15 SWOT Analysis…………………………….18

16 Awards………………………………………20

17 Conclusion………………………………….22

Objectives: To survey market demand and consumption of major

traditional dairy products of Gokul Milk, as also their process know-how up gradation.

To identify leading players in Surveyed Areas.

To explore marketing opportunities and investment prospects.

Ensure an assured market for Milk producers throughout the period, as well as good remunerative prices. 

Analyze growing need for Milk & Milk products of the consumers in Navi Mumbai & else where. 

Study the Co-operative structure of milk producers at the village level. 

Imparting training for developing human resource at rural level for effective leadership, Management skills & improvement of services to rural Milk producers. 

Background

The Kolhapur District Co-operative Milk producers Union Ltd., Kolhapur was established on 16th March, 1963 under the Co-operative Act. It made a moderate beginning by collecting 700 liters of Milk per day from 22 societies. Most success stories have a humble beginning & so have been with 

Kolhapur Zilla Dudh Utpadak Sangh Mayadit.

On 16th March 1963 a spark stormed a fire to help the White Revolution revolt heavily, when on this day came into being the “Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd” with the introduction of its popular brand of Gokul Milk & its wide range of Dairy products in to the market.

LocationsFollowing series of images will help you locate Kolhapur, where we are located. Simply click the hotspot areas on the following images.

The Kolhapur Production Unit location

A word from    Chairman,

Mr. Vishwasrao Patil...

Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd., Kolhapur, commonly known as Gokul is a farmer's Dairy Co-operative organisation dealing with more than 300,000 rural milk producers. This professionaly managed organisation is working under able and dynamic leadership of its Chairman, Shri Vishwasrao Patil. Its paid-up share Capital is of Rs.150 million and its annual turnover is of Rs.3.5 billion.

Daily 460,000 liters of milk is handled by the organisation out of which about 80% share is of buffalo milk. Its main dairy of 750,000 lpd capacity with powder plant of 30 M.T. per day capacity is situated at Kolhapur in Maharashtra State. This processing facility is supplemented by a chain of Chilling units located in its operational area.

On the merit of its excellent performance, the organisation has won Indian National Productivity Council Awards for 11 times during last 11 years.

 It is highly cautious in observing strict quality control norms in its various operations. By virtue of this it could be proud recipient of ISO-9002 certification in the year 1998.

While striving hard to provide utmost satisfaction to its esteemed customers it is also constantly endeavouring to improve the quality of life of its rural producer members through execution of unique village development programmes i.e. Gokul Gram Vikas Yojana.

In order to enhance Milk production, the Sangh provides on credit, quality

Cattle feed on a 'no profit no loss' basis, as well as free A.H. services & nominally charged A.I. services to the Producer members.

All-round achievements of organisation is cumulative outcome of visionary directions from its members of Board of Directors, Managing Director, dedicated work put up by its able and devoted staff and last but most important one is whole hearted involvement of its member-producers in policies of organisation.

Vishwasrao Patil

Questionnaire for the customers:-

1. Which milk do you prefer?2. What are the reasons for using

that product?3. For how long are you using that

product?4. How much quantity do you

purchase?5. What is your way of purchase?6. Have you anytime switched from

one company to another?7. Are you with this roduct? If yes or

no why?8. Which are the expected areas for

improving?9. If there is a price reduction in the

compititors product then will you have a shift?

10. Are you satisfied with the service provided by the distributers ?

Market Share

Others82%

Gokul18%

1 According to our survey Market share of Gokul Milk is 18 % in surveyed area.

2 Remaining 82% market share are captured by Amul, Warana, Mahanada and others.

Logistics

Logistical competency is achieved by coordinating the following:

1 Network Design2 Information3 Transportation4 Inventory5 Warehousing

Products

The Gokul Dudh Sangh Products are extremely popular in the Local & Distant Markets. Branded as Gokul Products, they include Milk, Shrikhand, Ghee, Table Butter, Skimmed Milk Powder & White Butter.Moreover, Skimmed Milk Powder is IS-Part I & Part II Extra Grade, which is on its way to capture the global market. In 1988, Liquid Milk Marketing was launched in Mumbai by the Dudh Sangh. Sales initially were 16,000 Liters/Day. Today Standard, Cow & Tonned Milk together account for more than 3.5 Lakh Liters/Day. In 1993 Gokul Milk was launched in Pune where the sales are 20,000 Liters/Day. The present sale in local Milk market

is 70,000 Liters/Day.

MilkBrand GokulPacking sizes 1 Liter & 500 m.l. Pouches

Standardized MilkFat 6.5 %SNF 9.2 %Rate per Liter Rs. 17/- Local Rs. 18/- for Pune, Kokan & Belgaum Rs. 22/- in Mumbai, Thane & Raigad District

Cow MilkFat 4.1 %SNF 8.5 %Rate Rs. 16/- Mumbai, Thane & Raigad District

Tonned MilkFat 3.1 %

SNF 8.5 %Rate Rs. 13/- for Mumbai, Thane & Raigad District Rs. 12/- for Pune, Kokan & Belgaum(Toning can be defined as the addition of the constituted skim milk to whole buffalo milk so to reduce the fat to 3%. Its nutritive value is almost similar to that of the fresh cow's milk. It is a useful source of protein for special conditions such as malnourishment, pregnancy etc.)

Shrikhand

Brand GokulVariety Badam Pista Mango, Ilaichi, NutmegFat 7 %Sugar 40 % Protein 9 % Packing Sizes Rates per K.g.500 gm. Poly BagRs. 60/- (only for Ilaichi)500 gm. Cup Rs. 73/-250 gm. Cup Rs. 75/-100 gm. Cup Rs. 85/-

Ghee

Brand GokulPacking sizes 1 K.g Pouch 500 gm.    Pouch

Fat 99.7 %Moisture 0.3 %Rates Rs. 130/- per 1 K.g

Table ButterBrand GokulPacking sizes 500 gm. Pack 100 gm. PackFat 80.5 %Moisture 16 %Salt 2.5 %Curd 1 %Rates Rs. 115/- per K.g. Rs. 120/- per per K.g.

Skimmed Milk Powder

Brand GokulPacking sizes 1 K.g. Poly Bag 500 gm. Poly Bag 100 gm. Poly Bag 25 Kg. in BagFat 1.0 %Moisture 3.5 %Protein 35 %Carbo-hydrates 51 %Minerals7 % Rates

1 K.g Poly Bag, Rs. 90/- per K.g. 500 gm. Poly Bag, Rs. 90/- per K.g. 100 gm. Poly Bag, Rs. 100/- per K.g.

White ButterBrand GokulPacking size 20 K.g. BoxFat 83 %Curd 1 %

ActivitiesMilk Procurement

The rated capacity of the Gokul Dairy is 6.5 Lakh Liters per day. Dudh Sangh covers 2569 village level dairy co-operatives on 151 milk routes for

Milk procurement everyday.

Since then, the figure has shot up year after year & today in the year 2000, the average procurement is 4.50 Lakh Liters per day. The ratio of Buffalo Milk to Cow Milk capacity is 78% to 22% respectively. The Buffalo fat is 7.21% (SNF 9.4%) & the Cow fat is 4.2% (SNF 8.6%). 

Preventive & Clinical Veterinary Services

A team of 47 trained veterinary graduates is recruited by the organization to cater to the Preventive & Clinical Veterinary needs of the milk producers. Each Veterinarian looks after an area of about 20 villages & provides mobile services round the clock at their doorstep. The Field Veterinarian is provided with a vehicle.

Breeding Services

In its operational area 243 Artificial Insemination centers have been established by the Union. All the necessary inputs to these centers such as LN2, semens, sheath, & even Cryogenic containers are made available by the union. At present more than 700 villages are covered under these services.

Fodder Development

A team of 5 Agriculture Graduates with the assistance of 5 supervisors are currently working under Fodder development section of the Union. Under this programme seeds of improved fodder varieties are distributed at 25% subsidy cost. Moreover, Manual Chaff Cutter & Power driven Chaff Cutter are distributed at 25% & 30% subsidy respectively also. 

Cattle feed Plant

In 1982, Dudh Sangh started production of 100 MTPD Cattle feed under the brand name Mahalaxmi. To meet the increasing demand for Cattle feed, Dudh Sangh expanded the plant capacity upto 200 MTPD.

 The production was later switched to by-pass feed to meet more demand at the same production capacity. The sale of Mahalaxmi Cattle feed is only meant for the village level Dairy Co-operatives that are affiliated to the Dudh Sangh.

Gokul Gram Vikas Yojana

The Dudh sangh, while keeping a keen eye on the quality of its products, also believes in the development of its Co-operatives. In March 1990 with the help of NDDB a program known as Gokul Gram Vikas Yojana was implemented.

This program covered Women’s Education, Member Education, Management Training, Youth Group Discussion, Leadership Development Program & Refresher Courses. Recently it has also included adoption of a Village for development. Initially more than 250 Villages were bene-ficiaries of this programme.

Reasons For Using Milk Brand

LowHighLowHighLowADVERTIZEMENT

Avg.GoodGoodBetterGoodPACKAGING

EasyEasyAvg.HardEasyAVALIBILITY

LowLowLowHigh High PRICE

√√√√√QUALITY

OTHERSWARANAMAHANANDA

AMULGOKUL

LowHighLowHighLowADVERTIZEMENT

Avg.GoodGoodBetterGoodPACKAGING

EasyEasyAvg.HardEasyAVALIBILITY

LowLowLowHigh High PRICE

√√√√√QUALITY

OTHERSWARANAMAHANANDA

AMULGOKUL

Availability

1 Door - To – Door

1 Retail Outlets

1 Malls

1 General Stores

Reasons

1 Gokul to Others

Highly conscious Comparatively costly Easy availability of competitor

products Less importance to umbrella

branding

1 Others to Gokul

1. Comparatively high quality2. Preference during occasions3. Expanded market demand4. 2 to the value of 1

QuantityMilk consumption

2

4

6

00

8

12

00 0

4

00

10

12

22

4 4

2

<1 1 2 >=3No. of Liters

Gokul

Warana

Amul

Mahananda

Others

1 Based on the survey of 72 consumers this graph shows the daily

consumption of different milk brands.2 I t can be seen that only 12 people

have gone for Gokul milk and rest for others which is about 18:82 ratio.

3 T his graph conveys that there is a huge market for Gokul to capture in Navi Mumbai area.

Expectations

1 Carton Packaging2 Low fats3 Avoid adulteration4 Increase in retail outlets5 Price effective 6 Maintaining high quality

SWOT Analysis

Strengths:

1. High quality2. Heavy demand during occasion3. Goodwill 4. Capture of rural market (Maharashtra)

Weaknesses:

1. Lack of marketing strategies2. Less emphasis on R & D3. Less focus on their other milk

products

Opportunities:

1. To concentrate on competitors market2. To increase the awareness of its by

products3. Match the international

Standards ( in all aspects ) 4. To motivate the distributors5. Have some extra benefit opportunities

for the consumers

Threats:

1. Competitors aiming at international standards in packaging and quality

2. The adulteration in the consumers market

3. People being diet conscious4. Easy availability of competitors

products

Awards

Gokul Dudh Sangh, thanks to its high production standards & exemplary performance, has won the National Productivity Council Award 11 times since year 1988-89.

Under guidance & assistance from NDDB & FAO, Gokul implemented a Quality Management System. The System contributed towards improving quality of the plant & its output not only up to the National standards but well enough to compete at International levels.

Here are some details of the awards that we have won over past years..

The image on the left denotes 1st Prize for  National Productivity Council Award. The 1st Prize was won for the following years

89-90

91-92

and 93-94 (won for both Dairy & Cattle feed categories)

The image on the left denotes 2nd Prize for  National Productivity Council Award. The 2nd Prize was won for the following years

92-93 (won for both Dairy & Cattle feed categories)

94-95 (won for both Dairy & Cattle feed categories)

and 96-97

The image on the left denotes the Merit Certificate award, which was won for the following years

93-94

94-95

ConclusionBased on the survey conducted conclusion can be stated as

1Inspite of maintaining high quality Gokul has not won 100% customer loyalty.

2Gokul Customers may shift to competitors product if the quality offered by them is superior.

3The customers also tend to shift on the basis of easy availability of the competitors product.

4Gokul has a potential of capturing the maximum

market if they have a strong marketing strategy.