KAMDHENU DAIRY

PRESENTED BY: MSC.(DESIGN)

SECTION: A1609
 INTRODUCTION
KAMDHENU DAIRY
MANAGING DIRECTOR: R.K. Samal
ASST. GENERAL MANAGER:SHRIVASTAVA
FOUNDED:1969
LOCATION: SANAND(GUJARAT)

• In the year 1969, the state government of a Western state started a milk
scheme for supply of milk in a major city in the state.
• According to this scheme, milk was to be collected from the Heda district in
which Sanand was located, and was to be supplied to the consumers in the city.
• During the initial stages of the scheme, the very little of the increase in price
offered by the state government was received by the farmers.
• In order to get the benefit of the increased prices, the farmer decided to start a
Union of Milk Producers and a Central Processing Unit at Sanand.
• It was decided that this union would collect milk from the farmers, pasteurize it,
and sell it to the state government.
• This marked the beginning of the Kamdhenu Dairy.
• The dairy started pasteurizing about 250 litres of milk per day.
• The organization grew at a very rapid rate.
• It was founded that the state milk scheme could not accept all the milk
collected by the Union in winter months
• While the production of milk in Heda district varied widely between the
summer and winter season. In winter the production was 250% of the
summer production.

This left Kamdhenu Dairy with two alternatives:

1- Either to restrict drastically the collection of milk during winter months:or
2- To find alternatives ways of consuming the surplus milk collected in winter
months.

• The first alternative was not satisfactory, as the farmers wanted to be

assured of a year-round market for all the surplus milk desired to sell.
• In order to this, the management of Kamdhenu Dairy decided to construct a
dairy factory to convert milk into milk products.
• It obtained assistance from UNICEF and the Government of New Zealand
and with an investment of Rs 50 lakhs a factory was put into operation
• The opening of the new dairy gave great incentive to milk production in the
Heda district and the Union was able to procure more milk each year.

• The milk collected by the Kamdhenu Dairy was converted into the following
main products:
1. FA milk for the state milk scheme.
2. Butter
3. Ghee
4. Skimmed milk powder
5. Baby food
6. Cheese
• Mr. Shrivastava the Asst. General Manager discussed the problem with senior
professor of the Management Institute.
• The quality of FA milk was being affected because of the uncertainty involved in
the procurement of raw milk.
• The supply of milk is at its minimum in the month of June and reaches its
maximum in December-January
• The quality of the FA milk if founded deteriorated the company has to pay the
penalty according to contract terms.
• And more over FA milk was the backbone of the company
• The company did not face any problem in selling their products
a. The whole milk powder is purchased by the Govt. of India for defence needs.
b. The cheese is being sold at a thousand tonnes a year without any difficulty .
c. The only problem is the production capabilities, the availability of raw milk and
contractual obligations of supplying FA milk to the state milk scheme at the
rate of 75,000 liters a day.

INTRODUCTION OF TEA :1. B.Rath, manager for corporate planning,

justified the entry into tea marketing as tea was a high margin product and did
not require additional resource allocation
2. They thought of introducing tea because the demand of tea for exporting
was high. So in order to meet the needs of the growing demand the exporters
were turning towards the domestic market.
3. Before implementing the tea business Kamdhenu Dairy conducted a
market research to understand consumer preferences as well as the
competitors
 Vision
 
Provide quality food and beverages to consumers at affordable prices while
ensuring fair returns to the producers.

 Mission
Dairy’s heritage is intrinsically linked to the cooperative movement in India.
Across the India we want our consumers to think, kaamdhenu, first when they think
of dairy products
The Kamdhenu Dairy was started mainly to provide better marketing facilities to
the farmers for marketing the milk they produced.

 
 MARKETING MIX
PRODUCT
• Kamdhenu dairy was one of the leading brand in Gujrat offering milk based
products & other food items in India.
• Kamdhenu food limited is the parent brand under which kamdhenu food Ltd.
comes which is subdivided into dairy products, dry fruits, chemicals.
• The dairy products of Kamdhenu dairy are edible Acid Casein , Whey powder,
White Butter, Whole milk powder, Lactose skimmed milk powder, Ghee , Dairy
white.
• Kamdhenu Ltd. tried to expand their market by their new startup business in
tea manufacturing.
• Only 35% wanted to make a repeat purchase. This is primarily due to the fact
that the taste of Kamdhenu tea doesn’t match the preferences of customers.
• The taste of Kamdhenu tea is different from that of the local competitors
because of the location of the processing.
• Complaints have been received about the irregular grain size of Kamdhenu tea.
• These complaints reflect on the quality consciousness of the consumers.
 PRICE
• The main objective of Kamdhenu is to penetrate the market. In western
Rajnagar, due to backwardness, popular brands have only one price
point, with a range of pack sizes.
• Flavoured arts milk & sagar ghee are the most sold products of
kamdhenu dairy and is the backbone of the company as compared to
other products and the lowest selling product is kamdhenu tea.
• Tea sold in western Rajnagar is currently priced at Rs. 115-120 per kg.
• Thus, in order to penetrate the market in this region, Kamdhenu should
lower its price for the time being. Kamdhenu earns a profit of 22% at
present.
• The DCS secretary has been found to very lax about promotion of
kamdhenu tea.
• To induce the secretary to support Kamdhenu’s product an incremental
differential slab for commission can be set up.
• This differential slab will act as an incentive for the secretary to look into
the sales of Kamadhenu products and especially tea.
 PLACE
• In the milk industry distribution is quite a critical part of the business.
• For Kamdhenu Tea, the market can be segmented geographically and based
on the tastes of the consumers. The two geographical market segments are
Eastern and Western Rajnagar.
• In the Eastern Rajnagar market, the villages located are Rajnagar, Vadgam,
etc. and in Western Rajnagar, the villages located are Radhanpur, Kankerej,
Wav, Deodar etc.
• The eastern Rajnagar segment offers more variety in terms of customers. It
has customers with preference in various price ranges including a higher
priced segment.
• The western part, on the contrary, has popular brands having only one price
point, though with a range of pack sizes. This strategy is due to the fact that
this region is mostly backward and has a majority as rural population.
 PROMOTION & DISTRIBUTION
• Milk and tea are complementary products, thus a new limited period
promotional scheme involving distribution of free 10gm samples packs of tea
on purchase of certain amount of milk, would promote the tea to a great
extent
• Simultaneously as mentioned earlier a change in the taste of the tea to
match the preferences of the general public, could potentially convert first
time consumers (targets of the above-mentioned promotion) to return
buyers.
• Kamdhenu tea distribution network is facing a major challenge due to
inability to maintain supply. Currently the milk supply chain is the only means
of distribution
• This system reaches out to the smallest of households in the Rajnagar
district.
• Simply loading the macro and micro distribution networks of milk with tea
would adequately solve Kamdhenu’s distribution worries.
 Analysis of Competitors:
Porters 5 Forces model

Threat of New entrants Power of Suppliers

(Moderate) (Low)
Tea business is complex catering Tea procurement through open
to localised need becomes a market auctions so no dependency
challenge of establishing distribution on individual tea suppliers
network Competitive Rivalry
switching cost is negligible
(high)
Many small or equally sized
competitors less products
Power of Buyers differentiation
Availability of Substitutes Customers
(High) are not averse to switching brands
Switching to competitive products costs of switching to substitutes is
is simple customers are price low and depends in offers provide
sensitive low brand preference
SEGMENTATION AND TARGETING
The tea market in India can be divided into many segments based on geography,
economic conditions etc. As per data in the case, the Indian market has been
broken up as below:
• Market research indicates that localised taste plays a very important role
when it comes to a customer selecting a tea. There is a marked difference
in the colour, aroma and taste of the tea because of the difference in the
taste of water in both the regions. If Kamdhenu tea wants to make an
impact with its product, it will have to first select the region which it wants
to target and based on that, it needs to develop the right blend keeping
the local taste in mind. The targeting strategy will accordingly be designed.
• Given the fact that Kamdhenu tea is currently sold at an average fixed
price with no range available, it is more suitable to launch it only in eastern
region. But then these points need to be considered:

1) Blending should be done locally in accordance to the taste of the rural

population.
2) The price should be brought down slightly in order to match competitor’s
price.
3) Packs of different sizes will have to be launched.
 POSITIONING
• Kamdhenu Tea needs to position itself in a much stronger way.
• There is no need for brand positioning as Kamdhenu is already known
in the market but the product needs to be positioned well in
customer’s minds.
• As research shows that packaging, manufacturer’s image and sales
promotion played a major role in influencing the purchase of the
Kamdhenu tea.
• The factors that affect sales positively are convenient timings, friendly
behaviour of the staff and credit offered on purchase.
• The first step in that direction should be to develop the product by
getting the right blend and hence the right taste.
SWOT ANALYSIS
STRENGTH
• Credit in dairy cooperative society.
• Cattle as movable asset.
• Market for milk produce.
• Rural presence.
• Good remunerative work for
women.
• Strong brand recognition in local
markets.
• Well established distribution
network in villages.
• Friendly and favourable staff
behaviour.
WEAKNESS
• Lack of cold storage facilities.
• Difficulty in breaking the brand loyalty
of customers towards existing local
brands.
• Fall in prices of products.
• Costly feeds and fodder.
• Inability to sell loose tea in order to
preserve their brand name.
• Rare advertising.
• Lack of knowledge of dairy and
training.
• Lack of understanding of local taste
and preferences.
• Less promotional strategies.
SWOT ANALYSIS
OPPURTUNITIES
• Buttermilk and ghee selling at
village level.
• Tie-up with hotels and restaurant
chain, etc.
• Sale of farm yard manure.
• Growing focus on health and
nutrients in urban market.
• Innovation in dairy ingredients and
products.
• Increase in market penetration.
THREAT
• Reduction in consumption by health
conscious people.
• Growing prices.
• Different competitors.
• Death of non-insured cows.
• In monsoon, roads are not
approachable.
• Unproductive animal.
• Threat from rural retailers.
• Lacks global/national brand which
makes it difficult to expand into
newer markets.
Present Strategy adopted by Kamdhenu Diary
Leveraging the existing supply chain network of Dairy Cooperative Societies as a
distribution network for selling tea.
The company hasn’t done much promotional marketing and is mostly relying on the
potential customers through their local DCS stores. The low brand awareness is also
hurting the sales of the company .

As the company isn’t able to compete with big players like Chowdhry, it is following the
MARKET FOLLOWER STRATEGY, to follow the market leader. It is making immense
efforts to match the product specification of Chowdhry by making the blend similar to
the blend of the most popular brand of Chowdhry.

Which product strategy should be adopted by Kamadhenu

Diary?
Product strategy begins with a strategic vision that states where company wants to
go, how it will get there, and why it will be successful.
Kamdhenu should go for leverage expansion as their product strategy. Leverage
expansion states that success of expansions to new product market depends highly
on use to maximum advantage.  
1. Existing market knowledge and,
2. Technical skills.
THANKYOU
EVERYONE…