Consumer Behaviour towards cooperative milk societies

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Consumer Behaviour towards cooperative milk societies: A Study on measuring ... covering a varying population segment of women, small and landless farmers.
IBWL 2020: Needs & Strategies- A Management Perspective

Consumer Behaviour towards cooperative milk societies: A Study on measuring customer satisfaction of ‘Aanchal’ milk (A Member Milk Union of UCDF Ltd.) Mohit Jamwal*, Dr. Akhilesh Chandra Pandey** *Research Scholar, **Assistant professor Department of Business Management HNB Garhwal University (A Central University) Srinagar Garhwal Uttarakhand

Abstract: Consumer behaviour refers to the behaviour that consumers display searching for purchasing, using evaluating and disposing of products and services that they expect will satisfy their needs. The study on consumer behaviour is the study of how individuals make decision to spend their available resources (time, money, effort) on consumption related items. It includes the study of what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, and how often they use it. Cooperative dairies needs to understand this concept in deep mode as the private players a posing a stiff competition to them. The present study attempts to explore the consumer behaviour of the customers towards the Aanchal milk daily which is member milk union of Uttarakhand cooperative dairy federation. Customer satisfaction was measured across different attributes of the Aanchal milk and the customer’s preference was checked across different parameters. Keywords: Cooperative dairies, Consumer behaviour, Customer satisfaction 1. INTRODUCTION Once the effectuation of first cooperative act is over in 1904, cooperative societies took large footsteps in India in almost all range of socio-economic activities. Dairy industry too didn’t remain untouched by this wave and started leaping towards the rural development of India through the establishment of cooperative milk societies. The commencement of white revolution from a small town Gujarat instituted an unparalleled model of growth in rural India that focused on setting up public-private partnership in the dairy industry. India is the world’s largest milk producer, accounting for more than 17% of world’s total milk production. Dairy sector in India has acquired substantial growth momentum from 9th Plan onwards as a result of which we now rank first among the world’s milk producing nations, achieving an annual output of about 127.3 million tonnes of milk during 2011-12 compared to 121.8 million tonnes in 2010-11. This represents sustained growth in the availability of milk and milk products for our growing population. Dairying has been viewed as prime activity directed towards alleviation of poverty and unemployment mainly in the rural areas which serves as steady additional income for rural people in the rain-fed, hilly and drought-prone regions covering a varying population segment of women, small and landless farmers. The per capita availability of the milk has reached a level of 281 grams per day during year 2010-11, but it is still lower than the world average of 284 grams per day. Most of the milk is produced by small, marginal farmers and landless labourers. About 14.46 million farmers have been brought under the ambit of 1, 44,168 village level dairy corporative societies up to March 2011. The indispensable contribution of cooperatives to India’s dairy industry speaks volumes in itself as India became the leading milk producing nation in the world. In India, the milk sector comprises of unorganised and organised and the former is putting a firm competition to the later. Consequently, it is imperative that the organised milk producing firms should motivate more producers- sellers to join them by extending help in terms of production of milk as well as providing a handsome price. Cooperatives milk society’s works on the same principle of providing assistance and good deals to its associate members so as to meliorate the productivity of the dairy

IBWL 2020: Needs & Strategies- A Management Perspective

business. Often, the cooperatives are confronted with problems like lack of entrepreneurship, ignorance about source of credit/finance, lack of training programmes, lack of possession of necessary productive assets, lack of required skills etc. More than 75,000 cooperative societies are dispersed all over the country and the membership is also record more than 10 million. In a whole, cooperative sector amounts to over 10 million households as compared to more than 70 million households pursue milk production. Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India’s apex organisation of the dairy cooperatives of Gujarat, popularly known as Amul. Leaving off the brand name ‘Amul’, almost all the state milk cooperation brands are regional. Some of the major regional brands are ‘Mother dairy’ in New Delhi, ‘Parag’ in U.P, ‘Sanchi’ in M.P, ‘Nandini’ in Karnataka, ‘Saras’ in Rajasthan, ‘Vijaya’ in Andhra Pradesh, ‘Verka’ in Punjab, ‘Aanchal’ in Uttarakhand etc. Demand forecasting, raw material procurement and distribution of processed materials are the crucial elements of dairy industry as these form the basis of maximising productivity of an organisation. Indian firms are somewhat vulnerable over these issues and come shorter to MNC’s and private dairies. After the grand success of ‘Anand Model’, the milk cooperative society formed in Uttar Pradesh was under the trade name of Parag. With the slicing of Uttarakhand from Uttar Pradesh as a new state the dairy cooperative functional in Uttarakhand was brought under trade name of “Aanchal” which comes under Uttarakhand Cooperative Dairy Federation (UCDF). It focuses mainly on liquid milk marketing and has not adopted product diversification, which is the need of the day. Other brands are entering the market by ‘misusing’ this channel and then penetrate into the liquid milk network.

1.2 Garhwal Dugdh Utpadak Sahakari Sangh Ltd: A Member Milk Union of UCDF under Study Garhwal Dugdh Utpadak Sahakari Sangh Ltd.Srinagar Garhwal, established in the year 1976 with its registration No. 1508, is a member milk union of Uttarakhand Co-operative Dairy Federation Ltd. (UCDF Ltd.). The Aanchal dairy, Srinagar Garhwal is operating in three districts namely- Pauri Garhwal, Rudraprayag and Chamoli. It covers the 12 development blocks in all three districts including Kot, Khirsu, Pauri, Dugadda, Yamkeshwar, Dwarikhal, Pabau, Kaljikhal, Jayharikhal, Agastyamuni, Ukhimath and Jakholi blocks. A total number of 2133 villages have been covered by the Aanchal Dairy Srinagar in the year 2013 under all the development blocks mentioned below.

S. N.

Table: 1.1 Aanchal Dairy Srinagar: At a Glance (May, 2013) Detail of Milk Cooperatives Pauri Rudraprayag

Total

1

Total cooperative milk societies formed

225

79

304

2

Total operative milk societies

133

40

175

3

41

81

4

Milk societies under Mother Dairy Development 40 Project Total Primary Members 5942

2295

8265

5

No. of Poorer Members

950

144

1094

6

Average Daily Milk Collection (in Kg)

3621

138

3759

7

Average Daily Milk Sale (in Lt.)

6814

950

7764

8

Animal Fodder Sale (Metric Tonnes)

9.85

0.90

10.75

9

Grant Allocated under District Scheme (in Lkh)

13.32

5.89

19.21

10

Total Employees Involved

IBWL 2020: Needs & Strategies- A Management Perspective

i

Permanent

48

-

48

ii

Contractual

8

3

11

iii

Under Mother Dairy Development Project

6

6

12

Source: Aanchal Dairy, Srinagar Aanchal Dairy system is constructed on the successful pattern of well-known model as Anand Pattern Dairy Co-operative Societies in a three-tier system involving collection of milk and marketing. Aanchal cooperative is providing a giving a novel opportunity to pursue a better livelihood to farmers that assured them an additional regular supply of income through milk production in hilly areas resulting in decrease in migration of local people. The Three Tier Structure compries of 

Village level Dairy Cooperative Societies (DCS): The role of DCS in villages is the collection of collection of surplus milk from farmer members and to provide suppert and services to the farmers.



District level Milk Unions: The role of milk unions is collection of milk from the entire village DCS of its district, getting it processed and market it. The Milk Union render support and services to the farmer through the village DCS by selling cattle feed, coordinates fodder development programmes and supply good quality fodder seeds , offers artificial insemination facilities to improve breeds of milch animals, etc.



State level Federation: The role of peak Federation is to furnish Marketing services and other support to the District Milk Unions of the State. Moreover, it also helps the Milk Unions to market milk outside the State, maintains liaison with the Government, Plans and Coordinates Programmes and ensures mobilization of resources.

2. REVIEW OF LITERATURE Sharma M.L.et al, (2007) analysed the inefficiencies existing in improving milk production, procurement pattern, marketing channels, and price spread of a dairy cooperative, Uttaranchal Cooperative Dairy Federation Ltd (UCDFL), also known as ‘Anchal’ in the Kumaun region of Uttarakhand and has proposed a model for eliminating these inefficiencies. It has been found that UCDFL is focused mainly on liquid milk marketing and has not adopted product diversification, which is the need of the day. It has been found that due to insufficient margins, the number of agents working for other private dairies has increased. Different marketing channels for milk have been identified and price spread has been calculated for all the channels. Nargunde A. Satish (2013) highlighted the role of dairy industry in uplifting the weaker sections of the society viz. small landholders, landless labourers and women. It is estimated that up to 60-65 percent of the income of this group (marginal and small-scale farmers) now comes from dairying. Studies have shown that dairying in rural areas surpassed crop production in terms of profit in marginal, small and mediumsized holdings. For small-scale farmers with irrigated land, dairying and crop production together, were more profitable than crop farming alone. Over the period, dairying has also acquired the contours of a fully-fledged industry in the country and has positively improved the life of those engaged in this business, directly or indirectly, bringing significant socio-economic changes.

Dakurah A. Henry (2005) studied the attitude towards, and satisfaction of residents of Alberta to their cooperatives. Results of the analysis also show a population that has a general positive attitude towards and is satisfied with their cooperatives as is reflected in assessing the performance of their cooperatives as good. Further analysis using the theory of planned

IBWL 2020: Needs & Strategies- A Management Perspective

behaviour show that respondents’ attitude towards their cooperatives is the single most important and significant predictor of their patronization behaviour. Rathod Prakashkumar et al (2012) conducted in Western Maharashtra region to know the perception of farmers towards livestock marketing services delivered by dairy cooperatives with regards to timely availability, amount paid and satisfaction level of the farmers towards the services. The farmers perceived that they were benefited by marketing services of the dairy cooperative to a great extent with regards to credit facilities, getting more income and access to market facilities. The study concluded that Gokul Dairy Cooperative provided various livestock marketing services for the farmers mostly on time at free or nominal rates. There is an urgent need to improve upon the quality of marketing services so that farmers would be more content and satisfied with the services of dairy cooperatives. Ashok, D. (2012) throws light on the usage pattern and the reasons behind low sensitivity of packaged dairy products. It reveals information concerning consumers' preferences and knowledge of processing organic/dairy products. It also identifies those consumers who are most likely to get processed organic/dairy products. Ramanjaneyalu. N (2012) studied consumers’ behaviour and dealers’ perception

towards Nandini brand in compare with other competitors’ brands. To excel in the highly competitive business the company needs to evolve their production, marketing and pricing strategies effectively. For doing this a clear perception about consumer preference with regard to product and service quality and price is of utmost importance. 3.

RESEARCH METHODOLOGY

The study has been based on both the primary and secondary data that mainly represents survey of the consumers of the Aanchal Dairy products in the vicinity of Pauri, Rudraprayag and Chamoli districts of Uttarakhand. The data have been collected with the help of designed questionnaire containing the questions pertaining to the quality of the milk products and their availability etc. A total number of 152 respondents using packaged milk of various brands were interviewed. The selection of customers was done on convenient random sampling technique. The secondary data has been collected from various published articles, journals, company reports, magazines and also from the websites. 3.1 OBJECTIVES OF THE STUDY  To know the consumer behaviour towards milk consumption.  To examine the satisfaction of consumers towards the milk products with special reference to Aanchal dairy.  To provide implications for Aanchal Dairy. 3.2 STATEMENT OF THE PROBLEM Learning the behaviour of consumers remains imperative for marketers to devise marketing strategies. Consumer’s attitude, preferences and satisfaction is an undermined human psychology that marks a particular human behaviour. In India, dairy industry is a rapid growing a flourishing in FMCG sector. The role played by the cooperatives in catering the needs of rural people and providing them livelihood are very much imperative. Studies on consumer’s perception and satisfaction on various brands of milk marketed by the cooperative dairies will definitely ensure development in the field of cooperative dairies that ultimately results into rural development. 3.3 LIMITATIONS OF THE STUDY: 1. The present study was based on 152 samples only.

IBWL 2020: Needs & Strategies- A Management Perspective

2. The study was conducted in Srinagar, Rudraprayag and chamoli town only. So this study was limited to these towns only and villages were not covered. 3. The views of the people are biased therefore it doesn’t reflect true picture. 4. DATA ANALYSIS Table 1

S.N

BRAND PREFERENCE BRAND OF MILK FREQUENCY

PERCENTAGE

1. 2.

Ananda Paras

41 19

27.0 12.5

3. 4. 5.

Param Aanchal Amul Total

35 32 25 100

23.0 21.1 16.4 100.0

It can be noticed from the above table that ‘Ananda’ tops the list of preferred brands among the available in the market. About 27% of the customers are using Ananda, 23.0% are using ‘Param’ and 21.1% prefer ‘Aanchal’ for their daily usage. Moreover, 16.4% customers are using ‘Amul’ and only 12.5% are using ‘param’. Table 2

CUSTOMER’S PREFERENCE TOWARDS MILK ATTRIBUTES

Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total

Quality 83 44 25 152

Availability 31 47 68 6 152

Price 38 61 53 152

Retailer 6 144 2 152

Others 2 150 152

It can be inferred from the above table that most of the customers have their first preference for quality of the milk, second priority to price whereas third preference to availability of the milk at a particular retail outlet. While most of the customers have their fourth preference as retailers and almost all of the respondents coined others as their fifth preference. Table 3

PREFERRED VARIETY OF AANCHAL MILK S.N 1. 2.

VARIETY Toned Milk (T.M) Standard Milk (S.M)

RESPONDENTS 6 15

PERCENTAGE 18.8 46.9

3.

Full Cream Milk (F.C.M) Total

11 32

34.4 100.0

Table 3 demonstrated the variety of milk preferred by the customers for their daily use. It is interesting to note that about 46.9% of customers prefer ‘standard milk’ followed by 34.4 %

IBWL 2020: Needs & Strategies- A Management Perspective

of the customers that use ‘full cream milk’ while the rest (18.8%) of the customers prefer to use ‘toned milk’. Table 4

S.N

PREFERED PACKAGING OF AANCHAL MILK QUANTITY RESPONDENTS PERCENTAGE

1.

Half Litre

7

21.9

2.

1 Litre

15

46.9

3.

1.5 Litre

5

15.6

4.

2 Litre

3

9.4

5.

More than 2 Litre

2

6.3

Total

32

100.0

Table 4 depicts the preferred packaging of daily milk usage by the customers. It can be noticed from the above table that most of the customers (46.9%) prefer to buy the 1 litre quantity of milk followed by 21.9% as 0.5 litre and 15.6% as 1.5 litre of milk. While 9.4% of the customers prefer to use 2 litre of milk in a single day while the rest (6.3%) use more than 2 litre of milk for their daily usage. Table 5

SOURCE OF AWARENESS FOR AANCHAL S.N 1. 2. 3. 4.

SOURCE Newspaper/Pamphlets Word of Mouth Advertisements Commission Agent Total

RESPONDENTS 3 20 2 7 32

PERCENTAGE 9.4 62.5 6.3 21.9 100.0

The above table demonstrates the source of information about the particular brand of milk used by the customers. Majority (62.5%) of the customers knew about the brand through word of mouth publicity, 21.9% as through commission agents, 9.4% as from newspapers/pamphlets and a very few (6.3%) through advertisements. Table 6

PRICE OF AANCHAL MILK S.N 1. 2.

PRICE Low Price Reasonable

RESPONDENTS 11 14

PERCENTAGE 34.4 43.8

3. 4.

High Price Total

7 32

21.9 100.0

IBWL 2020: Needs & Strategies- A Management Perspective

From the above table, it can be inferred that majority (43.8%) of the customers perceived the price as ‘reasonable’, about 34.4% comprehend as ‘low price’ while the remaining 21.9% sensed it as ‘high price’. Table 7

CUSTOMER SATISFACTION LEVEL TOWARDS AANCHAL MILK Spoilage Taste Highly satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied Total

Thickness

Smell

Price

Availability

Availability

in desired

in desired

quantity

outlet

Rate

Packaging

3

4

4

3

6

4

5

6

7 5 9

6 5 10

6 4 11

5 6 12

9 5 7

9 6 7

8 4 6

6 7 5

8

7

7

8

5

6

9

8

32

32

32

32

32

32

32

32

It can be observed from the above table that the customers are satisfied with the price, packaging and thickness attributes of the Aanchal milk while the other dimensions like taste, smell, spoilage rate and availability are not satisfactory. HYPOTHESIS TESTING-Chi Square Test 1. There is an insignificant relationship between monthly income of customers and brand of milk used by them.

Income * Brand of milk used Which milk brand do you use Ananda Income

Total

Below Rs.5000

Paras

Param

Aanchal

Amul

Total

19

19

16

10

6

70

Rs. 5000-10,000

9

0

17

11

5

42

Rs. 10,000-Rs.15,000

7

0

2

8

7

24

Rs. 15,000-Rs. 20,000

4

0

0

3

3

10

Above Rs. 20,000

2

0

0

0

4

6

41

19

35

32

25

152

Chi-Square Tests Asymp. Sig. (2Value

df

sided)

IBWL 2020: Needs & Strategies- A Management Perspective Pearson Chi-Square

a

16

.000

63.826

16

.000

8.075

1

.004

56.244

Likelihood Ratio Linear-by-Linear Association N of Valid Cases

152

a. 12 cells (48.0%) have expected count less than 5. The minimum expected count is .75.

The tabled depicts the value of chi square was found out to be 56.244. It is far above the critical tabled value of 26.296 at 16 degrees of freedom. Therefore, the null hypothesis is rejected. Hence, there is a significant relationship between monthly income and brands of milk used by the customers. 2.

There is an insignificant relationship between price of milk and variety of milk used by the customers. Price of Milk * Variety of milk used Which of the variety of milk that you daily use

Price of Milk

Tonned Milk

Standard Milk

Full Cream Milk

(T.M)

(S.M)

(F.C.M)

Total

Low Price

12

11

10

33

Reasonable

30

40

24

94

8

13

4

25

50

64

38

152

High Price Total

Chi-Square Tests Asymp. Sig. (2Value

df

sided)

a

4

.638

2.633

4

.621

Linear-by-Linear Association

.209

1

.648

N of Valid Cases

152

Pearson Chi-Square Likelihood Ratio

2.535

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 6.25.

The tabled shows the value of chi square was found out to be 2.535. It is far below the critical tabled value of 9.488 at 4 degrees of freedom. Therefore, the null hypothesis is accepted. Hence, there is a significant relationship between monthly income and brands of milk used by the customers.

IBWL 2020: Needs & Strategies- A Management Perspective

5. FINDINGS AND RECOMMENDATIONS The results from the analysis of the data collected on the various aspects of consumer satisfaction towards the Aanchal products during the field surveys can be summarized as follows: 1. Ananda is the dominating milk brand in Srinagar Garhwal Region. However, Aanchal stood at number three on the brand popularity scale. 2. The most important attribute that motivates a customer to purchase a brand of milk was found out to be quality followed by price, availability, retailers and others in order of influencing strength. 3. The customers are satisfied with the price, packaging and thickness attributes of the Aanchal milk while the other dimensions like taste, smell, spoilage rate and availability are not satisfactory. 4. The most preferred type of milk variety among the Aanchal milk was found out to be standard milk followed by full cream and toned milk. The market share captured by the Aanchal milk products amounts to about one-fourths of the total market of milk in Srinagar Garhwal. Therefore, the firm should devise effective strategies in increasing the sales of their milk products. Non-observance of timeliness, inefficient distribution of milk, frequent break-downs of milk vans, delays in loading and unloading at depots lead to disturbed supply of milk and its products. Though co-operatives in the Garhwal division of Uttarakhand are showing good results, there are certain inefficiencies in the supply chain management, which are hindering their fast growth. The strategy should incorporate effective supply chain management, advanced level of promotions and projecting the products as a potential brand. Further, a close talk with some of the retailers of Aanchal milk revealed that despite the good quality and better hygiene value of the Aanchal milk it could not attract the significant consumers due to its poor marketing, lesser commission to the retailers and inadequate supply timings. The retailers were of opinion that if the management of Aanchal dairy focuses on the timely delivery, better marketing strategies, better sales promotion schemes and better margins to the retailers it could become the best-selling milk brand in Srinagar Grahwal area. The reason being that the Aanchal dairy are not using any chemicals to maximize the shelf life of milk products but this remains a lack of information among the customers. The majority of the customers are satisfied with the price so it has been suggested the standard and affordable price has to be maintained. Customers are also expecting more quality from the brand so that the brand can also develop its sales. Majority of the Aanchal dairy customers are expecting some more dairy products from the company. Therefore, the company can focus and expand its business. 6. CONCLUSION Based on the study of the organization and survey on the sale of Aanchal milk, it can be concluded that to excel in the highly competitive business the company needs to evolve their production, marketing and pricing strategies effectively. For doing this a clear perception about consumer preference with regard to product and service quality and price is of utmost importance. The present study attempts to bring out the factors leading to the purchase behaviour and perception of consumers in buying Aanchal milk. The study suggests that availability of Aanchal milk to the retailers and to the consumers is not upto the desired state. The company has to reinforce its sales promotional activities by enhancing advertisements in local television channels, hoardings, newspaper and displays.

All positive aspects of Aanchal milk must reach the public. As quality was found to be very

IBWL 2020: Needs & Strategies- A Management Perspective

important factor, the cooperative needs to look for quality improvement with regard to thickness, smell and spoilage rate, pricing policy needs to be reviewed and made such so that they can compete with the loose milk vendors. Retailers are expecting higher margin, hence pricing policy should be reviewed to keep the retailers satisfied and enthusiastic in the promotion of sales of Aanchal Milk. These efforts may go a long way in providing adequate public/satisfaction about Aanchal Milk., this well help the firm to excel in their businesses. 7. REFERENCES 1. Chandran T. Ravi, Arumugasamy G. (2013) “Consumers Attitudes towards Arokya Milk in Nagercoil Town” Indian Journal Of Applied Research, Vol 3 (4) 296-304. 2. Kothari C.R. (2003), Research Methodology Methods & Techniques, Wiley Eastern Limited, New Delhi. 3. Kotler, Philip. 1991. Marketing Management - Analysis, Planning, Implementation, and Control, (VII Edition). New Delhi: Prentice – Hall of India Pvt. Ltd. 4. Mary C. Jothi (2013) “A Study on Consumer Behavior of Aavin Milk in Bhel Township: Trichy” International Journal of Advance Research in Computer Science and Management Studies, ISSN: 2321-7782 (Online) Vol.1(4). 5. Nargunde A. Satish (2013) “Role of Dairy Industry In Rural Development” International Journal of Advanced Research in Engineering and Technology, ISSN 0976 –6480(Print), ISSN 0976 – 6499(Online) Vol. 4(2). 6. Periyasami N. (2005) “Milk production in India “kisan world, sakthi sugars Ltd., Delhi vol. 33. 7. Ramanjaneyalu n. (2012) “Consumers’ behaviour and dealers’ perception towards dairy products – a case study of dharwad milk union of karnataka milk federation (kmf)”Asian Journal of Research in Social Science & Humanities, ISSN 2249‐7315, Vol. 2(2). 8. Ramanujam, K.N., “Role of Co- operative in milk marketing venture”. Indian journal of marketing Graphic press New Delhi 2007. 9. Rena Ravinder, Vadde Suresh (2010) “Consumer Behaviour towards Women’s Cooperative Dairy (Swakrushi Milk): A Field Based Study in Karimnagar District, India” KASBIT Business Journal, 3(1):25-44. 10. Sathya Sundarm I., (2009 )“Rural Poverty and Dairy Development”. Southern Economists Bangalore, p.16. 11. Schiffman Leon and Kanuk, (1994) Consumer Behaviour (Fifth Edition), New Delhi: Prentice Hall of India.

12. Sharma M.L. et al (2007) “Potential and Prospects of Dairy Business in Uttarakhand: A Case Study of Uttaranchal Cooperative Dairy Federation Limited” Agricultural Economics Research Review, Vol. 20 (Conference Issue) 489-502.