Business plan on milk company Essay

India is a state declared backward area and is eligible for various Fiscal incentives. In kuvadva, the land is cheaply and easily. Here, taxation is also less. Other favourable reasons for the selection to this particular location are as under: 1. Raw Material: Sufficient raw materials like Milk, Flavour, Water, etc. , are easily available. 2. Market: From the marketing point of view, we have a good and encouraging market for our product. There is a good demand available for Flavoured Milk. 3. Labour: We have got stable labour force and right type of labour in adequate numbers at reasonable wage rates. 4. Transportation: Being Rajkot a big city, we can easily have availed the transportation facilities. 5. Availability of Infra- Structure facilities: All infra structural facilities like water, electricity, telephone, etc. are very easily available. 6. Other facilities: Other large number of facilities can be available at this place such as subsidy, loans at cheaper rate, etc. PRODUCT INTRODUCTION AND MARKET ANALYSIS Dairy industry is of crucial importance to India. The country is the world’s largest milk producer, accounting for more than 13% of worlds total milk production. It is the world’s largest consumer of dairy products, consuming almost 100% of its own milk production. Dairy products are a major source of cheap and nutritious food to millions of people in India and the only acceptable source of animal protein for large vegetarian segment of Indian population, particularly among the landless, small and marginal farmers and women. Dairying has been considered as one of the activities aimed at alleviating the poverty and unemployment especially in the rural areas in the rain-fed and drought-prone regions. In India, about three-fourth of the population live in rural areas and about 38% of them are poor. The progress in this sector will result in a more balanced development of the rural economy. The importance of milk in human diet especially for children and expectant and nursing matters is vital. To meet the demand of the increasing population milk production in India has to be increased. It is neither possible nor desirable to increase the cattle and buffalo population to achieve this target. This can only be achieved by stepping up milk production of our bovine population by cross breeding of cows and use of improved cows and cow. Today, dairy cows are specialized to produce large volumes of milk. Specialist scale dairy farming is only viable where either a large amount of milk is required. Uses & Applications of Milk The term ‘milk’ refers to a heterogeneous mixture secreted by the healthy mammary glands containing fat, proteins and carbohydrates along with minerals and vitamins in the form of emulsion, colloidal suspension and true solution respectively in the continuous phase of water. In the other words milk may be defined as an emulsion of fat in a watery solution of sugar and mineral salts and with protein in a colloidal suspension. On storage of milk at some more temperature for some time, the acidity found increased to some extent and this increased acidity is known as Developed acidity. Milk is used as a food, Used as a complete food of infant, It is used to prepare curd, butter, ghee, cream and ice cream etc. , Milk is used in all homes, It is used in hotels and restaurants as milk food preparation and in the preparation of tea. Market Survey India is the world’s largest producer of dairy products by volume, accounting for more than 13% of world’s total milk production, and it also has the world’s largest dairy herd. The Indian Dairy sector acquired substantial growth momentum from 9th Plan onwards, achieving an annual output of 121. 8 (estimated) million tons of milk during 2010-11. This has not only placed the country on top in the world, but also represents sustained growth in the availability of milk and milk products for the growing population. The market is currently growing at round 5% pa in volume terms. There is an impressive level of processing i. e. 22% in organized sector. Major players in the dairy sector with dairy products include Gujarat Co-operative Milk Marketing Federation (GCMMF) and Nestle are the largest player. Other includes Milk food Limited, SmithKline Beecham Limited, Indodan Industries Limited, H. J. Heinz Limited, Britannia, Cadbury, etc. All other local dairy cooperatives have their local brands (For e. g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc. ). Other private players include J K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. SOURCE OF RAW MATERIAL The one and only raw material on which the dairy plant functions is MILK. And as Gujarat has abundant livestock especially buffalo’s availability of the raw material is not a problem here. Fig. 1 Lower level or primary level milk producer’s co – operative make a collection of milk from member producers. Members’ producers are farmer owing cows of buffalos. They bring milk to primary level societies. The collection of milk through members’ producers standing in queue. An account of every member producer is maintained which contains the details regarding the fat content, quality and quantity of goods, time of collection and the payments due or outstanding. In case of quality of the co – operative must be alert so as to neglect. The collection of source milk and substandard milk. For pricing collected milk importance is given to quality. The milks’ prices are based on FAT and SNF. I. e. sold non-fat contents. It needs to consider the bacteria population in the milk for raw material paying milk price. Payment is done on daily or monthly bases depending upon co – operative policy and members’ preference. This milk is proportionately distributed and brought to milk processing plant. MACHINERIES 1. PASTEURIZER: Fig. 2 The pasteurizer consists of plate heat exchanger, balance tank, pump, hot water circulation system (including mixer of steam and water, hot water pump, steam adjusting valve and water level control) and computer system for pasteurisation program, CIP program, and temperature control. It is used in heating and cooling raw material. The pasteurizer is usually used in the process of milk, ice-cream, milk powder, fruit juice, and beverage, which is sensitive to heat. The material is pumped to the plate heat exchanger, then undergone preheating, holding, heat energy recover and cooling, which can keep the products original physical nature and taste. If the temperature is below the set degree, this is sensed by a temperature transmitter. A signal activates flow diversion valve and the material flows back to the balance tank, then the material is pasteurized again. The state of the pasteurization temperature is recorded on a disc of the recorder in process of pasteurization. 2. POLLY FILL MACHINE: The Polly fill machine helps to pack the milk into the achieves their bottles of various sizes. One such machine can pack 100 bottles of milk in one single minute. Fig. 3 PRODUCTION PROCESS Milk is processed through a process called pasteurization. In the process of pasteurization, the milk product is actually heated. The milk is heated in order to kill any bacteria that may be within the milk still. After the milk is pasteurized and all bacteria are killed off, the milk is then cooled and packaged and then shipped out to stores. Diagram 1 Dairy cattle are brought in twice a day and milked. Fig. 4 The cattle on this farm are fitted with microchip collars that register each individual cow as she enters the milking shed. This microchip identification allows the production figures to be collected & collated by computer for each cow. Each cow has its complete production for each location. Fig. 5 After milking, the milk is cooled and stored in refrigerated vats at four degrees Celsius until collected by the milk tanker. Milk is collected once a day. The tanker driver carries out preliminary tests to the milk, checking its smell, taste and that it has been refrigerated to four degrees Celsius. The failure to store at less than four degrees Celsius can result in the milk being bought at a reduced price or not at all. It is extremely important that milk remains refrigerated at all times to maintain product freshness. Because milk is a nutritious food, any bacteria that are present in milk will grow and multiply rapidly, particularly if the milk is not refrigerated. Fig. 6Fig. 7 At the milk factory the milk is pumped into holding tanks where it is held until the results of tests that are routinely carried out are known. These tests include: somatic cell counts, total plate count, butterfat percentage and protein percentage. The results of these tests help determine the price paid by the milk factory to the farmer. Fig. 8 PRODUCTION CAPACITY. Office equipment30,000 †¢TOTAL FIXED CAPITAL:Table no. 10 Sr. No. ParticularsTotal Value 1. Land37,00,000 2. Building17,50,000 3. Machinery and Equipment 9,35,000 4. Furniture 1,20,000 5. Office equipment 30,000 Total65,35,000 †¢TOTAL WORKING CAPITAL:Table no. 11 Sr. No. ParticularsTotal Value ( 1 month) RsTotal Value ( 3 month) Rs 1. Raw Materials9,08,00027,24,000 2. Salary and Wages 50,100 1,50,300 3. Utilities 14,000 42,000 4. Other expenses 14,000 42,000 Total9,86,10029,58,300 †¢TOTAL COST OF PROJECTTable no. 12 Sr. No. ParticularsTotal Value Rs. 1. Total Fixed Capital65,35,000 2. Total Working Capital ( For 3 Months)29,58,300. Total94,93,300 FINANCIAL ARRANGEMENT †¢SOURCES OF FINANCETable no. 13 Sr. no. ParticularsAmount Rs. Total Amount Rs 1. Promoter’s Contribution (71. 91% of total Capital required)68,26,300 2. Borrowed Capital(28. 09% of total Capital required) 12% of GSFC (50% of borrowed Capital) 12% of IDBI (50% of borrowed Capital) 13,33,500 13,33,500 26,67,000 Total94,93,300 †¢INTEREST ON CAPITALTable no. 14 Sr. no. ParticularsInterest RateTotal Value Rs. 1. GSFC Loan12%1,60,020 2. IDBI Loan12%1,60,020 3. Own Contribution9%6,14,367 Total9,34,407 PROFITIBILTY OF THE PROJECT (PER MONTH) †¢COST OF PRODUCTIONTable no. 15. Particulars1st year (60% Prod. Capacity)2nd year (80% Prod. Capacity)3rd year (100% Prod. Capacity) Variable Cost Raw material Wages Other expenses Utility 1,08,96,000 2,11,200 84,000 1,68,000 1,45,28,000 2,81,600 1,12,000 2,24,000 1,81,60,000 3,52,000 1,40,000 2,80,000 Total Variable Cost1,13,59,2001,51,45,6001,89,32,000 Fixed Cost Salary to Staff Depreciation Total interest paid Other expenses (50% of Office & Admin. Expenses) 3,90,000 4,31,250 9,34,407 84,000 3,90,000 3,51,938 12,45,876 84,000 3,90,000 2,89,490 15,57,345 84,000 Total Fixed Cost32,76,657 32,89,73833,59,912 Total Cost1,46,35,8571,84,35,3382,22,91,912. †¢COST SHEETTable no. 16 Particulars1st year2nd year3rd year Raw Material Consumed Opening stock of R. M Add: Purchase of R. M. Less: Closing stock of R. M. – 1,08,96,000 – — 1,45,28,000 – — 1,81,60,000 – – Cost of Raw Material1,08,96,0001,45,28,0001,81,60,000 Add: Direct wages Utility Total2,11,200 1,68,000 3,79,2002,81,600 2,24,000 5,05,6003,52,000 2,80,000 6,32,000 Prime Cost1,12,75,2001,50,33,6001,87,92,000 Factory Overheads: Repairs and maintenance Supervisor Production manager Depreciation on Building Depreciation on Machinery 18,000 72,000 84,000 1,75,000 2,33,750 21,000 72,000 84,000 1,57,500 1,75,312. 24,000 72,000 84,000 1,41,750 1,31,484 Factory Cost5,82,7505,09,8124,53,234 Administrative Expense SALARY TO: Manager A / C Clerk Peon Watchman Depreciation Interest on borrowed loan 84,000 36,000 18,000 8,400 12,000 22,500 3,20,040 84,000 36,000 18,000 8,400 12,000 18,825 2,74,320 84,000 36,000 18,000 8,400 12,000 16,256 2,28,600 Administrative Cost5,00,9404,51,5454,03,256 Cost of Production1,23,58,8901,59,94,9571,96,48,490 Add: Op. stock of Finished goods Less: Cl. Stock of Finished goods- 1,10,0311,10,031 1,35,0541,35,054 1,91,740 Cost of Goods Sold1,10,0312,45,0853,26,794 Sales and Distribution expenses. Salary to Sales Manager Transportation Expenses Advertising & Publicity Expenses Sales Expenses 84,000 14,400 60,000 14,400 84,000 19,200 80,000 19,200 84,000 24,000 1,00,000 24,000 Total1,72,8002,02,4002,32,000 COST OF SALES1,24,21,6591,60,37,6421,97,43,284 SALES1,45,30,6441,94,85,1642,43,30,412 PROFIT21,08,98534,47,52245,87,128 †¢RAW MATERIAL:Table no. 17 Sr. no. Raw materialQuantityRateTotal amount Rs. 1. Milk60,000 liters40 per liter2,40,000 2. Bottles1,60,0005 per bottle6,50,000 3. Bottle caps60 cartons(3000 caps each)300 per carton18,000 Total9,08,000 †¢STAFF AND LABOUR SALARY AND WAGES:Table no. 18 Sr. No. ParticularsNo. of PersonTotal Value Rs. 1. Admin staff330,800 2. Skilled Worker49,000 3. Unskilled Worker810,300 Total 50,100 †¢UTILITIES:Table no. 19 Sr. No. ParticularsTotal Value Rs. 1. Power12000 2. Water2000 Total14000 †¢INTEREST ON CAPITALTable no. 20 Sr. no. ParticularsInterest RateTotal Value Rs. 1. GSFC Loan12%1,60,020 2. IDBI Loan12%1,60,020 3. Own Contribution9%6,14,367 Total9,34,407 †¢REPAYMENT OF BORROWED LOANTable no. 21 Particulars1st year2nd year3rd year4th year5th year6th year7th year Total Loan (26,67,000)26,67,00022,86,00019,05,00015,24,00011,43,0007,62,0003,81,000 Less: Installment3,81,0003,81,0003,81,0003,81,0003,81,0003,81,0003,81,000 Closing Balance22,86,00019,05,00015,24,00011,43,0007,62,0003,81,000NIL Total Interest on Borrowed Loan 3,20,040 2,74,320 2,28,600 1,82,880 1,37,160 91,440 45,760 †¢DEPRECIATION SCHEDULETable no. 22 Sr. No. Particulars1st year2nd year3rd year 1. Building (10%) Less: Depreciation Closing Balance17,50,000 1,75,000 15,75,00015,75,000 1,57,500 14,17,50014,17,500 1,41,750 12,75,750 2. Machinery (25%) Less: Depreciation Closing Balance9,35,000 2,33,750 7,01,2507,01,250 1,75,313 5,25,9375,25,937 1,31,484 3,94,453 3. Furniture (15%) Less: Depreciation Closing Balance1,20,000. 18,000 1,02,0001,02,000 15,300 86,70086,700 13,005 73,695 4. Office and Equipment (15%) Less: Depreciation Closing Balance30,000 4,500 25,50025,500 3,825 21,67521,675 3,251 18,424 †¢OTHER EXPENSES:Table no. 23 Sr. No. ParticularsTotal Value Rs. 1. Postage and stationery1000 2. Repair and Maintenance1500 3. Advertising and Publicity5000 4. Transport Charges1200 5. Insurance and Taxes2000 6. Sales Expenses1200 7. Telephone Expenses1500 8. Miscellaneous Expenditure600 Total14000 OPERATING STATEMENT Table no. 24 Particulars 60%80%100% Sales (A)1,45,30,6441,94,85,1642,43,30,412 Cost Of Production Raw Material Utility Wages Total Cost. ADD: Opening Stock of Finished goods LESS: Closing Stock of Finished goods Total Operating Cost (B) 1,08,96,000 1,68,000 2,11,200 1,12,75,200 – 1,10,031 1,11,65,169 1,45,28,000 2,24,000 2,81,600 1,50,33,600 1,10,031 1,35,054 1,50,08,577 1,81,60,000 2,80,000 3,52,000 1,87,92,000 1,35,054 1,91,740 1,87,35,314 GROSS PROFIT (A – B = C) 33,65,475 44,76,587 55,95,098 Indirect Expense: Other Expense (Fixed) (Variable) Salary to staff Depreciation Total Indirect expense (D) 84,000 84,000 3,90,000 4,31,250 24,85,750 84,000 1,12,000 3,90,000 3,51,938 22,09,412 84,000 1,40,000 3,90,000 2,41,295 19,90,762 EBIT (C –D = E)8,79,72522,67,17536,04,336. Interest on own Capital Interest on Borrowed Loan Total Interest (F)6,14,367 3,20,040 9,34,407 6,14,367 4,26,720 10,41,087 6,14,367 5,33,400 11,47,767 EBT (E – F = G)(-) 54,68212,26,08824,56,569 LESS: Tax (40%)————4,90,4359,82,628 EATNIL7,35,65314,73,941 RATIO ANALYSIS PROFITABILITY ANALYSIS RETURN ON INVESTEMENT = EBIT x 100 Total Capital Investment (For the 1st year) = 8, 79,725 x 100 53, 34,000 = 9. 27% (For the 2nd year)= 22, 67,175 X 100 94, 93,300 = 23. 88% (For the 3rd year)= 36, 04,336 X 100 94, 93,300 = 37. 97% COST OF CAPITAL= Int. on own capital + Int. on borrowed capital x 100 Capital employed. (For the 1st year)= 5, 60,070 x 100 53, 34,000 = 10. 50% (For the 2nd year)=8, 33,394 x 100 94, 93,300 =8. 78% (For the 3rd year)=7, 37,357 x 100 94, 93,300 =7. 77% GROSS PROFIT RATIO = Gross Profit x 100 Total Sales (For the 1st year)= 33, 65,475 x 100 1, 45, 30,644 = 29. 59% (For the 2nd year)=44, 76,587 x 100 1, 94, 85,167 =22. 97% (For the 3rd year)=55, 95,098 x 100 2, 43, 40,412 =23% NET PROFIT RATIO= Net Profit x 100 Total Sales (For the 1st year)= 14, 41,818 x 100 1, 45, 30,644 =9. 92% (For the 2nd year)=26, 49,962 x 100 1, 94, 85, 164 =13. 60% (For the 3rd year)=38, 48,641 x 100 2, 43, 30,412 =15. 82% BEP ANALYSIS. BEP (In Units) = Fixed Cost Contribution (For the 1st year)=32, 76,657 8. 73 = 3, 75,333 units (For the 2nd year)=32, 89,738 2. 15 =15, 30,111 units (For the 3rd year)=33, 59,912 8. 88 =3, 78,368 units BEP (In Rs. ) = BEP in Units x Selling Price (For the 1st year) = 3, 75,333 x 40 = 1, 50, 13,320 (For the 2nd year)=15, 30,111 x 40 =6, 12, 04,440 (For the 3rd year)=3, 78,368 x 40 =1, 51, 34,720 PROFIT & LOSS A/C Table no. 25 Particulars1st year2nd year3rd year Income Sales ADD: Closing Stock Total of Income 1,45,30,644 1,10,031 1,16,40,675 1,94,85,164 1,35,054 1,96,20,218 2,43,30,412 1,91,740 2,45,22,152 Expenditure Opening Stock. ADD: Purchase of R. M. Utility Wages Total of Expenditure – 1,08,96,000 1,68,000 2,11,200 1,12,75,200 1,10,031 1,45,28,000 2,24,000 2,81,600 1,51,43,631 1,35,054 1,81,60,000 2,80,000 3,52,000 1,89,27,050 GROSS PROFIT33,65,47544,76,58755,95,098 Other Expense Other exp. (Fixed) (Variable) Salary Depreciation Int. on own Capital Int. on borrowed Capital Total 84,000 84,000 3,90,000 4,31,250 6,14,367 3,20,040 19,23,657 84,000 1,12,000 3,90,000 3,51,938 6,14,367 2,74,320 18,26,625 84,000 1,40,000 3,90,000 2,41,000 6,14,367 2,28,600 17,46,457 NET PBT14,41,81826,49,96238,48,641 BALANCE SHEET (1st year) Table no. 26 ParticularsAmount (Rs.)Amount (Rs. ) Liabilities Promoter’s Capital Borrowed Loan IDBI 13,33,500 GSFC 13,33,500 Profit and Loss A/C Total Liabilities 68,26,300 26,67,000 14,41,818 1,09,35,118 Assets Gross Block (Less: Depreciation) Debtor Cash on Hand Closing Stock Total Assets 24,03,750 18,85,336 65,36,001 1,10,031 1,09,35,118 BALANCE SHEET (2st year)Table no. 27 ParticularsAmount (Rs. )Amount (Rs. ) Liabilities Promoter’s Capital Borrowed Loan IDBI 13,33,500 GSFC 13,33,500 Profit and Loss A/C Total Liabilities 68,26,300 26,67,000 26,49,962 1,21,43,262 Assets Gross Block (Less: Depreciation) Debtor Cash on Hand Closing Stock Total Assets 20,51,812. 24,89,099 74,67,297 1,35,054 1,21,43,262 BALANCE SHEET (3st year)Table no. 28 ParticularsAmount (Rs. )Amount (Rs. ) Liabilities Promoter’s Capital Borrowed Loan IDBI 13,33,500 GSFC 13,33,500 Profit and Loss A/C Total Liabilities 68,26,300 26,67,000 38,48,641 1,33,41,941 Assets Gross Block (Less: Depreciation) Debtor Cash on Hand Closing Stock Total Assets 17,62,322 28,46,970 85,40,909 1,91,740 1,33,41,941 INTRODUCTION Lawrence Apply wrote, management is the development of the people and not the direction of things. Employees hold a key place in business. No business enterprise can exist and function without employees. The plan of the business may be perfect and also structure of the organisation may be perfect but if the recruitment of personals is unscientific, the business can’t gown. Milk sense pvt. Ltd. will enrich with technically sound and convicted manpower. The average age of the employees will be 23 years, their total appears will be 500, and their technical strength will be approximately 170, staff strength of the Dairy will be 110 and trainee workers will be approximately 230, Development and empowerment is the trait of the H. R. D. functions. The trainer and workers get hostel facilities and other benefits. BATCHES AND FACILITIES. Milk sense will run 2 shifts and the employers are distributed to fulfil the requirement. 1st sift runs from 8. 00A. M to 8. 00 P. M 2ed sift runs from 8. 00P. M to 8. 00 A. M Besides these the employees will be given many benefits like: 1. Uniform change room 2. A good canteen facility 3. Bonus 4. Transportation Facilities etc. 1. Uniform change room In milk sense pvt. Ltd. Workers will be provided with a changing room because workers will have to work with a food product hence the milk should be pure and germ free for those workers will have to change their cloths before starting their respective work. 2. Canteen Facility. One canteens functioning at site, where Breakfast / snacks are available in the morning hour and lunch from 12:00p. m. To 2:30p. m. at fixed charges. Tea, coffee etc. will be served in the office two times in the morning hours and once in the afternoon. 3. Bonus During festival season and at time of high profits the company will give bonus to their workers and employees. 4. Transport facility The company provides free bus services to commute and from all corners of Rajkot, kuvadva. TRAINING PROGRAMME AND WORKSHOP The Hosiery training centre Ahmedabad trains operating and maintenance of staff in the Dairy and food industries. Technical facilities at the institute were augmented during the year to meet the needs of co-operatives and private sector industries 260 participants attended various courses at the institute during the year. Milk sense’s personnel department will involve activities such as, †¢To recruit and select the very best candidates available for each vacancy. †¢Develop personal performance through improvement processes, which contributes to the overall growth of the employees and workers. †¢To create effective, need – based, future – ready, flexible salary and wages systems. †¢To create and keep record of each employee and worker. SALARY AND QUALIFICATION Minimum Salary to the workers in the dairy is Rs. 100 per day besides this they are provided provident facility. They are given wages as per the factory act. Qualification:- All the employees of the milk sense pvt. Ltd. will have to get the qualification of ITI or graduation. PERFORMANCE APPRAISAL Performance Appraisal is a system evaluation of a works performance and potential for development. The overall objective of performance official duties is importance the efficiency of an enterprise by attempting to mobilize the best possible efforts from individual employed in it. The salary reviews, the development and training of individuals, planning, job ration, each and every firm has its own method to evaluate this performance. In Our Company we also measure the skills, ability, performance, important function of personnel management, which helps them to make important decision like training and development, promotion, transfer etc. In a company the head prepares performance of any candidate’s confidential report and it is presented to his highest authority. This report is managed to any candidate to transfer, promotion etc. INTRODUCTION Marketing is a very vital function of any industries. To reach high profits. Every company has to handle its marketing function with care. As the whole world is turning in to a global market marketing function is getting more important in every company. The term marketing is changing in the word. If the market does a good job understanding Consumer need develops product that provide superior value and price distributes and promoters then officially According to E. W. cundiff and R. R. still, â€Å"marketing management is concerned with the direction of purposeful activities towards the attainment of marketing goals. † The basic goal of marketing is satisfaction of needs of customers and generation of revenue for the business purpose. ? GENERAL INFORMATION In MILK SENSE PVT. LTD. marketing will be a basic activity for the total business it is market which sells and distributes products to the people who need them at a place they want at a time they require and at a price, they are prepared to pay of late marketing department. Milk sense will have attracted the increasing attention from companies and nations because it provides good quality of product. Milk sense also provides enough quantity with the respect to price Density price channel of distribution etc. are all made on the basis of the information picked up from the market through constant & systematic research. MARKETING MIX According to Ferrel, Lucas and Luck a product, with the target Market as focal point, serves as the starting point for the development of a marketing mix strategy and forms the basis for all other decisions regarding distribution, promotion and price. Decisions relating to the development and marketing of products include amongst others, decisions about product attributes, branding, packaging and labeling. Milk is classified as a consumer good rather than a business good. It can further be defined as a convenience good in that the customer is supposed to have complete knowledge of the product before purchasing it, and because it is also purchased with minimum effort. It is important that milk, as a convenience good, be readily available when and where the consumer needs to purchase it. PRODUCT LIFE CYCLE: The declining consumption of milk has become an international phenomenon. The consumption of soft drinks has tripled in this period, making them the most popular beverage, while milk is ranked fourth after coffee and tea. PRODUCT DEVELOPMENT: New product development should also take consumer trends into account, such as consumers of milk becoming more health conscious. Labels with ‘fat free’ and ‘cholesterol free’ are turning into the selling points of the future. Milk marketers are aware that consumers perceive milk as being fattening, so emphasis should be placed on giving customers the correct information. This is as easy as printing more information on the bottle labels. Low fat fresh milk is sold as containing 2 percent fat, while full cream milk has merely 1 percent more fat than the 2 percent milk. There is an increasing need for more information to be printed on labels. An example of such a segment is the diabetic consumers. The diabetic market is untouched, while numbers of diabetic consumers are increasing. It is apparent that full cream milk is generally prohibited in most diet schedules, while skimmed milk may be consumed in limited quantities. It is important for dairy researchers and decision makers to note that consumers are requiring more dietary information, and consumption may increase if details of the product are provided. PACKAGING: Most of the dairies selected for the study use a ‘family’ packaging strategy, which means that all products in the range are almost identically packed or have an important packaging characteristic in common. Packaging, however, has many functions. The most important functions of packaging are to contain the liquid, promote milk and provide storage. Another function which is becoming increasingly important today, is the recyclability of the package used. Companies are becoming more ‘environment friendly’ by using a recyclable package, which should result in less waste. Wholesalers and retailers prefer packages that are easy to ship, store and to pack. Consumers, however, look for items that are easy to handle, open and close. Towrope, for example, launched a screw top 1 liters bottle of milk. The consumer can therefore easily open or close this container, whilst freshness is maintained by preventing the milk from absorbing other odors. PRICE: While one price for milk is for example set for all final consumers, different consumers attach different meanings to the price they pay for a product. The consumer’s aim is to spend his/her income in a way that will afford him/her maximum satisfaction. Most dairy companies have price margins in which to deal. Milk being a basic food, has a low profit margin of around ten to fifteen percent. The dairy industry probably has to familiarize the consumer with an acceptable price of milk, such as 40 RS. Per liters and maintain that price. CONSUMER BEHAVIOUR India’s dairy market is multi-layered. It’s shaped like a pyramid with the base made up of a vast market for low-cost milk. Consumers while purchasing dairy products look for freshness, quality, taste and texture, variety and convenience. Presently, barely 778 out of 3,700 cities and, towns are served by its milk distribution network, dispensing hygienically packed wholesome, quality pasteurized milk. According to one estimate, the packed milk segment would double in the next five years, giving both strength and volume to the modem sector. The narrow tip at the top is a small but affluent market for western type milk products. Of the three A’s of marketing – Availability, Acceptability and Affordability, Indian dairying is already endowed with the first two. People in India love to drink milk. Hence, no efforts are needed to make it acceptable. Its availability is not a limitation either, because of the ample scope for increasing milk production, given the prevailing low yields from dairy cattle. It leaves the third vital marketing factor affordability. How to make milk affordable for the large majority with limited purchasing power is essence of the challenge. One practical way is to pack milk in small quantities of 250 ml or less in polythene sachets. Already, the glass bottle for retailing milk has given way to single-use sachets which are more economical. Another viable alternative is to sell small quantities of milk powder in mini-sachets, adequate for two cups of tea or coffee. ADVERTISING As an entrepreneur in the milk industry milk sense first of will start its advertisement by providing free sample and giving advertisement in magazines and standard newspapers like â€Å"TIMES OF INDIA†. Fig. 9 An identified Sponsor can define advertising as a mass promotion of goods & services. As per many classical writer of management says â€Å"Effective Advertisement makes selling task half†. After a little success Milk sense will adopt the same strategy but in rigorous manner. The product of milk sense will be published on very popular T. V channels like â€Å"National Channels†, Zee T. V. † â€Å"SONY â€Å", â€Å"STAR PLUS† etc. Generally T. V. channels are most popular and suitable medium of such advertisement. DISTRIBUTION CHANNEL. The distribution of fresh milk, being a perishable product with a limited shelf life of about 3 days, needs careful planning. It is important that all milk packages have a sell-by date printed on the product. This is an indication to the customer of the product’s freshness. If milk is uniformly priced, many customers consider their choice of purchase by checking the shelf life of the milk. Shelf life has become an important product benefit, which is associated with freshness. As competitive pricing strategies may urge customers to look for other benefits besides price, branding and ‘freshness’ become important.