A

PROJECT
WORK
ON
OMFED

PROJECT SUBMITTED TO
KHARIAR AUTONOMOUS COLLEGE,
KHARIAR
FOR THE PARTIAL FULFILLMENT OF
BACHELOR OF SCIENCE IN CHEMISTRY

GUIDED BY:PROJECT BY:

DR. TARUN KUMAR PRADHAN NAME – ASHISH KUMAR BAXI
(H.O.D OF CHEMISTRY)
ROLL NO. – 18CHE-008
MRS. RAJALAXMI RATH
(LECT. IN CHEMISTRY)

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 DEPARTMENT OF CHEMISTRY

KHARIAR AUTONOMOUS COLLEGE, KHARIAR

Certificate

Certify that the work contained in this project entitled ‟A PROJECT ON OMFED”
submitted by ASHISH KUMAR BAXI bearing Roll no: 18-CHE-008 for the degree of
B.sc in chemistry, is a bone fide record of project work carried by the students under my
supervision and guidance.

Mrs. RAJALAXMI RATHA Dr. TARUN KUMAR PRADHAN

(M.Sc.; MPhil) (M.Sc., MPhil, PhD)

(Lect. in Dept. of chemistry) (Head of the department)

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 ACKNOWLEDGEMENT
I would like to express my sincere gratitude to a number of people who helped and
supported me to implement the project related to my B. Sc degree work.

First, I would like to express my gratitude and indebtedness to Dr. Tarun Kumar
Pradhan (HOD), for his kindness in allowing me for introducing the present topic
and for his inspiring guidance throughout the project work.

I am my deep sense of gratitude and sincere thanks to the principle, Mrs Anupama
Padhi, principle of Khariar autonomous college, Khariar for her encouragement
and for all the facilities that she provided for this project work.

I am highly thankful to Mrs. Rajalaxmee Ratha and Miss. Nivedita Barik for their
day to day supervision and constant help in completing my project.

I wish to thank Mr. Premananda Meher and Mr. Iswar Dandasena for their advice
and words of encouragement during my project work.

I would like to give my special thanks to my parents who helped me a lot in

finalizing this project within limited time frame.

Last but not the least my sincere thanks to all my friends who have patiently
extended all sorts of help for accomplishing this undertaking.

DATE: ASHISH KUMAR BAXI

PLACE: Department of chemistry
Khariar Autonomous College, Khariar

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 DECLARATION

I hereby declare that the content given in my project work is correct to the best of my
knowledge and the data are collected from the previous research work

NAME ASHISH KUMAR BAXI

(Roll no: 18-CHE-008) Signature Date

Certified by:

Mrs. Rajalaxmee Ratha Signature Date

(Lect. in chemistry)

Certified by:

Dr. Tarun Kumar Pradhan Signature Date

(Head of the Dept.)

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 CONTENTS

Serial No. Topic Page No.

Chapter 1 INTRODUCTION 06-07
1.1 Introduction to Project 07
1.2 Scope of the Project

Chapter 2 ORGANISATION OVERVIEW 08-15

2.1 About OMFED 09
2.2 Background 09
2.3 Vision of OMFED 10
2.4 Major Objectives of OMFED 11
2.5 Primary Activities of OMFED 11
2.6 OMFED: The Journey 12

Chapter 3 PROJECT MANGEMENT IN OMFED 16-17

3.1 Product management 17
3.2 Product Levels 18
3.3 Quality control at OMFED 19
3.4 Product Mix 20
3.5 Product Planning 21
3.6 Product Management Decisions 22
3.7 Reason for Line Extension 24
3.8 Product Line Decisions Making Process in OMFED 26
3.9 Marketing 27

Chapter 4 BRAND MANAGEMENT IN OMFED 28-34

4.1 Brand Management 29
4.2 OMFED: The Brand 29
4.3 Strategic Decisions taken to Build the Brand 30
4.4 Brand Equity 32
4.5 Brand Positioning 33
4.6 Inderstanding Competitors Brands 33

Chapter 5 CONCLUSION 35-38

5.1 Findings 36
5.2 Recommendations for Gaining Competative Advantages 37

5.3 Conclusion 38

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 Chapter-1
INTRODUCTION

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1.1 INTRODUCTION TO THE PROJECT

T
he product abundance is visible in the overcrowded shelves. There is virtual product
explosion in various categories. The reality is very few of them win consumer’s heart and
soul. The rest languish to be later on pulled out. The product may start as product and die
as store shelves as products. But successful product start as product in the factory and goes on to
become brands in consumer’s heart and minds. Brands are bridges between the factories where
assembly take place and the consumer who seek end goals and value. It is the connection makes
true generator of corporate wealth and power. The value of a business is determined by the
brands it holds rather than the conventional assets it possesses. Every company’s product
portfolio contains product with different margins. The main is that companies should recognize
that these items differ in their potential for being priced or advertised more as ways to increase
their sales, margins, or both. The companies’ must review how the line is positioned against
competitors’ line. Product and brand management comes up as important aspect of management
to understand the customer needs and relate them to the product so that the product can be
positioned in the distinctive way.

1.2 SCOPE OF THE PROJECT

A
s the project title suggests, this project focuses on product and brand management of
OMFED for competitive advantage. This project was carried out through the detailed
study of the organization, observations, and discussions with the organization’s
executives along with the survey. Product management is the voice of the market inside the
company. Product management is the instrumental in achieving business goals across the product
lifecycle, which includes the following stages: Pre-Development, Development, Introduction,
Growth, Maturity, Decline, and The End of Life. Proper brand management involves making
sure that each promotional piece, touch point and every usage of your name, logo and messages
support your organization and goals by reinforcing your brand in the way you intended.

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 Chapter-2
ORGANIZATION
OVERVIEW

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2.1 About OMFED:

T he Odisha State Cooperative Milk Producers Federation Limited (OMFED)

is an apex level Dairy Cooperative Society registered eider Cooperative Society Act —
1962. It is the leading organized milk producer of Odisha and has come into existence to
Integrate the milk producers in rural areas with consumers in the urban areas with an
Enterprising aptitude. It got registered in 1980 and started working since 1980. It took
over OMPAC in 1988. Its main activities include promoting, production, Procurement,
Processing and marketing of milk & milk products along with other horticultural and
agricultural products for economic development of the rural farming community in
Odisha.

Over the year, OMFED has become a household name and It has developed trust
of farmers. Now OMFED is producing 5.5 lakh liters milk from 3,72,000 members to
whom OMFED gives Rs. 2.60 crores daily at the rate of 26 rupees per liter of milk. No
doubt, the Procurement versus Marketing in the initial year and at present provides a
clear picture how consumers have made trust with the OMFED Brand.

The members depend upon OMFED for their social and economic development.
Farmers are provided with medicines, plants and fodder, subsidized cattle feed, various
types of training aid payment for their produce at 10 days interval without any sort of
exploitation\harassment by the vendors.

OMFED is one of the best Cooperative profits making organization in Odisha. The
entire profit passes on to the farmers. OMFED is providing all types of milk products such
as Ghee, Paneer, Curd, Buttermilk, Lassi, Chhenapoda, ice-cream, Flavored milk, Rabidi
apart from milk. OMFED is also supplying milk to Hospitals and Defense establishments.
The milk marketing pricing is cheaper if compared with other states.

2.2 Background:

O
disha can be considered as one of the poorest states in India from
the perspective of industrial development. In Odisha, we can find the majority of the
population being dependent on agriculture, animal husbandry and other studies related
activities as Its primary means of occupation cum livelihood and thief source of Income.
But the poor irrigational facilities and frequently witnessed natural calamities pose a
Serious threat and barrier to sustainable agriculture. If situations can turn to be
favorable, it can render a decent and dramatically changed lifestyle to the dependent
population. But owing to the persistent problems and countless miseries, the crowd
migrates heavily from villages to cities In search of some greener pastures. Incidentally
Though there is a large concentration of milk cattle such as cows and buffaloes in rural
areas of Odisha, but the per capita ownership of cattle isn’t large enough to justify
organized milk generation and selling. Therefore, this was never considered as a feasible

9
and viable alternative to provide means of livelihood to the rural masses. Farmers in
Odisha produce milk at competitive costs due to lower land costs and lower wage rates.
The availability of grazing land in Odisha and cheaper feed also contributes to lowering
the cost of milk production Smallholders using buffalo for milk production in Odisha
were found to be more cost competitive. It also appears that there is a large potential to
reduce milk production costs of smallholder dairy farming and Increase family farm
income through milk production by better breed, feed and herd management.

OMFED came into existence after conceiving the novel idea to start a collective
work with farmers/milk producers through milk generation and marketing. So, OMFED,
to shortly describe, forms a rural urban development continuum by providing livelihood
to rural Odisha and offering the urban middle class with a safe, secured and hygienic
Source of milk.

2.3 Vision of OMFED:

T o be a leading milk producing organization at International level of efficiency

with widest and satisfied customer base, maximizing wealth of stakeholders and
Continuing to the state economy.

Mission:
• Advancement of dairying, encouraging and educating people, through mutual
participation.

• Continuous endeavor to increase productivity and per capita consumption.

• To promote clean milk production and distribution with state-of-art technology.

• Customer satisfaction with reliable, uninterrupted service and quality products.
• To foster a performance-oriented culture encouraging innovation
• To promote a congenial work climate encouraging employee to participate and
contribute for organizational growth.
• To be a learning organization and responsive to changing environment,
• Continuous up-gradation of skills and competence of employees and their career
advancement.
• To enrich quality of life of people and preserve ecological balance.

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2.4 Major Objectives of OMFED

• To carry out activities for promoting production, procurement, processing and marketing
of milk and milk products for economic development of the rural
Farming community.
• Development and expansion of such allied activities as may be conducive for the
promotion of the dairy industry. Improvement and protection of much animals and
economic betterment of those engaged in milk production.
• In particular and without prejudice to the generality of the forgoing objective, the
federation may purchase and/or erect building, plant machinery and other ancillary
objects to carry out business.
• Study problems of mutual interest related to procurement, marketing of dairy and allied
products.
• Purchase commodities from the members of other sources without affecting the
interests of the members, process, manufacture, distribute and sell them same,
arrange to manufacture/purchase and distribute balanced cattle feed and for the
• Purpose to set up Milk collection and chilling centers. Milk Processing Plants,
Product factories etc., in any of the district covered under its area of operation.
• Provide veterinary aid and artificial insemination services and to undertake animal
husbandry activities as to improve animal health care disease control facilities.
• Advice, guide and assist the Milk Union In all respects of management, supervision
audit functions.
• Render technical, administrative, financial and other necessary assistance to the
• Member unions and enter in to collaboration agreement with someone, if the
need arises.
• Advise the member unions on price fixation, public relations and allied matters.

2.5 Primary Activities of OMFED

1. Procurement of Milk
2. Providing technical inputs to milk producers
3. Providing training in new and scientific methods to increase productivity of
milk in the state.
4. Proper storing/chilling of milk.
5. Processing and marketing of milk.

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2.6 OMFED: The Journey

T he Odisha State Cooperative Milk Producers Federation Limited (The

OMFED°) was established by’ the government of Odisha in the year 198O with a vision
to
ensure milk producers get a lion’s share of the price paid by the consumers and to
provide marketing support to the milk producers in the state in order to develop their
social and financial status. Headquartered in Bhubaneswar. The capital of Odisha,
OMFED Isan apex level Dairy Cooperative Society registered under Cooperative Society
Act -1962.

(fig 1: ANAND Pattern of dairy Development)

It adopted the Anand Pattern also known as Amul model of National Dairy Development Board
(NDDB) and started helping villagers to form cooperative societies and asked
them to supply their surplus milk to the OMFED.

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During initial period it motivated people to take up dairy farming as a profession
and helped the formation of about SS rural primary cooperative societies involving
merely about 2500 farmers.

Within a period of last 35 years, the number of rural primary cooperative societies
has gone up to 5350 and more than 275,000 farmers registered in such societies are
earning their livelihood by selling milk to the OMFED.

The procurement of milk for day one in the year 1980 was only 39 litres from four
undivided districts of Odisha, that is. Cuttack, Puri, Dhenkanal and Keonjhar. The milk
was collected at the village level and was transported through trucks in 40 litre
aluminum cans for processing at 5000 litre capacity chilling plant at Liquid Milk Plant,
Phulnakhara, near Bhubaneswar. At that time, it was under the jurisdiction of Odisha
Agro Industries Corporation. Later, the plant was taken over by OMFED.OMFED was
filtering the milk and sending it to the market especially In Bhubaneswar and Cuttack
towns in small vehicles. The consumers were buying the milk from loose cans at the rate
Rs.2.50 per litre National Dairy Development Board (NDDB) was also supplying butter
oil and skimmed milk powder (SMP) for reconstituting milk in order to cater to the
demand of the consumers.

After production of poly pack milk in the year 1983, consumers reposed their faith
on OMFED and the sale of liquid milk per day was enhanced to 30,000 litres. Farmers
after their own consumption Increased their supply of surplus milk to the Chilling Plants
forgetting remunerative, price and several other benefits including cattle feed. This was
the time when the exploitation of farmers by the vendors was over.

At that time some of the vendors or gwallas were purchasing the milk from the
farmers and were selling the same by adding water into it. As a result, the milk became
sour, curdled and adulterated. Looking at this scenario, OMFED set up a modern plant
in the year 1984-85, to produce processed homogenized, pasteurized and fortified with
Vitamin-A pouch milk of 500 ml and milk product such as Chhena(cheese), Ghee and
Curd.
At that time marketing people were receiving heavy price from local vendors. In
Course of time consumers realized OMFED milk is pure, fresh and affordable. For the
Interest the farmers’ Cattle Feed Plant of 100 tans was established in the year 1984 to
Supply cattle feed to farmers at subsidized rate and another plant was established at
Rourkela in the year 1986 to supply milk to SAIL, industrial hubs and consumers.

OMFED has nine dairy plants at Bhubaneswar, Rourkela, Sambalpur, Balasore,

Dhenkanal, Bhawanipatna, Jeypore, Berhampur and Keonjhar to process milk received
from farmers through chilling centers of District Milk Producers Union. Under the brand
“OMFED’ these dairies are involved in processing of milk products in various packing
sizes for marketing the same inside and outside the state of Odisha.

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 (Fig 2: Milk Union of OMFED)

OMFED as a brand name has become an integral part its existence. OMFED Is
Organizing marketing facilities fix whatever milk Is produced in villages and hence to
Give the farmers and incentive to produce more milk. The farmer producer is paid on the
Basis of quality of milk i.e. two axis milk pricing structure based on fat (Ghee) and Solid
not fat (cheese) contain of milk. Thus, its effectiveness as a co-operative organization in
handling rural milk -procurement, processing and marketing has been proved beyond
doubt in the state of Odisha. OMFED is providing good, fresh pasteurized, homogenized
and clean milk, both toned and double toned in hygienic polythene sachets of half litre
to the consumer at reasonable price from their modern hygienic dairy plants. OMFED is
practicing high ethical standards In Its business. OMFED milk and milk products are very
nutritive, tasteful, delicious, digestive, and adds to satiety. It is sweet and appetizing and
can be consumed directly. It is also good for brain development of growing children. The
Odisha state co-operative Milk Producers federation Ltd. (OMFED), its affiliated Dist., Co
operative Milk Producers Union and hundreds of village Milk Producers Co-operative
Societies provides a 3-tier o-operative organizational set up for milk production,
Procurement and marketing of milk and milk products in a large scale.

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 (Fig. 3: Plants of OMFED)
OMFED is currently procuring an average of 5 lakh 5Othousaand litres of milk per
day from farmers of all the 30 districts of Odisha and the milk and product marketing is
around 5.51 lakh litres per day. The procurement & milk is increasing day by day due to
establishment of milk cooperative societies across the state. As regards marketing,
OMFED has appointed 5,000 retailers’ distributors to sell milk and milk products. The
average per day milk procurement during 2014-15 increased by 14% compared to an
average procurement of 3.9 lakh litres per day during 2013-14. The peak procurement of
milk during 2014-15 in a day was 519211litres per day. The turnover of OMFED during
2014-15 reached the highest level of Rs.650 crores with an increase by 9% over the
preceding year. The gross profit earned by the organization during 2014-15 was
Rs.45.00crores (all-time record) with an increase of 28% over the previous period.

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 Chapter-3

PRODUCT
MANAGEMENT
IN OMFED

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3.1 Product Management

P
roduct management is the process of conceiving, planning, developing, testing, launching,
delivering and withdrawing product the market. The purpose of the product management
is to create customer value and measurable business benefits by identifying unsolved
customer problems to create product experiences that outwit the competition over sustainable
period. Product and market Development initiatives help to extend the life of the product.
Product life cycle management is the core objective. For the product performance improvement,
it has to be monitored constantly. No products can survive only by doing without adapting to the
changing marketing conditions.

Product Concept:
Product is a set of tangible and intangible attributes, including packing, color, price,
manufacture’s prestige, manufacture and retailer’s services, which the buyer may accept as
offering satisfaction of wants, or needs.

The product concept assumes that consumers will buy the product that offers them the highest
quality, the best performance, and the most features. A product orientation leads a company to
try constantly to improve the quality of its product. Under this concept, it is believed by the
managers that consumers prefer well-made products and can appreciate better quality and
performance.

Here focus should be on

• Quality
• Variety and
• Research and Development

OMFED which is devoted to the product concept of marketing believes that consumers would
automatically favor for products of high quality. So, the organization spends considerable
energy, time and money on introduction of quality and variations in products.

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 3.2 Products Levels

I n planning market offering, the marketer needs to think through five levels of product. Each
level adds more customer value, and the five constitute customer value hierarchy.

1. The most fundamental level is the core benefit: the fundamental service or benefit
that the customer is buying. Like when a customer is buying milk he is actually buying
‘health’ and ‘nutrition’.
2. At the second level, the marketer has to turn the core benefit into a basic product. Milk is
the product here in the example which is providing nutrition and health.
3. At the third level, the marketer prepares an expected product, a set of attributes and
conditions buyers normally expect when they purchase this product. Quality, low acidity
and purity are expected when we purchase milk.
4. At the fourth level, the marketer prepares an augmented product that exceeds customer
expectations. In case of OMFED milk, these pasteurized, homogenized, available in most
of the places, low cost per value. Thickness, freshness, richness and taste are also other
augmented benefit.
5. At the fifth level stands the potential product, which encompasses all the possible
augmentations and transformations the product or offering might undergo in the future.
Here is where companies search for new ways to satisfy customers and distinguish their
offer. For example, OMFED is panning online product availability for its customers so
that products would be only few clicks away.

Marketers must see themselves benefit provides and turn the core benefit into product. Level
three features are minimum basic requirements and because most providers meet these minimum
criteria, so people settle down for which ever brand they find or of least expensive. Today’s
competition essentially takes place at the product-augmentation level. (In many cases,
competition takes place mostly at the expected product level). Product augmentation leads the
marketer to look at the user’s total consumptions system: the way the user performs the tasks of
getting and using products and related services. According to Levitt, the new competition is not
between what companies produce in their factories, but between what they add to their factory
output in the form of packaging, services, advertising, customer advice, financing, delivering
arrangements, warehousing, and other things that people value.

Some important points should be noted about product-augmentation strategy. First, each
augmentation adds cost. Second, augmented benefits soon become expected benefits e.g. for
packed milk pasteurization is now expected benefit. Third, as companies raise the price of their
augmented product, some competitors offer a “stripped-down” version at a much lower price e.g.
loose milk by vendors.

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Successful companies add benefits to their offering that not only satisfy customers but also
surprise and delight them. Delighting customers is a matter of exceeding expectations.

3.3 Quality Control at OMFED

P
roduct management involves quality product development as quality is an important
aspect in the delivery of the product. As Milk is a perishable food product and self-life of
milk is too short care has to be taken to ensure quality at many stages. OMFED has been
known as brand providing quality products. Therefore, maintaining quality of the product is
essential for the organization. Being a Government organization, it has responsibility towards its
stake holders, farmers, and customer. OMFED is committed to provide qualitative, adulteration
free, proper food value product in the market. For this it has Quality Control Department which
takes care of the milk and milk product testing from procurement till delivery.

In the Milk collection centers while receiving milk, test for fat and SNF is done to ensure the
proper nutrient values of the milk. Basic level test like lactometer tests are done here to check the
water adulteration in the milk. Periodical surprise testing is done to test for adulteration from
village collection level.

Milk is stored in the chilling plants to control the acidity of the milk. While delivering the raw
milk insulated Raw Milk tanks are used to prevent the milk from curdling or excess acid
formation.

At the procurement time in the dairy plants platform tests are done. Milk is agitated by plunger to
take the sample as sample must be true representative of the Raw Milk. OLT and platform tests
decides whether the milk is to be produced or not. If the sample is found be positive in
adulterated contents like sugar, salt, Urea, neutralizers etc. or does not meet with the fat and SNF
standards then the milk is rejected. Fat test, Acidity test, Clot on Boiling test etc. are performed
to check quality of the raw milk. Test for adulterants like Urea, Starch, Sugar, Salt and
Neutralizer are done to check the milk unadulterated.

Different Microbiological tests like MBRT (Methylene Blue Reduction Test), phosphate test,
Bacteriological test for Standard plate Count are carried out from time to time check for
microbiological growth. Proper cleaning of the plant Machineries is done on regular volume
basis or whenever required through CIP (Cleaning in Place). Cleaning is done by Normal water,
Hot water, Caustic water and Acid Cleaning. Regular checking of machinery contents is done
through MBRT test of milk in production area to avoid bacteriological development.

Products are tested in the Quality Control Laboratory after packaging on regular basis. Self-life
testing of different products is done to observe the self-life of the products.

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To maintain Quality of the milk and milk products after packaging the products in cold storage.
FIFO principle of products flows is maintained to ensure proper product management.

3.4 Product Mix

A
product mix is the set of all products and items that a particular seller offers for sale. A
Product mix consists of various product lines. A Company’s product mix has a certain
width, length, depth, and consistency. The width of a product mix refers to how many
different product lines the company carries. The length of a product mix refers to the total
number of items in the mix. The depth of a product mix refers to how many variants are offered
of each product in the line.

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3.5 Product Planning

P
roduct planning is the on-going process of identifying and articulating market
requirements that define a product’s feature set. Product planning serves as the basis for
decisions about price, distribution and promotion. It is the process of creating a product
idea and following through on it until the product is introduced to the market. Additionally, a
small company must have an exit strategy for its product in case the product does not sell.
Product planning entails managing the product through its life using various marketing
strategies, including product extension or improvements, increased distribution, price change and
promotions.

Phases of product planning:

• Developing the product concept

The first phase of the product planning is developing the product concept. Marketing managers
usually create ideas for new products by identifying certain problems that consumers face or
various customers need. For example, a small computer retailer may see the need to create s
computer repair division for the products it sells. After the product idea is conceived, managers
will start planning the dimensions and features of the product. Some small companies will even
develop a product mock-up or model.

• Studying the market

The next step in the product planning process is studying the competition. Secondary research
usually provides details on key competitors and their market share, which is the percentage of
total sales that they hold in the marketplace. The business can then determine places in which it
has an advantage over the competition to identify areas of opportunity.

• Market research
Every company should consider doing both qualitative and quantitative marketing research for
its new product. Focus groups are an example of qualitative information. Focus groups allow
companies to ask their consumers about their likes and dislike of a product in small groups. A
focus group allow the company to tweak the product concept before testing it through phone
survey-a more quantitative marketing research function. Phone surveys enable a company to test
its product concept on a larger scale, the results of which are more predictable across the general
population.

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Qualitative research is a method of inquiry employed in many different academic disciplines,
traditionally in the social sciences, but also in market research and further contexts. Qualitative
researchers aim to gather an in-depth understanding of human behavior and the reasons that
govern such behavior. The qualitative method investigates the way why and hoe of decisions
making, not just what, where, when. Hence, smaller but focused samples are more often used
than large samples. Quantitative research refers to the systematic empirical investigation of
social phenomena via statistical, mathematical or numerical data or computational techniques.
The objective of quantitative research is to develop and employ mathematical models, theories
and/or hypotheses pertaining to phenomena.

• Product introduction

If they survey results prove favorable, the company may decide to sell the new product on a
small scale or regional basis. During this time, the company will distribute the products in one or
more cities. The company will run advertisements and sales promotions for the product, tracing
sales results to determine the products potential success. If sales figures are favorable, the
company may be able to sell the product on national basis.

• Product life cycle

Product planning must also include managing the product through various stages of its product
life cycle. These stages include the introduction, growth, maturity and decline stages. Sales are
usually strong during the growth phase, while competition is low. However, continued success of
the product will pique the interest of competitors, which will develop products of their own. The
introduction of these competitive products may force a small company from losing market share.
The company may also decide to better differentiates is product to keep its price steady. PLC can
be viewed as an important source of investment decision for the company.

3.6 Product Management Decisions:

I
t encompasses all decisions incidental to creating, maintaining and presenting the optimum
bundle of need satisfiers that the organization is capable of offering. The organization need
to know about the sales and profit of each item in their line in order to determine which
items to build, maintain, harvest, or divest. They also need to understand each product line’s
market profile.

A product is too short if profits can be increased by adding items; the line is too long if profit can
be increased by dropping items. Company objectives influence product-line length.
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Product lines tend to lengthen over time. Excess manufacturing capacity puts pressure on the
product line manager to develop new items. The sales force and distributors also pressure the
company for a more complete product line to satisfy customers; but as items are added, several
costs rise: design and engineering costs, inventory costs, manufacturing-changeover costs, order-
processing costs, transportation costs, and new item promotional costs. Eventually, someone
calls a halt. Top management may stop development because of insufficient funds or
manufacturing capacity. The controller may call for a study of money-losing items. A pattern of
product-line growth followed by massive pruning may repeat itself many times. OMFED
lengthens its product line in mostly through line stretching and line filing.

Line stretching
Every company’s product line covers a certain part of the total possible range. Line stretching
occurs when a company lengthens its product line beyond its current range. Decisions pertaining
to line stretching are taken whenever the marketer feels he can increase his profits by either
adding or dropping items from the line. OMFED added ice cream in its product offering in the
year of 2008 thus stretching the product like upward to a whole new level.

Line filling
Adding more items within the present range can lengthen a product line. There are several
motives for line filling: reaching for incremental profits, trying to satisfy dealers who complain
about lost sales because of missing items in the line trying to utilize excess capacity, trying to be
the leading full-line company, and trying to plug holes to keep out competitors. Line filling is
overdone if it results in self-cannibalization and customer confusion. The company needs to
differentiate each item in the consumer’s mind. Each item should possess a just-noticeable
difference.

OMFED launched milk along with curd and ghee in 1981. In the year 2000 paneer and
chennapodahad been introduced in the market. Further whole milk curd added in the product in
2003.

Line modernization
Even when the product line length is adequate, the line might need to be modernized. The issue
is whether to overhaul the line piecemeal or all at once. A piecemeal approach allows the
company to see how customers and dealers take to the new style. It is also less draining on the
company’s cash flow, but it allows competitors to see changes and to start redesigning their own

23
lines. In rapidly changing product markets, modernization is carried on continuously. Because
competitors are constantly upgrading their options, each company must redesign their own
offering. A company would like to upgrade customers to higher valued, higher-priced items. A
major issue is the timing of the product line improvement so that they do not happen early and
damages the sales of their current product line, or come out too late so that the competitors can
establish a strong foothold.

3.7 Reasons for line extension

There are several factors, which can explain why OMFED have pursued line extensions. These
are being discussed as under

Consumer desires
Consumers are switching brands and trying products they have never used before. Line
extensions try to satisfy the desire for “something different” by providing a wide variety of
products under a single umbrella. Such extensions, companies’ hope fulfils customer desire
while keeping them loyal to the brand franchise.

Line extensions can help a brand increase its share of shelf space thus gaining higher visibility
and attracting consumer attention. When marketers coordinate the packaging and labelling across
all items in a brand line, they can achieve attention getting billboard effect on the store shelf or
the display stand thus leverage the brand’s equality. However, building enough volumes to offset
the additional costs required for such extensions is also necessary.

Excess procurement
OMFED added new product lines to make use of their excess procurement. In fact, excess
procurement encourages the introduction of line extension that requires only minor adaptations
to current products. Milk being a perishable product having short-life, excess milk must be
converted into value added milk products. OMFED procure 85000 litre of milk from farmer
across the district every day. Managing the excess procured milk is thus a challenge.

Competitive intensity
Mindful of the link between market share and profitability, managers often see extensions as a
short-term competitive device that increase a brand’s control over limited retail shelf space and,
if overall category can be expanded, also increase the space available to the entire category.

24
Trade pressure
The proliferation of retail channels for consumer products compels marketers to offer board and
varied product lines. Retailers object to the proliferation of marginally differentiated and “me
too” line extensions of additional stock- keeping units (SKU). They instead, demand special
package size to meet their specific customer demand (e.g. bulk packagers or multi-packs of low
price, variety) or derivative models impede comparison-shopping by consumers.

Emerging a brand
A line extension can be an effective way to make a brand more relevant, interesting and visible.
In doing so, it can create a basis for differentiation, build and audience for the advertisement of
an old brand (through the brand may be healthy), and stimulate sales. This would give new as
well as old customers sufficient reason to buy the brand.

Exploitation of variety fulfillment

A brand may be stretched across multiple product categories to take advantages of a common
and important consumer benefit existing in both, the products and the consumer perceptions.
This is the common benefit of exploitation strategy, which ensures that sales in the other
categories do not affect the parent brand. Line extensions can also increase a brand’s consumer
share of requirement within a given product category.

Expanding a brand’s core

A brand may have a strong image that promotes loyalty and exclusiveness. A line extension can
extend that promise. In fact, line extensions can perform the role of continually improving the
core brand. Intelligent line extensions may be used as means to attract users who buy multiple
brands.

Managing true innovation

Line extension is an effective way to foster and manage true innovation, thereby enhancing the
value proposition, expanding the usages context, and blocking competitive entry.

Blocking or inhibiting competitors

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Line extensions have the potential of inhibiting of neutralizing moves by competitor. Failure to
see this aspect may result in adverse consequence for market leaders, which permitted new
companies to gain a toehold in their respective industries.

Managing a dynamic environment

Line extensions provide a way to survive in an environment full of ambiguities and transitory
signals and forces. If the company does not extend line it may face the risk that if a segment is
created corresponding to the “new” product, such a segment may be a precursor to a large trend
that, if ignored, might generate a strategically altered landscape with a first-mover competitor
holding a considerable advantage.

3.8 Product Line Decision Making Process in OMFED

D
ecision related to introduction of a new product to the product line or deleting a product
from product offering is a complex process. When the actual sales of a product are
much less than the expected sales and the production cost of the product is a liability
for the organization, the products are deleted. These decisions are taken by marketing and
production managers with the approval of the government. Products like Double Toned Milk,
Rasabali dropped from product line due to underperformance of the product in the local market.
While deleting a product, care is taken to safeguard the prestige of the farmers.

While introducing a product the proposal is developed by marketing and production department
and the final approval is given by government. Price fixation and price increase or decrease
decisions are taken by the Government taking view of the production cost, market conditions,
interest of the farmer and consumers, and retailer and distributors' prestige. Thus, decisions
related to product line are time consuming and always taken prioritizing the farmers' interest and
market scenario.

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3.9 Marketing

O
MFED is the marketing arm of the network and manages the physical delivery and
distribution of milk and dairy products from all the Unions to customers. OMFED is
also responsible for all decisions related to market development and customer
management. These activities, which range from long-term planning to medium-term and short-
term operational decisions are described below.

As mentioned earlier, introduction of new products and choice of product mix and markets
should be consistent with the growth strategy, and synchronous with growth in milk supply.
OMFED's demand growth strategy may be characterized by two key elements: (developing
markets for its high value products and (ii) maintaining a healthy level of customer base for its
base products (low value segment). This strategy often requires OMFED to allocate sufficient
quantity of milk supply to low value products, thereby sacrificing additional profits that could be
generated by converting the same to high value products. While deciding between milk and milk
products, priority is given to meet the daily demand of milk and after that only the surplus milk
is used for manufacturing of milk products.

Interestingly, advertisement & promotion was not considered to be enough of value addition and
hence the budget was kept relatively small. Instead, OMFED preferred a lower price with
emphasis on efficiency in advertising. In this context, OMFED provides umbrella branding to all
the products of the network. For example, liquid milk as well as various milk products produced
are sold under the same brand name of OMFED.

OMFED also plays a key role in working with the Unions to coordinate the supply of milk. In
essence, it procures from multiple District Unions, which in turn procure from the Village
Societies registered with each Union.

OMFED is planning web-based ordering facilities for its customers. A well-defined supply chain
is to be developed provide service to customers who order in this manner.

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 Chapter-4

BRAND
MANAGEMENT
OF OMFED

28
4.1 Brand Management:

B rand is the seller’s promise to deliver the same bundle of benefits consistently to
buyers A product is any offering bi’ a company to a market that serves to satisfy
customer needs and wants. A product can be an object, service, idea, etc. Brands are
not the same as Products. On the other hand, a name becomes a brand when consumers
associate it with a set of tangible and intangible benefits that they obtain from the
product or service.

Uniformity is the mother of branding. Brands are particularly linked to uniformity

or homogeneity. As long as, something remains single or unique, there would be no
need of branding.

Branding has always been an important aspect of marketing. ¡5 the analysis and
planning on how brand is perceived in the market. Developing a good relationship with
the target market is essential for brand management. Tangible aspects of Brand include
the product itself, look, price, packaging etc. The intangible elements are the experience
that the consumer has had with the brand, and also the relationship that they have with
that brand.

Customers will recognize your company, your product. your service and your status
through your brand. You can build an incredible brand through messages, images and
ads but whether you realize ¡t or not, your company is creating this reputation with
everything that you and your local affiliates do. So, you need to make sure you are
consistently living up to you brand promise each and every day.

The most important part of brand management is on-going maintenance and

control. Proper brand management involves making sure that each promotional piece,
touch point and every usage of your name, logo and message sports your
organization and goals by reinforcing your brand in the way you intended. This allows
you continue to strengthen the association your brand Imprints on your customers.
Even the best brands can fall apart if not managed properly.

4.2 OMFED: THE BRAND

OMFED is representation of the economic freedom of dairy farmers. The core
values of the company are:

➢ To provide remunerative returns to the farmers.

➢ Give the best quality product to the consumer.

➢ At the best possible price.

29
The organization has a glorious history of 35 years with the farmers and people of
Odisha. As Government organization it is more responsible and have obligation to work
for the betterment of the farmers as well as customers. OMFED was first in Odisha to
bring about milk as a packed product. It is trusted as a brand synonymous to quality,
Adulteration was primary concern in loose milk but availing quality tested as per FASSI
guidelines milk products of OMFED are perceived as a Brand symbolizing quality with
affordability.

Supply Chain and distribution channel of OMFED are quite vast and spread over
ensuring easy availability of milk and milk products.

OMFED as an umbrella brand is presently used for the different products manufactured by
OMFED; like OMFED Toned Milk in the milk category amount other products, which includes
OMFED butter, OMFED ice-creams, OMFED ghee etc.

OMFED is the apex milk selling body in Odisha and is a state federation. It follows proper
quality standards and has earned the distinction of using the national ‘mnemonic’ symbol
accorded by the National Dairy Development Board (NDDB) in the state of Odisha. This
Mnemonic symbol is used for selling and distribution of Milk. “Fresh and pure” on its milk
pouches is part of mnemonic symbol owned by the National Dairy Development Board (NDDB).

4.3 Strategic Decisions Taken to Build the Brand

The strategic decisions that developed OMFED as a brand can be classified Ni the
following broad categories:
1. Technology
2. Pricing
3. Quality
4. Product Portfolio
5. Distribution Network
1. Technology Strategy:

➢ The technology, packaging and OMFED’s approach to marketing is based on the

changing taste buds of the consumers. The technology strategy is characterized by four
distinct components:
a. New products
b. Process technology
c. Complementary assets to enhance milk production
➢ Few diaries of the Odisha market have wide variety of products produced by OMFED.
Village societies are encouraged through the subsidies to install chilling units.
Automation in processing and packaging areas is in many plants and in process and
proposal for many.

30
 ➢ OMFED actively pursues developments in embryo transfer and cattle breeding in order to
improve cattle quality and increase in milk yields.
➢ OMFED is planning to go online to provide its consumers online buying experience of
product at one click.
➢ OMFED has tied up with AMUL recently for technology upgradation.

2. Pricing Strategy:

A
t the time OMFED was formed, consumers had limited purchasing power and
modest consumption levels of milk and other dairy products. Thus, OMFED adopted a
low-cost price strategy to make its products affordable and attractive to consumers by
guaranteeing them value for money.

3. Quality:

MFED has not changed its core values —give the best quality product to the

O customer. OMFED follow the quality standards directed by “fssai” (Food Safety and
Standard Authority of India).

Few ensuring the quality, OMFED take various steps in various stages. OMFED is
maintaining the quality from the point of collection. Milk is tested to find FAT and SNF
contents along with lactometer tests in the collection centers. Surprise checks and tests
are done even in chilling plants. Platform Tests and OLTs are conducted while procurement.
Tests are done to detect adulteration in the raw milk and if found then the milk is rejected as
OMFED don’t compromise on the quality of its product. Other Microbiological and self-life tests
are also conducted to test quality from time to time in the laboratory. Quality Control
Department conduct various tests to check and maintain the quality of the products.

To ensure milk and milk products are delivered in best quality conditions these
are stored in cold storage within the temperature rare of 4-5° C till dispatch. Products
are transported to distributors and retailers through insulated vans to maintain this
temperature.

4. Enhance Product Portfolio:

MFED’s strategy of umbrella branding has also helped establish its brand firmly in

O people’s minds. The network follows an umbrella branding strategy. OMFED is the
common brand for all its product categories: liquid milk, butter, ghee, Curd, Paneer,
Chenopod, Peda, Ice-cream and Horticulture and Agro products.

5. Distribution Network:

31
OMFED products are available in over a large number of retail outlets across Odisha through its
network of distributors.
OMFED transacts on an advance demand draft basis from its wholesale dealers instead
of the cheque system adopted by other major FMCG companies. This practice is consistent with
OMFED’s philosophy of maintaining cash transactions throughout the supply chain and it also
minimizes dumping. The organization has launched its products in various supermarkets like Big
Bazar to increase the availability.

4.4 Brand Equity

B rand equity describes the value of having a well-known brand name, based on the idea that the
owner of a well-known brand name can generate more money from products with that brand
name than from products with a less well-known name, as consumers believe that a product with
a well-known name is better than products with less well-known names. So, Brand equity refers
to the value of a brand. Brand equity Is the value premium that a company realizes from a product with a
recognizable name as compared to its generic equivalent. Factors contributing to Brand Equity are:

Brand Loyalty:
Loyal customers will consistently purchase products from their preferred brands, regardless of
convenience or price.

Brand Association:
Brand Associations are not benefitting, but are images and symbols associated with a brand or a brand
benefit in customer’s mind.

Brand Awareness:
It is the likelihood that consumers recognize the existence and availability of a company’s product or
service.

Perceived Quality:
Perceived quality refers to the customer’s perception about the total quality of the brand.

Customer based brand equity model:

The premise of this model is that the power of the brand — OMFED lies in what customers have feIt,
seen and heard about the brand over time. The power of brand resides in the minds of the customers.

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4.5 Brand Positioning

P ositioning is a marketing strategy that aims to make a brand occupy a distinct position, relative to
competing brands, in the mind of the customer. Companies apply this strategy either by
emphasizing the distinguishing features of their brand or they may try to create a suitable image
through advertising.
• Positioning: OMFED
➢ A mass market player, no premium offerings
➢ USP- quality with affordability
➢ OMFED creates value for money for both the dairy farmers and customers
➢ Social image: Socio-economic developers of farmers.

4.6 Understanding Competitors Brands

M
ajor competitors of OMFED are AMUL, Milky Moo (Milk Mantra), Kamdhenu,
Mother Dairy and Local vendors fin the state of Odisha. Though OMFED is holding
majority of the milk and milk product market in Odisha but it has to be cautious
enough to defend its share markets. So careful study of competitor’s products, their product’s
quality, price, packaging and strategies.

1.AMUL:

A
mul as a brand name is familiar to almost every individual in India, Amul is known for
its quality products purity and hygiene. For over more than the past 50 years, Amul has
been serving the consumers of India with a variety of quality products. Amul follows a
business model to provide products to customers which provide ’value for money’ to the
consumer. Amul has enjoyed its status of market leader in products like butter, cheese and dry
milk, by providing customers with quality products at completive prices. It is a Dairy
Cooperative of Gujarat, also known as The Gujarat Cooperative Milk Marketing Federation
Limited (GCMMF).

OMFED follows the Amul model in Odisha and OMFED is also planning to collaborate with
Amul for scaling up its operations and standardisation of its products. OMFED will also soon
sign a Memorandum of understanding with Amul, which is having rich global experience in this
field for collaboration in various aspects. With more and more milk pouring in at OMFED
plants, surplus milk is needed to be dispatched to other states and under this backdrop, Amul is
agreeing to receive OMFED milk at its plant in Kolkata.

33
Amul will also extend support to OMFED for quality control and marketing for which officers of
OMFED will visit Amul Dairy at Kolkata and to know about the strategies adopted by the Milk
Behemoth.

2. Mother Dairy:

I
t is an emergingbrand in Odisha through it is established brand in the country. Mothers Dairy
is providing various types of milk and milk products. The Live-low fat milk of mother dairy
is attracting many health-conscious customers who prefer less fat in milk. Toned Milk,
Double Toned Milk, Skimmed Milk and standardized Skimmed Milk are among the products
offering of mother dairy. Clearly mother diary is working on segmentation of the milk market.
Mothers diary ice creams are also widely available in Odisha.

3. Milky Moo:

M
ilk Mantra launched in 2009 is a consumer daily foods venture that sells ready to
drink milk under the milky moo brand. Along with Milk it is also known for its
Paneer and Curd. From Developing a strong daily supply chain in rural Odisha to
ethical sourcing from farmers and innovative Packaging. Milk Mantra is also attempting to give
the dairy industry a makeover. On the other end it works closely with rural dairy farmers, their
needs and the quality of their products and on the other it has innovated on the packaging format
for an urban population. The Moo Cow character in its advertisements is innovative and
attractive.

4. Kamadhenu:

S
tarted in 1999 KAMADHENU BRAND became a well-known house hold name in
Odisha. Variety of milk and milk products are available in its range. Celebrity
endorsement of Famous Odia actress Aparajita Mohanty its ads also encourage many to
buy Kamadhenu products, the brand is well known for its quality products especially milk, curd,
lassi and buttermilk.

34
 Chapter-5
CONCLUSION

35
5.1 FINDINGS
The Research on Product and Brand Awareness gives indications towards the positioning of
OMFED and its products awareness level. The important points are summarized below.

1. 70% of the Sample thought of OMFED when asked for a brand of Milk. This Indicates
OMFED is positioned well enough in customer's mind with respect to milk. But as new
brands are entering the market, and other existing brands are trying to be positioned in
customer's mind too. This is the reason why even after knowing OMFED 30% of the
sample doesn't associate milk with OMFED.
2. While purchasing milk and milk products many customers value Quality as First
Preference and taste as second. Among the OMFED users 23% of customers prefer
OMFED because of Quality and 14% for taste. Yet many Non-OMFED users do not use
OMFED because of quality and taste issues (36% and 32%). From the total sample 40%
have given OMFED products 3 stars rating for its Quality out of stars and for taste
OMFED scored 3 stars by 30% of the sample.
3. Availability as a factor is preferred as 3" factor by 30% of the sample. 23% of OMFED
users used OMFED Milk for its wide availability, 57% of the total sample rate OMFED
5stars for its Availability. 87% of sample knows OMFED through its Booths and
Parlours.
4. Price as a factor for purchasing milk and milk products is dispersed from 1 to 5 positions.
21% of sample consider price as their primary focus while buying dairy products.34%
and 33% of the sample give OMFED 4and 3 stars respectively for its Price.
5. 5.48% of the sample rank packaging as 5" preference while buying milk and milk
products. But the importance of packaging can't be denied as one of the competitors
Milky Moo is trying to position in the market in terms of its innovative packaging 31% of
the sample gives OMFED 3 Stars for packaging.
6. OMFED as a brand is associated with quality products by 17%, with products in
affordable price by 21%, with economic development of farmers 26% and with all these
by 36% of the respondents.
7. Advertisements are less observed by the respondents.87% of the sample know OMFED
products through its booths. Only 4% have seen TV advertisements of OMFED. About
91% of the respondents don't know who the Brand Ambassador of OMFED IS
8. 44% respondents recalled OMFED plain curd while asked for products except milk
without being prompted. Ghee, Sweet curd and Cottage cheese are also recalled many
times. Few recalled lassi, Ice-cream and flavoured milk. Chennapoda, Butter, Butter Milk
have negligible recalling percentage.
9. 100% of the sample are aware of OMFED milk. Less than 10% of the respondents are
aware of Peda and Cold Coffee, 33% of respondents are aware of Chennapoda and only
16% of the respondents are aware of Table Butter of OMFED.

36
 10. 10.56% of the respondents did not know about Horticulture and Kandhamal Organic
products of OMFED. 21% have no idea about OMFED Ice-cream,
11. Among the Ice-cream Flavours Vanilla is the most aware flavour followed by Choco-bar,
Strawberry, Butterscotch and Chocolate Black Current is the least known Flavour along
with mango and strawberry Milk Lollies.
12. 12.39.39% of the OMFED milk users are satisfied in the range of 75 to 100% satisfaction
level 34.85% of OMFED users are having 51to 75% satisfaction level. 25.76% of
OMFED users are having 26-50% of satisfaction.

5.2 Recommendations for Gaining Competitive Advantages

• It was observed that very few are aware of the advertisements of the Brand OMFED.
OMFED had taken important steps for improving its visibility. Facebook page is now
acting as a branding platform for the organisation and its products. But still
advertisement in print media and TV are required to improve awareness of certain
products.
• Advertisement of products like Table Butter, Flavoured Milk, Chennapoda, Lassi, Butter
Milk, Horticulture and Organic products should be done to popularise these products.
• Advertisement should be innovative, creative and people should relate to those. Making
more attractive packaging is also essential.
• Products of OMFED contain general food and price information. Specific nutrient
content per unit of product should be mentioned on the package to give more specific
information. For example, mentioning the nutrition value of 100 ml of milk on the milk
package. Currently it only displays fat 3% and SNF 8.5%. if the nutritional values like
Protein%, Vitamins%, Calcium% etc. would be mentioned on the packet the product can
be better positioned.
• In past days defaming news about OMFED had been telecasted. Proper clarification by
appropriate personnel should be issued to answer the questions in the mind of
customers.
• The organisation may upload its advertisement in different forums like You Tube to avail
the internet advantages of the telecasted ads.
• Proper hygiene and sanitary conditions in the plant must be observed to deliver
products in proper quality deliverable condition.
• OMFED was known for its quality and taste. But now it is known as the most available
branded food item. The organization must try to reposition its quality and taste features
in the mind of the customer.

37
 • Coordination between the different Departments must be observed to handle market
challenges in a more professional way.
• Automation and expansions of different plants should be done to cope with the growing
production pressure and market demand.
• GPS based vehicle Tracking System may be introduced in the supplying and raw milk
tankers to known about the position of the vehicle in real time.
• New value-added products after proper market study and segmentation with sufficient
media focus can be developed. Food for health-conscious groups like sugar free Ice-
Creams, Low fat Milk can be introduced.
• Being the Market Leader in food industries in Odisha OMFED should try to defend its
position against the emerging brands.

5.3 Conclusion
OMFED is the biggest food brand of Odisha. It has been Glorious History of 36 Years of
association with the farmers and customers of Odisha. The organization is committed to work
for development of farmers and providing quality product in a cost-effective manner. Its supply
chain is the power driver of the system. Effective marketing and proper positioning of the
image of the organization is the key to its success. Without compromising with its core values
and promises it is constantly evolving as learning and developing organization. Technological
development can increase its efficiency and quality delivery. Understanding this OMFED is
working for technological development and expansion of its projects on one hand and
encouraging farmer to adopt dairy farming on the other. Leveraging the gap between farmers
and customers OMFED have now opportunity to venture outside the state boundaries.
Believing on the product concept of marketing OMFED has reached this far. Therefore,
emphasizing on product development along with its brand it can cross new horizons.

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