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A STUDY ON THE MARKETING PRACTICES OF THE KOVILPATTI CO-OPERATIVE MILK SUPPLY SOCIETY LTD

A STUDY ON THE MARKETING PRACTICES OF THE KOVILPATTI CO-OPERATIVE MILK SUPPLY SOCIETY LTD

 

INTRODUCTION

                       The national income is contributed by many sectors and among them occupies an important place the agricultural sector. In the agriculture sector, the dairy sector plays a vital role. The dairy sector of India has witnessed some major changes over the last two decades. As a result of concerted efforts towards total dairy development, our milk production has nearly trebled. “The milk has now become the largest single agricultural commodity with dairy industries estimated at more than Rs. 52,000 crores, a figure which is expected to reach Rs. 88,000 crores per annum by the next century”1  In the beginning of next century. “ The milk production of India which had stagnated at around twenty million tones for the past twenty years (1980 -  2000 ), began rising from 2000 onwards and crossed over 50 million tonnes mark in 2002. In 2005-2006 the milk output was around 59 million tones. The milk production is poised to reach the 76 million tones.

 

            As a matter of fact, encompassing a wide geographical area and reflecting different political systems, differing level of economic development, social systems, changes in tastes, preferences and traditions, the approach to dairy development has varied widely from region to region in India. The prosperity of any land from time immemorial has been measured in terms of the flow of milk. History establishes that India was a land of milk before foreign innovations. After the break of the services union, India has become the second largest milk producer in the world next to the USA.

 OBJECTIVES OF THE STUDY

             The following are the objectives of the present study

 

1. To review the structure and functions of the Co-operative milk supply society
2. To find out the existing marketing practices and to identify the problems which it has to face in the marketing of milk.
3. To analyse the cost structure involved in the pricing of milk.
4. To assess the functioning of the society from the consumers point of view.
5. To offer suitable solutions to overcome the problems identified.

 

HYPOTHESIS

 

            The present study aims at testing the following hypothesis:

 

1. When there is reduction in the price of milk, the consumers will buy more.
2. The price charged by the society is not a reachable one.

 

CONCEPTUAL DISUCSSION:-

             The important concepts used in the present study are the Co-operative milk society, vendors, consumers and the appropriate government.

 

             I.      Co-operative Milk Supply Society

In this study, the Co-operative milk supply society refers to the institution which is based on the Co-operative principles to distribute milk to the consumers.

          II.      Vendors

It includes any person who is engaged for distribution of milk to the consumers either in booths or by door to door delivery.

       III.      Consumers

For the present study, consumers refers to the persons who are actually the buyers of milk from to society.

        IV.      Appropriate Government

The appropriate government may be the central or the state government of Tamil Nadu government.

 

 

RESEARCH DESIGN

 Methodology

 

1. Sampling Design

 

A topic of this nature required the selection of a suitable place. In Tamil Nadu, the milk supply societies are concentrated more in Tuticorin district than in any other districts. In Tuticorin district, Kovilpatti milk supply society has been selected purposely since, it is the biggest society covering a vast area in Tuticorin District. Moreover, the researcher belongs to this area.

 

1. Statistical Techniques:-

 

Progressive mean , standard deviation, chi-square test have been applied to analyse and interpret the data collected.

 

PERIOD OF THE STUDY

                       The present study covers a period of one year 2006-2007 in order to ascertain the latest trends in the field.

 

LIMITATIONS

             The members and the private vendors have not been covered by this study due to the time and cost constraints. As there are large number of consumers in the society a limited sample has been taken by “Convenient Sampling method”.

 ANALYSIS AND INTERPRETATION

           

1.             The data for the present study was collected from the respondents through a questionnaire. Results were tabulated and analysed by using appropriate statistical techniques mentioned in the research methodology. The results from the statistical   analysis and the objective-wise analysis of the study are presented in this section.

 

1. Channels of Distribution of Milk

Table - 1.1

 

S.No

Channel

No of Booths

In Ltrs

Percent

1.

Through Booths

5

1000

23.53

2.

Through Vendors

28

3250

76.47

 

 

Total

4250

100

 

            76.47% through vendors and the remaining 23.53% of milk through booths. For detailed analysis, the society shall take efforts to increase the number of booths so as to cover all the areas of the society.

 

 B.  Timing of Milk Supply

Table - 1.2

 

S.No

Periods

Time

1

Morning

6.00 to 7.30pm

2.

Evening

4.00pm to 5.30pm

 

It is suggested that the society shall try to supply milk according to the convenience of consumers also by introducing some flexibility in the time schedule.

 

 

 

1. The opinion on timings of the supply of milk.

 

Table 1.3

 

Timing

No of families

Percent

Satisfied

52

65

Not Satisfied

28

35

Total

80

100

 

            Table 1.3 depicts that 65% are satisfied with the present timing. The remaining 35% felt that present timings is inconvenient in the sense that they  require milk at least half an hour earlier than then usual  timings in the morning and half an hour later than the usual one in the evening.

           

1. Daily milk requirements of sample families

 

Table 1.4

 

Income

Family Classification

No. of Families

Milk Requirement  in ltr

Average purchase in Ltr

Below 3000

Low Income

16

17

1.00

3001 – 5000

Middle Income

28

49

1.75

Above 5000

High Income

36

72.5

2.00

 

Total

80

138.5

 

 

Table 1.3 shows that, there is a direct relationship between income and purchase of milk. It reveals that the high income families are purchasing averagely 2.00 liters of milk per day whereas the middle income families are buying averagely 1.75 liters daily and the low income families are purchasing nearly 1.00 liter per day. It shows that higher the income, higher is the daily consumption. So the society must concentrate on high income people and also it should take efforts to improve the daily consumption of the lower income people.

 

 

1. Rate Charged

Table 1.5

           

           

Rate

No of Families

Percent

Rate High

40

56.25

Rate Reasonable

35

37.5

Rate Low

5

6.25

Total

80

100.00

 

It has been observed from the above table that only a merge percentage of sample families constituting 6.25% feel that the rate is low and 35 families representing 37.5% feel that the rate is reasonable which has been proved by the Chi – Square test as given, below and the remaining 40 families forming 56.25% are of the opinion that the rate is high. However, it is found through enquiry that, it is the practice of the society to raise the existing price first. Whenever the price is raised by the Society, immediately it is followed by the private vendors. Instead of acting as a price controller the society seems to act as a price fixer now-a-days. It is not good trend.

 

 

Computation of Value of Chi – Square

Table 1.6

 

Observed Frequency

Expected Frequency

(O-E)

(O-E)2

(O-E)2

E

40

26.67

13.3

178

6.67

35

26.67

8.33

69

17.62

5

26.67

-12.67

470

2.54

80

 

8.96

717

26.88

 

Degree of Freedom                  =          (r-1)

 

                                                =          3-1

 

                                                =          2                                                         

1.             For 2 d.f, Chi – square value     =          5.99 ( table value )

           

Since the calculated value of Chi-Square is more than the table value, the hypothesis viz, “the prices charged by the society is not a reasonable one” is rejected.

 

 

 

1. Reduction in the price of Milk

 

Since the price factor is a decisive one in any purchase, an analysis has been made regarding the impact of price reduction if resorted to on the level of their purchase and put forth in Table 1.7

 

Table 1.7

The impact of price reduction on the purchase of milk

 

     

 

No of families nearly to buy

 

Rate reduced by ( paises )

½ ltr

1 litre

1.5 litre

No. change in Families

0-10

-

-

-

80

10-20

3

-

-

77

20-30

5

3

2

67

30-40

22

11

-

34

 

From the above table, it is evident that out of 80 families, 46 families are willing to purchase as additional quantity of milk if the price is reduced by 10 to 40 paises per litre. This means that there is a great impact on the slight reduction in price. It shows that the purchase is not standardized. This has again been proved by the application of statistical technique namely standard deviation as given below. Since, the mean value is more than the calculated standard deviation value, the hypothesis, viz., “the consumers will buy more there is a reduction in price” is accepted. The impact of price raise has not been analysed since 56.25% of the sample families already feel that the price is very high as reported in table 1.6. If the increased price considered, the purchases might be affected. Hence, it is suggested that the society shall take all efforts to maintain this existing price at least.

 

 

 

Calculation of Standard deviation

Table 1.8

 

 

Class Interval

Frequency         ( f )

Mid Value    ( m )

 

D=   m-5

 

  5  

Fd

Fd2

0-10

0

5

0

0

0

10-20

3

15

2

6

36

20-30

10

25

4

40

1600

30-40

33

35

6

196

39204

 

46

 

12

244

40840

 

 

Value of std deviation               =          146

 

 

 

 

G. Behaviour of the Co-operative Staff

           

The growth of any business depends on the efficiency of the staff members. At present, there are 38 staff members working in the society. An overall idea regarding the behaviour of staff towards the consumers is analysed and presented in table 1.8

 

Table 1.9

Opinion of the Staff

Behaviour

No. of Families

Percent

Courteous

44

55

Moderate

20

25

Rough

16

20

Total

80

100

 

            It is heartening to note from the above table that a vast majority of the sample families, representing 55% feel that the behaviour of staff is only courteous and it moderate in the case of 20 families. Only a very low percentage 20% of families feels that they rough service. So, to improve the behaviour of staff, it is suggested that a complaint book shall be placed both in the office and at the booth and it must be made known to every consumers.

 

 

 

MAJOR FINDINGS

 

1. As far as the Kovilpatti Co-operative milk supply society is concerned, the management is vested with a board, which consists of nine members elected by the general body as per the election procedures. In addition to the procurement and sale of milk, making arrangements with the nationalized banks for issuing loans to members. Selling green fodder to its members at subsidized prices and providing employment are the other functions of the society.

 

1. The current study has given due importance to the marketing practices of the society. At present, the society procures milk both from its members and the chilling centre in order to meet the demand and requirements of the consumers in Kovilpatti.

 

1. A careful analysis of the selling price shows that the price has increased from Rs. 12.00 in 2005-2007 to Rs19.00 in 2007-2008, thus representing an increase of Rs 7.00. On personal enquiry, it was found that it is due to the fact that the rate charged by the chilling centres has considerably increased during that period.

 

1. The pricing policy of the society is divided into two stages, namely policy regarding purchase price and selling price. Regarding the purchase policy, it is found that the society is following the two axis pricing system for its procurement from the members. Under this system, the society is making payment on the basis of Fat & SNF contents in the procured milk.

 

1. Regarding the sales policy, it is found that the society is not having any scientific policy, it is found that the society is not having any scientific policy. All the costs incurred are not independently and scientifically maintained by the society. Hence, an attempt has been made by the researcher to find out the actual cost on scientific lines by adopting the single or unit output costing.

 

 

SUGGESTIONS

 

1. To increase the numbers of milking members and to procure more milk from members. It is suggested that the area of operation of the society shall be extended to a radius of at least 12 kms.

 

1. It is also recommended that the society shall make their procurement rates known to all residing in the area of operation so as to attract more suppliers of private dealers and thereby achieve the target of the required number of milking members.

 

1. In order to tackle out the problems related to the payment of high price to the chilling centers, it is advised that the society shall take efforts to take payment on the basis of the Fat and SNF contents so that the society can have an effective control over its procurement price.

 

1. Again, the study suggests that the society shall try to supply milk according to the convenience of consumers also by introducing some flexibility in their distribution time schedule.

 

1. Regarding the reduction in  price of milk the present study would like to suggest that the society shall try to reduce its existing price at least  by a very small margin since the price reduction has much impact on the level of their purchases.

 

1. The Success of any business depends on the attitude and preferences of the consumers.

 

 

 

BIBLIOGRAPHY

 

1.  
   • Hajela,J.N “ Principles problems and practice of Co-operation” Shival Agarval & Co, Agra – 3 1985 page No 58.
   • Kulandaisamy,V. “Co-operative Dairying in India” Rainbow Publications, Coimbatore – 30 1986, Page No ; 22.
   • Philip Kotler, & Gary Armstrong, “Marketing for non-project organizations” 1975, Page no 176.
   • Moretenson and Juergen “ Approved practices in Dairying”, Oxfort Publishing Companies, New Delhi, 1964.
   • Dept of Economics and statistical ; Production & Percapita availability of milk, Statistical outline of India 2006-2007.
   • Interim Report of the National Commission on Agriculture on milk production Government of India, Ministry of Agriculture, New Delhi, page no 32.
   • Deepak Shah & Alok Shah, Changing structure of milk production in Maharastra, Productivity Vol 39 Nov 2006
   • Iya,K.K, Role of Dairy Development in Rural  economy, Indian Dairyman  - Conference number Vol XXX 1976 page 105.
   • Dr.Patel,R.K Pricing of Milk Eleventh Dairy Training Programme , New Delhi, 1982.

About the Author

M.Sekar,
HOD - Business Management,
RVS College of Arts & Science ( Autonomous )
Sulur, Coimbatore 641 402

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