CHAPTER-1

INDUSTRY PROFILE

1.1 ORGIN OF MILK INDUSTRY:

Earlier people used to have animal milk for food. However the people of ancient
Babbly Lon, Egypt and India raised dairy cattle as early as 400 B.C. At that time, the
family cow was the cheap source of milk. A family used as much it needed and traded
or sold the rest to neighbor.
A dairy industry grew; several cities passed laws to control the sale of milk.
Some of these laws made it illegal to add water to milk or to remove cream from milk.
However, none of the early laws set health standard for milk. Many dairies added
chemical preservatives to milk. But after sometimes these chemicals were found to
be harmful, laws prohibited their use. Gradually cities and states began supervising
the milk industry in order to protect public health. In 1856 an American inventor
named Gail Borden received a patent for the first successful milk condensing
process.
About in 1885, dairies first used glass, jars and bottles, in which workers were filled
milk by hand. The invention of bottling machine in 1886 has proved that filling the
containers easier and faster.
In 1890, Stephen M. Babcock, an American agricultural chemist developed a list to
measure the fat content of the milk. The market value of milk depends on its fat
content, which dairies still determine by the Babcock test. In 1890s a few dairy plants
introduced pasteurization, a process invented by the French scientist Louis Pasteur.
One of the greatest epics -Mahabharata gives us the fact that dairying has an age-old
background. In those days cattle were treated as god. As the years passed, people
started using cattle to satisfy their needs of milk, milk products and for cultivation. But
during olden day's milk and milk products were not sold. Only after 1940's dairying
was started in an organized manner, in those days dairies were encouraged to
make pasteurized butter, mainly for the British army. One of such firm was "Urban
Milk Supply Scheme". After independence greater Bombay Milk Scheme has come
into existence. By this time many state government set up composite "Dairy

1
Development Department" to facilitate milk production, procurement, processing
and marketing. A dairy is place which deals with collection, processing of milk and
manufacturing of various milk products on an industrial scale

KARNATAKA MILK FEDERATION

KMF was instituted in 1984, by federating the 13milk unions in the state and thus
forming the state level apex organization. As a cooperative apex body of the state of
Karnataka, it represents dairy farmers’ organization and also implements dairy
development activities to achieve the following objectives:

 Provides assured and remunerative market for the milk produced by the
farmer members.
 Provide quality milk to urban consumers.
 To build village level institutions in co-operative sectors to manage the dairy
activities.
 To ensure provision of milk production inputs, processing facilities and
dissemination of know-how.
 To facilitate rural development by providing opportunities for self employment
at village level, preventing migration to urban areas, introducing cash
economy and opportunity for steady income.

LIST OF CO-OPERATIVE MILK PRODUCERS UNDER KARNATAKA

MILK FEDERATION

• Bangalore Milk Union

• Belgaum Milk Union
• Bellary Milk Union
• Bijapur Milk Union
• Dharwad Milk Union
• Gulbarga Milk Union
• Hassan Milk Union
• Kolar Milk Union
• Mandya Milk Union
• Mysore Milk Union
• Shivmoga Milk Union
• Tumkur Milk Union

2
DAIRYING IN INDIA:

Around 1500 to 2000 the Aryans were the first to domesticate cattle use for tilling
their land and obtain milk to be consumed as food. It was the Aryans who priced the milk
of a cow more than its meat, forbade its slaughter and created legends about it, even
worshipped it. Hindus even today consider cow as sacred. More of the total production
of milk is obtained from cows. In India, dairying has been practiced as a rural cottage
industry since the remote past. Semi commercial dairying started with establishment of
military dairy farms and cooperative milk unions throughout the country towards the end
of the 19th century.
However, market milk technology may be considered to have commenced in 1956 with
the functioning of the central dairy of Aarey milk project technology in 1956 with the
establishment of AMUL dairy.

1.2 GROWTH AND PRESENT STATUS OF THE INDUSTRY:

The Indian dairy industry is heading towards new century with an accelerated and
positive momentum. With unprecedented growth in milk production by over two and a
half time in the two decades to about 58.8million tons in 1992, India has emerged as the
largest milk producer in the world with an annual milk production of 76 million tons. Food
processing industry ranks as the 5th largest industry in the country. Through the milk and
the milk products have 85% business in unrecognized sector; it is having only 7%
growth per year.
The establishment of a cooperative structure as a ready and regular buyer or milk
produced gave a new turn to the rural economy. Today, over 275 dairy plants and 85
milk product factories in the cooperative, public and private sectors handle an
estimated 12-15% of the total milk produced. In most of the countries in the world, the
proportion of the milk delivered to the dairies is over 90%.
The trends are now changing fast in India too. It is expected that the processing of the
milk on organized scale will increase sharply in developed countries. This will
consequently increase the opportunities for the value addition. While the value of the

3
output of the dairy products in the countries’ food sector has increased from 5-7%
during the same period. Now the days of milk scarcity and imports are behind us. The
organized sector can seize the opportunity of tapping the market of value added dairy
products like butter, cheese, lactose, khova, paneer eIt is beyond doubt to mention that
the organized dairy industry has done a splendid job by transforming itself from an
import dependent enterprise to self sufficient industry and the embarking on export of
various products. And now it is poised for another wave of expansion by undertaking
large scale production of milk in the organized sector.

GROWTH PROCESS

KEY ITEMS UNIT 1976- 2015-16 2016-17 2017-18 2018-

77 19(upto
Feb'19)
Dairy Co- Nos 416 14826 15074 15864 16045
operatives
DCS Registered
DCS Functioning Nos 13270 13517 14256 14521

Women DCS Nos 3949 3919 4122 4122

Registered
Women DCS Nos 3550 3549 3743 3777
Functioning
STEP Registered Nos 2104 2274 2374 2374

STEP Functioning Nos 1943 2088 2199 2199

Membership Nos 37000 23.50 23.54 24.60 24.67

lakhs lakhs lakhs lakhs
Ann. Avg. Milk LKPD 0.50 64.88 65.51 70.81 75.87
Procurement
Peak LKPD 72.30(june 72.84(july 77.63(june 84.44(june

4
 Procurement 15) 16) 17) 18)
Avg. Milk Sales LLPD 95050 34.38 33.32 34.72 34.82

Avg. Curd sales LKPD 3.97 4.09 4.39 4.62

Avg. Good life LLPD 3.56 4.03 5.02 5.28

sales
Daily Payment to RS.Crores 0.09 14.62 16.00 18.22 18.28
Farmers
Total
Turnover(KMF & RS.Crores 8.82 11779 13133 13550 _
Unions)

MILK FEDERATION:
The Karnataka Co-operative Milk Producers Ltd came into existence on 1-5-
1984by federating the milk unions in the state and thus forming the state level apex
organization.
When all the project activities are completed, the main role of the federation will be to
market surplus milk products and to produce and supply centralized inputs.

1.3 KEY PEOPLES OF THE INDUSTRY

RAKESH SINGH, IAS MANAGING DIRECTOR / CEO, KMF

5
 Place of
Name Designation
working

RAKESH SINGH,
MANAGING DIRECTOR / CEO KMF CO
IAS

M.T. KULKARNI DIRECTOR (MKTG) KMF CO

DR.G.T. GOPAL DIRECTOR ( PURCHASE / CTI ) KMF CO

DR.D.N.HEGDE DIRECTOR(AH & SCHEMES) KMF CO

B.M. SURESH
DIRECTOR (ENGG/ADMIN) KMF CO
KUMAR

RAMESH B
DIRECTOR (FIN) KMF CO
KONNUR

H. S. MANJUNATH DIRECTOR (STEP) KMF CO

D.PRASANNA
ADDL DIRECTOR (QC) KMF CO
KUMAR

ADDL DIRECTOR
M.S.SUHAEL KMF CO
(SYSTEMS/PURCHASE)

C.P.REDDY PUBLIC RELATION OFFICER KMF CO

UNION CHIEFS

Name Designation Place of working

DR. G.T GOPAL M.D BENGALURU MILK UNION

KOLAR-CHIKKABALLAPURA
DR K SWAMY M.D
MILK UNION

6
Name Designation Place of working

DR. M.S VIJAYKUMAR M.D MYSURU MILK UNION

MALLIKARJUNA M.D CHAMARAJNAGAR MILK UNION

GOPALAIAH M.D HASSAN MILK UNION

DR. K. RAMACHANDRA
M.D MANDYA MILK UNION
BHAT

B. MUNEGOWDA M.D TUMAKURU MILK UNION

DR.G.V. HEGDE MD DAKSHINA KANNADA

DR.A.R
M.D SHIVAMOGGA MILK UNION
CHANDRASHEKAR

BUKKA MALLIKARJUNA M.D RAICHUR-BALLARI-KOPPAL

SURESH NAIK K.N M.D DHARWAD MILK UNION

UBEDULLA KHAN M.D BELAGAVI MILK UNION

D. ASHOK M.D VIJAYAPURA-BAGALKOT

DR.C.H.KAMKERI M.D KALABURAGI MILK UNION

UNIT CHIEFS

Name Designation Place of working

DIRECTOR ( CENTRAL TRAINING

DR.G.T. GOPAL
PURCHASE / CTI ) INSTITUTE

7
Name Designation Place of working

T. S. SHASHIDHAR DIRECTOR NANDINI MILK PRODUCTS

DR. H V THIPPAREDDY DIRECTOR(FARM) NANDINI SPERM STATION

DR.B.V.SATHYANARAYAN DIRECTOR MOTHER DAIRY

NANDINI HITECH
GOVINDE GOWDA DIRECTOR PRODUCT PLANT,
CHANNARAYAPATNA

CATTLE FEED PLANT,

DR. K. RAVI G.M
GUBBI

CATTLE FEED PLANT,

P.RAMAKRISHANAPPA G.M
RAJANUKUNTE

CATTLE FEED PLANT,

MADHUSUDAN G.M
DHARWAD

CATTLE FEED PLANT,

D.VIVEK G.M
HASSAN

CATTLE FEED PLANT,

DR. B.M.SADASHIVAPPA G.M
SHIKARIPUR

NANDINI PACKAGING
M.KRISHNAPPA G.M
FILM PLANT

ADDL DIRECTOR TRAINING CENTER,

M.SHIVALINGEGOWDA
(TRAINING) MYSURU

TRAINING CENTER
DR.ABDUL AZIZ MULLA ADDL.DIRECTOR
DHARWAD

8
Name Designation Place of working

B.N.VIJAYKUMAR M.D DDIL, ASANGI- BAGALKOT

BALLARI ICE CREAM

V.RAVIKIRAN I/C
PLANT

1.4 PEST ANALYSIS:

• Indian Dairy Industry is at cross roads
• Industry strongly dominated by the government sector and working in co-operative
mode is going to face keen competition from private sector
• Co-ops performed well in some states, but in many states, they are functioning as
parastatals, weak representative of farmer interest
• Currently co-op prices serve as a bench mark for pricing of dairy
• Weak co-ops competing with private sector may severely affect farmer interest

 POLITICAL
MYSORE diary is under the guidelines of kmf administration and financial matters.
Labors are paid according to 6th pay commission and also provided epic facilities
according to state government.MYMUL even gets grants from government. The land
is owned by MYMUL on rent basis from the government

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 ECONOMICAL
Since milk is a daily use product the demand will be always high and also MYMUL
has the major portion of market sales are always at high. And the prices vary
according to government taxes and availability raw milk

 SOCIAL
Since most of employees are from nearest area culture differences is not there.
Every employee is provided uniform to feel the sense of unity. There are all types of
age groups in the organization and mostly elderly employees are in a higher job
designation

 TECHNOLOGICAL
Milk is being test in every part of the process starting from procurement to dispatch
through automated machines such as lactometer. There are 15chilling unit, 3bays,
4pasterisation unit, 4silos and more 10 engineers to take care of the machines. The
process starting from procurement to packaging is fully automatic with only 4people
controlling the whole process

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1.5 PORTER’S FIVE FORCE MODEL

 THREAT OF NEW ENTRY

Brand preferences and consumer loyalty:
There is an immense level of brand preference of nandini milk in the minds of the
people.
The level of preference specifically in the liquid milk sector is that they would go to
the other retailer only of the retailer does not have nandini milk.

 BARGAINING POWER OF SUPPLIER

Hear is appropriate bargaining power of supplier:
In olden days there were not any kind of cooperative soceities as the farmer was
exploited but nowadays the farmer’s rights are protected under the cooperative

11
rules and regulations which ultimately results in moderate power of bargaining from
the supplier.

 RIVALRY AMONG COMPETITORS

Mergers and acquisitions:
As such in the industry there are no mergers or acquisitions how ever if any MNC
wishes to entry though this route then the competition might be severe.

 THREATS OF SUBSTITUTE
Availability of attractive price substitute:
Different subtitutes are available for different category of products .There is ample
availability of low priced subtitutions from local vendors and retailers .

 POWER OF CUSTOMERS
This specifically deals with ability customers have to drive prices down.It is affected
by how many buyers are customer a company has, how significant each customer
is,and how much it would codt a customer to switch from one company to another
company. The smaller and more powerfull a client base,the more power it holds.

12
 CHAPTER-2
COMPANY PROFILE

MYMUL

2.1 BACKGROUND AND HISTORY

Mysore Dairy with the capacity of 10 TLPD was started in the year 1965 under the
control of the Department of Animal Husbandry and Veterinary Services of
Karnataka State, which was transferred to Karnataka Dairy Development
Corporation in the year 1974. The capacity was expanded to 60 TLPD in 1980 under
the scheme operation flood and transferred to the Karnataka Milk Federation in
1984. As per the Government policy the Dairy and its Chilling Centers were handed
over to Mysore Milk Union on 01.06.1987. The capacity was expanded to 100 TLPD
under the Operation Flood II and further expanded to 180 TLPD under Perspective
Plan I Programme.

13
Under the World Bank aided Karnataka Dairy Development Projects, the activities
on Dairy Development were taken up in the year 1975. The Mysore District Co-
operative Milk Producers Societies Union Ltd was registered on 23.11.1976, having
the jurisdiction extended to the entire Mysore District and Five Talks of Mandy
District. The Union undertook the work of organization of Milk Co-operatives in
‘AMUL Pattern’ with the main objective of socio-economic reformation of the farmers
in the rural areas through Dairying as main subsidiary occupation.

Later the Union was bifurcated into Mysore and Mandya District Co-Operative Milk
Producers Societies Union Ltd from 01.04.1987. Consequent to the bifurcation of
Mysore District into Mysore and Chamarajanagar Districts, this Union is renamed as
Mysore-Chamarajanagar District Coop Milk Producers Societies Union Ltd. Later
from April 2015 Bifurcation of Mysore-Chamarajanagar district milk union as Mysore
milk union and Chamarajanagar milk union.

VISION AND MISSION:

2.2 Vision

 To march forward with a missionary zeal which will make KMF a trailblazer of
exemplary performance and achievements beckoning other Milk Federations
in the country in pursuit of total emulation of its good deeds.

 To ensure prosperity of the rural Milk producers who are ultimate owners of
the Federation.

 To promote producer oriented viable cooperative society to impart an impetus

to the rural income, dairy productivity and rural employment.

 To a bridge the gap between price of milk procurement and sale price.

 To develop business acumen in marketing and trading disciplines so as to

serve consumers with quality milk, give a fillip to the income of milk producers.

 To compete with MNCs and Private Dairies with better quality of milk and milk
products and in the process sustain invincibility of cooperatives.

14
2.3 Mission
Heralding economics, social and cultural prosperity in the lives of our milk producer
members by promoting vibrant, self-sustaining and holistic cooperative dairy
development in Karnataka State.

2.4 Values:
Honesty, Discipline /Timeliness, Quality , Trust, Impartial, Savings, Transparency.

2.5 QUALITY POLICY

Mysore District Milk Union is committed to procure and supply safe Milk & Milk
Products to the satisfaction of consumer by:
Complying with statutory and regulatory requirements
Constant communication with all parties involved in the food chain
Adopting GHP, GMP & HACCP
Adopting scientific processing methods,
Training of employees Union/Dairy Co-operative societies.

ISO 22000 Documented and Under Implementation.

This commitment is supported by measurable objectives and brings about continual
improvement.

2.6 PRODUCTS AND SERVICES PROFILE:

The product profile refers to the study of the products information of the company. The
various milk and milk products manufactured at MYMUL are shown below:
The following are the products and their quantity offered by MYMUL:

Toned milk Homogenized toned milk

15
Full cream milk Ghee

Peda Butter

Paneer Khova

16
Masala majjige Sweet lassi

Mysore pak Curd

17
 Badam Powder Chocolate Bite

Flavored Milk Jamoon Mix

Nandini Toned Milk

Nandini Toned Milk is the Karnataka’s most favorite Milk. Fresh and pure milk
containing 3.1% fat and 8.5% SNF. Available in 520 ml & 1 liter packs.

Nandini Homogenized Toned Milk

Nandini Homogenized Toned Milk is pure Milk containing 3.1% Fat & 8.5% SNF.
This is Homogenized and pasteurized. It gives you more cups of tea or coffee and is
easily digestible.

Nandini full cream milk:

Full milk; contain 6.1% fat and 9%soloid not fat. Rich creamier and tasted milk, ideal
for preparing homemade sweets and savories. Available in 500ml.

18
Nandini Ghee

A taste of purity, Nandini Ghee made from pure butter. It is fresh and pure with a
delicious flavor. Hygienically manufactured and packed in a special pack to retain the
goodness of pure ghee. Available in 200 ml, 500 ml, 1000ml packs & 15 kg tins.

Nandini Peda

Nandini Peda made from pure Milk. Available in 100gms & 250gms packs.
Nandini Peda made from pure Milk. Available in different flavor like Kesar peda.

Paneer

It is a tasty, wholesome and nutritious supplement for a variety of dishes. Add

Paneer to make dishes creamy and mouth-watering. Available in 200gand 1kg
packs. Can be stored for 30 days when kept frozen.

Khova

Add Khova to preparations like carrot halwa, gulab jamoon etc. and increase the
richness of its taste. Available in 200g packs. Can be stored for 30 days when kept
frozen.

Cashew Burfy

Pure Milk based cashew burfi is available in 250gms.

Nandini Curd
Nandini Curd made from pure milk. It’s thick and delicious giving you all the
goodness of homemade curds. Available in 250 grams and 500 grams packs .

Nandini Sweet Lassi

Nandini Sweet Lassi the most refreshing drink made from fresh curd.Best alternative
to cool drinks during summer.

Nandini Peda Kesar

Nandini Peda made from pure Milk.Available I n different flavours like Kesar &
Elaichi.

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Good life

Cow’s pure milk. UHT processed, bacteria free in a tamper proof tetra fino pack
which keeps this milk fresh for 60days without refrigeration until opened. Available in
500ml and in 200 ml bricks.

Badam burfi

Badam burfi is a delicious treat made up of milk and it can be stored at room
temperature.

Flavored milk

Sterilized flavored milk. Nutritious and wholesome milk available in 5 different flavors,
pineapple, rose, badam, pista and natural orange.

Masala majjige

It is one of the drinks available in the dairy. Its prepared using masala ingredients.

AREAS OF OPERATION

As a district milk union under KMF, individually the union has no opportunities to
expand their operation because the MYMUL is structured under KMF as a district
milk union of Mysore district. The union itself acts as a branch of KMF but the union
has opportunities by way of marketing its milk products out of its limited market
borders means of its district market borders The district milk unions are controlled
by the KMF, which acts as a mother organization to all other district unions in
Karnataka. The union receives all types of demand orders from in and outside the
country. Especially the milk powder has more demand from foreign countries. The
union will produce other milk products according to their demand rate.

PROCUREMENT:

To procure the surplus milk available in the primary milk producers’ Co-operative
societies of the union jurisdiction area.
• Organising dairy co-operative societies at village level.
• Organising milk procurement route to procure milk.
All the dairy co-operative societies in the union jurisdiction will be a share holder to
the affiliated federal body where in the dairy co-operative societies will be assisted in
procuring milk in both shifts and providing technical input support to the producer
members and to make remunerative payment to the dairy co-operative societies on
the quality parameter.

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TECHNICAL INPUT ACTIVITIES

It is one of the fundamental objectives of MYMUL to carry out activities for enhancing
Milk production in its Milk shed area. In view of this, various technical input services
like veterinary health care, artificial insemination services, vaccination, supply of
balanced cattle feed and quality fodder seed etc. are provided for enhancing milk
production and economic development of farming community.

ANIMAL HEALTH AND EMERGENCY SERVICES

The union is taking special care to promote the health of the cattle of member milk
producers. Veterinary health care facilities have been extended to all the DCS.
Emergency veterinary routes, Health camps, Vaccination against Foot and mouth
disease are being provided to all functional societies. Mass deworming programme is
carried out twice in a year at all DCS. There is also a backup of Veterinary First Aid
Services to needy milch animals through trained DCS staff. Introduced Trio-NB-Sac
and 'Godhara Shakthi' to improve quality of Milk.

STEP (Support to Women Training & Education Program)

The Programme of STEP aims

 To organize exclusive Women Dairy Cooperatives and to take up employment

cum income generation activities.
 To provide need based and extensive training for skill upgradation.
 Mobilizing women in formation of Self Help Groups as a tool for income
generating activity and for easy access to credit.

2.7 COMPETITIORS OF MYMUL:

The major competitors of MYMUL are as follows:

 Jersey
 Dodla
 Arogya
 Gomatha
 Thirumala
 Swastika
 Loose milk vendors
 Heritage

Jersey:

 Plant located at Andhra Pradesh

 Sale in union jurisdiction 45tlpd (100 tlpd in city)

21
  MRP is 20per litre seller rate rs.22 based on quantity

 Commission ranges from 40-70 per litre

 Quality perception-thick and longer shelf life

 Flexible distribution-retailers, wholesalers or anyone willing to sell

 Payments cash and carry or while collecting empty crates on return trip.

 Availability- mostly retail outlets and now capturing institutional sales by any
means.

 Vigorous advertisement especially at the point of purchase.

Dodla:

 Plant located at Nellore

 Availability of raw materials at cheaper rate.

 sale in union jurisdiction 18tlpd

 MRP rate Rs.19per litre-seller rats Rs.22

 Commission ranges from 40-50paisa.

 Quality perception-thick and long shelf life.

 Flexible distribution-retailers or anyone willing to sell

 Returns will be accepted

 Payment-cash and carry or while collecting empty crates on return trip.

 Channel members are playing critical role in boosting the sales.

 Packing is attractive with multi colour pricing on sachets.

22
  Consumers perceive that milk is good for making curds.

Arogya:

 Plant located at Bangalore.

 Sale in union jurisdiction 10tlpd.

 MRP rats Rs.18per litre

 Commission ranges from 60paisa per litre.

 Availability- mostly retail outlets like bakeries, condiments and departmental

stores.

 Packing is attractive with multi colour pricing on sachets.

 Concentrating on value added products and not much on milk

Loose milk vendors:

 Market share is next to Nandini.

 Loose milk from erode and local cattle rears.

 MRP rate Rs.7 to Rs12 per litre

 Majority of the milk is heavily adulterated and no uniform quality.

 Sales from 50ml and above

23
2.8 SWOT ANALYSIS

A SWOT analysis is a strategic planning tool used to evaluate the strengths,

weaknesses, opportunities and threats involved in a project or in a business venture
or in any other situation requiring a decision.

Environmental analysis

Internal Analysis External Analysis

Strengths Weakness Opportunities Threats

SWOT Analysis

24
SWOT Analysis of the Organization

STRENGTHS:

 Market leader.
 “Nandini” is a trusted house hold brand name.
 Two lakh farmer members.
 Provides excellent veterinary, AI, vaccination, Extension facilities, Feeds and
Fodder seeds supply etc., in the field, which cannot be thought off by any
private operator. Hence earned lot of goodwill from member producers, who
patronize the union throughout the year.
 Has earned the distinction of not failing to deliver the milk to market on time
throughout the year.
 There are days with no power supply, no water supply; but there is no day
without NANDINI milk supply.
 Highly remunerative and timely payment to producers.
 Union is in good financial position.
 ISO 9001-2000 certificate.
 Good institutional support from KMF, NDDB, etc.,

WEAKNESS
 Lack of flexibility in deciding about its operation. No authority over issues like
pricing, offering volume discounts etc.,
 Political interference.
 Organizational structure does not permit incentive/ reward for good
performance.

OPPORTUNITIES
 Since the Mysore district is under Cauvery basin, perennial greens are
available to the cattle.

25
  Institutional markets, bakeries, hotels etc., are not fully tapped and these can
be captured preferably by direct marketing.
 Diversification of milk products like Peda, Mysore Pak.... etc.,
 Exploit the “Human Face”, by positioning in the market as an organisation
with social responsibilities of serving the milk produced by paying
remunerative price and serving customer by offering hygienic quality product
at a reasonable price throughout the year. Union is not in the business to
maximise the profit as in the case of private dairies and is acting as price
stabilizing force in the market. Projecting these to the customers will reinforce
the positive image of the organisation in customer’s minds as a caring
organisation which service to them as its motto.

THREATS
 After liberalization, entry barriers in the dairy industry eased for new entrants.
 The competition from Co-operatives like Dodla, Heritage, Kamadenu.... etc.,
 Private dairies procure milk at low cost from producers and sell milk resorting
to unethical trade practices. It is a marketing war in which union has to fight
by rules and other private dairies do not fight by rules. Hence, there is no
level playing field for organization with social responsibilities to compete with
organizations with purely profit motive.
 Some private dairies are selling homogenised milk, which appears rich. The
union cannot homogenize all its huge quantity of milk due to lack of
homogenizing capacity and increase in processing cost.
 Plans of major companies like Reliance, ITC to enter into milk market in
future.

2.9 Market Share of MYMUL:

 60-70% of market share- Nandini.
 05-10% of market share- loose milk vendor.

 10-20% of market share- other private brands

26
2.10 PRESENT PROJECTS/STATUS
 Establishment of 100 MTPD New Mega Milk Powder Plant with an
approximate outlay of Rs. 300 crores in Kannamangala Village , Channapatna
Taluk, Ramanagara District is envisaged, to meet surplus milk conversion
requirement of southern part of Karnataka

 Koppala Dairy with 60-100 TLPD capacity expandable to 8 LLPD at an

estimated cost of Rs.38 Crores

 Mega Dairy at Mysuru 6 LLPD capacity expandable to 8 LLPD at an estimated

cost of Rs.124 Crores

 New 3 LLPD to 5 LLPD capacity Dairy and 2 LLPD UHT Plant at

Chamarajanagara at an estimated cost of Rs.125 Crores

 Chikkaballapura Dairy with UHT Plant at an estimated cost of Rs. 100 Crores

 Establishment of new dairy at Bagalkot with a capacity of 50 TLPD -1 LLPD at

an estimated cost of Rs.29 Crores

 Uppoor Dairy of capacity 1.5 – 2 LLPD at Udupi District. Rs – 80 Crores

 Establishment of new mega dairy and Milk products plant at Kanakapura –

Rs.447 Crores

 Establishment of Milk Powder Plant of 30 MTPD capacity at Dharwad at a

cost of Rs. 27 crores

 Mega Dairy at Mandya with capacity of 8 to 12 LLPD at an estimated cost of

Rs. 180 Crores

 Construction of Quarters at KMF Central Office Premises at an estimated

cost of Rs.8 Crores

Projects Under PPP :

a) Establishment of Deep Freezers at Chellaghatta an approximate cost of Rs.12

Crores

b) Establishment of 300 MTPD New Cattle feed plant at Arakalagoodu at an

estimated cost of Rs. 78 Crores

27
  Establishment of New Dairy at Davanagere for SHIMUL of capacity 3LLPD to
5LLPD at a estimated cost of Rs.85 Crores

 Construction of Bull mother farm development at Nandini Sperm

Satation,Hessaraghatta,at an estimated cost of Rs.4 Crores

 Establishment of New 300MT capacity Cattle Feed Plant at Dharwad at an

estimated cost of Rs.23 Crores

 New Product Plant at Shivamogga dairy at an estimated cost of Rs.

25 Crores

2.11 FUTURE PROJECTS/PLANS

Projects Under PPP ;

a) Establishment of Corrugated Box Manufacturing Unit at Challaghatta at an

approximate cost of Rs.25 Crores

b) New Nandini Packaging Film Plant at an approximate cost of Rs.80 Crores

23 LLPD to 5 LLPD Capacity Dairy at Davanagere at an estimated cost of Rs. 85

Crores

28
2.12 BALANCED SCORECARD
A balanced scorecard is a performance metric used in strategic management to
identify and improve various internal functions of a business and their resulting
external outcomes. It is used to measure and provide feedback to organizations.
Data collection is crucial to providing quantitative results, as the information
gathered is interpreted by managers and executives, and used to make better
decisions for the organization.
The balanced scorecard was first introduced by accounting academic Dr. Robert
Kaplan and business executive and theorist Dr. David Norton. It was first published
in 1992 in the Harvard Business Review article “the scorecard measures that drive
performance." Both Kaplan and Norton took previous metric performance measures
and adapted them to include nonfinancial information.

Purpose Behind the Balanced Scorecard

The balanced scorecard is used to reinforce good behavior in an organization by
isolating four separate areas that need to be analyzed. These four areas, also called
legs, involve learning and growth, business processes, customers, and finance.

The balanced scorecard is used to attain objectives, measurements, initiatives, and

goals that result from these four primary functions of a business. Companies can
easily identify factors hindering business performance and outline strategic changes
tracked by future scorecards.

The balanced scorecard can provide information about the company as a whole
when viewing company objectives. An organization may use the balanced scorecard
to implement strategy mapping to see where value is added within an organization. A
company also utilizes a balanced scorecard to develop strategic initiatives and
strategic objectives.

The Four Legs of the Balanced Scorecard

Information is collected and analyzed from four aspects of a business:

1. Learning and growth are analyzed through the investigation of training and
knowledge resources. This first leg handles how well information is captured
and how effectively employees utilize the information to convert it to
a competitive advantage over the industry.
2. Business processes are evaluated by investigating how well products are
manufactured. Operational management is analyzed to track any gaps,
delays, bottlenecks, shortages, or waste.
3. Customer perspectives are collected to gauge customer satisfaction with
quality, price, and availability of products or services. Customers provide
feedback about their satisfaction with current products.

29
 4. Financial data such as sales, expenditures, and income are used to
understand financial performance. These financial metrics may include dollar
amounts, financial ratios, budget variances, or income targets.

Kmf-mymul does not follow balanced scorecard approach .

30
 CHAPTER- 3

ORGANISATION DESIGN

3.1 A review of choice in design

A review of choice in design is the determination and start of the general approach
and strategy adopted for a particular organizational study. The research has
undertaken a comprehensive plan of the sequence of operation for the descriptive

31
study to achieve the research objectives with the arrangement of condition for
collection and analysis of data.

Primary data:
This is the process where first hand information was collected. The research derives
it after completing certain activities. Primary data is collected directly from the dairy.

Secondary data:The Secondary Data is readily complied data from statistical

statements and other sources. The data can be obtained from either published or
non published sources

3.2 ORGANISATION STRUCTURE:

 The organization chart and accompanying baggage that show who reports to
whom and how tasks are both divided and integrated. Since mymul is a co-operative
sector unit. The structure of the organization is democratic. Major decision however is
taken is at top-level management of the company.

32
 CHAPTER-4

BUSINESS LEVEL FUNCTIONS AND PROCESSES

4.1 HUMAN RESOURCES MANAGEMENT;

HR Practices of MYMUL:
The following are the HR practices of MYMUL:

1. House rent Allowance:-

It is allowance provided to all permanent employees at the rate of 13% of basic pay.
2. Conveyance Allowance:-
Companies provide conveyance facilities to each employee from the place of
residence to the place of work. MYMUL: also provides this allowance because it is
situated 10 km away from MYSORE. Conveyance allowance of Rs. 225/month for
persons owning Scooters/Motorcycle, Rs. 500 for moped whereas Rs 1000
3. Provident and Pension Fund:-
This contribution is equal to that of employee contributions i.e. 12% of salary and it
is divided between provided and pension fund as 8.33% and 3.67% respectively.
The total accumulated is balanced in the individual PF account and is paid to
employee at the time of his retirement or on his leaving the service. In the event of
the death of the employee accumulated balance is paid to his legal heirs
4. Gratuity:-
The amount of gratuity payable is generally 15 days average salary. For this
purpose salary includes only basic pay, DA and completed service.

5. Compensation for disablement:-

The employees are covered under the group saving Life Insurance scheme. Who
contributes to the fund are as follows:
• Below SDC - Rs. 30

33
• Above SDC - Rs. 60
• Below superintendent - Rs. 90
• Above superintendent - Rs. 120
• Out of this 12% is kept for insurance
• In the event of disablement of any nature, insurance company will compensate as
per the terms and conditions
6. Leave Facilities:-
All permanent employees as on the date of settlement will be given leave facilities
as mentioned below.
• Earned leave
• Casual leave
• Commuted/half day leave
• Maternity leave
7. Medical Reimbursement:-
Contribution from employees is 1.75% (except washing allowance and conveyance
allowance), Rs 25 from management.
Total 6.5% should be remitted to ESI within stipulated time of 21 days. If an
employee becomes fully handicapped, company will provide him Rs. 170/month
depending upon the salary scale. If an employee earns less than Rs. 25 then
management contribute Rs. 25 to ESI
Training and Development:
At MYMUL, training and development is an ongoing process. The workers are
trained to operate machines, reduce scrap and avoid accidents whereas the
supervisors, managers and executives are provided training which will enable them
to grow and acquire maturity of thought and action. The training and development
efforts at MYMUL are designed to help the employees satisfy their personal goals –
through higher level of skills and competencies; facilitate higher contribution at their
present jobs and to prepare them for the next level of the organization. The
employees who are deployed for training are considered to be on duty and they get
the TA and DA as per the rules of MYMUL. Normally the training programs
conducted at MYMUL are:
 Workshop on good quality Ghee.
 Computer Basics.
34
 ISO Quality System Awareness Programmer.
 Workshop on Sale Tax.
 Quality Audit Programmers.
 Marketing management.
 Materials management.
 Workshop on First aid.
 Reclaim Grades for Milk Packaging Application and Food Laws.
 Total Energy Management Programmed.
 Marketing and Brand Management
 Improving sales effectiveness.

Classification of employees

 Permanent employee: A permanent employee is one who is on the

permanent rolls of the union against the specific cadre and enjoying all such
benefits as specified under the regulatory rules of MYMUL or all such benefits
which may be excluded from time to time. Employees who are recruited are
deemed to be permanent employees subject to declaration of probation and
confirmation by an order.
 Probationer employee: A probationer employee is one who is provisionally
employed to fill a permanent vacancy in a post for a period of probation which
will not exceed 2 years on aggregate and whose name is entered on the rolls
of the probationer employees
 Apprentice: It means a learner who is engaged to undergo apprenticeship
training and who is paid a stipend and whose terms and conditions of
apprenticeship are governed by the provisions of The Apprenticeship Act of
1961. The Union Dairy is not obliged to employ him on completion of his
apprenticeship period
Functions:
1. Recruitment of candidates
2. Selection of best suited and right person
3. Training and development of employees

35
 4. Framing of rules
5. Creating a good working environment
6. Motivating the employees to work hard
7. Maximizing the performance of employees
8. Maintenance of records
9. Maintenance of industrial relations
10. Employee Service and Benefits
 11. Compensation
4.2 Recruitment
Procedure of appointment
 If a post is to be fulfilled by competitive examination, then after giving
adequate publicity in the leading Kannada newspaper and one of the national
dailies (as the appointing authority may determine).
 The appointment procedure will be carried in the order of merit subject to
reservation in Rule 3.6 from the list of candidates prepared by the selection
committee or expert panel.
 If it is by selection, after giving such adequate publicity in leading newspaper
at least one in Kannada and English to the recruitment as the appointing
authority may determine in the order of merit
 In case of the post being fulfilled by internal promotion from its own staff it is
done by a selection of a person on the basis of merit and suitability in all
respect

4.3 MARKETING

Departmental Hierarchy: Marketing department comprises of departmental head and

further divided into two categories and further into officers then to superintendents.
Salesmen and dispatcher. The hierarchy is as under.

36
 MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

ZONAL MANAGER

SUPERINDENTENT

MARKETING ASSISTANT
HELPER

FUNCTIONS
 A To capture the market share.
 To collect information about revenue.
 Maintain sales and other accounts.
 To attain major market shares.
 They conduct the market survey to analyze the consumers’ feedback of their product.

Marketing Strategies adopted by MYMUL:

“Procure more, produce more, sell more, and earn more”
• By procuring and producing more MYMUL achieves economies of scale which
results in least cost distribution on each unit sold.
• It raises consumer awareness for Nandini by pamphleteering, raising health issues
related to consumption of adulterated milk and soon.
• 981 no of retailer ship during 2011-12 75 no till October 05 were commissioned.
• As per the demand for milk and milk products available throughout the day, 26
numbers of Franchise Outlets, 19 no of parlors are made functional.

37
• For the retailers who were not in a position to install chest cooler insulated boxes
numbering around 900 were distributed during the said period. Milk and milk
product were preserved in the insulated boxes and sold.
• Around 40 numbers of 400 liters capacity chest coolers under the cold chain
development has been distributed

Promotional Activities:

Door to door campaigning: - This is done through the sales force team by
questioning the consumers, reasoning them, issuing brochures etc. This is carried
on periodically.
• Organizing meeting:- Organizing meetings is important public places and inviting
important period like doctor, professional, government officers etc.
• Visit to Non -Govt. Organizations:- Visiting to NGOs and creating awareness about
the product and its benefits, inviting them to the plant and showing them the
production procedures.
• Visit of school children to the dairy and promoting their products through them by
issuing samples.
• Inviting the consumer forum and creating awareness to them.
• Participating in trade shows, exhibitions and educate people
• Through advertising in major media’s like T.V., News Papers, hoardings etc…
• It seals its product under the brand name ‘ NANDINI’

4.4 QUALITY CONTROL DEPARTMENT

Functions: The main function of quality control section is to control the quality
and produce best quality products. In Q.C section, the milk is tested before
processing and even after processing. Before processing the milk, it is tested for
adulteration, fat content in the milk. Milk 8% is rejected and above 8% of fat is
accepted. After the mi8lk is processed again, it is tested for bacteria fat contents,
acidity etc… Then the reports are prepared after conducting tests. Then these
reports are further submitted to KMF for further clearance and approval. If my defects
are found, then KMF notifies and recommends for further better performance

38
 Quality Control Techniques Adopted:

The various tests conducted in order to maintain the quality of milk are as under:

1. Garber Test: - To know the fat content present in the milk. It is mixed with
sulphuric acid. (MILK + H2SO4)

2. Milk Test: - To know the fact content present in the milk through electronic device.

3. Lactometer: - To know the stability of the milk and is conducted by mixing the milk
with water and using lactometer, stability is tested.

If milk water quantity is more in the milk the lactometer will immerse inside.

 MBRT test and ethylene blue radiate Test.

 Acidity Test.

 PFA Test and Prevention of food Adulteration Test

PROCEDURE

EACH TANKER IS WEIGHTED AT HEATING AT 78 DEGREE C

MILK IS UNLOADED TO
THE WEIGH BRIDGE & THE SAMPLE AND MAINTAINED AT 45
RAW MILK SILOS (4 SILOS
MILK IS TESTED IN ELECTRONIC FAT DEGREE C
WITH A CAPACITY OF 1
TESTER LAKH LITRES)
HMST WHERE CHILLING OF MILK AT 5
AFTER PROCESSING, THE MILK IS
PASTEURIZED MILK IS DEGREE IN PASTEURIZE
CONVERTED INTO 4 TYPES OF
STORED
MILK I.E. FCM, TM, CTM AND
HCM

NEXT THE MILK IS SENT FOR DISPATCHING SECTION, MILK

PACKING SECTION FOR IS KEPT AT 5 DEGREE C IN THE

PACKAGING. COLD

39
4.5 FINANCE DEPARTMENT:

MANAGER

DEPUTY
MANAGER

ACCOUNTS
OFFICER

SUPERINDENTENT

ACCOUNT
ASSISTENT 1

ACCOUNT
ASSISTANT 2

HELPERS

Functions:
The main functions of financial department are as under:
1. To manage cash.
2. To manage bills.
3. To manage transportation bills.
4. To manage pay bills.
5. To manage accounts.
6. Prepare IBP

1. Cash: -
There are two cash counters in the financial section,

40
 I) Collection of sales proceeds counter.
II) Cash counter
i. Collection of sales proceeds counter: This is for cash collection of
sales proceeds of milk and milk products. Cash remitted by challan system
from various milk distribution roots for sale. A receipt is passed for the net
amount collected from each of the distribution root salesmen and this is being
recorded in a on-line account. This entire amount collected by the end of the
day is remitted to bank the same day to the current account of the milk union.
ii. Cash counter: Another cash counter is for handling impressed cash and
cheques. Impressed cash means amount required for meeting various payment.
Receipts are being issued for collection of cash towards receipts of EMD
(Security deposit repayment of advance drawn and such other outstanding) all
these things are recorded in a cashbook called petty cash book. This cashbook is
being closed at the end of day a verified by accounts office\Asst. Manages
finance. Cheques are also being drawn for payments of bills whenever payments
are required through cheques. For receipt of any cheques received from outside
official, general receipts are being passed in cash counter using tally ERP9.

2. Bills:
Bills are being received from various suppliers and usually the purchase section
after getting the Material Receipts Information (MRI) from stores duly certified for
quality and quantity, sends bills to finance section in the related files and these
bills are processed and entered in the control register and after scrutiny from pre-
auditors bills are put up for passing before MD through Assistant Manager
Finance. After the approval of MD the cheques are drawn in the name of the
parties. File with entries of cheque No. and a copy of the voucher is returned to
purchase section / to the concerned section. And the payment vouchers are
accounted in com
3. Transportation Bills: -
Following are the types of transportation bills:
i) Procurement Transportation Bills (PTC)
ii) Distribution Transportation Bills (DTC)
iii) Mobile veterinary root bills

41
iv) Cattle feed transportation bills
v) LN2 transportation bills (Liquid Nitrogen)
vi) Hire vehicle transportation bills
4. Pay Bills: -
Attendance data are being received from time office as per the punch card
entries, further the attendance of chilling center staff and field staff are being
received from concerned section once in a month duly certified by section needs.
Based on these attendance extracts pay bill of all the 950 employees of the milk
union are being prepared through computers and salary is being distributed
through Canara Bank main Branch, Syndicate Bank of BDCC Bank by way of
crediting the account of respective employees in the Bank. These are various
heads under which salary recoveries are made such as Employees Provident
Fund (EMF), Employees State Insurance Scheme (ESI), Professional Tax, LIC,
GSLIS (Group Saving Linked Insurance Scheme), pay advance, Bank loan and
such other deductions under about 45 account heads. These salary recoveries
are being sent to respective departments such as Regional PF commissioner,
ESI office,
Professional Tax Office, LIC of India, different banks where employees avail
loans through cheques. The account section prepares salary.

5. Accounts: -
The functions of account section are: •
To maintain record of day-to-day transactions, update entries in computer.
• Prepare monthly nominal accounts.
• Prepare annual financial statements such as receipt and payments, trading,
and P/L a/c and balance sheet and also to produce the same to statutory
auditors and get it audited
Sources of Finance:
The main source of finance is sales realization (Retained Earnings). Sales are
purely on cash / cheques basis. As the nature of the product is highly perishable
i.e., that milk and other milk products. Hence because of this the product needs
to be immediately sold to the end users, as result money is generated
immediately and routinely. Hence this forms the only source and can be

42
 classified as short-term source finance. The other products of milk and as their
perish ability period is little more i.e., for a products of 3-4 months and sales are
realized and money gained out of it can be classified as long-term source of
finance. Sometimes they even get grants from the government.
The Union had an approximate turnover of Rs. 692.82 crores in the year 2016-
2017 as against Rs. 527.76Crores for the year 2009-10.

Share Capital (in Lakh Rupees)

5000 4537.82
4500
4067.1
3844.17
4000
3500
3000 2494.51
2500 1728.02 1813.37
2000
1500
1000
500
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

43
NET PROFIT (In Lakh Rupees) 3031.48
3203

1195.28
748.61
486.25 521.83
216.89

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

44
2500000000

2000000000

1500000000

2014-15

1000000000 2015-16
Increase
Decrease
500000000

4.6 OPERATIONS;

MILK PROCUREMENT

The Milk produced by 99405 farmers at village level will be collected every day
morning and Evening at DCS. Under Clean Milk Production program, to
maintain the freshness & quality of the milk 121 Bulk Milk Coolers covering
377 DCS of Total Capacity 1,92,802 liters were installed at DCS level. During
the year the Unions daily average milk procurement is 9.32 Lakhs Kgs, which
works out to be 551 kgs per day per DCS. The milk procurement has increased
by 2.15 % when compared to the last year.
MYMUL is offering the most remunerative milk procurement price to member
producers. The operational efficiency is reflected on procurement prices paid to the
member producers. The average milk procurement price paid during the year was

45
Rs. 19.06 for every Kg of Milk supplied to the Union, which is 80% of total cost of
production

Sal & Admin Misc Int & Bank Chrgs

Ret. Margin 7% 0% 0%
2%

Packing
2%

Process Milk Purchase

9% 72%

Transport
1%

Milk collected at DCS will be transported to Chilling Centers, through 102 Milk
Procurement Can Routes, by traveling 16,775 KM’s every day. 23 Bulk Milk Cooler
(BMC) Routes are also in operation, which collects milk from 121 BMC centers of
373 DCS directly transported to mysore Dairy through insulated tankers.

Cost consumption at mymul:

Transportation 4%

Process 5%

Packing 3%

Retail margin 3%

Sales & administration 6%

Miscellaneous 5%

Interest and bank charges 2%

Milk purchase 72%

46
 CHAPTER-5

SUMMARY OF FINDINGS, CONCLUSION AND SUGGESTION

5.1 SUMMARY OF FINDINGS

 MYMUL has a wide marketing network throughout the state.

 The customer awareness level towards Nandini milk is excellent because
all the 100 respondents are aware of it.
 Proper training programs for farmers are an additional services provided by
the company which is improving Nandini’s popularity among the farmers and
ensures quality and consistency of supply of milk from them.
 Majority of respondents belongs to the age group of 22-50 years.
 Majority of respondents are of female category.
 Majority of the respondents have chosen TV as the best media to increase
the sales.
 Majority of the respondents buy the products because of their own decisions.
 Majority of respondents have suggested creativity in advertisement makes it
most memorable.
 Majority of respondents say Nandini’s advertisement convey enough required
information about its products.
 Majority of the respondents say picturisation strategies impress the
customers more.
 Majority of the respondents buy Nandini products because of their availability.

47
5.2 SUGGESTIONS

 The company should make more use of the different medias available like
television, radio and other medias which can attract lot of customers.
 It can be suggested that advertisements should be made more attractive and
innovative to draw the attentions of the customers.
 It can be suggested that different offers must be made available and that will
attract customers.
 Most of the customers buy Nandini products due to its ease availability, so
maintain products available to customers through effective distribution
channels.
 It can be suggested that the company should have their upper held priorities
towards revising their pricing strategies to popularize the products for the
mass greater reach outs in the future period of time.
 Company can reduce the price of the product by adopting few cost reduction
techniques, so it will help attract different classes of people.
 Bonus and incentives can be given to the dealers in order to motivate them.

48
5.3 CONCLUSION:

Though the study is not exhaustive, the data obtained is enough to understand the
attitude of the customers towards Nandini products.

The result of the survey proves that, Indians in spite of being price conscious,
nowadays they are more health concerned and quality oriented. To be dominant
players in the market, sales promotion is very crucial weapon. To maintain and
retain the tough customers and also, to build a good rapport with the channel
partners.

According to market research the consumer had given positive response regarding
all aspects of Nandini products. It shows Nandini is attracting consumers and
prospecting in business. But in a competitive field, one should not satisfy with one’s
present performance. In order to maintain higher competitive efficiency, regular
market research will help an organisation to ascertain the consumer preference and
according to them for creating and maintaining brand image in the minds of people.

49
 BIBLIOGRAPGHY

BOOKS REFERRED:

 Philip Kotler, “Marketing Mangement, 11th edition, Pearson education Asia

Publication.
 Pingali Venugopal, “Sales and Distribution management”, SAGE RESPONSE
PUBLISHERS, Response edition.

WEBSITES:

 www.kmfnandini.com
 www.mymul.com

50