SUMMER INTERNSHIP PRESENTATION

TITLE

Study of RDFL Milk in South Delhi (Badarpur):

“What are the factor that affect brand switching and activities to be under taken by (RDFL) for brand

switching.”

PRADEEP KUMAR BHARTI

MBA-AB (2010-12) 3rd sem.

RELIANCE DAIRY FOODS LIMITED

Faculty Of Management Studies

Banaras Hindu University

Varanasi

Topics covered Industry Profile Company Profile & financial

analysis SWOT Analysis Research Objectives Research Methodology About the Product: Milk Findings and ConclusionSuggestions

Traditionally, in India dairying has been a rural cottage industry.

Semi-commercial dairying started with the establishment of military dairy farms and

co-operative milk unions throughout the country towards the end of the nineteenth

century.  

Reliance Retail has entered the dairy sector with the launch of its liquid milk brand

called ‘Dairy Pure’. The milk was test launched in Hyderabad.     

  Reliance Retail is at present procuring 10,000 litres per day at its procurement centre

in Atmakur in Nellore district. Later in the year, Reliance Retail will launch Dairy Pure

in 3 variants — family milk, low fat and whole milk. It would also diversify into a range

of value-added dairy products believed to be yoghurt, cheese and ice creams.

Reliance Dairy Pure has a launch price of Rs 9 for a half-a-litre packet .

About 35% of total milk produced in the country is processed.

There are currently 676 dairy plants in the organized sector that combines

cooperative, private and government sector units.

The total amount of milk produced has increased from 53.9 million tonnes in 1990-01

to 112.5 million tonnes in 2009-10.

Per capita availability of milk presently is 263 grams/day in 2009-10, increased from

176 grams/day in 1990-01.

Industrial Profile

Company Profile The Reliance Group, founded by Dhirubhai H. Ambani (1932-

2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain.

RIL entered in dairy sector through it’s retail dairy venture Reliance Dairy Foods Limited which is a subsidiary of Reliance Retail Limited.

Mr. Harsem Singh, an ex-senior executive of the National Dairy Development Board is heading RIL’s retail dairy venture.

Reliance Retail has stepped into the dairy products sector in 2007 with a national ‘pilot’ launch of its liquid milk (family milk segment) in Hyderabad, Andhra Pradesh.

Reliance Retail currently has its processing and packaging facilities in Andhra Pradesh, Haryana, Punjab and Rajasthan. 

The milk brand “Dairy Life” is being sold through Reliance Retail stores and general trade (including milk retailers) in Andhra Pradesh, Tamil Nadu, Maharashtra, Haryana, Punjab, Rajasthan, Delhi & NCR (National Capital Region) and Himachal Pradesh.

Financial Statement

Rs. In lakhs

StrengthThe major strength of the RDFL is that it is a subsidiary of Reliance Industries Limited which is a recognized brand name.The increasing demand for milk products presents a great opportunity for RDFL to increase and scale up the production.

RDFL is having a competitive edge in terms of pricing.

More margin is given to the retailers to compete the existing competitors.

Weakness

Absence of RDFL Outlets.

New player in Dairy sector.

Supply Chain Management is weak in comparison to competitors.

SWOT ANALYSIS

Opportunity

There is a scope of business as there is a demand for dairy products.

RDFL should open its own outlets to get the maximum advantage of the demand.

Need to put more stress in the face-to-face direct marketing to reach to the customers.

Dairy products are highly income elastic.

Threats

Presence of established players like M.D., paras & Amul.

Margin is very low in dairy industry.

Strong supply chain management by the competitors.

SWOT ANALYSIS

Research Objectives

Assessing the potential of milk market in South Delhi.

To explore the RDFL’s position in the territory vis-à-vis other brands.

Analyzing the reasons of failure of RDFL’s milk in South Delhi.

Suggesting adequate remedial course of action for RDFL.

Research Methodology

Research Design- Exploratory research Research tools- Questionnaire and Question Schedule Research technique- Interpretation based on percentage

analysis Sampling technique- Convenience sampling Elements- Consumers, Retailers & Distributors Source of data- Primary Data and Secondary Data Sampling size- 36 Household Consumers, 27 Institutional

Consumers, 65 Retailers and 3 Distributors. Period of study conducted- 5th May, 2011 to 5th July, 2011.

Data analysis The collected data was depicted in the form of graphical

charts in MS Excel. Simple tools like bar charts, pie charts are used. Statistical tool- arithmetic mean, percentage etc. are used.

About the Product-Milk & its Component

Constituents of Pasteurised packaged Milk

Milk Variants FAT (in %) SNF (in %)

Full Cream Milk 6 9

Toned Milk 3 8.5

Double Toned Milk 1.5 9

A white fluid secreted by the mammary glands of female mammals for the nourishment of their young, consisting of minute globules of fat suspended in a solution of casein, albumin, milk sugar, and inorganic salts. 

Milk is a rich source of calcium, vitamins and proteins. Contrary to common belief milk is not high in fat. Pasteurised milk should be stored at a temperature of 5°C or less. In general the gross composition of cow ’s milk is 87.7% water, 4.9%

lactose (carbohydrate), 3.4% fat, 3.3% protein and 0.7% minerals(referred to as ash).

FINDINGS

In Delhi milk market comprises around 56 lakh liters of packaged milk. Per day use and is dominated by Delhi milk scheme(DMS) ,Mother dairy, Paras, Amul & Reliance dairy etc. which sells more than 85%.

The most organized sector players are Mother dairy (66%) , Amul (10%), RDFL(3%) , Paras and dairy India etc.

Amul comes second after Mother dairy in terms of sale, while RDFL, Dairy India, Ureka, DMS, and Paras are marginal players.

Mother dairy, and DMS are having their processing and packaging facilities in Delhi and RDFL supply milk from their dairy plants at sonipat (haryana).

RDFL improve our supply chain management and quality of products comparison to competitor.

M.D. AMUL RDFL DAIRY INDIA OTERS

Series1 66 10 3 4 16

5

15

25

35

45

55

65

RDFL Market Share%

OF M

AR

KET S

HA

RE

FINDINGS

Consumers

Yes19%

No81%

Have ever tried RDFL's Milk

32%

29%

3%3%

32%

Reasons for not trying RDFL milk

Availability issuesLack of awarenessQuality issuesCustomer loyalty with present brandUse loose milk

14%

43%

29%

14%

Reasons for Discontinuation of RDFL milk

Price Taste Quality Availability Other reasons

Retailers

13%

88%

Promotional activity

Effective Not Effective

29%

21%

50%

Means of Promotion

Small Banner Wall Painting Not Applicable

Retailers

25%

75%

Quality of RDFL milk according to retailer

Good

Average

4%

50%

46%

Customer's response to RDFL Milk

Liked Mixed Not Liked

Retailers

32%

42%

26%

Reasons for not stocking RDFL Milk

Lack of Awareness Non-availability Loyalty with present brand

Distributors

Quality issues21%

Leakage7%

Lack of Pro-

motion21%

Spoilage

prob-lems21%

Lack of Inter-action betwee

n Com-

pany & Retail-

ers14%

Others14%

Reasons of Failure/ Low sales

Conclusion

Consumers were not satisfied with quality & taste of RDFL milk.

There is lack of awareness among consumers regarding the brand and product.

Company is lagging in terms of reach to customers. Old retailers were having major problem of leakage in

milk pouches and early spoilage of milk. The major problems faced by new retailers were early

spoilage of milk, lack of awareness among consumers regarding RDFL milk.

There was lack of interaction between company representative and retailers.

There is good demand for packaged milk in south Delhi.

Suggestions The quality of milk should be consistently maintained. Company should try to conduct camps & awareness

programmes for consumers. As availability and awareness issues are major reasons for

not trying RDFL milk, the distributional channel need to be strengthened.

There is need of good promotion of the product. Before startup in a new area there should be good

promotion through banners, pamphlets, newspaper advertisements etc.

The consumers were frequently facing problem of early spoilage, hence company should ensure that consumers get fresh milk.

The frequent spoilage problem may be due to increase in temperature during transportation. The vehicles should be properly insulated.

?

Thank You….