CHAPTER - VII

SUMMARY, FINDINGS AND RECOMMENDATIONS

INTRODUCTION

This chapter presents summary, findings and recommendations of the

study. It was a case study of Malabar Milk Cooperative Producers Union to

evaluate its operations, management and marketing activities with a view to

identifying major strengths, weaknesses etc. This study had as major objective

identification and analysis of the real problems that MRCMPU faced with a

view to generate useful information for it to formulate an effective strategy

that can make it vibrant and more competitive.

The following part of this chapter shows summary of the study,

findings divided into major findings and other findings, results of hypothesis

testing and also the recommendations of the study.

SUMMARY

The introduction chapter dealt with a brief report of dairying in India

and Kerala, Operation Flood and its phases, and the formation of KCMMF

(Milma). The problem, scope, and objectives of the study, hypotheses, and

methodology were elaborated. Besides sample design, research design, the

tools of analysis, data collection tools, limitations and chapter scheme of the

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study were also explicated. A brief explanation about KCMMF Ltd,

MRCMPU Ltd, and MCDMU Ltd were also included. Definitions of various

terms such as competitive advantage, competitive strategy, core competence

and competitive analysis were also presented. In the last part of the

introduction chapter, various studies conducted within the country and outside

the country on competitiveness of dairy sector were reviewed.

In the second chapter, the mission of Milma, its area of operation,

activities and other programmes were mentioned first. As the first part of the

first secondary objective was to evaluate the performance of KCMMF Ltd in

general, seven variables such as growth of APCOS, growth in farmer members

and suppliers, growth in procurement of milk, growth in milk sales, growth in

milk products sales, growth in turnover and profitability of KCMMF were

analysed and interpreted. For this, secondary data from the annual reports of

KCMMF Ltd for the period 1990 to 2003 were used.

As part of the first secondary objective, to evaluate the performance of

MRCMPU Ltd, operational performance, financial performance and value

addition were analysed. Operational variables such growth rate of APCOS,

growth rate of farmer members, milk procurement, sales of milk, sales of milk

products were considered first. Next, financial variables such as profitability

ratios such as gross profit margin, net profit margin, operating profit margin,

operating ratio, turnover ratios such as total assets turnover, fixed assets

turnover, working capital turnover, inventory turnover, profitability ratios in

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relation to investment such as return on total assets, return on capital

employed, return on equity, and solvency ratio like debt equity ratio of dairies

and MRCMPU were ascertained. Under value addition variables , gross value

addition, net value addition, total value addition, value of production,

incremental gross value addition, incremental net value addition, incremental

total value addition were analysed.

The fourth chapter dealt with the analysis for the second secondary

objective of the study. Data from the survey of retailers of Milma milk and

milk products were analysed. Distribution of Milma milk and milk products

from the dairies, selling of Milma milk and milk products through the outlets,

and competition from other firms in the milk and milk products market were

part of the analysis. Analysis of distribution covered the delivery of milk and

milk products, convenience in delivery time of Milma milk and milk products,

availability of Milma milk and milk products were studied. Under selling of

milk and milk products, movement of milk, seasonal variation of Milma milk,

seasonal variation of Milma milk products were evaluated. Since Milma

claimed that competition was one of the major problems, competition from the

other private firms in Kannur, Kozhikode and Malapuram districts was

examined in detail. Under competition, intensity of competition, ultimate

effect of competition, decline in counter sales were taken into account. Cornell

technique was used in order to measure the overall retailer satisfaction score.

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The fifth chapter mainly focused on customer service level of

MRCMPU and consumer satisfaction. In order to cover the first part of the

third secondary objective, the customer service level of MRCMPU to

maximise the customer’s perceived value of the brand was evaluated. For this,

awareness, availability, purchase of Milma milk and milk products, and

loyalty of consumers of Milma milk and milk products were considered. To

evaluate consumer satisfaction, cornel technique was used to ascertain

consumer satisfaction score. For this, availability, price, quality, packing of

Milma milk and milk products and response of Milma to changing needs were

taken into account. Finally, purchase of milk and milk products by the

nonusers of Milma milk, their opinion about price and quality of Milma milk

and milk products and the general matters affecting the quality of milk and

milk products were taken into account.

As the fourth secondary objective of this study was to assess

operational efficiency of MRCMPU and recommend measures to enhance

efficiency of operations, the study focused on developing various models such

as forecasting model, processing model, inventory model, location planning

and SWOT Analysis of MRCMPU. Forecasting model was developed to

forecast the demand of milk and milk products. The processing model

suggested ways and means to enhance the volume of production of milk and

milk products in the fragmented supply chain. A model for capacity utilisation

of milk and milk products equipment was developed to identify idle time and

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bottlenecks. Inventory model aimed to ascertain the amount of safety stock

necessary to satisfy a given level of demand by considering the joint impact of

demand and replenishment cycle (performance cycle) variability. The model

location planning was developed to indicate location planning to fix two or

more locations in a particular route of distribution. Finally, the strengths,

weaknesses, opportunities and threats of MRCMPU were identified with the

help of SWOT Analysis in order to evaluate the strategy of MRCMPU.

MAJOR FINDINGS

The major findings of this study are presented below. They are

followed by some minor findings and then the results of hypotheses testing.

MRCMPU states that its main problem is surplus milk during flush

season. The problem was analysed and found that on an average,

MRCMPU had 5.6 kilo litre per day (klpd) of surplus milk. The average

milk procurement of Palakkad and Wayanad districts (from 1991-92 to

2003-04) was 116.1 klpd. But the average milk procurement of

Kozhikode, Malapuram, Kannur and Kasargod Districts was only 48.8

klpd. Both Palakkad and Wayanad Districts procured more than 70

percent of the total milk that was procured by MRCMPU. On an average,

MRCMPU procured 71.0 klpd from Palakkad District but it could sell

only 34.0 klpd through Palakkad dairy (from 1991-92 to 2003-04).

Surplus milk of MRCMPU was the result of surplus milk from Palakkad

District.

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On an average, the annual growth in procurement of milk of

MRCMPU was 15.2 percent as against 11.5 percent growth in milk sales.

The growth rate in milk sales was not proportionate to the growth in milk

procurement. That is, there was an imbalance between milk procurement

and milk sales. Moreover, milk sales per agency of MRCMPU showed a

steady decrease. It might be either the overcrowding of agencies or

inefficiencies of agencies in selling milk.

MRCMPU cited its next problem was growing competition

from private firms. The findings of this study are that about 71.0 percent

of the retailers experienced competition for two to three years. About

44.0 percent of the retailers were of the opinion that competition was

very low. But 30.0 percent of the retailers were of the opinion that

competition was moderate and above moderate. Moreover, 68.0 percent

of the retailers were of the opinion that competition had rarely or never

affected Milma sales. It showed that the intensity of competition was not

generally high. But its intensity was high in Malapuram District in

comparison to that in Kannur and Kozhikode districts. Other firms gained

more market share in milk and milk products where Milma was not

actively present. In Malapuram district, private firms sold milk and milk

products much more than what they sold in the other districts of the state

because MRCMPU was not keen about that market as it was far away

from its dairy in Kozhikode. Retailers in Malapuram District were of the

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opinion that during the employees strike at the Kozhikode dairy, supply

of milk in Malapuram district was disrupted and it caused a shortage of

milk there. During this period, private firms made a smooth entry into the

market of Milma in that district. Except a few leading private brands,

most firms had no longer a strong presence in that district. Other firms

offered higher commission, provided credit facility to retailers, took back

the unsold milk and milk products, and encouraged hotels and restaurants

to buy their milk by advertising more fat content in their milk.

The effect of competition can also be measured by evaluating

the decline in the counter sales of Milma milk and milk products. In

Kannur District nine out of seventeen retailers (53.0 percent), were of the

opinion that the decline in the sale of Milma milk was 14.2 percent of

total milk sales, in Kozhikode District seven out of seventeen retailers

(41.2 percent), were of the opinion that the decline in Milma milk sales

was 37.4 percent of total sales and in Malapuram District ten out of

sixteen retailers (62.5 percent) were of the opinion that the decline was

24.6 percent and, in all twenty six out of fifty retailers (52.0 percent)

were of the opinion that the decline was 25.4 percent.

Similarly, in the case of curd sales, eight retailers of Kannur

District, three retailers of Kozhikode District, two retailers of Malapuram

District and in all thirteen retailers were of the opinion that there was

decline in counter sales of Milma curd due to competition. On an

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average, in Kannur District, decline in the counter sales of Milma curd

was 10.4 percent of total sale of curd, in Kozhikode District it was 40.3

percent and in Malapuram District it was 38.0 percent. In the case of

sambharam, only one retailer in Kannur district was of the opinion that

there was decline in counter sale of Milma sambharam due to

competition. On an average, decline in the counter sale of Milma

sambharam was 16.7 percent.

Shakthi, Amrut, Arogya, K S, Taste me, were the major

competitors. In Kannur District, local brands such as Nimmees, Kepees,

and Prema sold curd at a price lower than the price of Milma.

In the case of competition from other private firms, thirty

nine retailers (78.0 percent) had average satisfaction, and eleven retailers

(22.0 percent) had high satisfaction. No retailer of all the three districts

had low satisfaction. As the majority of retailers came under average

satisfaction, and no retailer of any of the three districts came under low

satisfaction, competition was found to be at a moderate or a low level. It

supported that competition from other private firms was not the major

problem of MRCMPU.

One of the main problems of MRCMPU was high

procurement cost. The average cost of goods sold ratio of MRCMPU was

92.3 percent. The average ratio of raw materials to value of production of

MRCMPU was 86.0 percent. Milk procurement price of MRCMPU was

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higher than that of MCDMU. About 80.0 percent of the selling price of

the milk was given by way of procurement price to the farmers. The ratio

of procurement price and transport cost to the selling price of the milk of

MRCMPU was higher than that of MCDMU.

Incremental value addition of MRCMPU was unsatisfactory.

The average incremental gross value addition, net value addition and total

value addition on value of production of MRCMPU were 0.1 percent,

zero percent and -0.2 percent respectively. More or less, cent percent of

the value of production was consumed by way of raw material cost,

production expenses, administrative expenses, selling & distribution

expenses and depreciation.

The average operating ratio of MRCMPU was 103.2 percent.

On an average 73.0 to 90.0 percent of total value addition was applied for

meeting employee cost and the remaining portion of value addition was

applied to meet interest, and tax. No portion of value addition is left for

returns to the owners. It showed that major portion of total value addition

of MRCMPU was applied for meeting employee cost.

The average debt equity ratio of MRCMPU was 1:1.3. It

showed that long-term debts constituted a major portion in the total

capitalisation of the Union.

In the case of delivery of Milma milk and milk products, 78.0

percent of the retailers had average satisfaction, 8.0 percent of the

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retailers had low satisfaction and 14.0 percent of the retailers had high

satisfaction. As the majority of retailers had average satisfaction,

MRCMPU was in a position of competitive parity while delivering milk

and milk products. There was no significant difference in the case of

dealer satisfaction in terms of delivery of milk and milk products among

the three districts.

In the case of selling of Milma milk and milk products, 82.0

percent of the retailers had average satisfaction, 2.0 percent had low

satisfaction, and 16.0 percent had high satisfaction. As the majority of

retailers had average satisfaction, MRCMPU was in a position of

competitive parity while selling milk and milk products. There was no

significant difference in the case of dealer satisfaction in terms of selling

of milk and milk products among the three districts.

In the case of overall dealer satisfaction, 84.0 percent of the

retailers had average satisfaction, 16.0 percent had high satisfaction. As

no dealer of any of the three districts had a low score, no dealer appeared

to be less satisfied. As the majority of retailers had average satisfaction,

MRCMPU was in a position of competitive parity in terms overall

retailers satisfaction score. There was no significant difference in the case

of overall retailers satisfaction score among the three districts.

On the basis of average scores ascertained, easy availability

of milk ranked first. Hygiene factor ranked second. Door delivery ranked

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third. Brand image ranked fourth. Price of Milma milk was fifth and

reliable service of Milma ranked sixth. Suitable packing of Milma milk

ranked seventh. Lack of alternative source of milk was in the eighth

position. Keeping (shelf) life of Milma milk and pleasant flavour

followed in that order.

About 29 percent of the consumers were of the opinion that

they had to wait for supplies of Milma due to stock out. A little over 23

percent of the consumers were ready to wait upto fifteen minutes if

Milma did not arrive in time to replenish stock. Not less than 25 percent

of the consumers were ready to wait for fifteen to thirty minutes, and 29.7

percent of the consumers were ready to wait for thirty to sixty minutes.

About 8.0 percent of the consumers were ready to wait for one to two

hours and two to four hours each. About 6.0 percent of the consumers

were ready to wait for more than four hours to buy ‘Milma’.

About 89 percent of the consumers of Milma milk were of

the opinion that the same quality grade milk was not available at lower

price from any other suppliers. The finding is that majority of the

consumers of Milma milk had no alternative source of milk at lower price

than Milma. Moreover, 50.0 percent of the consumers of Milma milk

were of the opinion that other than from Milma, fresh milk was not

available during the normal business hours. They hardly use the milk of

other firms. But 42.5 percent of the consumers of Milma milk purchased

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milk substitute for domestic use. Out of which, 86.3 percent of the

consumers of Milma milk used milk powder and the remaining 13.7

percent of the consumers used condensed milk.

About 23 percent of the consumers of Milma milk were of

the opinion that fresh milk was available throughout the business hours

from other suppliers, but milma was not. MRCMPU would lose about

one fourth of its consumers if supply does not reach within 15 minutes of

delivery time, again one fourth of its consumers within the next 15

minutes, and one fourth of its consumers in the next thirty minutes. It

would lose more than 78.0 percent of its customers if Milma does not

arrive in time. Hence MRCMPU must ensure availability of milk in retail

outlets whenever it is needed by the consumers.

Hygiene factor was the second ranked one. On an average,

1.7 percent of the consumers of Milma milk used other brands of milk.

The main reasons for not using the milk of other firms were poor quality

and poor hygiene.

Both households and non households ranked the factors easy

availability of milk, hygiene and door delivery of milk as first, second

and third respectively. Non households got milk at competitive price

from other sources but they preferred Milma milk due to its brand

reputation. Non households were not of an opinion that Milma milk could

be kept for long hours. Non households had alternative supply source for

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milk. Leakage of milk was high in the case of non households as they

took large quantities of milk and they faced shortage of Milma milk too.

Door delivery of Milma milk was very poor in Kannur

district, whereas it was efficient in Kozhikode and Malapuram districts.

Consumers of Milma milk in Kozhikode and Malapuram districts had

alternative source for milk but not for people in Kannur district.

Both households and non households ranked first with regard

to the factor of easy availability of curd. Non households were not

satisfied with the price of curd. They could get curd at a price less than

that of Milma from other firms. Non households were dissatisfied with

the quality of curd and its packing. Brand image was given more

importance and lack of alternative supply source got no score from non-

households. It meant that non households used Milma curd because of its

reputation.

In the case of availability of Milma milk, 94.4 percent of the

consumers of Toned Milk in summer and 96.7 percent in monsoon and

winter had average satisfaction. 95.7 of the consumers of Milma Rich in

summer, monsoon and winter had average satisfaction. Cent percent of

the consumers of Milma Smart and Homogenous Toned Milk had

average satisfaction in all seasons. Hence MRCMPU was in a position of

competitive parity in the case of availability of all varieties of milk in all

seasons.

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In the case of availability of Milma milk products, 98.3

percent of the consumers of Milma ghee in summer, and 96.7 percent in

monsoon and winter had average satisfaction. In summer 90.8 percent of

the consumers of Milma curd, 95.4 percent in monsoon, and 92.3 percent

in winter had average satisfaction. In summer 93.8 percent of the

consumers of Milma sambharam and 75.0 percent in monsoon and winter

had average satisfaction. 90.0 percent the consumers of Milma ice cream

in summer and winter, and 60.0 percent in monsoon had average

satisfaction. Hence MRCMPU was in a position of competitive parity in

the case of availability of all varieties of milk products in all seasons

except sambharam and ice cream in monsoon.

In the case of price of Milma milk, 90.8 percent of the

consumers had average satisfaction. 9.2 percent of the consumers had low

satisfaction. But no consumer had high satisfaction. MRCMPU was in a

position of competitive parity in the case of price of Milma milk. There

was no significant difference in the case of consumer satisfaction as

regards the price of Milma milk among the three districts.

In the case of price of Milma milk products, 75.0 percent of

the consumers of Milma milk products had average satisfaction. 16.7

percent of the consumers of Milma milk products had low satisfaction.

But 8.3 percent of the consumers of Milma milk products had high

satisfaction. MRCMPU was in a position of competitive parity in the case

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of price of Milma milk products. There was no significant difference in

the case of consumer satisfaction as regards the price of Milma milk

products among the three districts.

In the case of quality of Milma milk, 65.0 percent of the

consumers of Milma milk had average satisfaction. 23.3 percent of the

consumers of Milma milk had low satisfaction and 11.7 percent, had high

satisfaction. MRCMPU was in a position of competitive parity in the case

of quality of Milma milk. There was no significant difference in the case

of consumer satisfaction as regards the quality of Milma milk among the

three districts.

In the case of quality of Milma milk products, 69.2 percent of

the consumers of Milma milk products had average satisfaction 19.1

percent of the consumers of Milma milk products had low satisfaction,

and 11.7 percent of the consumers of Milma milk products had high

satisfaction. There was no significant difference in the case of consumer

satisfaction as regards the quality of Milma milk products among the

three districts.

In the case of packing of Milma milk, 59.2 percent of

consumers of Milma milk had average satisfaction. Exactly 20 percent of

the consumers of Milma milk had low satisfaction, and about 21 percent,

had high satisfaction.

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In the case of packing of Milma milk products, 77.5 percent

of the consumers of Milma milk products had average satisfaction. 11.7

percent of the consumers of Milma milk products had high satisfaction,

and 10.8 percent of the consumers of Milma milk products had low

satisfaction.

In the case of handling of consumers complaints, 91.7

percent of the consumers of Milma milk and milk products had average

satisfaction. 6.7 percent of the consumers of Milma milk and milk

products had low satisfaction, and 1.6 percent of the consumers of Milma

milk and milk products had high satisfaction. MRCMPU was in a

position of competitive parity in the case of handling of consumers

complaints.

In the case of innovation in marketing, 94.2 percent of the

consumers Milma milk and milk products had average satisfaction. 3.3

percent of consumers Milma milk and milk products had low satisfaction,

and 2.5 percent of the consumers Milma milk and milk products had high

satisfaction. MRCMPU was in a position of competitive parity in the case

of innovation in marketing.

In the case of scheduling of delivery time, 85.0 percent of the

consumers of Milma milk and milk products had average satisfaction. 8.3

percent of the consumers had low satisfaction, and 6.7 percent of the

consumers of Milma milk and milk products had high satisfaction.

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MRCMPU was in a position of competitive parity in the case of

scheduling of delivery time.

In the case of granting of agencies, 89.2 percent of the

consumers of Milma milk and milk products had average satisfaction. A

little over 8 percent, had low satisfaction, and 2.5 percent, had high

satisfaction. MRCMPU was in a position of competitive parity in the case

of granting of agencies.

There was no significant difference in the case of consumer

satisfaction as regards response of Milma to changing needs among the

three districts.

A large majority of the consumer respondents (82.5 percent)

(for the last five yeas) were regular consumers of Milma milk, and it

increased to 90.0 percent. Moreover, 14.2 percent of the consumers (for

the last five yeas) were the occasional consumers of Milma milk, which

decreased to 10.0 percent. It meant 4.2 percent of consumers (occasional)

of Milma milk became the regular consumers of Milma milk. Again 3.3

percent of the consumers of Milma milk (for the last five years) who

were the non users of Milma milk became regular consumer of Milma

milk. Non user of Milma milk (for the last five years) had become either

regular or occasional consumers of Milma milk. The current base of

regular and occasional consumers of Milma milk will remain with milma

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in the future also. Hence MRCMPU can sustain its current rate of milk

sales in the next few years.

Of the consumer respondents, 59.2 percent were regular

consumers of Milma milk products (for the last five years), and this

increased to 60.8 percent by the end of the five year period. But 23.3

percent of the consumers of Milma milk products (for the last five years)

were occasional consumers of Milma milk products, and this had

increased to 39.2 percent. Non user of Milma milk products (for the last

five years) became either regular or occasional consumers of Milma milk

products. The existing base of regular consumers of Milma milk products

is most likely to increase in future. Hence MRCMPU can raise the sales

of existing milk products in future.

As MRCMPU can maintain current share of milk market in

future and it can increase volume of sales of existing milk products in the

future. There is only a low chance for consumers deserting Milma

products in the near future. As major market share of milk and milk

products was captured by MRCMPU, any change in the marketing

performance may lead to synergistic effect. Hence the various core

factors affecting sales of milk and milk products such as availability of

Milma milk and milk products, price of Milma milk and milk products,

quality of Milma milk and milk products, Packing of Milma milk and

milk products and response of Milma to changing needs were considered.

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The study reveals that MRCMPU was in a position of competitive parity

on the above mentioned core factors. It needs to take measures to

improve its competitive position in this respect.

Among non-users of Milma, 33.3 percent were of the opinion

that the price of Milma milk was low. Whereas 40.0 percent of the non

users were of the opinion that the price of Milma milk was average and

for 26.7 percent, price of Milma milk was high. A little over 83 percent

of the non users were of the opinion that the price of Milma milk

products was average. But 16.7 percent of the non users were of the

opinion that the price of Milma milk products was high.

From the survey of non users of Milma milk, 10.0 percent of

the non users were of the opinion that the quality of Milma milk was low.

Exactly 80 percent of the non users were of the opinion that the quality of

Milma milk was average. But 10 percent of the non users were of the

opinion that the quality of Milma milk was high. Around 27 percent of

the non users were of the opinion that the quality of Milma milk products

was low and 60 percent, average. But 13.3 percent of the non users were

of the opinion that the quality of Milma milk products was high.

About 63.3 percent of the occasional consumers of Milma

milk (for the last five yeas) increased to 73.3 percent and it would

increase to 76.7 in future. 36.7 percent of the non users decreased to 26.7

percent and it would decrease to 23.3 percent in future. MRCMPU could

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reduce the number of non users of Milma milk by increasing the numbers

of occasional consumers of Milma milk.

A little over 3 percent of the non users of Milma milk

products (for the last five years) were regular consumers of Milma milk

products, this rose to 10.0 percent, but it would decrease to 6.7 percent in

the next few years. The proportion of occasional consumers (for the last

five years) decreased from 60 percent to 56.7 percent and it is likely to

increase to 60 percent in the immediate future. Of the non-users of Milma

milk products (for the last five years), their proportion among the sample

respondents decreased to 33.3 percent from 37% and it is likely to be one

third for the next few years as well. Non users (for the last five years)

became either regular or occasional consumers of Milma milk products.

OTHER FINDINGS

Other findings of this study are given under various heads such as

performance of KCMMF, Union wise competitiveness, dairy wise

competitiveness, retailers performance, customer service, non users approach,

common factors affecting the quality of milk and milk products.

Findings with respect to the Performance of KCMMF

The average annual growth rates of registered and functional

APCOS of KCMMF from 1991 to 2003 were 6.2 percent and 6.1 percent

respectively.

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On an average, 93 percent of the registered APCOS of

KCMMF were functional and 7.0 percent of them non functional.

The average growth in farmer members and suppliers of milk

of KCMMF were 8.0 percent and 6.0 percent respectively.

On an average. 25 percent of the members supplied milk to

KCMMF. The overcrowding of members in a society influenced the

administration of APCOS, Unions and Federation

The annual growth in milk procurement by KCMMF showed

the highest growth of 14.2 percent in the year 2000. In 2003, it showed a

big decline of 9.9 percent over that of the previous year. On an average,

the growth in milk procurement from 1993 to 2003 was 5.3 percent.

The annual growth in milk sales by KCMMF showed the

highest growth of 12.3 percent in the year 1996. On an average, the

annual growth in milk sales from 1993 to 2003 was 7.2 percent.

On an average, the deficit milk of KCMMF was about forty

six thousand litres per day. It required the cross analysis of procurement

and selling of milk by the three Unions and variations in procurement of

milk in flush and lean seasons.

The average growth in ghee sales from 1997-98 to 2002-03

was 11.9 percent. The average growth rates of curd and sambharam sales

were 23.6 percent and -3.1 percent respectively. The average growth rates

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of ice cream sales and peda sales were 32.1 percent and 25.0 percent

respectively.

Ice cream ranked first with regard to the average annual

growth rate and peda ranked second. Curd and ghee ranked third and

fourth, while milk ranked fifth. Sambharam came last in terms of sales

growth annually.

On an average, the annual growth in the turnover of KCMMF

was 10.4 percent. The average net profit ratios of Unions and KCMMF

were 0.2 percent and 0.4 percent respectively. On an average, the overall

net profit ratio was 0.4 percent.

Union-wise competitiveness

The average annual growth rates of registered APCOS of

MRCMPU and MCDMU from 1990-91 to 2003-04 were 10.3 percent

and 3.5 percent respectively.

The average annual growth in functional APCOS of

MRCMPU and MCDMU from 1990-91 to 2003-04 were 12.8 percent

and 2.9 percent respectively. In this case MRCMPU gains competitive

advantage, whereas MCDMU is in a position of competitive

disadvantage.

The mean percentage of defunct APCOS of MRCMPU and

MCDMU from 1990-91 to 2003-04 were 11.5 and 9.1 respectively. The

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proportion of defunct APCOS as a percentage of total registered APCOS

of MRCMPU was higher than that of MCDMU.

The average annual growth rates of procurement of milk by

MRCMPU and MCDMU from 1990-91 to 2003-04 were 15.2 percent

and 8.0 percent respectively. In this case MRCMPU gains competitive

advantage, whereas MCDMU is in a position of competitive parity.

The average procurement of milk per functional APCOS of

MRCMPU from 1990-91 to 2003-04 was 316 litres per day whereas it

was 172 litres in the case of MCDMU. In this case MRCMPU gains

competitive advantage, whereas MCDMU is in a position of competitive

parity. MCDMU should improve it.

Milk procurement per supplier per day of MRCMPU was 3.0

litres during the period 1991-92 rose to 4.1 litres in the period 2001-02.

The average growth rates of selling of milk by MRCMPU

and MCDMU from 1990-91 to 2003-04 were 11.5 percent and 2.3

percent respectively. In the case of average growth in selling of milk,

MRCMPU gains competitive advantage, whereas MCDMU is in a

position of competitive disadvantage.

On an average, MRCMPU sold 151.0 thousand litres of milk

per day. On the other hand MCDMU sold 89.0 thousand litres of milk per

day (1990-91 to 2003-04).

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On an average the annual growth in procurement of milk by

MRCMPU was 15.2 percent as against 11.5 percent growth in milk sales.

On an average, the annual growth in procurement of milk of MCDMU

was 8.0 percent as against 2.3 percent growth in milk sales (1990-91 to

2003-04).

On an average MRCMPU and MCDMU had 5.6 thousand

and 11.4 thousand litres of surplus milk (per day) respectively (from

1990-91 to 2003-04).

The average annual growth in ghee sales of MRCMPU and

MCDMU from 1991-92 to 2003-04 were 19.8 percent and 7.1 percent

respectively. In this case MRCMPU gains competitive advantage,

whereas MCDMU is in a position of competitive parity.

The average annual growth in curd sales of MRCMPU and

MCDMU were 23.1 percent and 21.5 percent respectively. In the case of

average annual growth in curd sales, both MRCMPU and MCDMU gain

competitive advantage.

The average annual growth in butter milk (Sambharam or

Lassie & Masala Majjige) sales of MRCMPU and MCDMU were 9.6

percent and 14.1 percent respectively. In this case MCDMU gains

competitive advantage, whereas MRCMPU is in a position of competitive

parity.

130

The mean market share of milk and milk products of

MRCMPU were 81.3 percent and 18.7 percent respectively. Whereas the

average market share of milk and milk products of MCDMU were 78.6

percent and 21.4 percent respectively.

The average market share of ghee, curd, sambharam (butter

milk), ice cream and peda of MRCMPU were 7.8 percent, 5.4 percent,

0.6 percent, 0.1, percent and 0.3 percent respectively. Whereas the

average market share of ghee, curd, sambharam (butter milk) and peda of

MCDMU were 12.1 percent, 7.4 percent, 0.3 percent, and 0.5 percent

respectively.

The average market growth in milk and milk products of

MRCMPU were 9.1 percent and 23.3 percent respectively. Whereas the

average market growth in milk and milk products of MCDMU were 7.6

percent and 23.4 percent respectively.

The average market growth in ghee, curd, sambharam (butter

milk), ice cream and peda sales of MRCMPU were 27.3 percent, 16.0

percent, 0.4 percent, 232.8 percent and 65.9 percent respectively.

Whereas the average market growth in ghee, curd, sambharam and peda

of MCDMU were 36.1 percent, 15.5 percent, 13.6 percent, and 28.9

percent respectively.

131

The average market shares of milk, ghee, curd and

sambharam (butter milk) of MRCMPU and MCDMU were 95.1 percent

and 98.4 percent respectively.

The average market growth in milk, ghee, curd, and

sambharam (butter milk) of MRCMPU and MCDMU were 52.8 percent

and 72.8 percent respectively.

In the case of market share and market growth in milk, both

MRCMPU and MCDMU gain competitive advantage.

In the case of market share and market growth in ghee

MRCMPU gains competitive advantage, whereas MCDMU is in a

position of comparative parity.

In the case of market share and market growth in curd

MCDMU gains competitive advantage, whereas MRCMPU is in a

position of comparative parity.

In the case of market share and market growth in butter milk

(Sambharam or Lassie & Masala Majjige) MRCMPU gains competitive

advantage, whereas MCDMU is in a position of comparative parity.

MRCMPU is more competitive than that of MCDMU as

regards the operational variables are concerned.

The net profit to sales ratio of MRCMPU was less than that

of MCDMU

132

Ratios of production cost, employee cost, administrative and

selling costs to sales of MRCMPU were less than those of MCDMU. But

the ratio of depreciation to sales of MRCMPU was higher than that of

MCDMU.

Dairywise competitiveness

On an average, the annual growth in procurement of milk of

Kannur, Kozhikode and Palakkad dairies from 1990-91 to 2003-04 were

15.8 percent, 12.6 percent, and 13.1 respectively. In this case all the

dairies gain competitive advantage.

On an average, Kozhikode, Kannur, Palakkad and Kasargod

dairies sold 62.3, 57.4, 34.1, and 27.3 klpd milk respectively.

On an average, three fourths of the market share of milk of

MRCMPU was from Kannur and Kozhikode dairies (from 1991-92 to

2003-04).

The average annual growth rates of milk sales of Kannur,

Kozhikode and Palakkad dairies from 1991-92 to 2003-04 were 8.2

percent, 11.2 percent and 8.6 percent respectively. In this case all the

dairies gain competitive advantage.

The average growth in procurement and selling of milk by Kannur

dairy were 15.8 and 8.2 percent respectively. The average growth rates of

procurement and selling of milk by Kozhikode dairy were 12.6 percent

133

and 11.2 percent respectively. But in the case of Palakkad dairy, the

average growth in procurement and selling of milk were 13.1 percent and

8.6 percent respectively (from 1991-92 to 2003-04).

On an average, surplus milk of Kannur and Palakkad dairies were

1.3 klpd and 35.2 klpd respectively, whereas Kozhikode dairy had a

deficit of 28.9 klpd (1991-92 to 2003-04).

The average annual growth rates of ghee sales by Kannur,

Kozhikode and Palakkad dairies from 1992-93 to 2003-04 were 12.5

percent, 14.3 percent, and 13.0 percent respectively. In this case all the

dairies gain competitive advantage.

The average annual growth rates of curd sales by Kannur,

Kozhikode and Palakkad dairies from 1996-97 to 2003-04 were 15.1

percent, 30.4 percent, and 43.1 percent respectively. In this case Palakkad

and Kozhikode dairies gain competitive advantage, but Kannur dairy is in

a position of competitive parity.

The average annual growth rates of butter milk (sambharam) sales

by Kannur, Kozhikode and Palakkad dairies from 1996-97 to 2003-04

were 12.6 percent, 31.0 percent, and 14.8 percent respectively. In this

case Kozhikode dairy gains competitive advantage, but Kannur and

Palakkad dairies are in a position of competitive parity.

Kozhikode dairy was more competitive than Kannur and Palakkad

dairies as regards the operational variables are concerned.

134

The average gross profit margin of MRCMPU was 7.7 percent.

The average gross profit margin of Kannur, Kozhikode and

Palakkad dairies were 8.3 percent, 9.0 percent, and 6.1 percent

respectively. In this case all the dairies gain competitive advantage.

The average growth in gross profit margin of MRCMPU was

-0.2percent.

The average growth in gross profit margin of Kannur, Kozhikode

and Palakkad dairies showed zero or negative growth rate

In the case of average growth in gross profit margin, both Kannur

and Kozhikode dairies gain competitive advantage, but Palakkad dairy is

in a position of competitive disadvantage.

The average operating profit margin of MRCMPU was negative (-

1.0 percent).

The average net profit margin of MRCMPU was 0.4 percent.

The average net profit margin of Kannur, Kozhikode and

Palakkad dairies were 1.3 percent, 0.6 and 0.5 respectively. In this case

Kannur dairy gains competitive advantage, but Kozhikode and Palakkad

dairies are in a position of competitive parity.

The average annual growth in net profit margin of MRCMPU was

0.02 percent.

135

The average annual growth in net profit margin of Kannur,

Kozhikode and Palakkad dairies were 0.02 percent, 0.3 percent and -0.03

percent respectively. In this case, Kozhikode dairy gains competitive

advantage, Kannur dairy is in a position of competitive parity and

Palakkad dairy is in a position of competitive disadvantage.

The average operating profit margin of MRCMPU was -1.0

percent.

The average operating profit margin of Kannur, Kozhikode and

Palakkad dairies were 1.5 Percent, 0.4 Percent and -0.1 percent

respectively. In this case Kannur dairy gains competitive advantage, but

Kozhikode and Palakkad dairies are in a position of competitive parity.

The average operating ratio of MRCMPU was 103.2 percent.

The average operating ratio of Kannur, Kozhikode, and Palakkad

dairies were 98.7 percent, 99.8 percent, and 100.2 percent respectively.

The average cost of goods sold ratio of Kannur, Kozhikode, and

Palakkad dairies were 91.7 percent, 91.0 percent and 93.9 percent

respectively.

The average operating expenses ratio of MRCMPU was 10.9

percent.

The average operating expenses ratio of Kannur, Kozhikode and

Palakkad dairies were 7.0 percent, 8.8 percent, 6.3 percent respectively.

136

The average ratio of establishment charges of MRCMPU was 4.0

percent.

The average ratio of establishment charges of Kannur, Kozhikode

and Palakkad dairies were 2.9 percent, 4.4 percent, 2.9 percent

respectively.

The average ratio of contingencies of MRCMPU was 3.4 percent.

The average ratio of contingencies of Kannur, Kozhikode and

Palakkad dairies were, 2.1 percent, 1.8 percent and 1.2 percent

respectively.

The average ratio of depreciation of MRCMPU was 1.3 percent.

The average ratio of depreciation of Kannur, Kozhikode and

Palakkad dairies were 0.8 percent 1.5 percent and 1.0 percent

respectively.

The average ratio of other operating expenses of MRCMPU was

2.0 percent.

The average ratio of other operating expenses of Kannur,

Kozhikode and Palakkad dairies were about 1.0 percent.

The average total assets turn over ratio of MRCMPU was 1.9

times.

The average total assets turn over ratio of Kannur, Kozhikode and

Palakkad dairies were 5.6 times, 3.4 times and 3.4 times respectively. In

137

this case, Kannur dairy gains competitive advantage but Kozhikode and

Palakkad dairies are in a position of competitive parity.

The average fixed assets turn over ratio of MRCMPU was 13.7

times.

The average fixed asset turnover ratio of Kannur, Kozhikode and

Palakkad dairies were 14.5 times, 20.8 times and 58.5 times respectively.

In this case Palakkad dairy gains competitive advantage, Kozhikode

dairy is in a position of competitive parity, but Kannur dairy is in a

position of competitive disadvantage.

The average working capital turn over ratio of MRCMPU was

10.4 times.

The average working capital turnover ratio of Kannur, Kozhikode

and Palakkad dairies were 34.8 times, 2.0 times and 0.9 times

respectively. In this case, Kannur dairy gains competitive advantage,

both Kozhikode and Palakkad dairies are in a position of competitive

disadvantage.

The average inventory turn over ratio of MRCMPU was 101

times.

The average inventory turnover ratio of Kannur, Kozhikode and

Palakkad dairies were 108 times 126 times and Palakkad dairy was 119

times respectively. In this case all the dairies gain competitive advantage.

138

The average inventory holding period of MRCMPU was 3.6 days.

On an average inventory, holding period of all dairies of

MRCMPU was about 3 days.

The average return on total assets ratio of MRCMPU was 1.0

percent.

The average return on total assets ratio of Kannur, Kozhikode and

Palakkad dairies were 7.1 percent 1.7 percent and -0.2 percent

respectively. In this case, Kannur dairy gains competitive advantage, but

Kozhikode and Palakkad dairies are in a position of competitive parity.

The average return on capital-employed ratio of MRCMPU was

1.1 percent.

The average return on capital employed ratio of Kannur,

Kozhikode and Palakkad dairies were 10.1 percent, 0.3 percent and 18.2

percent respectively. In the case of average return on capital employed

ratio, Palakkad dairy gains competitive advantage, Kannur dairy is in a

position of competitive parity, but Kozhikode dairy is in a position of

competitive disadvantage.

The average return on equity ratio of MRCMPU was 2.1 percent.

The average ratios of return on equity of Kannur, Kozhikode and

Palakkad dairies were 15.4 percent, 4.4 percent 35.8 percent respectively.

In this case, Palakkad dairy gains competitive advantage, Kannur dairy is

139

in a position of competitive parity, but Kozhikode dairy is in a position of

competitive disadvantage.

The average debt equity ratio of Kannur, Kozhikode and Palakkad

dairies are in the proportion of 1:3.2, 1:2.7 and 1:1.8. It meant that long

term debts of Palakkad dairy were higher than those the other dairies of

MRCMPU.

Kannur dairy is more competitive than Kozhikode and Palakkad

dairies as regards financial variables.

The average ratio of gross value added to sales MRCMPU was 3.2

percent.

The average ratio of gross value added to sales of Kannur,

Kozhikode and Palakkad dairies were 6.2 Percent 8.5 percent 3.6 percent

respectively. In this case, both Kozhikode and Kannur dairies gain

competitive advantage, but Palakkad dairy is in a position of competitive

parity.

The average ratio of net value added to sales MRCMPU was 2.1

percent.

The average ratio of net value added to sales of Kannur,

Kozhikode and Palakkad dairies were 5.4 percent. 7.1 percent and 2.8

percent respectively. In this case, both Kannur and Kozhikode dairies

140

gain competitive advantage, but Palakkad dairy is in a position of

competitive disadvantage.

The average ratio of total value added to sales MRCMPU was 6.4

percent.

The average ratio of total value added to sales of Kannur,

Kozhikode and Palakkad dairies were 5.5 Percent, 6.6 percent and 4.7

percent respectively. In this case, both Kannur and Kozhikode dairies

gain competitive advantage But Palakkad dairy is in a position of

competitive parity.

On an average 73 to 90 percent of total value addition was applied

for meeting employee cost by Kannur, Kozhikode and Palakkad dairies

and Union. It meant that the remaining portion of value addition was

applied to meet interest, and tax.

The average incremental gross value added on value of production

of Kannur, Kozhikode and Palakkad dairies were -0.2 percent, -0.5

Percent and -0.1 percent respectively. In this case, Palakkad dairy is in a

position of competitive parity, but Kannur and Kozhikode dairies are in a

position of competitive disadvantage.

The average incremental net value added on value of production

of Kannur, Kozhikode and Palakkad dairies were -0.3 Percent, -0.6

Percent, and -0.3 Percent respectively. In this case, all the dairies are in a

position of competitive disadvantage.

141

The average incremental total value added on value of production

of Kannur, Kozhikode and Palakkad dairies were -0.2 percent, -0.6

percent -0.3 percent respectively. In this case, all the dairies are in a

position of competitive disadvantage.

The average ratio of raw materials to value of production of

Kannur, Kozhikode and Palakkad dairies were 84.1 percent, 81.9 percent

and 87.8 percent respectively. Comparatively raw material cost was

higher in the case of Palakkad diary and it was the lowest in the case of

Kozhikode dairy.

The average ratio of selling and distribution costs to value of

production of MRCMPU was 4.3 percent.

The average ratio of selling and distribution expenses to value of

production of Kannur, Kozhikode and Palakkad dairies were 4.6 percent,

4.8 percent, and 3.3 percent respectively.

The average ratio of production expenses to value of production

of MRCMPU was 3.0 percent.

The average ratio of production expenses on value of production

of Kannur, Kozhikode and Palakkad dairies were 2.9 percent, 3.0 percent

and 3.0 percent respectively.

The average ratio of administration expenses to value of

production of MRCMPU was 1.0 percent.

142

The average ratio of administration expenses to value of

production of dairies varied from 0.5 percent to 0.6 percent.

The average ratio of depreciation to value of production of

MRCMPU was 1.2 percent.

The average, ratio of depreciation to value of production of

Kannur, Kozhikode and Palakkad dairies were 0.9 Percent, 1.7 percent,

and 1.0 percent respectively.

More or less, cent percent of the value of production was

consumed by Palakkad dairy and the Union by way of raw material cost,

production expenses, administrative: expenses, selling & distribution

expenses and depreciation. Ratios of production cost, employee cost,

administrative and selling costs to sales of MRCMPU was less than that

of MCDMU. But the ratio of depreciation to sales of MRCMPU was

higher than that of MCDMU.

Kannur and Kozhikode dairies are more competitive than

Palakkad dairy as regards value addition variables are concerned.

Kannur dairy gains competitive advantage, Kozhikode dairy is in

a position of competitive parity, and Palakkad dairy is in a position of

competitive disadvantage as regards the operational, financial and value

addition variables are concerned.

143

Retailers’ Performance

46.0 percent of the retailers had taken up selling milk and milk

products of Milma as their main line of business. Exactly 54 percent were

selling some other products along with the business of Milma. For 91

percent of the retailers of Milma milk and milk products, their proportion

was 80:20 or more. For 61.0 percent of the retailers had one-fourth of

their sales turnover from Milma milk and milk products. Exactly 36

percent of the retailers had an experience that ranges between one and

five years.

54.0 percent of the retailers were satisfied with the morning

delivery of milk and 35.0 percent of the retailers were satisfied with the

evening delivery of milk.

42.0 percent of the retailers preferred early delivery of milk in the

morning, and 44.0 percent of the retailers preferred early delivery of milk

in the evening. More than 50.0 percent of the retailers in Malapuram

District preferred early delivery of milk in the morning.

20 percent of the retailers were willing to take late delivery of

milk in the morning and 26 percent of the retailers were willing to take

late delivery of milk in the evening.

144

64 percent of the retailers were not willing to take late delivery of

milk in the morning and 68 percent of the retailers were not willing to

take late delivery f milk in the evening.

98 percent of the retailers were satisfied with the present delivery

time of milk products.

62 percent of the retailers were of the opinion that the present

delivery system made no effect on size of order, 32 percent of the

retailers supported under - order and the remaining 6 percent of the

retailers supported over - order. Shortage of milk was possible as 32

percent of the retailers supported under - order.

44 percent of the retailers were of the opinion that milk was

always available, but 26 percent of the retailers were of the opinion that

there was occasional shortage of milk. As more than one fourth of the

retailers experienced occasional shortage of milk, it might be due to

under - order on the part of dealer, long lead time to deliver milk, under

capacity of dairy to meet the demand for milk.

95 percent of the retailers were of the opinion that ghee is always

available.

87 percent of the retailers experienced that curd was always

available and 6.5 percent of the retailers supported that curd was mostly

available.

145

A little over 95 percent of the retailers were of the opinion that

sambharam was always available.

About 93 percent of the retailers mentioned that peda was always

available.

Cent percent of the retailers were of the opinion that other milk

products such as ice-cream, Milma plus, Milma refresh were always

available.

75.5 percent of the retailers were of the opinion that Toned Milk

was the fast moving milk.

48.6 percent of the retailers supported that Milma Rich was

average moving and slow moving.

Majority of the retailers were of the opinion that Milma Smart and

Homogenous Toned Milk were average moving.

Retailers had no opinion in the case of availability of Milma

White and Milma Jersey.

46 percent of total milk sales were from Toned Milk sale in all

seasons.

Not less than 25 percent of total milk sale was from Homogenous

Toned Milk in all seasons.

Milma Smart contributed 15.0 percent share in the total milk sale

in all seasons.

146

Milma Rich contributed 12.0 percent share in the total milk sale in

all seasons.

Toned Milk was fast moving milk, and Homogenous Toned Milk

came next.

39.5 percent of total sale of Toned Milk (500 ml packets per

dealer per day) was in summer, 28.1 percent was in monsoon and the

remaining 32.4 percent was in winter.

41.0 percent of total sale of Milma Rich was in summer, 27.1

percent in monsoon and 31.9 percent in winter.

40.8 percent of total sale of Milma Smart was in summer, 27.5

percent in monsoon, and 31.9 percent is in winter.

38 percent sale of total sale of Homogenous Toned Milk in

summer, 28 percent in monsoon and about 33 percent in winter.

40 percent of total sale of milk was made in summer, 28 percent

in monsoon and 32 percent in winter. All varieties of milk sales were

high in summer and low in monsoon.

About 68 percent of the retailers in monsoon and summer, about

83 percent of the retailers in winter were of the opinion that ghee sales

were average and above average. 12.6 kg of ghee per month per dealer

was sold in monsoon, 22.0 kg ms in winter and 14.2 kg in summer.

147

62.5 percent of the retailers in monsoon, 77.7 percent of the

retailers in winter, and 95.9 percent of the retailers in summer were of the

opinion that curd sales was average and above average. 25 packets (500

ml) per day per dealer could be sold in monsoon, 36 packets in winter

and 59 packets in summer. Curd was fast moving in summer.

13.3 percent of the retailers in monsoon, 40.5 percent of the

retailers in winter, and 91.9 percent of the retailers in summer were of the

opinion that sambharam sales was average and above average. 9 packets

(200 ml) per day per dealer could be sold in monsoon, 17 packets in

winter and 35 packets in summer. Sambharam was fast moving in

summer.

Cent percent of the retailers were of the opinion that ice cream

sales were average and above average in summer. 1.7 litres per week per

dealer could be sold in winter 16.3 litres in summer. Ice cream was fast

moving in summer.

93.8 percent of the retailers in monsoon and summer, and 90.7

percent of the retailers in winter, were of the opinion that peda sales was

average and above average. 133 pieces per day per dealer could be sold in

monsoon, 106 in winter, and increased to 134 in summer.

About 58.0 percent of the retailers had net profit less than Rs.

2500 per month from Milma business.

148

About 64.0 percent of retailers were of the opinion that milk

booths varying from zero to two within one km radius of their booths.

Customer Service

About 93.3 percent of the consumers of Milma milk were of the

opinion that Toned Milk was always available in summer, 96.7 percent of

the consumers of Milma milk were of the opinion that Toned Milk was

always available in monsoon and in Winter. It showed that there was the

possibility of shortage of Toned Milk in summer season. In the case of

Milma Rich, 95.7 percent of the consumers of Milma milk were of the

opinion that Milma Rich was always available in all seasons. But cent

percent of the consumers of Milma Smart and Homogenous Toned Milk

were of the opinion that Milma Smart and Homogenous Toned Milk were

always available in all seasons.

In the case of ghee, 90.0 percent of the consumers in summer,

88.3 percent of the consumers in monsoon and 86.7 percent of the

consumers in winter were of the opinion that ghee was always available.

But in the case of curd, 89.2 percent of the consumers in summer, 93.8

percent of the consumers in monsoon and 87.7 percent of the consumers

in winter were of the opinion that curd was always available. It showed

that there was the possibility of shortage of curd in summer. Similarly, in

the case of sambharam, about 81.3 percent of the consumers in summer,

75.0 percent of the consumers in monsoon, and 68.8 percent of the

149

consumers in winter were of the opinion that sambharam was always

available. It again showed that there was the possibility of shortage of

sambharam in summer. In the case of ice cream, cent percent of the

consumers were of the opinion that ice cream was always available in

summer and winter. But 90.0 percent of the consumers were of the

opinion that ice cream was available in monsoon.

About 55.8 percent of the consumers were of the opinion that they

bought Milma milk on special occasions like marriage etc.

The average quantity of milk purchased per head (household

consumers) was 229 ml (240.5gm).

About 75.0 percent of the consumers of Milma milk bought Toned

Milk, 19.2 percent bought Milma Rich and the remaining 5.8 percent,

Milma Smart and Homogenous Toned Milk.

On an average, one litre of Toned Milk was purchased daily per

respondent, whereas the average quantity of 2.2 litres of Milma Rich was

purchased daily per respondent. The average quantity of the purchase of

Milma Smart and Homogenous Toned Milk was more or less one-half

litre.

About 81.6 percent of the consumers of Milma milk products

made monthly purchase of ghee. But 55.4 percent of the consumers made

weekly purchase of curd. Next to curd, 43.8 percent of the consumers

bought sambharam daily, 50.0 percent of the consumers made weekly

150

purchases of ice cream. But in the case of peda, 40.0 percent of the

consumers made weekly & fortnightly purchase of peda.

Purchase of ghee by household consumers was high in Malapuram

district. On an average, 826 gms of ghee was purchased per household

per month.

In the case of purchase of curd, Malapuram district ranked first.

On an average, 2.88 litres of curd were purchased per household per

week.

In the case of purchase of sambharam, Kannur district ranked

first. On an average, 300 ml of sambharam was purchased per household

per day.

Household consumers of Malapuram district bought ghee, curd

and peda in large quantities than in the other two districts.

On the basis of descending order of purchase of milk and milk

products, 75.0 percent of the consumers bought Toned Milk. 54.2 percent

of the consumers bought curd. 50.0 percent of the consumers bought

ghee. 19.2 percent and 13.3 percent of the consumers bought Milma Rich

and sambharam respectively. On an average, 8.3 percent of the

consumers bought peda and ice cream. About 3.3 percent and 2.5 percent

of the consumers bought Milma Smart and Homogenous Toned Milk

respectively.

151

On an average 82.5 percent of the consumers of Milma milk

bought enough quantity of milk for domestic use.

On an average 69.2 percent of the consumers of Milma milk

products bought enough quantity of milk products for domestic use.

On an average, a little over 4 percent of the consumers of Milma

milk products used other firm’s milk products. Consumers of Milma milk

did not use other firm’s ghee, curd and sambharam but they used butter,

cheese and milk powder of Britannia, Amul and Nestle. The main reasons

for not using the milk products of other firms were poor quality,

unreliable source, and poor brand image.

In the case of ghee, easy availability ranked first. Next to easy

availability, hygiene factor ranked second and competitive price and

brand image ranked third and fourth positions respectively. Reliable

service of Milma and suitable packing ranked fifth and sixth positions

respectively. Pleasant flavour and shelf life ranked seventh and eighth

positions, whereas lack of alternative source and door delivery got the

last position.

In the case of curd easy availability and hygiene factor ranked

first and second positions but lack of alternative source and brand image

ranked third and fourth positions. Reliable service of Milma ranked fifth

position. Competitive price ranked sixth position. It meant that the price

of curd was not competitive. Retailers of Milma were of the same opinion

152

that curd price of Milma was higher than that of other firms. Suitable

packing ranked seventh position. Pleasant flavour and door delivery

ranked eighth and ninth positions respectively and shelf life got the last

rank. It meant that curd could not be kept for long hours.

In the case of sambharam, easy availability, hygiene factor and

competitive price ranked first, second and third positions respectively.

Pleasant flavour and brand image got fourth and fifth ranks. Brand image

ranked sixth, while suitable packing, reliable service of Milma and door

delivery got more or less equal points. Shelf life got no points and ranked

last.

In the case of ice cream, pleasant flavour, competitive price, and

hygiene factor ranked first, second and third positions respectively. But

easy availability, reliable service of Milma and brand image got fourth,

fifth and sixth ranks, while suitable packing, shelf life and door delivery

got seventh, eighth and ninth ranks. Lack of alternative source got no

points and ranked last.

In the case of peda, pleasant flavour, easy availability, and

hygiene factor ranked first, second and third positions respectively. But

reliable service of Milma, competitive price and brand image got fourth,

fifth and sixth ranks respectively, while, shelf life, lack of alternative

source and suitable packing got seventh, eighth and ninth ranks. Door

delivery got no points and ranked last.

153

Exactly 45 percent of the consumers of Milma milk and milk

products were aware about the quality of Milma milk and milk products

by use and 24.0 percent of the consumers through advertisement and

through word of mouth. 77.0 percent of the consumers of Milma milk

and milk products were aware of brand of Milma milk and milk products

through advertisement. 34.0 percent of the consumers of Milma milk and

milk products were aware of price of Milma milk and milk products

through the retailers, 28.0 percent of the consumers through

advertisement and by use.

Availability of all varieties of milk products, price of Milma milk

and milk products, and packing of Milma milk products were the

strengths of MRCMPU.

Quality of Milma milk and milk products, packing of Milma

milk, handling of consumers complaints, innovation in marketing,

scheduling of delivery time, granting of agencies were not the strengths

of MRCMPU.

Non Users of Milma Milk

On an average, 1 litre of milk was bought at a time. 66.8 percent

of the non users of Milma milk bought milk from nearby household, 23.3

percent use their own milk, and 3.3 percent bought from near by society,

private firms and others.

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Majority of the non users of Milma milk did not buy milk

products or they made milk products such as ghee, curd, and sambharam

in their home.

Average quantity of milk purchased per head (non users of Milma

milk) was 200 ml (210 gm) per day.

Majority of the non users did not buy ice cream and peda.

33.3 percent of the non users made ghee themselves. 46.7 percent

of the non users made curd themselves. 6.7 percent of the non users made

sambharam themselves. 13.3 percent of the non users bought ice cream

from other firms and 3.3 percent of the non users bought ice cream from

Milma. 10.0 percent of the non users bought peda from other firms and

they did not buy peda from Milma.

66.7 percent of the non users of Milma milk bought Milma milk

on special occasions like marriage. 16.7 percent of the non users of

Milma milk depended on nearby societies and nearby households.

80.0 percent of the non users of Milma milk bought enough

quantity of milk and milk products for their domestic use.

53.3 percent of the non users of Milma milk bought milk

substitute for their domestic use, and used milk powder.

43.8 percent of the users of milk powder bought 500 gm milk

powder in a month, 25.0 percent bought one kg of milk powder and 12.5

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percent bought 100 gm and 200 gm of milk powder in a month. About

6.2 percent of the users of milk powder bought 400 gm of milk powder in

a month.

Non users of Milma milk ranked hygiene factor first. Next to

hygiene factor easy availability ranked second. Door delivery ranked

third. Competitive price ranked sixth. Hygiene factor, easy availability,

and door delivery were the influencing factors.

In the case of ghee, easy availability, hygiene factor and pleasant

flavour ranked first, second and third respectively. Competitive price

ranked fourth.

In the case of curd, hygiene factor and easy availability ranked

first and second respectively. But dislike of packed products and

competitive price ranked third and fourth.

In the case of sambharam, easy availability, door delivery,

competitive price and hygiene factor got same rank.

In the case of ice cream hygiene factor ranked first, easy

availability, maintenance of friendship and door delivery ranked second,

third and fourth respectively.

Common Factors Affecting the Quality of Milk and Milk Products

A little over 84 percent of the consumers of Milma milk and

73.3 percent of the non users were more or less aware of the quality of

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Milma milk. But 15.8 percent of the consumers of Milma milk and 26.7

percent of the non users were not aware of the quality of milk. Both the

consumers and non users were not highly aware of the quality of milk.

42.5 percent of the consumers of Milma milk and 66.7

percent of the non users were of the opinion that the pooling of milk

from different producers of milk affected more or less the quality of

milk. 22.5 percent of the consumers were of the opinion that the pooling

of milk from different producers of milk did not affect the quality of

milk. But 35.0 percent of the consumers of Milma milk and 33.3 percent

of the non users were of the opinion that it affected highly the quality of

milk.

47.5 percent of the consumers of Milma milk and 30.0

percent of the non users were of the opinion that the quality of

pasteurized milk was more or less equal to the quality of cow milk

offered by households. 15.8 percent of the consumers of Milma milk and

36.7 percent of the non users were of the opinion that the pasteurized

milk was less in quality than the cow milk offered by households. But

36.7 percent of the consumers of Milma milk and 33.3 percent of the non

users were of the opinion that the pasteurized milk was not less in quality

than the cow milk offered by households.

75.8 percent of the consumers of Milma milk and 76.7

percent of the non users were of the opinion that they checked more or

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less the fat and SNIFF contents when they bought the milk. But 24.2

percent of the consumers of Milma milk and 23.3 percent of the non

users surely checked fat and SNF contents when they buy the milk.

About 47 percent of the consumers of Milma milk and 73.3

percent of the non users were of the opinion that time interval between

procurement and delivery of milk affected more or less the quality of

milk adversely. 20.0 percent of the consumers of Milma milk were of the

opinion that it surely affected the quality of milk adversely. But 33.3

percent of the consumers of Milma milk and 26.7 percent of the non

users were of the opinion that it did not affect the quality of milk

adversely.

Two thirds of the consumers of Milma milk and 53.3 percent

of the non users were of the opinion that other firm’s milk and milk

products were more or less unhygienic. 8.3 percent of the consumers of

Milma milk and 16.7 percent of the non consumers were of the opinion

that other firm’s milk and milk products were not unhygienic. But 25.0

percent of the consumers of Milma milk and 30 percent of the non users

were of the opinion that other firm’s milk and milk products were surely

unhygienic.

RESULTS OF HYPOTHESIS TESTING

As mentioned in the introduction chapter, the following hypotheses of

this study were tested.

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Ho.1: MRCMPU is competitive as regards the operational activities.

Three by Three matrix was used to test the above hypothesis. From this

Matrix, competitive advantage, competitive parity, and competitive

disadvantage of MRCMPU and MCDMU on operational variables such as

functional APCOS, procurement of milk (in Qty), procurement of milk per

functional APCOS, selling of milk (in Qty), selling of ghee (in Qty), selling of

curd (in Qty), selling of butter milk (in Qty), selling of milk (in value), selling

of ghee (in value), selling of curd (in value), selling of butter milk (in value),

were ascertained. Again competitive advantage, competitive parity, and

competitive disadvantage were sub divided into Low, Medium and High. Then

the values ascertained on the above mentioned variables in the columns Low,

Medium and High were consolidated. The total values in the competitive

advantage column were further taken as positive. The total values in the

competitive parity columns were taken as neutral (i.e. 0), and the values in the

competitive disadvantage column were taken as negative. The total values in

the column ‘low’ were multiplied by one, the total values in the column

‘medium’ were multiplied by two, and the total values in the column ‘high’

were multiplied by three. Then the final scores were consolidated. The total

scores of MRCMPU and MCDMU were compared to measure the competitive

position of MRCMPU. As per the consolidated scores MRCMPU got 25

points whereas MCDMU got 6 points. Hence the hypothesis is accepted i.e.,

MRCMPU is more competitive as regards the operational activities.

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Ho. 2: Dairies of MRCMPU are competitive as regards the operational,

financial and value addition activities are concerned.

Three by Three matrix was also used to measure the competitiveness of

diaries as regards operational, financial and value addition activities. From the

consolidated scores of various operational variables such as procurement of

milk (in Qty), selling of milk (in Qty), selling of ghee (in Qty), selling of curd

(in Qty), selling of butter milk (in Qty), Kozhikode dairy got twelve points

whereas Palakkad and Kannur dairies got eight and six points respectively.

Hence Kozhikode dairy is more competitive than Kannur and Palakkad dairies

as regards the operational activities are concerned.

From the consolidated scores of various financial variables such as

gross profit margin, annual growth of gross profit margin, net profit margin,

annual growth in net profit margin, operating profit margin, total assets turn

over, fixed assets turn over, working capital turn over, and inventory turn over,

ROT, ROCE, ROE, Kannur dairy got thirteen points whereas Kozhikode and

Palakkad dairies got four points each. Hence, Kannur dairy is more

competitive than Kozhikode and Palakkad dairies as regards financial

activities.

From the consolidated scores of various value addition variables such

as gross value addition, net value addition, total value addition, incremental

gross value addition on VOP, incremental net value addition on VOP,

incremental total value addition on VOP both Kannur and Kozhikode dairies

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got one point each whereas Palakkad dairy got minus three points. Hence both

Kannur and Kozhikode dairies are more competitive than Palakkad dairies as

regards value addition activities.

From the consolidated scores of various operational, financial, and

value addition variables, Kannur dairy got twenty points whereas Kozhikode

and Palakkad dairies got seventeen and nine points respectively. Hence it can

be conclude that out of three dairies of MRCMPU, Kannur dairy gains

competitive advantage, Kozhikode dairy is in a position of competitive parity,

and Palakkad dairy is in a position of competitive disadvantage as regards

operational, financial, and value addition activities are concerned.

Ho 3: MRCMPU is as competitive as its rival with regards to retailer

satisfaction.

“Cornell” technique was used in order to measure the retailer

satisfaction score. This score was measured under the following heads: - viz.

(1). Delivery of milk and milk products. (2). Selling of milk and milk products

and (3). Competition.

The statements were arranged in the form of five point scale so that

subjects could indicate the intensity of the attitudes of retailers for each item.

Weights were assigned for each item, the most favourable response

representing the highest value, and the least favourable response representing

the lowest value. Weight five was assigned to the most favourable response,

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weight four to the next favourable response and so on. Weight one was

assigned to the least favourable response. After the total score was obtained

for each item, by adding up the weights of the categories, minimum score,

maximum score and average score were calculated. On the Basis of the total

scores obtained, the retailers were classified as low, average and high. Low

was equal to less than mean minus one standard deviation, average was equal

to from mean minus one standard deviation to mean plus one standard

deviation and high was equal to higher than mean plus one standard deviation.

When the retailers came under low satisfaction, MRCMPU was in a position

of competitive disadvantage, or when it came under average satisfaction,

MRCMPU was in a position of competitive parity or when it came under high

satisfaction, MRCMPU gained competitive advantage.

In testing retailer satisfaction score in delivery of milk and milk

products, the following variables such as packing of Milma milk, packing of

Milma milk products, co-operation of delivery persons in delivery of Milma

milk, co-operation of delivery persons in delivery of Milma milk products,

leakage of milk were considered. From the consolidated results of retailer

satisfaction score in delivery of milk and milk products 78.0 percent of the

retailers came under average satisfaction 8.0 percent of the retailers came

under low satisfaction and 14.0 percent of the retailers came under high

satisfaction. As the majority of retailers came under average satisfaction score

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MRCMPU was in a position of competitive parity in delivering milk and milk

products to retailers.

In testing retailers satisfaction score in Milma milk and milk products

sales the following variables such consumers complaints about the quality of

Milma milk, consumers complaints about the quality of Milma milk products,

consumers complaints about delay in delivery of Milma milk, consumers

complaints about delay in delivery of Milma milk products commission given

by Milma were considered. From the consolidated results of retailer

satisfaction score in selling Milma milk and milk products, 82.0 percent of the

retailers came under average satisfaction, 2.0 percent of the retailers came

under low satisfaction, 16.0 percent of the retailers came under high

satisfaction. As majority of the retailers came under average satisfaction,

MRCMPU was in a position of competitive parity in selling milk and milk

products.

In the test for the retailers satisfaction with milma versus its

competition, the following variables such as intensity of competition, effect of

competition on the sales of Milma milk and milk products were considered.

From the consolidated results of retailer satisfaction score in competition, 78.0

percent of the retailers had average satisfaction, and 22.0 percent of the

retailers had high satisfaction. No retailer of all the three districts came under

low satisfaction. As majority of the retailers came under average satisfaction

MRCMPU was in a position of competitive parity as regards competition.

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From the consolidated results of overall retailer satisfaction score in

delivery of milk and milk products, in selling Milma milk and milk products,

and in competition, 84.0 percent of the retailers came under average

satisfaction, and 16.0 percent of the retailers came under high satisfaction. As

no retailer of any of the three districts came under low satisfaction, no retailer

appeared to be less satisfied. As majority of the retailers came under average

satisfaction, MRCMPU was in a position of competitive parity in overall

retailer satisfaction.

Ho. 4: MRCMPU is as competitive as its competition with regard to

consumer satisfaction

“Cornell” technique mentioned above was also used in order to

measure the consumer satisfaction score. For this the following variables such

as availability of Milma milk and milk products, price of Milma milk and milk

products, quality of Milma milk and milk products, packing of Milma milk

and milk products and response of Milma to changing needs such as

innovation in marketing, scheduling of delivery time, granting of agencies and

handling of consumers complaints were taken into account.

About 94.4 percent f the consumers of Toned Milk in summer, 96.7

percent each in monsoon and winter came under average satisfaction,

similarly, in summer, monsoon and winter 95.7 percent came under average

satisfaction. But in the cases of Milma Smart and Homogenous Toned Milk,

cent percent of the consumers of Milma milk came under average satisfaction

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in all seasons. Hence, MRCMPU was in a position of competitive parity in the

case of availability of all varieties of milk in all seasons.

About 98.3 percent of the consumers of Milma ghee in summer, 96.7

percent each in monsoon and winter came under average satisfaction.

Similarly, 90.8of the consumers of Milma curd, 90.8 per cent in summer, 95.4

percent in monsoon, and 92.3 percent in winter came under average

satisfaction. But, in the case of sambharam, 93.8 percent in summer 75.0

percent in monsoon and winter came under average satisfaction. In the case of

ice-cream 90.0 percent of the consumers in summer and winter came under

average satisfaction. But 60.0 percent of the consumers in monsoon came

under average satisfaction. Hence, MRCMPU was in a position of competitive

parity in the case of availability of all varieties of milk products in all seasons

except sambharam and ice cream in monsoon.

In the case of price of Milma milk, 90.8 percent of the consumers of

Milma milk came under average satisfaction. 9.2 percent of the consumers

came under low satisfaction. But no consumer came under high satisfaction.

As far as the price of Milma milk was considered MRCMPU was in a position

of competitive parity.

In the case of price of Milma milk products, 75.0 percent of the

consumers of Milma milk products came under average satisfaction,. 16.7

percent came under low satisfaction, and 8.3 percent came under high

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satisfaction. As far as the price of Milma milk products was concerned,

MRCMPU was in a position of competitive parity.

In the case of quality of Milma milk, 65.0 percent of the consumers

came under average satisfaction. 23.3 percent of the consumers came under

low satisfaction. But 11.7 percent of the consumers came under high

satisfaction. As far as quality of Milma milk was, concerned MRCMPU was in

a position of competitive parity.

In the case of quality of Milma milk products, 69.2 percent of the

consumers came under average satisfaction 19.1 percent of the consumers

came under low satisfaction and 11.7 percent of the consumers came under

high satisfaction. As far as quality of Milma milk products was concerned

MRCMPU was in a position of competitive parity.

In the case of packing of Milma milk, 59.2 percent of the consumers

came under average satisfaction. 20.0 percent of the consumers came under

low satisfaction, and 20.8 percent of the consumers came under high

satisfaction. As far as packing of Milma milk was concerned MRCMPU was

in a position of competitive parity.

In the case of packing of Milma milk products, 77.5 percent of the

consumers came under average satisfaction. 11.7 percent of consumers came

under high satisfaction and 10.8 percent of the consumers came under low

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satisfaction. As far as packing of Milma milk products was concerned

MRCMPU was in a position of competitive parity.

In the case of innovation in marketing, 94.2 percent of the consumers

came under average satisfaction. 3.3 percent of the consumers came under low

satisfaction, and 2.5 percent of the consumers came under high satisfaction. As

far as innovation in marketing was concerned MRCMPU was in a position of

competitive parity.

In the case of scheduling of delivery time, 85.0 percent of the

consumers came under average satisfaction. 8.3 percent of the consumers

came under low satisfaction, and 6.7 percent of the consumers came under

high satisfaction. As far as scheduling of delivery time was concerned

MRCMPU was in a position of competitive parity.

In the case of granting of agencies, 89.2 percent of the consumers came

under average satisfaction. 8.3 percent of the consumers came under low

satisfaction, and 2.5 percent of the consumers came under high satisfaction. As

far as granting of agencies was considered MRCMPU was in a position of

competitive parity.

In the case of handling of consumers complaints, 91.7 percent of the

consumers came under average satisfaction. 6.7 percent of the consumers

came under low satisfaction and 1.6 percent of the consumers came under high

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satisfaction. As far as handling of consumers complaints was concerned

MRCMPU was in a position of competitive parity.

RECOMMENDATIONS

From the analysis of this study, interviews with the officials of Milma,

experts in the domain, various officials of govt. departments and based on

information from the related literature, the following recommendations are

made that can be .

Marketing

It is found that product availability at retail outlets is a

critical factor for sales and customer satisfaction etc. Competitors gain in

market share when Milma is not present in a market or its supplies are

not adequate. Hence, MRCMPU must concentrate to eliminate the gap

between demand for and supply of its milk and milk products.

MRCMPU must build adequate capacity to fulfill the orders of milk and

milk products whenever it is required. For this, monitoring of product

availability in retail outlets on a regular basis and earnest efforts to

minimize stock out at any time of the day are essential. Hence, the new

business strategy for MRCMPU should have this as a major factor for

enhancing its competitiveness. It may also consider running milk and

milk product trucks to service retail outlets and major institutional

customers wherever and whenever they need Milma products.

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As mentioned in the findings of the study, surplus milk is one

of the problems of MRCMPU and it was also found that it was the

Palakkad district that procured much of the surplus milk. If demand-

supply mismatch in Palakkad district is handled properly, this problem

can be contained.

Though the growth rate of milk sales shows an increasing

trend, milk sales per agency of MRCMPU shows a declining trend. It

may be due to overcrowding of agencies or inefficiencies of agencies. In

this situation, MRCMPU must make periodical evaluation of the

performance of agencies.

From the field survey, it is understood that MRCMPU can

enhance the sale of curd and peda when MRCMPU is ready to cut price

of curd and peda. When the price of curd is cut by Re.1/, MRCMPU can

compete with the other rival brands. If MRCMPU is ready to reduce the

price of peda and if it is adequately supported with promotion, the peda

sales can be enhanced because consumers are ready to buy peda instead

of buying chocolates of reputed brands.

Certain retailers were of the opinion that the attitude of

delivery persons is totally indifferent. These are not MRCMPU

employees. As contract workers, they have no long-term interest in the

organization. There may also be other reasons for their callous behaviour

like low remuneration, long waiting time in the dairy for taking delivery

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of milk and milk products, and long travel, sometimes throughout the

night. Hence, MRCMPU must take measures to minimise, integrate the

retail network by employing own employees or engaging retail

relationship managers who must be in constant touch with retailers and

attending to their complaints and problems.

Generally, hotels and restaurants prefer milk with high fat,

because they can make more cups of tea or coffee from this type of milk.

MRCMPU mist produce and sell another variety of milk with high fat to

the hotels and restaurants alone at comparatively high price. In this case,

hotels and restaurants are ready to purchase such milk in large quantities.

Certain consumers are of the opinion that milk may be

unhygienic as the milk was supplied in containers. Moreover, quality of

milk may be deteriorated when the dealer opens the freezer frequently

for supplying milk to the consumers. Hence MRCMPU should take

initiative to remove this complaints and to aware the dealers to preserve

the quality of milk.

Door to door delivery is inevitable to enhance the milk sales.

But certain consumers were of the opinion that the dealer who made

door delivery charges Re. one per day. From the part of consumers it is

too much. MRCMPU must look into this problem.

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Generally, the market share of Toned milk is higher than

other varieties of Milma Milk. But certain consumers were of the

opinion that the quality of Toned Milk was poor in general and the

quality of Milma Smart was poor in particular. Hence, MRCMPU must

focus its strategy to enhance the selling of Toned Milk by ensuring

quality of these varieties of milk.

Retailers are the strong link between the Union and

consumers. Hence, retailer’s satisfaction should be a major concern for

the organisation. The retailers had many complaints. Some of them were

of the opinion that leakage of milk was more and it was seen on the next

day. In such a situation, MRCMPU was not ready to take back such milk

packets. Hence, the retailer must suffer this loss. There was the

possibility of shortage in quantity of milk and curd in the packets.

Sometimes the delivery persons did not deliver the actual quantity of

milk as already ordered. In certain cases, urgent orders were not

entertained by Milma due to the lack of mobile services. Retailers

expected certain incentives from Milma during Onam festival, but it was

not given by Milma. Hence, MRCMPU must gather suggestions and

complaints from the retailers while distributing milk and milk products

and must take necessary corrective action.

MRCMPU must gather and evaluate necessary data

regarding the opinion of consumers, retailers, wholesalers, employees

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and public about the performance of MRCMPU, various aspects of milk

and milk products, innovations and challenges in the milk and milk

products market. For this suggestion, boxes may be fixed in the APCOS,

retail outlets, dairies and chilling plants. Such suggestions and

complaints can be collected while procuring and distributing milk and

milk products.

Estimation of future demand for the product is one of the

important tasks of strategists. Certain methods like moving average, least

square are insufficient at a certain extent. As strategic decision revolves

around accurate results, sophisticated techniques such as exponential

smoothing, and linear programming can be applied in order to forecast

demand for milk and milk products.

As mentioned in the findings other rival firms gained more

market share by providing more commission, credit facility to the

retailers and taking back the unsold milk and milk products. In this

situation MRCMPU must ensure that retailer compensation is adequate

and on par with competition.

Production

As milk is a fast decaying one, it cannot be stored for long

hours in the dairy and in the retail outlets. Hence, the average stock level

and safety stock level must be computed by taking average demand and

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average lead time. The amount of safety stock necessary to satisfy at a

given level of demand can be determined with the use of statistical

technique. The joint impact of demand and replenishment cycle

(performance cycle) variability can be considered to ascertain safety

stock and closing inventory.

The milk procured from far off APCOS must be processed

first in order to avoid decay of milk. . For this, working time of dairies

and chilling plants may be started earlier than the normal starting time.

Capacity utilisation of milk and milk products equipment has

to be raised in order to avoid idle time and bottlenecks in production

process. Under utilisation of plant, capacity leads to idle time and

insufficient capacity of the plant leads to bottlenecks. Idle time results

under absorption of fixed overheads whereas bottlenecks in the plant

results inability of production department to fulfill the orders in time.

Hence, MRCMPU must watch the optimum utilisation of plant capacity

to avoid idle time and bottlenecks during the production process.

As very thin films were used while packing Milma Smart, the

quality of packing of such milk was poor. Similarly, the curd filling

machine was not cleaned well, there was the possibility of the presence

of cockroach in curd. Hence MRCMPU must take necessary steps ensure

the quality of milk and curd in the production process itself.

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Procurement and Distribution

Route optimization of various procurement and distribution

routes can be done in order to standardise procurement and distribution

outlets. In this case MRCMPU can reduce its transporting costs. For this

bench marking can be adopted with the activities of related firms,

competitors and unrelated firms.

The retailers have gained much bargaining power and at

times dictate terms to MRCMPU. Proper discipline must be ensured

throughout the distribution network with sincere supervision.

Location Planning

Availability of milk and milk products is one of the

responsibilities of dairy. For this, location planning by comparing the

total weight distances of each logistics centre can be followed. In this

case, a particular logistics centre or two or more logistics centres, which

have the lowest total cost, may be identified to ensure best customer

service.

Management Information System

Management Information system of MRCMPU must be

enhanced and made up to date. Necessary feed back system must be

adopted in order to coordinate the functions of various dairies, chilling

plants and Union.

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Accounting

Performance of most efficient products can be ascertained by

comparing the unit cost and selling price of the products. In this case, cost

structure of each and every product must be determined. For this Activity

Based Costing (ABC) system can be followed in order to ascertain product

wise cost structure. Cost of each and every activity must be identified at its

origin. After considering the cost driver of each and every activity, cost can be

apportioned to various milk and milk products.

CONCLUSION

This study makes an attempt to evaluate the performance of KCMMF

in general and MRCMPU in particular and helps to formulate an effective

strategy to make it vibrant and competitive. As Milma is processing and

selling milk and milk products in large scale, a small change in the

procurement and selling price ultimately results high change in the earnings of

Milma at the end. Increase in the selling price of milk and milk products is

not the ultimate solution to solve the present crisis of Milma but it has to

control and reduce its logistics cost such as procurement, material handling,

inventory, transportation, packing, and warehousing as logistics cost plays a

dominant role in the total cost of the product. Survival and growth of Milma is

not the responsibility of Milma alone but the responsibility of farmers,

consumers, employees, public, govt. and the society as a whole.

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