CHAPTER-1

INTRODUCTION AND DESIGN OF THE STUDY

INTRODUCTION

Milk is a vital for human growth and development, body maintenance and protection
from diseases. Cow milk generally contains between 3 and 4 g of fat/100 g, although values as
high as 5.5 g/100 g have been reported in raw milk. Dairy is a vital part of the global food
system, providing economic, nutritional and social benefits to a large proportion of the world's
population. With up to one billion people living on dairy farms, dairying plays a major role
within the economics of numerous communities, regions and countries across the globe. Dairy
and dairy products provide livelihood to millions of homes in Indian villages. They supply the
quality of milk and milk products to people of both urban and rural areas.
Dairying has become an essential secondary source of income for millions of rural
families. It enhanced socio-economic development during the 21st Century is throwing up
challenging issues like food security, food safety, quality and their linkages with the national and
international markets as the demand for food is increasing.
India is the world’s largest dairy producer. According to the National Dairy Development
Board (NDDB), Indian dairy demand in 2021-22 is estimated to be between 200 to 210 million
metric tons. Indian dairy production needs to grow approximately 5 percent per year in order
meet NDDB’s 2021-22 demand projection. The Indian dairy sector is estimated to be worth
Rs.3.6 lakh crores, according to the Department of Animal Husbandry, Dairy & Fisheries,
Ministry of Agriculture, and Government of India. Indian Dairy sector has grown significantly
over the years. Dairy products demand in India has increased dramatically in both rural and
urban sectors. In the year 2015 fluid milk consumption is forecast to increase 4.8 percent to
59.75 million metric tons on population growth and rising incomes, which has resulted in Indian
buying more nutritious food, especially milk and dairy products. In Tamil Nadu, major milk
contributor is Aavin, a Tamil Nadu-based milk producer’s union, procures milk, processes it and
sells milk and milk products to consumers. Now, it becomes a leading company for having most
consumers in all over Tamil Nadu.
 The consumer is the one who pays to consume goods and services produced. As such,
consumers play a vital role in the economic system of a nation. Consumer behaviour is the
behaviour that consumers display in searching for, purchasing, using, evaluating and disposing
of products and services that they expect will satisfy consumer needs and wants. (Schiffman.G
and Kanuk) (2008)
In competitive and saturated market, a key to success of any business depends on
knowing consumer and his consumption patterns and recognizing and understanding factors
influencing his decision-making for the purpose of developing an attractive offer of products,
supporting services, communication means and other marketing tools that would fit like a glue to
customer’s needs. (Klaudia Kurajdova) (2015)
The factors affecting consumer’s buying behaviour, while buying the dairy products, the
variables include packaging, cost, availability, ingredients, product popularity, product quality,
product taste, etc., that influence the choice of a brand of milk and milk products.(Ananda
Kumar. A & Babu.S) (2014)
Marketing is “the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large”. For business to consumer marketing, it is “the process by which companies create
value for customers and build strong customer relationships, in order to capture value from
customers in return”. For business to business marketing it is creating value, solutions, and
relationships either short term or long term with a company or brand. It generates the strategy
that underlies sales techniques, business communication, and business developments. It is an
integrated process through which companies build strong customer relationships and create value
for their customers and for themselves.

Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the
customer as the focus of its activities, marketing management is one of the major components of
business management. Marketing evolved to meet the stasis in developing new markets caused
by mature markets and overcapacities in the last 2-3 centuries.
Consumer behaviour is the study of individuals, groups, or organizations and the
processes they use to select, secure, and dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on the consumer and society.[1] It blends
elements from psychology, sociology, social anthropology, marketing and economics. It attempts
to understand the decision-making processes of buyers, both individually and in groups such as
how emotions affect buying behavior. It studies characteristics of individual consumers such
as demographics and behavioral variables in an attempt to understand people's wants. It also tries
to assess influences on the consumer from groups such as family, friends, reference groups, and
society in general.Customer behavior study is based on consumer buying behavior, with the
customer playing the three distinct roles of user, payer and buyer. Research has shown that
consumer behavior is difficult to predict, even for experts in the field. Relationship marketing is
an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of
the true meaning of marketing through the re-affirmation of the importance of the customer or
buyer. A greater importance is also placed on consumer retention, customer relationship
management, personalization, customization and one-to-one marketing. Social functions can be
categorized into social choice and welfare functions.

DEFINITION OF CONSUMER BEHAVIOR

The term consumer behavior is defined as the behavior that consumers display in searching for,
purchasing, using, evaluating and disposing of products and services that they expect will satisfy
their needs. Consumer behavior focuses 15 on how individuals make decisions to spend their
available resources (time, money, effort) on consumption related items. That includes what they
buy, why they buy it, when they buy it, where they buy it, how often they buy it, how often they
use it, how they evaluate it after the purchase and the impact of such evaluations on future
purchases, and how they dispose of it. One of the most important constants among all of us,
despite our differences, is that above all we are consumers. We use or consume on a regular basis
food, clothing, shelter, transportation, education, equipment, vacations, necessities, luxuries,
services and even ideas. As consumers we play a vital role in the health of the economy-local,
national, and international. The purchase decisions we make affect the demand for basic raw
materials, for transportation, for production, for banking; They affect the employment of workers
and the employment of resources, the success of some industries and the failure of others. In
order to succeed in any business, and especially in today’s dynamic and rapidly evolving market
place, marketers need to know everything they can about consumers what they want, what they
think, how they work, how they spend their leisure time. They need to understand the personal
and group influences that affect consumer decisions.
 1.1 STATEMENT OF THE PROBLEM

Milk is an essential commodity in life of Indian consumers. They prefer healthy and
energy drinks for consumption. Milk and Dairy products are easily available, it offered by
number of milk brands. The main challenge for marketers is, to create the consumer loyalty by
quality, freshness, odour and taste. Marketers are necessary to know the consumers response
towards their own brand milk and dairy products of its availability, acceptability and
affordability.
Milk has always been a source of nutrition for every human being. The food habits of the
people also require a lot of milk and milk products. Even though substitutes like artificial
whiteners have been available in the market, everybody has been striving hard to get quality
cattle milk at a reasonable price. This has resulted in the growth and development of MPCS in all
districts of the States of India in general, and the state of Tamil Nadu in particular.
 1.2 REVIEW OF LITERATURE
Review of literature is one of the core activities involved in research study, which forms
the basic foundation on which further study can be conducted. it facilities the researcher to
understand and familiarize with the basic concept on the subject. A literature review is an
account of what has been published on a topic by accredited scholar and researcher. The
following review of literature collected from various sources.

Patel (1976)5 in his article ‘Milk for Millions’ suggests that the significant increase in
milk production could be achieved only if additional feed is made available and a greater
percentage of the available feed is reserved for high yielding animals.
Grewal and Rangi (1980)6 in their article “Economics and employment of Dairying in
Punjab” pointed out that the total milk production in the state of Punjab was 21.03 lakh tonnes in
1970-71 which increased to 29.26 lakh tonnes in 1978-79. The percapita production of milk had
increased from 437gm per day to 511gm in the same period. This was done by replacement of
low yielding indigenous cows with high yielding buffaloes and cross breed cows.
Mrs. M.L. Kamaeswari (The Indian Journal Marketing – Oct - 2009) has expressed that,
industrialization has bought vast changes in the automobile industry, because and development
of any area requires appropriate transportation facilities, automobile industry in one of the fastest
growing sectors in our country. The rapid growth of middle class section is the primary reason
for the growth of two – wheeler industry people in rural and semi urban areas are trying to
devote their life style and people in metropolitan cities are completely disappointed with the
public transport system. Indian is the third largest manufacture and second largest consumer of
two-wheeler in the world. It has been achieved due to variety of reason like restrictive policy of
the government of Indian and rising demand for personal transport.

Dr. Senthilkumar , department of business management, Indian automobile, in his

research study 2009, found that competitive hostility, supplier, “power” and market turbulence
relationship appreciate the role of public private partnership as win –win situation for private
entities government an individual consumers. In recent we saw two-wheeler manufacture like
bikes focus being on the domestic market and then on exports. There are signs of becoming a
developed nation and this will increase the energy need if the country even more.
 Mr. Senthil Kumar department of research scholar in Indian council for market research,
ICMR conducted a study and published in the journal of marketing,2009, to understanding the
buying behavior or towards vehicle that are being aggressively marketed by companies. The
objective of the study was to understand the growing awareness of products. It was interesting to
note that respondent agree to have a change in buying behavior depending upon the product
being stated as a green.

Velappan and Chidambaranathan (1982)7 in their book ‘Agricultural Economics’ says

that measures, both preventive as well as curative, should be undertaken on a large scale to tackle
various cattle diseases. Proper nutritive fodder, sound breeding and healthy surroundings would
help the prevention of diseases and surely increase milk production.
Singh and Tewari (1986)8 in their article. “An Economic Analysis of Inter State
Disparities of Milk Production and Institutional Facilities in India” pointed out that the
institutional encouragement for co-operative societies might greatly help in increasing the
production of milk in backward areas of India.
Muniraj (1987)9 in his book “Farm Finance for Development” indicated that increasing
milk production depended on meeting the fodder and concentrate feed requirements adequately
during lactation and dry period. Feeding the animals with balanced diet gave better milk yield.
Punjab Singh and Majumdar (1992)10 in their article, “Current status of Feed and Forage
in management of livestock in India” stated that the proper feeding and management could
substantially increase milk production. This required regular supply of dry and green fodder.
Available production technologies and land could maintain supply of fodder at optimum level
but required a massive production drive to increase the production.
Sandip K. Bhatt (1994)12 in his article ‘Issue of Co-operative Dairying in India” stated
that milk production increased by upgrading cows and buffaloes through artificial insemination.
Also a conscious attempt should be made to alter the relative ratio between buffaloes and cows in
favour of the latter to reduce fluctuations in milk production between the summers and winter
seasons.
Madanna and MV Srinivasa Gowda (1994)15 “Co-operative and the commercialization
of milk production in India” stated that for a long period dairying in India was characterized by
the dominance of small and marginal farmers, scattered production, inadequate marketing
channels, lack of modern inputs and facilities for products transportation. Milk marketing was
represented by unorganized private traders who turned milk trading into an exploitative market.
Nowadays for marketing of milk - a highly perishable commodity, it has been felt that a well
conceived and organized network of dairy co-operatives right from the village level would be
essential for the speedy growth of dairy industry in the country.
Ramanujam K.N. (2003)16 studied the ‘Role of Co-operatives in Milk Marketing
venture’ as Indian middle class consumers have a craze for milk and its products. As they have
good purchasing power, there exists high demand for milk and milk products. As a result, India
is emerging as one of the largest and fastest growing consumer market for milk and value added
milk products in the world and the ever increasing demand for milk products is a testimony for
this. Therefore, only by having an effective and sound system of distribution of milk and milk
products, will India emerge as the world’s leading dairy nation.
Sathya Sundram (2005)18 in his article “Rural Poverty and Dairy Development” said that
milk production increased from 17 million tonnes in 1950- 51 to 88.1 million tonnes in 2003-
2004. The quantum of additional employment generation in dairy industry depends on various
factors like number and type of animals possessed, size of households and feeding practices.
Periyasami N. (2006)20 in his article “Milk production in India” through which it is
established that the cost of production per litre of milk in India worked out to be the lowest in the
world. Thus there will be competitive advantage to increase India’s global share of export in the
dairy sector. Since Indian dairy sector is one of the least subsidized sectors in the world, it can
therefore, afford to take an aggressive stand in its position in world milk production. India
became the world leader in milk production in 2001 with a production of 84 million tones.
 1.3 OBJECTIVE OF THE STUDY

 To study the consumer buying behavior towards heritage Aavin milk at Trichy city.

 To analyze the factors that influences the consumer buying decision.

 To study the problems faced by consumer.

 To ascertain the satisfaction level of Aavin Milk

 To know the medium that plays an important role in purchasing the Aavin Milk

 To ascertain the satisfaction level of Aavin Milk

 1.4 THE SCOPE OF THE STUDY

 This study has been made to find the level of satisfaction and consumer buying behavior,
the customer has regarding the service provider by `Aavin Milk place at Trichy city.
 The study was aimed at measuring the promotional activities level towards customer
preference in Aavin Milk through well designed questionnaire.
 The study may help the company to device new strategies.
 The study will also help the company to know about the demographics of the customers
and their respective choices for products.
 To know the customer’s view and factors related to preference that attracts them to
purchase from milk
 1.5 RESEARCH METHODOLOGY
Research methodology may be understood as a science of studying how research done
scientifically. It is a way to systematically adopted by a researcher in studying his/her research
problem along with logic behind him. For a meaningful and systematic analysis of the study is
indispensable. Thus rendering solution to the problem identified.

1.5.1 TYPE OF RESEARCH

The study undertaken is of ―Descriptive Research in nature.Descriptive research is also
called Statistical Research. The main goal of this type of research is to describe the data and
characteristics about what is being studied. The idea behind this type of research is to study
frequencies, averages, and other statistical calculations.
1.5.2 HYPOTHESIS
The hypothesis of the study is based on the researcher objective. The researcher wants to
know about the consumer buying behavior. So, the researcher has to used the technique and the
hypothesis of,

H0 : There is no significant difference between the demographic factors and attribute of

Aavin milk.

H1 : There is a significant difference between the demographic factors and attribute of

Aavin milk.

1.5.3 SOURCE OF DATA

Primary Source
The Primary source of collecting data for research is Questionnaire filled by the
customers of Aavin milk. The Primary Data of Collection is a major source of the data.
1.5.4 METHOD OF DATA COLLECTION

The method of collecting the data is to the researcher has to collect the data from the
consumers through the method of questionnaire. The questionnaire has to contain the details and
the understanding of consumer’s opinion about the heritage Aavin milk.
1.5.5 THE SAMPLING TECHNIQUE
In this study is focused on the understanding of consumer buying behavior in Trichy city.
The sample size of the study is 200 respondents. And the non-probability sampling technique has
to use in this study. The random sampling technique is normally used on this study. Because of
the sample size of the study is undefined one. So which is an one of the useful technique of this
study.
1.5.6 STATISTICAL TOOLS FOR USED
Two structured questionnaires were designed as tool for primary data collection.
The questionnaire comprised of both close and open ended question. Each questionnaire
shows the demographic characteristics of individuals consumers and as well as retailers.

1. SIMPLE PERCENTAGE ANALYSIS

This is a method to compare two or more serious of data. It identifies the relationship between
the data’s.
2. CHI- SQUARE ANALYSIS
In order to the chi- square test either as a test of goodness of fit or as a test to judge the
significance of association between attributes, it is necessary that the observed as well as
theoretical or expected frequencies must be grouped in the same way and the theoretical
distribution must be adjusted to give the same total frequency.
1.5.6 LIMITATIONS OF THE STUDY

 This study is purely based on the zone of Trichy city alone. So the particular city alone
considered.
 In this study focus only the consumer buying behavior of Aavin milk products.
 This study mainly focused on the understanding of consumer buying behavior alone. So,
additional details are not considered.
 This study only conducted from the respondents of 200 consumers.