COMPARISON OF MARKETING /

WORKING PRACTICES OF M/S.

CHITALE BANDHU, M/S. WARANA,

& M/S. GOKUL.

213 13. COMPARISON OF MARKETING / WORKING

PRACTICES OF M/S. CHITALE BANDHU, M/S.

WARANA, & M/S. GOKUL.

a) MARKETING PRATICES OF M/S. CHITALE BANDHU

One of the highest income tax paying families of the country includes M/s.

Chitale bandhu. Mr. Bhaskar Ganesh Chitale is the pioneer who made the beginning of their business journey in 1939. His two sons,

Raghunathrao and Narsinharao (Rajabhau) have further reinforced the foundation. Today the third generation is managing the show. Milk manufacturing / processing is done at Bhilawadi (Sangli District) and milk products are manufactured at Pune. The two shops at prime location like

Deccan Gymkhana and Vishrambaug are their own shops where people wait for hours to buy the 'Bakarwadi' and famous Shrikhand.

During Diwali, the sale of Pedha is app. 2000 kg., Chakka - 28000 kg. and milk 2 lakh litres per day. The Bakann/adi was very liked by late

Mrs.Indira Gandhi. This item has been the speciality or brand name of

M/s. Chitale Bandhu. This kind of achievement in a eatable product category involves sincere attitude and dedication plus hard work.

The surprising factor however is the upbringing and modesty of the whole

Chitale family. None of them is a member of any 'Club' and are teetotallers. The only thing this family does is to go on foreign tours alternatively but here also they would be searching for technological developments in dairy industry of that country affflMlrlng these findings

214 back to their business. In fact, packed milk in plastic bag is the concept

started by M/s. Chitale in Pune which they had seen abroad during one of

their yearly visits.

The 'Bakanwadi' is manufactured in a machine which they have bought

from Holland.

The bull farm developed at Bhilawadi is one of the first of its kind in Asia.

It is a matter of pride for Maharashtrians that we have such a family as a

role model for the young generation to come.

M/s. R.G.Chitale are the technological leaders in Dairy industry today.

Today, M/s. Chitale collect milk to the tune of 2,00,000 litres per day for

processing, packing and manufacturing milk products for sale to the urban

population of Pune. M/s. E.G.Chitale have pioneered developments and

production by distributing high yielding Muntia and Mehsana buffaloes in

the district of Sangli.

Approximately 10,000 buffaloes have been distributed to the milk

producers of this area by providing them interest free loans and subsidy

on every buffalo.

Every year, 1,000 buffaloes are supplied as replacement stock to avoid

dwindling production and losses to the farmers.

A step further in this development activity is achieved by establishing

frozen laboratory with ultra modern equipments and high efficiency

techniques of deep freezing at Bhilawadi station. To support this activity,

215 a bull mother farm with high yielding buffalo mothers was also established.

The high yielding buffaloes were meticulously selected directly from further breeders of Haryana (Rohtak) and Gujarat (Mehsana area).

The farming activity was started in 1960 and this ultra modem fami was established in August 1996 with 150 buffaloes. This buffalo farm is fully automate, with computer controlled milking machines and feeding stations. The manure scraping is also done by automatic device. The buffaloes are kept comfortable by providing foggers in loose house conditions.

The average milk yield of farm is 14 litres/ buffalo/day. About 20% of buffaloes yield between 15-18 litres of milk with an average of 7% fat.

Rest of the buffaloes yield between 10-15 litres.

With better management practices, they have successful by achieved mortality of calves to less than 2%. All the buffaloes of the farm and buffaloes bull are being tested routinely for T.B.,.J.D., Bmcellosis and are found free from diseases. They are routinely vaccinated against hemarrhagic septicemia, black quarter and foot and mouth diseases.

The bull mothers are being bred by frozen semen procured from selectively bred buffalo bulls. Phenotypically, the bulls have all character of Murrha and Mehsana breeds.

216 The fertility of bull is proven as their semen is routinely used in the operational area of M/s. B. G. Chitale.

HIGHLIGHTS OF WORK CARRIED OUT AT M/s. B.G.CHITALE,

(CHITALE DAIRY, BHILAWADI STATION).

Organisation of- The A.I. Work was organised in 10 centres covering

2500 Murrah / Mehsana buffaloes after quick survey of buffalo population of the village. Each centre is managed by a qualified Live Stock

Supervisor. The in-charge of the centre gives services of artificial insemination, pregnancy diagnosis and treatment to the buffaloes owned by the milk producers. Three veterinarians are appointed, each veterinarian covered a cluster of 3-4 LSS centres.

Infertility Camps:- To start with meetings were held in different villages to explain the program. Simultaneously work camps covering infertility, A.I.

Pregnancy diagnosis and clinical cases were held to popularrize artificial insemination. Such camps were regulariy under taken at these centres.

Treatment crates were distributed to all the centres and free A.I. and pregnancy diagnosis services are given. Initially frozen semen was procured from BAIF Uralikanchan but then it was thought to have their own semen freezing laboratory at Bhilawadi station under M/s. B. G.

Chitale, Dairy. Under this project, Bull mother farm was established with hgh yielding 150 buffaloes. The idea is to produce merited buffalo bulls for breeding purposes whose dams as well as sires are known and recorded.

These buffalo bulls will be selected at birth, based on the growth, dams yield and will be reared separately for breeding purpose. These bull will be used for production of semen. The frozen semen of these bulls will

217 utilised as per the plan of the project on the buffaloes in the centres along with the bull of ICAR.

Frozen Semen Laboratory:- Highly sophisticated Frozen Semen

Laboratory was established and was made functional from April 1997.

Ten Murrah, Mehsana bulls were purchased from high yielding buffaloes of Rohtak (Haryana) and Mehsana area (Gujrat) with known pedigree.

The semen freezing was started from April 1997 on wards. Initially some difficulties were faced because of summer condition and low quality ejaculates. As the conditions improved good quality semen was obtained and regular semen freezing was carried out. At semen collection bull aprons are being used. The laboratory is equipped with Laminar flow,

Photo electro colourmeter, digital electronic balance, filling and sealing machine, printing machine, a 320 litre freezer, freezing rack, storage container, liquid Nitrogen container, etc. So far, up to Dec 1997, 22000 doses in french mini straws were stored and around 3000 straws were utilised in field and in Bull mother farm for A.I. Program.

218 BUFFALO FARMING PRACTICE IN AREA OF BHILAWADI DIST

SANGALI

Buffalo farming is traditional in western Maharashtra especially in districts of Kolhapur, Sangli and Satara. The buffalo population is mostly non descript. In the area where milk procurement, processing and marketing is undertaken by eitherco-operative sector or private agencies, the buffaloes have been procured and distributed for milk production. In the areas of Bhilawadi where M/s. B.G.Chitale are working since 1939 efforts have been taken to procure high producing Mun'ah/ Mehsana buffaloes from Haryana and Gujrat and distributed to milk producers by subsidising the cost of buffaloes. The farmers were given interest free loans for procurement for milch buffaloes and also subsidy to the tune of Rs. 2500/- per buffaloes. This was to encourage the farmers for undertaking milk production as supplementary income activity. M/s. B.G. Chitale has given lot of attention for upliftment of rural community by providing them opportunities of self employment through dairy fanning. They have given health care and insemination facilities to the buffaloes owned by fanfners.

The organisation has distributed over 8000 good quality buffaloes.

The average milk per buffalo is 13 litres per day which goes to 2500 litres per lactation of 305 days. On an average the buffaloes yield for 280 to

290 days and the present inter calving period is around 450 days. In the project, the efforts will directed to reduce the inter-calving period to 400 to

415 days by selection and breeding.

219 Bull Station and Semen Laboratory:-

In the project, the buffalo bull station is established with 5 Murrah buffaloes and 5 Mehsana buffalo bulls belonging to high pedigree. The semen is regularly collected, processed and frozen. The range of dams yield of the buffalo bulls is from 3200 to 4400 litres per 305 days. Highly sophisticated frozen semen laboratory is established and made functional from April 1997. For semen collection bull aprons are being used on the donor bull. The sheath and prepuce is being washed with warm distilled water and wiped by clean towel. The buffalo bull is washed and cleaned every time before collection of semen. The semen collection crate is on the danish pattern. Semen is being collected 2 days in a week in early morning before 8.30 am. 5 bulls are being collected every day. The tris- fmctose, citric acid eggyolk - glycerol diluent is used for diluting the semen and diluted semen is filled in french mini straws. Sealed with milk

PVA powder. The straws are being spread of freezing racks. An equilibraition period of three hours is given at 5°C in refrigerator. After quilibraition the straws are frozen over liquid nitrogen vapour in a wide mouth cryo can of 320 litres capacity. The freezing racks are kept over the freezing grill touching the liquid nitrogen so that the freezing is carried out at 4 cm above nitrogen level. The laboratory is kept infection-free by regular fumigation at weekly interval and bactrial load is determined by exposing the nutrient agar plates in the laboratory at different spots. The laboratory is different spots. The laboratory is provided the polyvinyl flooring and is being mopped with lizol a disinfectant. The walls are having marble tiles up to the roof and there are minimum horizontal surfaces. The laboratory is kept at 20°C by providing two Air conditioners.

The AV room and sterilization rooms are adjacent to it from where the AV

220 is given out for collection The semen storage, liquid nitrogen storage is also in the same building but away from freezing unit. The frozen semen is held in quarantine for one month in the laboratory. After one month the semen is released for field utilization.

Field Development Pragram

At present, M/s.B.G.Chitale has provided A.I.Services in 14 clusters which caters 2500 buffaloes of milk for A.I. Services, pregnancy diagnosis and health. The Clusters are as follows:-

Sr.no. Name Incharge Vet Officers at

1 Bhilawadi LSS Bhilawadi

2 Ankalkhop LSS

3 Chopdewadi LSS

4 Bhilwasdi Station LSS

5 Asta - Astua Vetemarian looks

6 Karandwadi - After directly cluster 5&6

7 Gotkhindi LSS

8 Walva LSS

9 Nandre LSS

10 Ramanandnagar LSS Tasgoan

11 Manjarde LSS

12 Yelavi LSS

13 Kapuskhed LSS '

14 Soni LSS

LSS is para veterinary personel trend in A.I. and pregnancy diagnosis.

221 Bull Mother Farm

. Bull Mother Farm

Highly Sophisticated Semen Processing Laboratory The present distribution of buffaloes breeds is as followes:-

Munrah 13.0, Mehsana 51.5 while Desi (Nondescript) 35.5. The area of

Bhilwadi is irrigated to the tune of 60 percent only. Following cluster Viz.

Bhilawadi, Bhilawadi Station, Ankalhnop, Chopdewadi, Gotkhindi Walva by canal water and lifts on Krishna river, Ashta,Karandwad, Gotkhindi,

Walva are also inrigated from Krishna river while clusters of Nandra,

Yelavi, Ramanadnagar are partially imgated. While clusters of Soni,

Manjarde Kapuskhed are non-irrigated.

The main producers of milk are small farmers having two to 5

buffaloes.(75%), while only (25%) milk producers are having more than 5

buffaloes. The small fanners keep their buffaloes in thatched or tin sheds

while only 8.2% farmers in this are a have cement concreted sheds.

Amongst the milk producers, 53% producers have facility of tap water

while 33% store water in tank, 10% have bore wells and only 4% have

well water Majority of milk producers offer water twice a day to their

buffaloes (74,0) while only 26% of the producers offer thrice or more

times. They advice to offer the cool water all round the day either by

providing water through bowls which help buffaloes to get rid of body heat.

It also help buffaloes to yield more milk.

In the countyside majority of milk producers wash buffaloes only twice

(85%) while only 15% of the buffalo owners wash thrice their buffaloes.

Majority of the buffalo owners feed home-made concentrate mainly cotton

seed cake and to some extent wheat bran, while 31.5% buffaloes owners

offer compounded feed. No buffaloes owners offer mineral mixture at

223 present separately. M/s. Chitale Bandhu insist and can70ut lot of extention through camps for feeding mineral mixture regularly.

Majority of buffalo owner in irrigated area feed sugarcane tops. In addition to sugar cane tops, 5.9% farmers feed hybrid napier 1.5% lucerne, 12.8% green jawar, 1.3% green maize and 1.5% shivri. 12.4% of farmers feed whole chaffed sugarcane. In non-inigated area (25.4%) farmers feed mainly jawar straw (Kadaba). 80% of the fanners feed fodder after chaffing while 20% offer whole fodder without chaffing. 18% offer oil twice a week. All the farmers in the are a milk their buffalo by hand. Only 4 fanners in the area have milking machine of the Alfa Agri bucket type. 57% farmers wash udder before milking while 1% use tit dips after milking. It is endevour of M/s. Chitle Bandhu to educate farmers to use preventive measure like tit dips to avoid mastitis.

Health Care Aspect:-

21.6% farmers deworm their buffaloes and calves. 57% farmers carry out regular vaccination against Haemorshagic Septiceamia, Black quarter and

Foot and Mouth Disease while nobody carried out testing against bruccellosis TB and JD disease at present. Efforts are made to encourage regular testing program through special team.

Present Incidence of different types of ailments in the area;-

Mastitis 35.7 Dianrhoes 21.5 Endometritis 16.5 Dystokia 7.1 Hypocalcaemia 7.3 Prolapse of utems/ Vagina 2.8 Abortion 3.5 Retention of Placenta 5.5

224 Present incidence of mortality in calves in the area

In the male calves below one month 58.2% below two month 29.4% below three month 12.4%

In the female calves below one month 50.3% below two month 35.2% below three month 14.5%

Efforts to carry out extensive education:-

Infertility camps:- Regularly the work camps were canied out In the area.

During 1996-97, 26 camps were held. In 97-98, 62 camps were held.

Amongst the cases attended, majority were endometriasis or missed oestrus detection. Some cases were presented for pregnancy diagnosis.

During the camps, farmer education regarding buffalo management, calf rearing artificial insemination and health care is done. The para vets as well as vets are stationed in villages and they are regularly visiting farmers for either. A.I.or pregnancy followup. They also educate farmers for calf rearing nutrition, and management of buffaloes. The demonstration farms like the Bull mother farm and other satalite buffalo famis are established with ideal management and feeding conditions as model for fanners.

Bull mother farm:-

The bull mother fann is established to produce good quality buffalo bulls for production of semen and development and improvement of buffalo production in this area.

The bull mother fann is set up with 150 buffaloes of Mun-ah and

Mehasana breed. The buffaloes were specially selected for high yield i.e.

3500 to 4400 litres per lactation. As far as possible, efforts are taken to have buffaloes having phenotypically characters tme to breeds and in

225 second and third lactation. The farm is fully mechanized and has Alfa

Laval Agri integrated milking and feeding system where milking point controller (MPC) together with flow master pro milk meter or the flow indicator fonn the foundation of the system, where absolute control of each buffalo daily milk production is obtained from MPC. All milking point activities are managed such as milk yield recording, pulsation, soft stimulation (Duvac TM) and cluster removal. Each buffalo has a transponder around the neck and the number is identified every time. The

buffalo enters the parlour. Each MPC stores milking date for up to 20 buffaloes. The parlour is equipped for ten buffaloes simultaneously. On the MPC a warning lamp lights up at the appointed symbol if the buffalo is

not to be milked or if the milk is not be directed to the tank.

In these cases, the cluster release will be blocked until the alarm override

button is pressed. If the buffalo has not eaten properly or if the buffalo

has not produced as much as expected the warning lamps will bum.

There is large visible lamp on the MPC that indicated, when the buffalo is

finished milking.

The MPC is a highly reliable, high capacity unit. It has backup of

batteries, so all information is stored in event of power failure. It has also

unique feeding system. Each unit of 25 buffaloes has one feeder. The

system feeds each buffalo correctly. The buffaloes can never eat more

than a certain programmed portion of the daily ration. The total ration is

fed over 7 to 10 visits to the station in 24 hours. So that njmen PH is not

upset. Buffaloes feed better and feed utilisation increases if buffalo eat

less than the stipulated ration, a warning signal is shown. If buffalo eats

less than half, the ration is carried over for the next day.

226 There is facility for step up and step down feeding as per production level or lactation curve. The data of bull mother fann is given in annexure. The calf feeding is similarly managed. Each calf after birth is transfered in single calf pen so that they do not leak each other and transfer the disease. This pen is provided with arrangements to keep water and feed buckets.

The calves are fed as per following schedule:-

Schedule of Calf Feeding

Assuming birth weight of 30kg.

Day Colostnjm/Milk Treatment For which purpose

1 Coiostrnm 3 kg. in For developing three devided doses resistance against calf food disesses 2 Colostrum 3 kg. in three devided doses OF 1kg each am noonand evening 3 As per No.2. Piperazine For deworming adipate @rate of 4ml. Per ten kg body weight 4 Milk as per no.2 Antiboitic feed To avoid for mula aurofac enteritis and / Tm-5 through diarrhoea milk. Half Tablet of sulpha dimadine and strinacin 5 3kg. Milk - 6 3kg. Milk Treat as per To prevent third day worms 7 4kg milk Add to milk Develop Antibiotic as well resistance to as Rovimix (Vit diseases A& D3) also give 50 ml of semm of mother subcutaneoursly 8 to 4kg milk As per above For coccidiosis 10 also a course of 3 days of sulmat should be done

227 Days of age and weight Milk Other Feed

11 to 15 days 35 kg Ito 1.5 kg, 2 to 3 times -

16 to 25 days 36 to 40 kgs 2 kg, 2 to 3 times 120gm calf starter & little green grass 150gm calf starter

26 to 30 days 41 to 50kgs 1.25kg 2 times & little green grass

1 to 2 months 46 to 50 kgs. 1.5 kg. skimmed milk 2 250to 300 gms calf times starter and little green fodder

2 to 3 months 56 to 70kgs. 2kg skimmed milk 2 tims 250to 300 gms calf starter and little green fooder

Above 3 months 61 to 90 1/25 of the body weight 500 gm calf starter and kgs. skimmed milk green fodder

After 3 months Milk ration can be cut.

The buffaloes are provided with water bowls for at will drining of water.

Each unit of 25 buffaloes have 8 water bowls. Whenever the buffaloes feel thirsty they walk to water bowl and drink water. The buffaloes adopted very quickly to this management. Each unit is provided with scraper to scrape away the dung and urine of buffalo in to a well from where it is lifted to farm as farm yard manure.

As a effort towards development, demonstration satalite farms have been established with 42 to 70 buffaloes in the areas so that farmers can come and see these units, adopt the new technology. For fodder production also, demonstration unit is established in front of bull mother farm where cultivation of lucerne hybrid napier, maize, cowpea guineee grass is done.

Fanners coming to see the buffalo farm also see the fodder farm and get the idea of feeding buffaloes for milk production.

228 Training:- The training to the field workers is regularly done at the farm for adopting new technologies of Al pregnancy diagnosis, clinical and healthcare. Every month, they come together and a lecture is arranged from the expert in medicine, so that idea about latest knowledge in preventive medicine and health care is given.

Every centre is covered one a month for holding work camp where the expert gives guidance to diagnose infertility cases. Line of treatment is given and follow up is done by the centre in-charge. It has been observed that the infertility cases have come to down to a great extent. After end of

2 years of holding, regular cases have come to down the great extent.

After end of 2 years of holding regular field camps a follow up of feedback from random number of farmers was collected and analyzed. The feedback report is very much encouraging.

229 INFORMATION ON BULL MOTHER FARM

1. Herd Strength of bull mother Farm 149.

a) Murrah 65 b) Mehsana 84

2. Buffaloes in milk 110

3. Days in lactation 390

4. Wt. Average of milk yield 9.5 k.g.

5. Best buffaloes of the herd as bull mothers numbers.

Best specimen of Buffaloes with their lactation yield.

Sr. No. Buffalo No. Breed Lactation Yield No. of days in lactation

1 2 Murrah 3777 599

2 4 Mehsana 3375 428

3 7 Murrsdi 2954 410

4 8 Mehsana 2900 440

5 12 Murrah 3208 371

6 20 Murrah 2705 360

7 21 Mehsana 2792 327

8 22 Mehsana 3371 582

9 24 Murrah 2888 405

10 26 Murrah 4081 577

11 28 Murrah 3042 435

12 39 Murrah 2868 370

13 40 Murrah 2779 373

14 53 Mehsana 3012 389

15 57 Murrah 3393 572

16 58 Murrah 3527 581

17 63 Mehsana 2957 281

230 Sr. No. Buffalo No. Breed Lactation Yield No. of days in lactation

18 66 Muirah 3166 438

19 67 Murrah 2523 310

20 73 Murrah 2718 328

21 79 Murrah 2987 305

22 81 Murrah 2867 526

23 83 Murrah 3142 524

24 84 Murrah 2812 318

25 87 Murrah 2692 331

26 95 Murrah 2527 529

27 98 Murrah 3316 504

28 107 Murrah 2520 426

29 109 Murrah 2974 426

30 301 Jaffer 3033 414

31 302 Jaffer 3166 409

32 308 Jaffer 3067 408

33 312 Jaffer 2913 414

34 317 Mehsana 2828 290

35 318 Mehsana 2881 295

36 320 Mehsana 2559 290

37 326 Mehsana 3354 296

38 327 Mehsana 2830 307

39 328 Mehsana 3003 301

40 329 Mehsana 2813 280

41 330 Mehsana 2586 272

42 496 Mehsana 2575 292

231 6 Method of Breeding adopted Artificial insemination by frozen

semen

7 Number of services per 2.7

conception (breeding efficiency)

8 Intercalving period (days) 414

9 Dry period (days) 70

10 Feeding conditions

Type of fodder/feed Sugarcane, maize lucern, napier,

guinee grass, Godrej Compounded

cattle feed.

Average feed aonsumed/liead 7kg.

Average dry matler 13.1 kg.

consumed/head

11 Management practices

Washing of buffaloes Fixed fogger system and showers

Watering of buffaloes Bowls for watering

Cleaning of shed Scrapers are provided high pressure

machine provided for washing

12 Calf rearing

Birth Weight individual pens 35kg individual pens are provided

with feeding buckets

Feeding colostrum For 3 dyas at 10% of body weight

Growth rate 0 to 180 days 600g per day

181 to 365 days 700g per day

13 Avg. and body weight at 290kg

maturity

14 Avg. and body weight at first Not applicable the heifer have not

232 calving concieved and calved so far

15 Sex ratio in calf born 220 200+out of 44 calves(50:50)

16 Deworming followed Yes regularly every month for calves

and every six month for adults

17 Post partum one stmm days 25 days

18 Enometritis/cervicities 2

19 Calving difficulty 2%

20 Repeat Breeder 8%

21 Retained placenta 2%

22 Delayed ovulation 2%

23 Mortality rate in calves causes M - 2.7% F - 0.75%

of mortality

Major diseases White scors and enteritis

24 Ketosis 0.5%

25 Milk fever Nil

26 Udder oedema 0.75%

27 Mastitis 5.3%

28 Teat blindness 0.5%

b) WORKING PRACTICES OF M/s. WARANA :

Tatyasaheb Kore, a visionary and resident of Warana Nagar first started the Warana Sugar factory in 1959. Slowly, he started estabilishing agro- based industries in a chain. With this, the economic condition of farmers improved. For other farmers, who did not have land (app. 80%) some source of income was necessary. The business which is complimentary to the farmers is of Dairy, hence Dudh dairy was established in 1968, Milk collection, processing and distribution are the major areas of the dairy unit which are inter-related hence an integrated approach was necessary.

233 THE WARANA DAIRY PROJECT

The technical and economic feasibility report of "Warana Dairy Project" was approved by the Agricultural Finance Corporation Dept. in 1972. The

Central Government issued Factory License in 1973-74.

infrastructurai Facilities.

Land and Building

Initially Warana Dudh Sangti had taken 50 acres of land from Warana

Kombdi Sahakari Sangh, Warananagar on 99 years lease in 1970.

Additional 35 acres land was also acquired for future expansion. Main

dairy building, ice plant with a capacity of production of 10 tonnes of ice

per day and staff quarters were built in 1975.

Initial Financial l-iurdles

Warana Dudh Sangh, is initial milk collection was about 1,950 litres on an

average per day in the year 1970, and has reached now 2,40,000 litres on

an average per day in 1997-98. The financial aid or subsidy in the form of

share capital was not sanctioned by the State Govt.. It was not even the

guarantor for the loan, M/s.Warana had collected Rs. 9 lakhs as share

capital from farmers. For further finance, they approached various banks

and finally Agricultural Finance Corporation and Bank of India agreed.

Commercial banks require 25% margin money and State Government

guarantee for financing such projects, which was not possible in this case.

Inspite of all this. Agricultural Finance Corporation and Bank of India

helped financing this project as a very special case.

234 SANCTIONED FINANCE COST FOR THE PROJECT (IN Rs.)

ITEM LOAN MARGIN TOTAL (in Rs.)

a) purchase of Milch Animals 89,40,000 29,80,000 1,19,20,000 Farmers Level b) Silo pits, equipment etc. 14,75,000 ^"4,90,000 19,65,000 Societies Level, C) Dairy Plant, building, 1,24,00,000 22,00,000 1,46,00,000 machinery. Equipment 2,28,15,000 56,70,000 2,84,85,000

The loan of Rs. 1.24 crores was sanctioned by the Bank of India in April,

1975 on 15% margin basis on the condition that the margin would be raised to 25 % within one year of starting of the Dairy. However M/s.

Warana had collected only Rs. 9.50 Lakhs as Share Capital which was only 6.5% of the project cost. Inspite of this, Bank of India financed the project as a special case.

Since this project is financed by Nationalized Bank, they were required to pay interest at the rate 14.75% initially. At a later stage, this project was approved for refinance by Agricultural Refinance Development

Corporation. Hence the rate of interest came down to 11%. The higher rate of interest, non-availability of share capital and no subsidy from State

Government lead to higher cost of the project initially.

Since 1969, M/s. Warana was having financial difficulties. The entire production viz. S.M.P., ghee as well as buffalo milk was being given to the

Government of Maharashtra till 1978-79. Since the Government was paying only provisional bills for the products supplied to Government Milk

Schemes, amount of pending bills with the Government was more than 1 crore rupees. This situation forced M/s.Warana to enter the market 235 directly to sell miik and miik products. Consequently the marketing activities in Bombay as weii as other cities of Maharashtra were started in

1980-81.

Till 1979, the accumulated losses were more than Rs. 45 lakhs whereas the share capital was less than Rs. 12/- lakhs. Within 4 to 5 years, Sangh could wipe out the accumulated loesses and was able to pay first final bill over and above Government prices In the year 1983-84.

Milk Products.

Milk processing and manufacturing of ghee and skimmed miik powder started in 1975-76. Installed capacity of skimmed milk powder plant is 5 tonnes per day and that of ghee/ butter plant is 3 tonnes per day.

Shrikhand production started in the year 1982-83. In 1982-83, production for the year was 218 tonnes and in 1997-98, the production of shrikhand is 2078 tonnes per annum.

The Research and Development Department was established in 1990 to develop new products . Lassi has become a famous brand in Bombay and other parts of Maharashtra, it has become a good substitute for cold miik.

Maiied miik products

The industrial license to manufacture 5000 tonnes of Malted Milk Food per annum was granted in 1989. The project cost is around 3 crores. The production was started in August 1991 and the production of BOURNViTA by the end of March 1992 was 1200 M.T. Warana Dudh Sangh is the only

236 co-operative industry in iV^aharaslitra which has diversified in

manufacturing such products.

Bombay Branch.

The branch started with the sale of mill< of 1200 litres per day in 1980.

Today, it is 2 lakh litres per day. Shrikhand is sold at the rate of 2 tonnes

a day. Initially the branch was established in the hired premises at Taloja.

A small cooler with a capacity of 3,000 litres was installed and the

distribution was started through few centres of Apna Bazar. When the

sale reached up to 12,000 litres per day, space became insufficient. The

Sangh then hired a cold storage from Mafco Limited in 1980. Sangh

started production of shrikhand in 1982. It was manufactured using home

made system of shrikhand manufacturing. Initial sale of shrikahnd was 50

kilogram per day. Because of its quality and test, it has become so

popular, that today almost 2 tonnes is consumed in Bombay every day.

In 1985, Sangh purchased a cold storage with 10,000 square feet built up

area and 3,300 square feet cold store area at Turbhe. it has assisted in

selling operations of Bombay. Simultaneously, M/s.Warana purchased

47,000 square feet land at M.I.D.C. Vashi and an independent processing

and packing station is establishing on this land. Almost all employees at

Bombay branch are from Warananagar area as per the policy of

developing local people.

FACILITIES TO FARMERS (MILK SUPPLIERS)

The following activities are undertaken under this scheme.

A) At farmers level.

237 1) M/s. Warana is giving 25% to 30% subsidy on purchase cost of milcii

animals and approx. Rs. 25 to 30 lakh are spent for this developments

activity per year.

2) Cattle feed : Independent cattle feed mixing plant having capacity of

100 tonnes per annum has been set up to distribute quality feeed to

the farmers.

3) M/s. Warana has started a unique scheme named 'JIVIT SURAKSHA

YOJNA' under this scheme in the case of death of a milk producer,

either natural or accidental, M/s. Warana gives suitable compensation

to the legal heir of the diseased milk producer.

4) M/s. Warana is rendering free veterinary services to its milk producers

through mobile veterinary routes visiting villages once a week for

treatment, operation and artificial inseminations. Round the clock

emergency veterinary services are provided. Seven Veterinary

Doctors are employed and about 12-13 lakh of rupees are being

spent every year. Vaccination against foot and mouth disease is also

given every year at a nominal cost.

5) In rural area women community is involved in management of animals

and milk production. Seminars are arranged at village level fore these

women. The idea behind is to give scientific information about feeding

and milking etc. to the rural ladies.

6) Cattle show and calf rallies: Cattle show and calf rallies are being

organized areawise to promote farmers towards rearing good milch

animal.

7) Fodder development: Fodder seeds are being distributed at 50%

subsidy and chopped dry fodder at 25 % subsidy.

238 B) At society level

1. 75% subsidy is given for purcliase of semen for in time milk collection.

2. 50% subsidy is given for the purchase of electronic milk tester for fat

analysis.

3. Up to 20% subsidy is given for construction of office building by the

milk society.

4. For examination of animals, crates are supplied on 50% subsidy.

5. Training is organised for Society Personnel to train them in Society

Management.

HUMAN RESOURCE DEVELOPMENT

Except in 1981, when workers went on strike, M/s. Warana has increased

the salaries and other benefits to the workers proportionally. Today, apart

from attractive salaries, following schemes are existing for welfare of

Human Resources.

1. Family Pension Scheme :

Provident fund. Leave Travel concession. Medical aid etc. are the normal

benefits. Apart from this Sangh has started a unique scheme named

"Family Pension Scheme" (NIVRUTI VETAN YOJANA) with the help of

Warana co-operative Bank. Under this scheme, 5% of worker's salary is

deducted per month and an equal contribution is given by the Sangh. This

scheme is applicable to each worker for maximum of 30 years period or

up to super annuation age i.e. 60 years. After this period the wori

get an fixed amount per month till his age is 90 years. This will be given

to him or to his legal heir in case of deceased workers.

2 Credit Society:

239 Loans are made available to workers for their immediate needs through

credit society. A grocery shop is also run by the society for which Sangh

charges a nominal rent.

3. Amrit Janseva Vishvast Mandal:

Amrit Janaseva Vishvast Mandal is an independent tmst managed by the

workers. A temple is constructed by this trust, which has become a centre

of attention of the young one's and the elderly community living nearby for

spiritual, cultural and traditional activities.

4. Ladies Co-operative Society:

This Mahila Co-operative is established to involve mral women in co­

operation which is beneficial for the overall development of Warana belt.

Savitri Co-operative Mahila Society has a membership of about 700 rural

ladies. Sangh requires plastic cups for packing of Shrikhand which are

manufactured here. Society started with Rs. 3 lacs, as share capital

Today total investment in plant and machinary is about Rs. 30 lacs and 50

ladies are working in this organisation.

5. Bonus and Exgratia:

20% bonus and 10% to 14% exgratia on total salary is being paid in cash

twice in a year.

6. Workers Welfare and games:

Amrut Kamgar Kalyan Krida Mandal has been established separately.

Games and Sports activities are organised by this 'mandal'. Also financial

aid is given to workers or his family members for the treatment of major

sickness.

240 WARANA 'S VISION

The major future plans are as follows.

1. Production of condensed milk.(milk reduced by evaporation to thick

concentration, with sugar, added)

2. Increase in the production capacity of skimmed milk powder and ghee.

3. Production of high value added dairy products like Mangogi (mango

pulp and milk), Yoghurt, Slimex (a dietary product for weight loss) etc.

4. Artificial Insemination Centres in big villages.

5. Construction of silos, pits at village level for storing and preservation

of green fodder.

6. Manufacturing of co-extruded polythene film and corrugated boxes

through ladies co-operative society.

7. Export of shrikhand and other dairy products.

8. Green fodder development programme.

SAHAKAR MAHARSHI TATYASAHEB KORE

Introduction of Warana Dairy Industry will remain incomplete without mentioning of 'Sahakar Maharshi Tatyasahed Kore'. He is the person behind today's computerised Warana Vally,. The seed was put in 1953.

In 1959, sugar factory was established. He developed well-planned

WaranaNagar Village, along with Shikshan Mandal, which runs primary school. Engineering, Arts, Commerce, Science and Polytechnic college and many high schools and 'balwadis'. For making use of the bi-products ofsugar industry, he established other industrial units like paper plant and alcohol fermentation plant, which besldds increasing profit also reduced air and water pollution. Waste matter is today used as fertilizer.

Tatyasaheb established 'Warana co-operative bank along with 'Warana

Bazar" (a chain of super mari^et) Warana Bazar is the first rural

241 supermarket of India. Tatyasahed also established other co-operative projects like Warana poultry and Warana Horticulture Farm. 'Warana Bal

Vadyavrund' the well known orchestra of children of villagers and construction of 'Lai Bahadur Shastri Bhavan' an auditorium cum theatre is the evidence of his love for art and culture. He also established 'Mahatma

Gandhi Charitable Trust' which runs a modem, well equipped hospital with a facility of 50 beds and expert professional doctors.

Warana Dairy project is the major successful project by Tatyasaheb.

Today every farmer in the area is associated with Warana Dairy, since it provides a major secondary source of income. It also provided employment to a large number of persons.

Warana is an ideal example in today's world for its development through co-operation. The vision for this was set by Tatyasahed Kore. He was really the milkman of Maharashtra.

STRUCTURE OF MARKETING DEPARTMENT AT M/s. WARANA

In Warana Dairy Industry the Marketing Department was established in the year 1979-80, to market milk and milk products in local cities and

Bombay. Initially, sale in the local cities like Ichalkaranji, Jaysingpur, etc. was 125 litres per day and 1,200 litres per day in Bombay. Warana Dudh

Sangh was making heavy losses by selling milk because of the higher cost of transportation.

From the outside, bankers were pressing for payment of their overdue installment and accumulated interest. Interest itself was overdue to the

242 tune of about 95 lacs of Rupees. Since Warana Dudh Sangh was not able to purchase even a single packing machine for milk packing, they started milk sale in unprinted bags and filling and sealing was done manually at that time.

Workers were unhappy since they were paid very low salaries and they went on indefinite strike in January 1981. Inspite of all these hurdles,

Warana Dudh Sangh continued its sincere efforts of marketing of its products under the able guidance of Tatyasaheb Kore and the sale of milk started increasing gradually. Today, Warana Dudh Sangh is the most successful Dairy in Maharashtra in marketing of dairy industry products. Today, sometimes they are forced to curb the activities because of the shortage of the raw milk.

ORGANISATIONAL STRUCTURE

Being co-operative dairy unit, the Chairman and the Board of Director's are the chief decision makers. The chairman and the directors are responsible for policy making and decision making while the managing director executes the policy. Managing Director is the Chief Executive and is responsible for running the unit on day to day basis. All the departmental heads report to the Chairman and Managing Director concurrently.

243 CHAIRMAN AND MANAGING DIRECTOR'S

MANAGING DIRECTOR

MARKETING MANAGER i MARKETING OFFIER (BOMBAY BRANCH) i MARKETING EXECUTIVES

M/s.WARANA'S MARKETING ORGANISATIONAL STRUCTURE

EMPLOYMENT IN MARKETING DEPARTMENT

The policy of the management regarding the employment is beneficial for the local residents. The important criteria for the selection of the candidate is, he or she should be a permanent resident of the area of operation of

Warana Dudh Sangh, which is some selected villages of Kolhapur and

Sangli districts. The area being rural, the quality of education available is low and hence most of the employees are not professionals.

244 PRODUCT RANGE

1. Cow milk : Cow milk with 3.8 percent to 4.0 per cent of fat and 8.5 percent

to 9.5 percent SNF. It is consumed by Diabetic and Heart patients

because of low fat content.

2. Whole milk : Buffalo milk with minimum 6.5 per cent fat and 9.0 per cent

SNF (solid not fat).

3. Standard Milk : It is high-breed cow milk with 4.5 per cent to 5.0 per cent

fat and 8.5 per cent SNF.

4. Skimmed milk powder: This fat free powder of milk is prepared by cooling

the vapours of fat free milk. Consumed mainly in the areas where regular

supply of milk is not available, it can be used for making tea or coffee and

can be given to babies.

5. Lassi: The well-known form of milk, prepared with value addition. Mostly

consumed on Railway stations, picnic spots and public areas.

6. Shrikhand : The highest selling product which is prepared from curd.

Besides curd, it contains sugar, dry fmits and many other nutritious and

tasty edibles.

7. Ghee : Ghee is extracted from cream of milk by using modem and latest

technology.

PRODUCT IDENTIFICATION

In today's competitive economy, similar products are available and every

producer wants to capture a large share of the market. This is done by

product differentiation methods. Packing, branding and grading are the

common methods that are used by the producers. This technique of

making a commodity popular in the market is known as 'product

identification' which, in quantitative terminology, means a certain standard

with a definite quality. Packaging, labelling, bnlNding and grading are the 245 vital marketing tools used in the marketing of milk and milk products in dairy industry and the private entrepreneurs and co-operative dairy organisations are innovatively using these tools.

BRANDING

A brand is a name, term, symbol or design intended to differentiate one's goods and services from the competitors. Normally Branding strategy is an integral part of overall marketing strategy. Branding, lebelling and

packing are complementary to each other. Once the brand is registered, it becomes legal and assumes the form of the trade mark, thus preventing others from making the use of that particular brand.

Branding is helpful in following ways.

1. To create competitiveness among the producers and the sellers.

2. To make effective advertising policy.

3. Branding helps in creation, stimulating strengthening or maintaining

product demand.

Warana Dudh Sangh, has a well known symbol branded, in the word

'WARANA', on the bags of milk, ghee, shrikhand and other products and

is easily distinguishable from other types of same products.

GRADING

Grading is giving a rank, class or value to similar products with varying

degrees in quality and purity. When the milk products are sold with

varying degree of purity, they are given different classes or grades and

are priced accordingly by manufacturer and for valuing by the buyers. For

example 'grade A,B,C etc. Grading is widely dependent on the local

requirement or demands of the trade.

246 The grading of milk and milk products in dairy industry started long time back. With the passage of time and advancement of civilisation, grading of milk and milk products assumed growing significance. Today grading is undertaken by manufacturers with varying names and several standards.

Warana Dudh Sangh has two grades of pasteurized milk, one is standard milk and other is cow milk. Both are marketed as per government standards. Shrikhand is also having two grades, one is 'kesharyukta shrikhand' and the other is 'ilaichiyukta shrikahnd'. The grade of

'kesharyukta shrikahnd' is little higher as the dietary value of 'Keshar" is higher. Ghee, lassi and skimmed milk powder are the standard products.

PACKAGING

Packaging gives security and safety to the commodity while transporting it from one place to another. Package design is the combination of the

Designer's creative skills and the marketer's knowledge about what the consumer likes. Today packaging has become a marketing necessity.

Customers make their decision of purchase by seeing the packing.

The management has recognized the importance of packaging. In

Warana, the transit type of packaging is used wherein the milk and the milk products are packed and sold by the industry to the buyers.

Similarly, Shrikhand is packed in decorated containers bearing name of the unit and transported in polythene bags, plastic containers and paper bags (for skimmed milk powder) are also used.

LABELLING

The label nomially carries verbal information about the product. In

Warana , brand labels are used for marketing of milk, shrikhand, ghee and

247 lassy. Descriptive and informative type of labelling is used for marketing of skimmed milk powder to appraise the consumers of nutritional values of the skimmed milk powder, its date of packaging and date of expiry, retail price, fonnulas of production and also unit price for consumption.

PRICING

Warana Dudh Sangh charges reasonably, hence their price are very competitive.

QUALITY OF WARANA PRODUCTS

All the Warana products are sold first in the market as the consumers prefer to buy Warana dairy products. The consumers are very happy with the quality of products. Shrikhand is very popular for its taste. In case of milk, consumer feel that Warana milk is of best quality, it contains maximum per centage of fat enabling the consumers to prepare ghee at their home. Same is the opinion about Lassi which is more popular in urban areas. The quality of skimmed milk powder is also competitive.

TRANSPORTATION

Warana Dairy Industry has bulk carrier tankers, for transportation of fluid milk. They also have refregerated containers for the transportation of products like ghee, shrikhand, etc. Tankers or refrigerated containers are hired from outside depending on the need.

DISTRIBUTION NETWORK

Initially milk is transported through tankers from the main plant at

Warananagar to Bombay branch. The milk is again tested and processed there and distributed in and around Bombay through refrigerated 248 cx}ntainers. Other dairy industry products are also distributed in a

systematic manner; the loaded container starts from main plant and also

from the Bombay branch for distribution. Each vehicle has been given

specific routes where it drops the products at every retailer up to the last

destination. The same vehicle returns back collecting empty crates and

other material used for packing. The distribution network of dairy industry

'products of Warana Dudh Sangh is as follows.

1. Islampur-^ Tasgoan-• Faltan-^ Baramati-^ lndapur->Aklui

Tembhumi _^ Solapur _^Akkalkot

2. Tuljapur ->• Usmanabad -• Nilanga-^ Latur -• Nanded.

Parabhani -•Purii -• Ambejogai

3 Gargoti -• Ajra -• Belgaum -• Hubli ->• Fonda -• Margoan

Venguria -• Ambejogai

2 Peth -• Karad _^ Satara-^ Pune ->• Shirpur _^ Nagar

Shrirampur _^ Shirdi _^ Kopargaon _^ Dhule

5 Malkapur -•Sakharpa-• Lanja-• Rajapur -> Ratnagiri-^ Devmka.

Khed-^Chiptun -^Dapoli

6 Sangola -• Pandharpur _^ Kurduwadi->- Barshi _• Karmala

Jamkhed _^ Beed _^ Jalna _^ Aurangabad

7 Kolhapur _^ Ichalkaranji -• Jaysingpur _^ Miraj.^ Shirol_^ Sangli

Madhavnagar

Following is the distribution networi< of Bombay Vashi Branch

1. Panvqk Raigad-^ KhopoH>. Lonavala

2. DombivU^ Kalyaa>. Ulhasnagar-^ Badlapur

3. Bombay city and suburbs

249 Following are the districts of Maharashtra where the dairy industry

products of Warana Dudh Sangh are marketed.

1 Kolhapur 9 Beed

2 Sangli 10 Nanded

3 Satara 11 Parabhani

4 Pune 12 Jalana

5 Bombay 13 Aurangabad

6 Soiapur 14 Ahmednagar

7 Usmanabad 15 Nashik

8 Latur 16 Dhule

In Bombay district following areas also included.

1. Bombay Suburbs

2. Thane

3. New Bombay

4. Kalyan

5. Dombivali

CHANNELS OF DISTRIBUTION AT WARANA

AGENTS

RETAILERS RETAILERS

ULTIMATE CONSUMERS

250 Warana Dudh Sangh has appointed authorised agents in various parts of

the state who are governed by the rules of Warana Dairy. These agents

supply Warana Dairy products to the retailers. Retailers then sell, these

products to final consumers Warana also distributes its dairy products to

authorised retailers directly. The agency of the retailer is terminated if

they are found malpractising. Warana has also opened its own retail

shops in major locations in the state for distribution of its various products.

All this is done to prevent malpractices of middlemen.

In summer season, there Is always scarcity of milk and dairy products are

scare due to poor production of milk. Middlemen take disadvantage of the

situation by raising the prices of milk and dairy products. A well managed

distribution channel will help curbing such activities.

ADVERTISING AND SALES PROMOTION

Advertising basically is any paid form of non personnel presentation or

promotion of ideas, goods or services by an identified sponsor. Today's

advertising industry is of the tune of 2000 crores. Advertising needs to be

done not only to maintain the existing demand but to increase the demand

by wining customers who use competitor's products

Warana's product range, is large, hence advertisement through marketing

department is an essential aspect of marketing Dairy products. Last year

they have spent Rs. 80 lacs. The major media used are

1. Press advertising : It includes advertisement in newspapers and

magazines. New papers can be classified into local level, state level and

nation level newspaper. The magazines are selective and are having wide

subscription.

251 Press advertising of the Warana Dairy Industry in state level is through

Indian Express, Loksatta, Bombay Samachar, Daily Sakal, Maharashtra

Times and Navbharat Times. In local news papers like Daily Sakal

(Kolhapur, Pune), Lokmat (Nagar, Aurangabad), Gomantak (Goa), Tarun

Bharat(Belgaum), Gavkari (Nashik), Aikya (Satara) and Satyavadi, Samaj

and Pudhari all the three from Kolhapur, and in national news papers likes

Times of India and Indian Express.

Advertisement in the newspapers Is much effective and less costlier.

Warana products have all over India market, hence they are using all the

three classes of newspapers for the advertisement of their products.

2. Broadcasting advertising : Broadcast media includes Radio and TV

media. Since, marketing network of Warana Dudh Sangh is spread all

over Maharashtra and even outside, Radio and TV are the ideal mediums.

They release Radio advertisement from Bombay, Pune, Aurangabad,

Parabhani, Ratnagiri, Panjim, and Sangli stations. TV advertisement is

released only from Bombay Centre. Advertisement on TV is released

occasionally as advertisement on Radio is released frequently.

3. Outside advertising : Outdoor advertisement includes posters,

paintings, neon signs, hordings, stickers, calenders etc. Warana Dudh

Sangh is also utilizing this media. The industry is distributing good quality

to its retailers, customers and milk producers. Posters and signs of

Warana Dairy Products are distributed to its retailers, stockists and other

shops in public places all over Maharashtra. The packing itself in which

products are packed are attractive. This attractive packing also plays very

important role in outdoor advertisement.

Warana has been successful in creating the necessary awareness by

using the correct media with a minimum cost.

252 SALE OF DAIRY INDUSTRY PRODUCTS

Selling dairy products is tough job because of the perishablility factor, however Warana's quality and the social-service oriented approach has established a lot of goodwill among the consumers. Warana is selling its dairy products in Bombay and suburbs through its Bombay branch. Milk processing and manufacturing of ghee and skimmed milk powder has been started in 1975-76. Installed capacity of skimmed milk powder plant is 5 tones per day and that of ghee/ butter plant us 3 tonnes per day.

WARANA NETWORK - THE FIRST IT NETWORK OF RURAL INDIA

Warana has been in the news currently not for sugar or milk politics. With

10 servers, two very small aperture terminals (V-sats), about 165 personal computers (PCs) and an Internet Kiosk in every village, M/s.Warana is the first rural networking project in India and its 4,00,000 people may be the best wired rural community in the world with 70 internet kiosks.

Information in Marathi on the weather, crop prices and harvesting schedules is available. The central and state government along with

Warana co-operatives themselves are investing Rs.3.5 crore to build this communications network.

Last year, its villages generated an income of roughly Rs.600 crore. The average Warana citizen makes Rs. 15,000 a year. Even higher than

Punjab's Rs.14,000. Sugar and milk, the props of the local economy are controlled by the WGC. The Warana Dairy Sangh collects 2,50,000 litres of milk a day the Warana Sugar Co-operative has an annual revenue of

Rs.200 crore and the Warana Bazar Co-operatives runs a chain of 29 retail stores.

253 Literacy is a high 90%, power supply is regular, and there are an estimated two telephone lines per thousand people, the national average is less than one. Add to that two Aptech computer training centres and many others offering computer courses.

For the IT Task Force, which shifted through 20 districts before settling on

Warana, this 1,50,000 acre area was simply the best point to kick off the pilot project in June 1998. The Union government and Maharashtra bore

50% and 40% of equipment expenses, respectively, with the Warana

Shikshan Mandal (WSM) contributing 10% plus the infrastmctural cost.

Each of the 70 information kiosks- equipped with unintenupted power systems - cost Rs. 50,000. There is also the cost of manning, housing, maintaining the network. The Pune office of the National Informatics

Centre (NIC), the government's arm for bringing information technology to public sector undertakings and ministries, is doing the rest. It developed the software in Marathi, picked the hardware and trained 100 people who will man the 70 kiosks and the six business and IT centres. Some of the booths have been already operatiional.

In case of complaints, the operator keys in the complaint and it goes directly to the managing director or departmental heads of the co­ operative society. The complaint are answered through e-mail and received in the village kiosk. This incidentally fulfils the second aim of the project: transperency. The first, efficiency, has already been fulfilled;

When the dairy goes online, payment for milk will be credited to the supplier's account in two-three days instead of 11 days as of now. Or

254 consider the retail chain. Earlier individual shop would manually track inventory and replenishments would come at fixed intervals. Now tracking is by computer hence continuous, so replenishments come as and when required. Result: inventory has been cut by 25%.

The sugar factory, the the dairy and retail chain, weather news, general information and grievance are already online, with the hospital, dairy pulp factory and others to follow in the next year. During this time six IT centres, set up to help students from classes four to 12 for study using computer, will also become operational.

The software for this can be classified into three catagories: intranet application, Internet applications and stand alone application. The link to the sugar factory, the dairy and the links among the various retail store are intranet application which can not be accessed from outside. But some of the modules - weather forecasts, crop information systems downloadable application forms for ration cards, birth certificates etc- are available on the Internet. Finally, some of the learning applications - through CD-ROMs - are available only on individual computers and are not netwoked.

The time farmers save and the increase in factory's efficiency eventually means more profits for everybody since most of the farmers are members of the society. The state government has been requested to convert each of the 70 kiosks into collection card applications for the state electricity board, ration card applications and railway ticket bookings. Each of these activities will generate money either through commissions or the Rs.2-5 fee that the villager can be charged for the service.

255 c). WORKING PRACTICES OF GOKUL

GOKUL {ISO9002) COMPANY

Most success stories have a humble beginning and so has been with

Kolhapur Zilla Sahal^ari Dudh Utpadak Sangh Ltd. On 16* march 1963, a spark stormed a fire to help the White Revolution revolt heavily, on this day came into being, the Kolhapur Zilla Sahakari Dudh Utpadak Sangh

Ltd. With the introduction of its popular brand of 'Gokul' milk and its wide range of milk products into the Market. Later in 1978, the National Dairy

Development Board included Kolhapur Zilla under the Operation Flood area. This proved to be the turning point for Dudhsangh. Because by the end of 1985, a dairy plant in the Dudhsangh's own premises in Gokul

Shirgoan MIDC was commissioned. Along the way, the Government Milk

Scheme in Kolhapur was handed over to the Sangh but Prior to this , the chilling centres of Dudhsangh were established at Gadhinglaj and Bidri about 75 &50 kms repectively away from Gokul Dairy.

MILK PROCUREMENT

When it comes to milk procurement, Gokul Dairy has always set an example. Consider the year 1985, when the average milk procurement was 1,14,836 litrs. per day with 676 village level societies affiliated to the

Dudhsangh. Sinch then, the figure has shot up year after year. Like in

1997, the average and peak procurement was 4,24,250 and 5,29,172 litres, per day. Presently, it is 5,40,000 Itrs. per day. In the last flush season, it touched an unprecedented 4,65,000 Itrs. The rated capacity of the dairy is only 4 lakh Itrs. per day. All this milk is collected from 1884 village level dairy co-operatives on 142 milk routes. As for the proportion of Buffaloes and Cows milk, its 75% and 25% respectively. The buffalo

256 Fat is 7.2T% and SNF is 9.4% and tlie cow Fat 4.2% and the SNF is

8.6%.

THE GOKUL PRODUCT RANGE

THE Dudlisangh's products are very popular in the marl

"Gokul", they include White butter, Table butter, Shrikhand and Ghee.

Besides, of course, skimmed milk powder which is IS-Part I and II Extra

Grade which is on its way to capture the global market.

OBJECTIVES OF KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK

SANGH LTD.

1) Development of infrastructure for procurement of milk in rural areas of

Maharashtra and to ensure an assured market for milk producers

throughout the year, as well as the best remunerative prices.

2) Fulfil the growing needs for milk and milk products of the consumers in

Maharashtra and else where.

3) Organise the co-operative structure of milk producers at the village

level.

4) Supplement the programme extension and inputs, with particular

reference to feed and fooder production and implement an intensive

breeding programme for milch animals to increase milk production.

5) Imparting training for developing human resources at rural level for

effective leadership, management skills and improvement of services

to rural milk producers.

6) Running co-operative development cell to increase awareness and

active women participation for better management of co-operatives

and their positive role in democratic setup.

257 INNOVATIONS

Gokul Dairy is always lool

Heating System (of 50,000 Itrs. capacity) is expected to save expenditure on furnace oil to the tune of Rs. 6,00,000 per annum. Talking more about oil / energy conservation, Gokul Dairy processes 160-170 litr. of milk, as against the average 115 Itrs. Similarly to process 36 Itrs of milk 1 unit of electricity is consumed, whereas the average figure is 30 Itrs.

GROWTH/ACHIEVEMENTS AT A GLANCE

For Gokul dairy, thanks to its high production standards and exemplary performance, winning National Productivity Council Awards have been but natural. The first one was for the year 1988-89, in the category of best milk Products Plant. The second, for the year 1992-93, in the category of outstanding liquid milk plant. The third and the fourth one was in the year

1993-94 in the category of best Dairy processing industry and Best dairy development and production in co-operative and public sector. Gokul again received national recognition in 1994-95 by getting NPC Award along with two National Awards for best performance in animal feed processing.

SPREADING OUT

Beginning 1988, liquid milk marketing was launched in Mumbai by the

Dudhsangh. Sales, initially, were 16,000 LPD. Today Buffalo, Cow and toned milk, together account for more than 3LLPD. In 1993, Gokul milk was launched in Pune where at present the sale is around 20,000 LPD.

Supply of milk to the State Federation and the Goa Union has been regular for the past many years.

258 EXPORTS

Gokul Skimmed Milk Powder (Extra Grade) has been exported to Sri

Lanka. The first step in International marketing. With GATT provision benefits, the sangh has entered in to the global Market.

MILKOTESTERS

The Dudhsangh has supplied 2043 milkotesters to village dairy co­ operatives with the present level subsidy of Rs.3,000/- per milkotester, for encouraging improvement in quality of milk.

COMPUTERS

Use of information technology in operation management and decision making is considered vital at Gokul, with inspection by computers at all levels, this efficiency has been achieved. Computerisation for working of milk co-operatives is encouraged by providing subsidy as input.

GOKUL GRAM VIKAS YOJNA

The Dudhsangh, while keeping a keen eye on the quality of its products, also believes in the development of its co-operatives. In March 90, with the help of National Dairy Development Board "GOKUL GRAM VIKAS

YOJNA" was implemented. This programme covered Women's education. Member education. Management Committee Training,

Secretary Training, Procurement and Input Training, Youth Group

Discussion, Women Group Discussion, Leadership Development,

Refresher Courses, Recently, it has also included adoption of villages for development. Initially, 175. villages were the beneficiaries. This number has now rose to 525.

259 CATTLE FEED PLANT

Dudh Sangh started procurement of 10OMT cattle feed to meet nutritional requirement in the year 1982.

The plant capacity was expanded to 200MTPD for meeting increasing need as a part of technical input programme. The production, later was switched to by-pass feed to meet more demand at same production capacity. The Cattle Feed is marketed under the most accepted brand called 'Mahalaxmi'

OTHER ACTIVITIES

Preventive and Clinical Veterinary Services

A team of 45 trained veterinary graduates is recruited by the organisation to cater the preventive and clinical veterinary needs of the dairy farmers.

Each veterinarian looks after an area of about 10 villages and provides these mobile services round the clock at their doorstep, by providing each field veterinarian with a vehicle.

Breeding Services

In its operational area, 240 artificial insemination centres have been established by the Union. All the necessary inputs to these centres such as liquid nitrogen, semen, sheath and even cryogenic containers are made available by the union. At present, 300 villages are taking advantage of these services.

Fodder Development

Availability of sufficient quantities of good and nutritious fodder is essential prerequisite for sustained milk production. In view of this, a

260 team of 4 agricultural graduates with the assistance of 5 supervisors, is working under fodder development section of the union. Under this programme, seeds of improved fodder varities are distributed at 25% subsidised cost, besides manual chaff cutters and power driven chaff cutters are distributed at 25% and 30% subsidy respectively. About 100 tonnes of fodder seed is distributed annually.

Embryo Transplantations

Under the national programme of Embryo Transplantation, a State E.T.

Centre was established at Kolhapur, Field operation of which commenced from August 1992, Presently, the conception rate of E.T. is about 35%.

The trend, surely, is encouraging.

BENEFITS TO THE MEMBERS AND OTHERS

Since the entire activities of the Union are monitored, manged and controlled by the elected representatives of primary dairy co-operatives, members and others enjoy abundant benefits. Some of these are-

1 Quality based remunerative price.

2 Make availability of productive cattle of high breeds.

3 Technical inputs are channelled and delivered.

4 Loan and advance guarantee for purchase of dairy equipment and

implements.

5 Community and personality development through co-operative

meeting.

6 Meeting marketing requirements by consistent supply of quality milk

and milk products.

7 Generations of employment to urban populations through growth of

allied Industries.

261 QUALITY MANAGEMENT AND ISO 9002

Under guidance and assistance from NDDB and FAO, Gokul implemented a quality management system. This will improve the quality of the plant and its output, to meet the national standards and also to compete at international levels.

Quality management system has accelerated the business in the following ways.

1 Achieving and sustaining quality of products and gain in customer

satisfaction.

2 Lower operation cost and improved productivity and profitability.

3 Enhanced market share and image.

To give the best service and products to the satisfaction of esteemed customers, Gokul practised quality management from its evolution and in short period now they are going for ISO 9002, and international accreditation for system certification along with HACCP to assure food safety of our customers and our organisation, (already received)

Keeping in mind the objective of Rural Development and the basic faith in the co-operative movement, Gokul has developed the whole district by making the milk producing farmers financially independent. The dairy business has become a parallel profession along with agriculture for the farmers of the district.

The programme for women development has received a very good response and has brought tremendous changes in the basic thinking pattern. In order to encourage the women to be active along with their family members, they are briefed about the activities of Sangh along with

262 financial information. The Sangh has tal^en care that the payment for the

milk is made to the women (from the milk supplying farmer's family) after

every ten days. In order to compete in the market, Sangh has used new

technology and computers in a big way in the Dairy Expansion Plan.

Quality of milk and milk products has been constantly improved and a

nationwide distribution network is being planned. A chilling centre has

been set up at Tawrewadi (Tal Chandgad) with a capacity if 1 lakh litres a

day since August 1997, Similar chilling centre with a capacity of 50,000

litres/day in being set up at Gogawe (Tal. Shahuwadi). Both these

centres are under the expansion plans. Additional packing machines

have been set up at New Bombay (Vashi) to cater to the local demand.

Awards:

Gokul is the first dairy project in Maharashtra to get ISO 9002. It has won

the gold medal for productivity quality and new development from the

Indian Council for Small and Medium exports, New Delhi. Rashtriya

Sahakarita Vikas - Gramin Prabhodhan Sanstha Amravati has awarded

the first prize to Gokul in 96-97 for productivity. The Sangh has

participated in the international Dairy Exhibition held at New Delhi in

March 1998.

Price Increase to Farmers :

To its 4 lakh milk supplying farmers, the Sangh has given more rates than

the Government rates. This extra money amounts to Rs.24,41,000,00/- "^

Milk Collection:

151 routes have been planned for collecting milk which are operated in the morning and evening. 'On line testing' of milk quality is carried out. 263 The milk collection/receiving centre has been expanded resulting in

efficient clearance of tankers. Milk producing farmers and societies meet

frequently in order to solve their doubts/problem if any. Seven Milk-testing

servicing centres have been started at Kolhapur, Borowade chiling centre,

Lingnur chilling centre are working with computers.

Dairy: With a capacity of 4 lakh litres Gokul is the biggest dairy in

Maharashtra. This figure has gone up to 5,50,000/- litres during the peak

season.

Quality: Raw milk is the main source of input. All efforts are undertaken

so that the raw material is of good quality. The milk supplying farmers/

societies have a major role to play here. H.A.C.C.P., the international

organisation has set guidelines for supply of milk and milk products.

Distribution: The liquid milk is supplied to Kolhapur, Ichalkarnji,

Pethvadgaon, Ratnagiri,, Rajapur, Chiplun, Kankavli, Kharepatan, Satara,

Belgaum. Milk products are supplied through Sholapur, Tuljapur,

Usmanabad, latur alongwith above mentioned places.

Rune Branch: Sales of milk started in 1993 with a figures of 10,000

litre/day. This figure has gone up to 21,000 litres, since last five years

with hardwork and careful planning. The figure is planned to raise to

30,000 litres/day.

Vaslii Brancli: A careful planning since last ten years has provided the

solid support for increasing the supply /sale through Bombay branch.

Toned milk is added since last year in the supplies to Bombay. The

264 average sale is 3 lakh litres. At present the packing capacity is 3,50,000 litres at Imperial Cold storage. A owned place is bought from CIDCO and a packing station is being built.

Gokul Gram Vikas Yojna: The schme was submitted to NDDB in 1995 and implementation is started in 1996, 200 villages are included Gokul

'Ambasadors' are selected and sent to Kolhapur, Bidri, Tawrewadi under the scheme. Literacy campaign. Superstition Eradication, Women leadership scheme, Training for self employment. Family Planning are some of the activities undertaken.

Veterinary Aid: 30 mobile veterinary facilities are available for the milking farmers on a 24 hour basis. Vaccination programme for different disease has been undertaken. Free medicines are provided under the first aid scheme of primary milk societies 's trained workers.

Fodder Development: Free fodder is distributed to the farmers Low quality fodder has been processed to, increase its digestibility and nutritional value. The experiment has been done in various places in the district.

Artificial Insemination: To increase the productivity of animals this facility is provided

Training: Various kinds of training programmes are conducted in

Kolhapur, Sholapur, Ratnagiri, Yavatmal and Sindhudurg, in the areas like supervisory skills. Milk Testing Training, Artificial Insemination, First aid,

Communication Skill etc. 265 Mahalaxmi Fodder Unit: has won prizes since last four years from

National Productivity Council. App. 62,000 tons of Mahalaxmi fodder is produced. Another 10% was ordered from outside sources. Considering the demand, the capacity for the plant is being increased to 400 tonns / day from 200 tonnes / day.

266 INSTRUMENTATION IN MARKETING

Scale 1. strongly Disagree. 2. Disagree. 3. Neither Agree nor Disagree. 4. Agree. 5. Strongly Agree.

(RESPONSES) Item Scale Statements CHITALE WARANA GOKUL BANDHU A) Market 1. In our firm, we meet 3 2 4 Orientation with customer at least (Intelligence once a year to find out Generation) what products or services they will need in the future.

2. Individual from our manufacturing/ production department interact directly with customers to learn how to serve them better.

In our firm, we do a lot of in-house market research

We are slow to detect changes in our customer product perfonmance

We survey end users at least once a year to assess the quality of our products and services

Data on customers satisfaction are disseminated at all levels on our firm on a regular basis

267 Item Scale Statements CHITALE WARANA GOKUL BANDHU 7. There is minimal 1 communication between marketing and manufacturing departments concerning martlet developments.

When one department finds out something important about competitors, it is slow to alert other departments.

B) Martlet 1. It takes us forever to Orientation decide how to respond to (Response our competitors price Design) changes

2. Mari

3. For one reason or another we tend to ignore changes in our customers, products and services needs.

We periodically review our product development efforts to ensure that they are in line with what customers want.

5. Our business plans are driven more by technological advances than by mari

6. Several departments get together periodically to plan a response to changes taking place in ourbusiness environment.

268 Item Scale Statements CHITALE WARANA GOKUL BANDHU 7. The product lines we sell 1 depend more on internal politics than real market needs.

C) Market 1. If a major competitor Orientation were to launch an (Response intensive compaign Implementation) targeted at our customers, we would implement a response immediately.

2. The activities of the different departments in our firm are well coordinated.

3. Customer complaints fall deaf ears in our firms

Even if you came up with a great marketing plan, we probably would not be able to implement it is in timely fashion.

We are quick to respond to significant changes in our competitors pricing structures.

6. When we find out that customers are unhappy with the quality of our service, we take conrectlve action immediately.

When we find that customers would like us to modify a product or service, the departments involved make concerted efforts to do so.

269 Item Scale Statements CHITALE WARANA GOKUL BANDHU D) Top Top managers repeated Management tell employees that our Emphasis firm' survival depends on its adapting to marketing trends.

Top managers often tell employees to be sensitive to the activities of our competitors.

Top managers keep telling people around here that they must gear up now to meet a customer's future needs.

According to top managers here, serving customers is the most important thing our firni does.

E) Top 1. Top managers in our firm Management believe that higher Risk Aversion financial risks are worth taking for higher rewards.

Top managers here accept occasional new product failures as being normal *

3. Top managers in our firm like to take big financial risks.

Top managers here encourage the development of innovative marketing strategies, knowing well that some will fail.

270 Item Scale Statements CHITALE WARANA GOKUL BANDHU

5. Top managers in our firm 5 4 3 like to "play it safe".

6. Top managers around here like to implement plans only if they are very certain they will work.

F) Inter- 1. Most departments in this departmental business get along well Conflict with each other

2. When members of several departments get together, tensions frequently run high.

People in one department generally dislike interacting with those from other departments.

Employees from different department feel that the goals of their respective departments are in harmony with each other.

Protecting one's department turf is considered to be a way of life in our firm.

6. The objectives pursued by the marketing department are incompatible with those of the manufacturing department.

271 Item Scale Statements CHITALE WARANA GOKUL BANDHU 7. There is little or no-Inter­ departmental conflict in our firm.

G) Inter- 1. In our firm it is easy to departmental talk with virtually anyone Connectedness you need to; regardless of rank or position.

2. There is ample opportunity for infomrial "hall talk" among individuals from different departments in our firm.

3. In our firm, employees from different departments feel comfortable calling on each other when the need arises.

4. Managers here discourage employees from discussing work related matters with those who are not their immediate superiors or subordinates.

People around here are quite accessible to those in other departments.

6. Communications from one department to another expected to be routed through "channels".*

7. Junior managers in my department can easily schedule meeting with junior managers in other departments.

272 Item Scale Statements CHITALE WARANA GOKUL BANDHU H) Formalisation 1. I feel that I am my own boss in most males

A person can make his own decisions without checking with anybody else.

How things are done around here is left up to the person doing the work

People here are allowed to do almost as they please

Most people here make their own rules on the job

6. The employees are constantly being checked on for rule violations.

People here feel as though they are constantly being watched to see that they obey all the mles.

I) Centralisation 1. There can be little action taken here until a superior approves a decision.

2. A person who wants to make his own decision would be quickly discouraged here

273 Item Scale Statements CHITALE WARANA GOKUL BANDHU 3. Even small matters have to be referred to someone higher up for a final answers.

4. I have to ask my boss before I do almost any thing.

Any decision I make has to have my boss approval

J) Reward System 1. No matter which Orientation department they are in, people in our firm get recognised for being sensitive to competitive moves.

Employees often go above and beyond the call of duty to ensure our firm's well being.

3. Our people have little or no commitment to our firm

4. It clear that employees are fond of our fimn.

K) Basic 1. People in our firm are Philosophy genuinely concerned about each other's needs and problems.

2. A team spirit pervades all ranks in our firm.

274 Item Scale Statements CHITALE WARANA GOKUL BANDHU 3. Working for our firm is like being a part of a big family.

4. People in our finn feel emotionally attached to each other.

5. People in this organisation feel like they are "in it together".

6. Our firm lacks an "Espirit de corps"

7. People in our firm view themselves as independent individuals who have to tolerate others around them.

L) Overall 1. Overall performance of Performance our firm last year.

Overall performance relative to major competitors last years.

M) Market 1. In our kind of business, Turbulence customers' product perfonnance change quite a bit over time.

Our customers tend to look for new products all the time.

Some times our customers are very price sensitive, but on other occasions, price is relatively unimportant.

275 Item Scale Statements CHITALE WARANA GOKUL BANDHU 4. We are witnessing demand for our products and services from customers who never bought them before.

5. New customers tend to have product related needs that are different from those of our existing customers.

6. We cater to many of the same customers that we used to in the past

N) Competitive 1. Competition in our 2 Intensity industry is cut throat

2. There are many "promotion wars" in our industry.

3. Anything that one 1 competitor can offer, others can match readily.

4. Price competition is a 1 hallmark of our industry.

5. One hears of a new competetive move almost every day

6. Our competitors are relatively weak.

O) Technological 1. The technology in our Turbulence industry is changing rapidly.

276 Item Scale Statements CHITALE WARANA GOKUL BANDHU 2. Technological changes 5 4 4 provide big opportunities in our industries.

3. It is very difficult to forecast where the technology is our industry will be in the next2 to 3years*

4. A large number of new product ideas have been made possible through technological breakthroughs in our industry.

5. Technological developments in our industry are rather minor.

277 COMPARISON

M/s. Chitaie M/s.Warana M/s. Gokul Bandhu Type Private Co-operative Co-operative \ Established in 1939 1968 1963 \

Turnover Rs.lOOCr. Rs.lSOCr. Rs.315 Cr.

Regd. Office & factory Bhilawadi Dist. Warananagar Dist Gokul Shirgoan

Sangli Kolhapur Dist Kolhapur

Branches at Pune New Bombay New Bombay

Mf. Milk capacity 2 lakh litres /day 2.20 lakh 4.30 lakh

litres/day litres/day

Distribution Mainly at Pune Bombay and local Bombay and local

2 own shops area, Kokan area

plus 7 franchise Maharashtra

+100 distributors

Product/ Prices

Milk (Nov'99) 15/litre (in Pune) Kolhapur 16/litre Kolhapur 16/litre

Pune 17/litre Pune 17/litre

Mumbai 14/litre Mumbai 18/Iitre

Cow milk 12.5 Cow milk

/litre 13.5/litre

Buffalo milk Toned milk

18/Iitre 13/litre

Bakarwadi Rs. 80/ kg.

KajuKatri Rs. 320/ kg.

Maiai Barphi Rs. 160/kg.

GulabJamun Rs. 80/ kg.

Shrikhand wadi Rs. 100/kg.

278 M/s. Chitale M/s.Warana M/s. Gokui Bandhu Ghee Rs. 158/kg. Rs. 140/ kg.

Shrikahand Badam Pista Rs. 60 /kg. Rs. 60 /kg.

Amrakhand Rs. 65 /kg.

Strawbeery Rs. 75 /kg.

Keshar Rs. 70 /kg.

Table Butter Rs. 115/kg. Rs. 120/kg.

Processed Cheese Rs. 140 /kg.

Mozarelle Cheese Rs. 120/kg.

Milk Powder Rs. 190/kg.

Promotion Advertising 70-80 lacs /year 20-25 lakh/year

budget 2 lacs/ Radio, new Radio, new

year (News papers papers etc.

paper during sponsoring T.V. Sponsored Agro

festivals, Radio Serial etc. 98 (Kolhapur)

etc.)

•Distributor's

vehicles are

painted by Gokul

•Participated in

Agri-exhibition at

Delhi.

279 MARKETING OF MILK THE AMUL WAY^^

The twin cities of Ahmedabad and Gandhinagar, with a population of four million make up anenomious milk market: 10lakh litres per day (LPD) worth Rs. 288 crore per annum. Since one of the objectives of Operation

Flood is to capture a commanding share of the liquid milk market in the metres, the Gujarat Co-operative Milk Marketing Federation (GCMMF) decided to set up a Mother Dairy on Ahmedabad's outskirts. With a capacity of 10 lakh LPD - 40 per cent consisting of milk in pouches; the rest of milk based products - it was expected to be the largest and the inost modem unit in Asia. The investment: Rs. 100 crores.

It was calculated that to break even on that kind of investment, WfiB

require milk sales of 2.3 lakh LPD in Ahmedabad - Gandhinagar ftfSiltB forth refenred to as only Ahmedabad) However, in January 1993, with just

9 year to go for the unit to be commissioned, GCMMF's sale of Amul milk

in this market was woefully inadequate at 1.3 lac LPD. A new marketing

team was set up v|l|h the objective of filling that gap: in other words, to

raise volume sa||f^]|y 76 percent within one year in the market growing at

the rate of bar^ f^-jB percent.

An Attractive pusinCss

Ever since Operation Flood was Initiated in 1970, the National Dairy

Development Board (NDDB) has been continuously making investments

in the dairy sector of Gujarat, its homebase. Since milk is abundantly

available, businessmen found the prospects of tapping the Ahmedabad

market tempting. Little wonder, apart from two dairies (Uttam and Abad)

in the co-operative sector, there are nine private units and some 20

brands in all.

280 This scenario is to be repeated in other metros as rural milk supply and urban consumption grows. After all, not every business offers low bamers to entry, modest investments, simply technology, coupled with high and almost immediate returns. According to estimates, a private packer nets of 10,000 LPD that translates into earnings in hand of Rs. 2,500 per day or Rs. 7.5 lakhs in a month.

Teething Troubles

In 1986, when GCMMF introduced Amul Milk to the city, it was in a colourful pack to distinguish it from other brands. However, in a market, where brand preference was weak, Amul was just another brand. As long as milk was available, consumers could not care less about aspects such as fat content-attributes with regard to which Amul was far superior to the rest. Highlighting these brand strengths effectively was harder still, since a large segment of the consumers were illiterate.

At the retailing end, Amul offered margins of only 15 paise per litre compared to 40 paise by private packers. Competition was so intense that all 20 brands sold at exactly the same price if the martlet leader changed it, all others followed suit swiftly. So while volume growth did take place, Amul continued to be vulnerable as is natural for any brand in essentially commodity market. In March 1993 the brand's market share was 27.9 per cent.

An eariier GCMMF attempt at creating distinctiveness had come to grief after starting off well enough. The pouch bore an expensive four-colour film design which was also used on the 40-odd insulated milk vans.

281 Instead of making the pouch design copy-heavy, colours and images were used, keeping in mind the state of market evolution: these were easy for customer to remember. Hence, different early morning symbols like birds, flowers, the sun and buffalo -were printed Bright colours were used to indicate the variety - for instance, blue indicated toned milk. It began to seem that the brand was acquiring an identity for itself.

However, since consumer awareness about varieties like toned and standardised milk was quite low, they tended to ask for it by either symbol or colour. So, Amul's standardised milk pouches, which were green and bore the picture of a buffalo, were known as either bhainswala or harawala.

Rival brands took advantage of this and soon appeared with pouches in similar colour and bearing identical symbols. When a consumer asked for bhainswala or harawala, the retailer could hand out another brand of standardised milk and picked a higher margin. The consumer didn't know the difference. Amul was back to square one: vulnerable again to both price competition and to retailer whims.

The fact that only effective branding could permit Amul to stand apart from the pack and help it reach its sales targets was reemphasized by this experience.

What GCMMF found partjculariy galling was : it knew that miJk sold by private distributors was inferior in quality to Amul. Inspection by GCMMF's quality control department revealed that pouches of almost all other brands contained at most 490 ml milk instead of 500 ml milk. The SNF

589 (solids not fat) or solids other than fat content in toned milk was only 8 percent instead of the statutory 8.5 percent.(thus saving the marketer an additional 50-60 paise per litre). In summer, the percentage fell even further since adding water to milk during scarcity conditions is common.

In standardised milk, brands had just 4.2 percent fat instead of the requisite 4.5 percent. All this despite the Prevention of Food adulteration

Act 1954, which lays down guidelines about minimum fat and SNF content.

The advantage of segmentation in a competitive and mature market also came to GCMMF. While the Act permits four types of milk- double toned, toned, standardised and whole -no dairy in India sells more than two types. So it was decided that, not only would Amul establish a presence in all existing segments but would also create fresh ones. (This later helped during price hikes because consumers could drop from the variety they had favoured to a less expensive one and yet stay within the Amul fold)

In the milk market, consumers show little preference for any brand or even any milk type. They easily shift between, say, toned and standardised for reasons of price and also because they are unfamiliar with ingredients that make up milk. GCMMF believed that it was possible to create brand preference and even give each milk type a distinguishable name.

However, Amul first had to be available to the consumer. Milk being a primary need, the house wife would settle for another brand (or type) if her preferred brand was unavailable when she needed it most i.e. early morning, to serve milk to the children, and pack them off to school; for the

283 morning tea.; even along with her, husband's breakfast. Easy accessibility seemed to be the key. In other words perfect and synchronised distribution channel's within the vicinity of the consumer* s home.

GCMMF began early 1994, by removing restrictions of crate deposit and geographical limit and giving incentives to the field staff to appoint new retailers. Within eight months, the retailer strength doubled to 1,200. The company plans to increase the number to 2,000 or one retailer per 300 households. (This really is not as much as it seems considering that

Vadllal has 1,500 outlets to sell ice-cream, a far less basic product, in the city)

GCMMF decided to capitalise on the fact that Thaltej, Gurukul and

Vastrapur upcoming settlements on the city outskirts - were yet to have adequate milk supplies. Poor roads plus the fact that these areas spread out, among other factors, contributed to very high distribution costs.

Starting with one retailer, GCMMF had 170 retail outlets in these areas in the year's time. The result: sales of 10,000 LPD just here. Being the pioneer helped Amul make this virtually its home ground.

Conventionally, government dairies use their own vans and manpower to distribute milk. The results: high overheads and outstaffing and sooner or later union trouble. In keeping with GCMMF's policy of low overheads and outsourcing, it was decided to have distributors who in turn would supply milk to retailers. This was similar to the way in which the distribution for GCMMF's consumer products was organised. An invoice would be raised on distributors who would lift milk against an advance pay order in addition to a day 's bank guarantee. In other words, the

284 distribution system for milk was comparable to that of marketers of fast- moving consumer goods. The main difference was that the milk retailers were in direct contact with GCMMF through a fornial agreement and a crate deposit. This minimized the distributor's hold on Amul's distribution system. Between Feb 1993 and the middle of the 1995 the number of distributors had grown from 5 to 20. Among these were distributors who had eariier serviced Amul's rivals. Apart from helping Amul capitalise on their experience, this directly hurt rival brands. The aim now is to have 30 distributors so that, at 4 lakh LPD, each distributor has a substantial 10-

15000 LPD to handle.

LAUNCH BY LAUNCH

In August 1994, Amul introduced its first premium branded product. Amul

Gold full cream milk, for Rs. 11 a litre. Full cream milk has a high fat and

SNF content, and is favoured by parents for children. This variant was so successful that within three months of launch, it had scaled 32,000 LPD, overtaking 20 -year-old market leader Shresth (14,000 LPD). The new offering expanded the mari

The next variant to be introduced - in June this year- was the double - toned and lower priced Amul Saathi. Double toned milk is low on fat and high on SNF, and is prefen'ed by diabetics, blood pressure patients, and the elderiy. The principal objective was to get consumers to switch to pouches from loose milk, which makes the other half of the Ahmedabad milk market. So, the price was kept the same as loose milk, at Rs. 7.50 a litre. Sales reached 12,000 LPD, and quickly led to the arrival of several

285 me-too brands such as Best and Sardar double-toned. A new segment had opened to terrific marketing activity that too within a period of just three weeks.

Next, Amu! standardised milk, around since August 1986, was branded as

Amul Shakti and priced at Rs. 10 per litre. Similarly, Amul toned milk, which had first entered the market in August 1986, got itself a new name,

Amul Taaza (Rs. 9 a litre).

In each of the four variants, the Amul name is prominent. The milk has obviously benefitted greatly from the name Amul butter, cheese and ghee are all milk based products and Amul milk is in consonance with that.

It was GCMMF's resolve to enter all segments that led it to launch small

200ml pouches (as opposed to the normal 500ml pouches), which were popular with the labour class. Though small pouches spell higher unit cost, and wastage of packing material, milk and so on; the marketing team asked itself:

Why permit the opposition a free run here? In may last year, it introduced

200 ml pouches priced at Rs. 1.70. Today, this pouch sells more than

11,000 LPD.

THE BRAND WINS

If there is one more thing that the Amul milk case study illustrates, it is that distinctiveness can be created even in a commodity market, even when me-too's are waiting to copy the leader in every regard.

286 To begin with, GCMMF decided to give more fat and SNF in Amul than required by law. Next, the fat and SNF contents of Amul milk began to appear on pouches in an attempt to educate the consumers and to be sure, the competition began doing this too.

GCMMF took the battle one step further into the enemy camp by printing the date of manufacture and code number on its pouches (though food products need to bear by law, milk is exempt). This facility isn't cheap: each code marketing machine costs Rs. 16,000 GCMMF proceeded to educate buyers on how to read the code and buying old stock.

Another instance of using opportunity to both stand apart from the crowd and generate consumers goodwill: in Ahmedabad, retailers commonly price milk higher in the afternoon, arguing that they are recovering the cost of refrigeration throughout the day. Understandably, this upsets consumers. So, GCMMF set up "8 to 8 counters" at 20 major outlets which would sell milk through the day at a steady price. The price for earning this goodwill was small: GCMMF only had to reimburse to the retailer the refrigeneration charges.

Advertising for Amul milk- probably a first for this category - began in

1990, with tiny budget. At the time, Ahmedabad Doordarshan was an excellent option since spot rates were low. Everything changed last year as Doordarshan's ratings dropping and those for Zee TV rose.

The marketers then turned to using a combination of leaflets generating awareness about milk and its contents, press ads, radio spots, hoardings, and cable TV, a highly underrated (and therefore cost effective) medium.

287 For just Rs. 400 per months, an operator reaching a thousand households would slot a 60 second commercial before the cable TV film, twice a day.

Monitoring ad telecasts was left to the field staff, and after the contracts of a couple of cable operators had been terminated, the rest lost all interest in violating the agreement.

To keep local involvement high, 25 percent of ad budget has been set aside for promotions. GCMMF began printing the Amul milk logo on home delivery bags, T-shirts, cap and umbrellas, among others. Gifts such as wall clocks were given to 20 retailers who had done the most business. Awards for the best driver, highest seller of Amul Gold, and best distributor were also distributed as incentives on occasions such as milk van rallies where all vans endorsed with the Amul milk brand name participated actively.

Since children are primary milk drinkers, school contact programmes, milk drinking competitions, Amul merit scholarships - one glass of Amul milk a day offered free to meritorious and deserving students for a year - have been incorporated as part of the mari^eting strategy. Colourful, stickers informing students about the ingredients of milk- each piece costing as much as Rs. 7 have been distributed free to the children in schools.

It's measure of the mari^eting campaign's effectiveness and longevity that sales of Amul in Ahmedabad stand at 2.5 lakh LPD and the mari^et share is up now from 27.9 percent in eariy 1993 to a commanding 52 percent.

NDDB has perfected the art of collecting milk from fanners, twice daily,

preserving it in cold storage, processing it and producing several products

288 such as processed milk, cheese, butter, baby food and milk powder.

Since most of these products have a limited shelf life, timely distribution throughout the country calls for effective logistics and SCM. Amul has perfected the SCM techniques several decades ago. These practice were on, long before the computers and communication system entered India.

289