Internship report with reference to,

KARNATAKA MILK FEDRATION(MYMUL)

Submitted by,

SANJAY R
(USN: 01JST21PMB093)
Submitted to

JSS SCIENCE AND TECHNOLOGY UNIVERSITY, MYSORE

In partial fulfilment of the requirements for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of,

INTERNAL GUIDE

Prof. Maheshwari B P

Assistant Professor

JSSCMS, Mysuru.

JSS Centre for Management Studies, Mysore

(Established under JSS Science and Technology University Act. No. 43 of 2013 Formerly Sri
Jayachamarajendra College of Engineering (SJCE)

1
 DECLARATION

I SANJAY R, (USN: 01JST21PMB093) hereby declare that the report on overall study of
Management with Marketing, prepared by me under the guidance Prof. Maheshwari B
P, MBA department, JSSCMS Mysuru.

I also declare that this internship work is towards the partial fulfilment of the university
regulations for the award of degree of Master of Business Administration by JSS Science
and Technology University, Mysuru.

2
CHAPTER-1
INDUSTRY PROFILE

1.1 ORGIN OF MILK INDUSTRY:

Earlier people used to have animal milk for food. However the people of ancient
Babbly Lon, Egypt and India raised dairy cattle as early as 400 B.C. At that time, the
family cow was the cheap source of milk. A family used as much it needed and traded
or sold the rest to neighbor.
A dairy industry grew; several cities passed laws to control the sale of milk. Some
of these laws made it illegal to add water to milk or to remove cream from milk.
However, none of the early laws set health standard for milk. Many dairies added
chemical preservatives to milk. But after sometimes these chemicals were found to
be harmful, laws prohibited their use. Gradually cities and states began supervising
the milk industry in order to protect public health. In 1856 an American inventor named
Gail Borden received a patent for the first successful milk condensing process. About
in 1885, dairies first used glass, jars and bottles, in which workers were filled milk by
hand. The invention of bottling machine in 1886 has proved that filling the containers
easier and faster.
In 1890, Stephen M. Babcock, an American agricultural chemist developed a list to
measure the fat content of the milk. The market value of milk depends on its fat
content, which dairies still determine by the Babcock test. In 1890s a few dairy plants
introduced pasteurization, a process invented by the French scientist Louis Pasteur.
One of the greatest epics -Mahabharata gives us the fact that dairying has an age-old
background. In those days cattle were treated as god. As the years passed, people
started using cattle to satisfy their needs of milk, milk products and for cultivation. But
during olden day's milk and milk products were not sold. Only after 1940's dairying
was started in an organized manner, in those days dairies were encouraged to make
pasteurized butter, mainly for the British army. One of such firm was "Urban Milk
Supply Scheme". After independence greater Bombay Milk Scheme has come into
existence. By this time many state government set up composite "Dairy Development

3
Department" to facilitate milk production, procurement, processing and marketing. A
dairy is place which deals with collection, processing of milk and manufacturing of
various milk products on an industrial scale

KARNATAKA MILK FEDERATION

KMF was instituted in 1984, by federating the 13milk unions in the state and thus
forming the state level apex organization. As a cooperative apex body of the state of
Karnataka, it represents dairy farmers’ organization and also implements dairy
development activities to achieve the following objectives:

 Provides assured and remunerative market for the milk produced by the farmer
members.
 Provide quality milk to urban consumers.
 To build village level institutions in co-operative sectors to manage the dairy
activities.
 To ensure provision of milk production inputs, processing facilities and
dissemination of know-how.
 To facilitate rural development by providing opportunities for self employment
at village level, preventing migration to urban areas, introducing cash economy
and opportunity for steady income.

LIST OF CO-OPERATIVE MILK PRODUCERS UNDER KARNATAKA

MILK FEDERATION

• Bangalore Milk Union • Belgaum Milk Union • Bellary

Milk Union • Bijapur Milk Union • Dharwad Milk Union •
Gulbarga Milk Union • Hassan Milk Union • Kolar Milk
Union • Mandya Milk Union • Mysore Milk Union • Shivmoga Milk
Union • Tumkur Milk Union

DAIRYING IN INDIA:

Around 1500 to 2000 the Aryans were the first to domesticate cattle use for
tilling their land and obtain milk to be consumed as food. It was the Aryans who
priced the milk of a cow more than its meat, forbade its slaughter and created
legends about it, even worshipped it. Hindus even today consider cow as sacred.
More of the total production of milk is obtained from cows. In India, dairying has been

4
practiced as a rural cottage industry since the remote past. Semi commercial dairying
started with establishment of military dairy farms and cooperative milk unions
throughout the country towards the end of the 19th century.
However, market milk technology may be considered to have commenced in 1956
with the functioning of the central dairy of Aarey milk project technology in 1956 with
the establishment of AMUL dairy.

1.2 GROWTH AND PRESENT STATUS OF THE INDUSTRY:

The Indian dairy industry is heading towards new century with an accelerated
and positive momentum. With unprecedented growth in milk production by over two
and a half time in the two decades to about 58.8million tons in 1992, India has
emerged as the largest milk producer in the world with an annual milk production of
76 million tons. Food processing industry ranks as the 5th largest industry in the
country. Through the milk and the milk products have 85% business in unrecognized
sector; it is having only 7% growth per year.
The establishment of a cooperative structure as a ready and regular buyer or milk
produced gave a new turn to the rural economy. Today, over 275 dairy plants and 85
milk product factories in the cooperative, public and private sectors handle an
estimated 12-15% of the total milk produced. In most of the countries in the world,
the proportion of the milk delivered to the dairies is over 90%.
The trends are now changing fast in India too. It is expected that the processing of
the milk on organized scale will increase sharply in developed countries. This will
consequently increase the opportunities for the value addition. While the value of the
output of the dairy products in the countries’ food sector has increased from 5-7%
during the same period. Now the days of milk scarcity and imports are behind us.
The organized sector can seize the opportunity of tapping the market of value added
dairy products like butter, cheese, lactose, khova, paneer eIt is beyond doubt to
mention that the organized dairy industry has done a splendid job by transforming
itself from an import dependent enterprise to self sufficient industry and the
embarking on export of various products. And now it is poised for another wave of
expansion by undertaking large scale production of milk in the organized sector.

5
GROWTH PROCESS

KEY ITEMS UNIT 1976- 2019-20 2020-21 2021-22 2022-

2023(August)
77

Dairy Nos 416 16071 16789 17014 17208

Cooperatives
DCS
Registered

DCS Functioning Nos 14493 14864 15005 15144

Women DCS Nos 4239 4547 4703 4780

Registered

Women DCS Nos 3868 4079 4143 4197

Functioning

STEP Registered 2474 2585 2855 2855

Nos

STEP
Nos 2299 2375 2880 2880
Functioning
Membership Nos 37000 24.75 25.75 25.90 26.14
Lakhs Lakhs Lakhs Lakhs

Ann. Avg. Milk LKPD 0.50 75.61 78.73 81.66 85.49

Procurement

Peak LKPD 84.44 88.30 90.62 94.18

(june’18) (july’20) (june’21) (june’22)
Procurement

Avg. Milk Sales LLPD 95050 35.57 35.59 37.17 41.89

Avg. Curd sales LKPD 6.18 5.14 5.92 7.52

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 Avg. Good life LLPD 6.01 6.80 6.61 6.74
sales

Daily Payment to RS. 0.09 18.12 21.41 22.52 26.14

Crore
Farmers

Total 16150 16656 19784 8928

Turnover (KMF & RS. 8.82
Crore
Unions)

MILK FEDERATION:
The Karnataka Co-operative Milk Producers Ltd came into existence on
1-5-1984 by federating the milk unions in the state and thus forming the state level
apex organization.
When all the project activities are completed, the main role of the federation will be to
market surplus milk products and to produce and supply centralized inputs.

1.3 KEY PEOPLES OF THE INDUSTRY

Place of
Name Designation
working

B.C SATEESH, KCS MANAGING DIRECTOR / CEO KMF CO

M. RAGHUNANDAN DIRECTOR (MARKETING) KMF CO

RAMESH B. KONNUR DIRECTOR (FINANCE/SYSTEMS) KMF CO

GOVINDEGOWDA DIRECTOR (CENTRAL VIGILANCE TEAM) KMF CO

7
 MUNIREDDY N. DIRECTOR (QA/PRODUCTION) KMF CO

M. S. SUHAEL DIRECTOR (PURCHASE) KMF CO

NALINI H. J DIRECTOR (CTI) KMF CO

NALINI H. J DIRECTOR (MIS) KMF CO

H. K. RAGHAVENDRA DIRECTOR (ENGINEERING) - 1 KMF CO

RAMESH B. KONNUR DIRECTOR (ADMIN) KMF CO

P RAMAKRISHNAPPA DIRECTOR (ENGINEERING) - 2 KMF CO

DR. BUKKA
DIRECTOR (AH/STEP) KMF CO
MALLIKARJUNA

UNION CHIEFS
Name Designation Place of working

Dr. S.T. SURESH MD BENGALURU MILK UNION

GOPALAIAH MD HASSAN MILK UNION
Madhusudhan MD KOLAR MILK UNION
Dr. P. R. MANJESH MD MANDYA MILK UNION
Dr. B.P SURESH MD TUMAKURU MILK UNION
B.N. VIJAY KUMAR MD MYSURU MILK UNION
Dr. K. S. BASAVARAJ MD SHIVAMOGGA MILK UNION
D.ASHOK MD DAKSHINA KANNADA MILK
UNION
Dr. K. M. LOHITHESWAR MD DHARWAD MILK UNION
M. RAJASHEKARAMURTHY MD CHAMARAJNAGAR MILK
UNION
SRINIVASAN G MD BELAGAVI MILK UNION
T. THIRUPATHAPPA MD BALLARY MILK UNION

8
 Dr. S. DIXIT MD VIJAYAPURA - BAGALKOT
MILK UNION
B.S. SIDDEGOWDA MD KALABURAGI MILK UNION
S.G. SHEKAR MD HAVERI MILK UNION
Smt. R. PADMAVATHI MD CHIKKABALLAPURA MILK
UNION

UNIT CHEIFS
Name Designation Place of working

Dr. BUKKA MALLIKARJUN DIRECTOR NANDINI SPERM STATION

H.S. MANJUNATH DIRECTOR MOTHER DAIRY

P.S. RANGASWAMY DIRECTOR NANDINI HITECH PRODUCT

PLANT, CHANNARAYAPATNA

G. M. CHANDRAPPA DIRECTOR RAMANAGAR POWDER

PLANT

Dr. KAMKERI C. H. MD DEMPO DAIRY, ASANGI

D.VIVEK DIRECTOR CATTLE FEED PLANT,

HASSAN

Dr. M. B. MADIWALAR G.M CATTLE FEED PLANT,

DHARWAD

B. T. KISHORE G.M CATTLE FEED PLANT,

SHIKARIPUR

KRISHNAPPA M. G.M CATTLE FEED PLANT,

RAJANUKUNTE

H Mahesh G.M CATTLE FEED PLANT, GUBBI

H.C. CHIDAMBAR MURTHY G.M NANDINI MILK PRODUCTS

B. DINAKAR G.M NANDINI PACKAGING FILM

PLANT

Dr. M. B. MADIWALAR G.M TRAINING CENTRE,

DHARWAD

V. RAVIKIRAN INCHARGE GM BALLARI ICE CREAM PLANT

Dr. P. V. PATIL INCHARGE GM TRAINING CENTER,

GULBARGA

S.C. ARVIND JOINT DIRECTOR TRAINING CENTER MYSORE

1.4 PEST ANALYSIS:

• Indian Dairy Industry is at cross roads

9
• Industry strongly dominated by the government sector and working in co-operative
mode is going to face keen competition from private sector
• Co-ops performed well in some states, but in many states, they are functioning as
parastatals, weak representative of farmer interest
• Currently co-op prices serve as a bench mark for pricing of dairy
• Weak co-ops competing with private sector may severely affect farmer interest

• POLITICAL
MYSORE diary is under the guidelines of KMF administration and financial matters.
Labors are paid according to 6th pay commission and also provided epic facilities
according to state government. MYMUL even gets grants from government. The land
is owned by MYMUL on rent basis from the government

• ECONOMICAL
Since milk is a daily use product the demand will be always high and also MYMUL
has the major portion of market sales are always at high. And the prices vary
according to government taxes and availability raw milk
• SOCIAL
Since most of employees are from nearest area culture differences is not there. Every
employee is provided uniform to feel the sense of unity. There are all types of age
groups in the organization and mostly elderly employees are in a higher job
designation

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• TECHNOLOGICAL
Milk is being test in every part of the process starting from procurement to dispatch
through automated machines such as lactometer. There are 15chilling unit, 3bays,
4pasterisation unit, 4silos and more 10 engineers to take care of the machines. The
process starting from procurement to packaging is fully automatic with only 4people
controlling the whole process

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1.5 PORTER’S FIVE FORCE MODEL

• THREAT OF NEW ENTRY

Brand preferences and consumer loyalty:
There is an immense level of brand preference of Nandini milk in the minds of the
people.
The level of preference specifically in the liquid milk sector is that they would go to the
other retailer only of the retailer does not have Nandini milk.

• BARGAINING POWER OF SUPPLIER

Hear is appropriate bargaining power of supplier:

In olden days there were not any kind of cooperative soceities as the farmer was
exploited but nowadays the farmer’s rights are protected under the cooperative rules
and regulations which ultimately results in moderate power of bargaining from the
supplier.

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• RIVALRY AMONG COMPETITORS
Mergers and acquisitions:
As such in the industry there are no mergers or acquisitions however if any MNC
wishes to entry though this route then the competition might be severe.

• THREATS OF SUBSTITUTE
Availability of attractive price substitute:
Different subtitutes are available for different category of products. There is ample
availability of low priced subtitutions from local vendors and retailers .

• POWER OF CUSTOMERS
This specifically deals with ability customers have to drive prices down. It is affected
by how many buyers are customer a company has, how significant each customer
is,and how much it would codt a customer to switch from one company to another
company. The smaller and more powerfull a client base,the more power it holds.

13
 CHAPTER-2
COMPANY PROFILE

MYMUL
2.1 BACKGROUND AND HISTORY
Mysore Dairy with the capacity of 10 TLPD was started in the year 1965 under the
control of the Department of Animal Husbandry and Veterinary Services of Karnataka
State, which was transferred to Karnataka Dairy Development Corporation in the year
1974. The capacity was expanded to 60 TLPD in 1980 under the scheme operation
flood and transferred to the Karnataka Milk Federation in 1984. As per the
Government policy the Dairy and its Chilling Centers were handed over to Mysore
Milk Union on 01.06.1987. The capacity was expanded to 100 TLPD under the
Operation Flood II and further expanded to 180 TLPD under Perspective Plan I
Programme.

Under the World Bank aided Karnataka Dairy Development Projects, the activities on
Dairy Development were taken up in the year 1975. The Mysore District Co-operative
Milk Producers Societies Union Ltd was registered on 23.11.1976, having the
jurisdiction extended to the entire Mysore District and Five Talks of Mandy District.
The Union undertook the work of organization of Milk Co-operatives in ‘AMUL

14
Pattern’ with the main objective of socio-economic reformation of the farmers in the
rural areas through Dairying as main subsidiary occupation.

Later the Union was bifurcated into Mysore and Mandya District Co-Operative Milk
Producers Societies Union Ltd from 01.04.1987. Consequent to the bifurcation of
Mysore District into Mysore and Chamarajanagar Districts, this Union is renamed as
Mysore-Chamarajanagar District Coop Milk Producers Societies Union Ltd. Later
from April 2015 Bifurcation of Mysore-Chamarajanagar district milk union as Mysore
milk union and Chamarajanagar milk union.

VISION AND MISSION:

2.2 Vision

• To march forward with a missionary zeal which will make KMF a trailblazer of
exemplary performance and achievements beckoning other Milk Federations
in the country in pursuit of total emulation of its good deeds.

• To ensure prosperity of the rural Milk producers who are ultimate owners of
the Federation.

• To promote producer oriented viable cooperative society to impart an impetus

to the rural income, dairy productivity and rural employment.

• To a bridge the gap between price of milk procurement and sale price.

• To develop business acumen in marketing and trading disciplines so as to

serve consumers with quality milk, give a fillip to the income of milk producers.

• To compete with MNCs and Private Dairies with better quality of milk and milk
products and in the process sustain invincibility of cooperatives.

2.3 Mission
Heralding economics, social and cultural prosperity in the lives of our milk producer
members by promoting vibrant, self-sustaining and holistic cooperative dairy
development in Karnataka State.

2.4 Values:

15
Honesty, Discipline /Timeliness, Quality, Trust, Impartial, Savings, Transparency.

2.5 QUALITY POLICY

Mysore District Milk Union is committed to procure and supply safe Milk & Milk
Products to the satisfaction of consumer by:
Complying with statutory and regulatory requirements
Constant communication with all parties involved in the food chain
Adopting GHP, GMP & HACCP
Adopting scientific processing methods,
Training of employees Union/Dairy Co-operative societies.

ISO 22000 Documented and Under Implementation.

This commitment is supported by measurable objectives and brings about continual
improvement.

2.6 PRODUCTS AND SERVICES PROFILE:

The product profile refers to the study of the products information of the company.
The various milk and milk products manufactured at MYMUL are shown below:
The following are the products and their quantity offered by MYMUL:

Toned milk Homogenized toned milk

16
Full cream milk Ghee

Peda Butter

Paneer Khova

17
Masala majjige Sweet lassi

Mysore pak Curd

Badam Powder Chocolate Bite

18
Flavored Milk Jamoon Mix

Nandini Toned Milk

Nandini Toned Milk is the Karnataka’s most favorite Milk. Fresh and pure milk
containing 3.1% fat and 8.5% SNF. Available in 520 ml & 1liter packs.

Nandini Homogenized Toned Milk

Nandini Homogenized Toned Milk is pure Milk containing 3.1% Fat & 8.5% SNF. This
is Homogenized and pasteurized. It gives you more cups of tea or coffee and is
easily digestible.

Nandini full cream milk:

Full milk; contain 6.1% fat and 9%solid not fat. Rich creamier and tasted milk, ideal
for preparing homemade sweets and savories. Available in 500ml.

Nandini Ghee

A taste of purity, Nandini Ghee made from pure butter. It is fresh and pure with a
delicious flavor. Hygienically manufactured and packed in a special pack to retain the
goodness of pure ghee. Available in 200 ml, 500 ml, 1000ml packs & 15 kg tins.

Nandini Peda

Nandini Peda made from pure Milk. Available in 100gms & 250gms packs.
Nandini Peda made from pure Milk. Available in different flavor like Kesar peda.

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Paneer

It is a tasty, wholesome and nutritious supplement for a variety of dishes. Add

Paneer to make dishes creamy and mouth-watering. Available in 200g and 1kg
packs. Can be stored for 30 days when kept frozen.

Khova
Add Khova to preparations like carrot halwa, gulab jamoon etc. and increase the
richness of its taste. Available in 200g packs. Can be stored for 30 days when kept
frozen.

Cashew Burfy

Pure Milk based cashew burfi is available in 250gms.

Nandini Curd

Nandini Curd made from pure milk. It’s thick and delicious giving you all the goodness
of homemade curds. Available in 250 grams and 500 grams packs.

Nandini Sweet Lassi

Nandini Sweet Lassi the most refreshing drink made from fresh curd.Best alternative
to cool drinks during summer.

Nandini Peda Kesar

Nandini Peda made from pure Milk.Available I n different flavours like Kesar & Elaichi .

Good life

Cow’s pure milk. UHT processed, bacteria free in a tamper proof tetra fino pack
which keeps this milk fresh for 60days without refrigeration until opened. Available in
500ml and in 200 ml bricks.

Badam burfi

Badam burfi is a delicious treat made up of milk and it can be stored at room
temperature.

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Flavored milk

Sterilized flavored milk. Nutritious and wholesome milk available in 5 different flavors,
pineapple, rose, badam, pista and natural orange.

Masala majjige

It is one of the drinks available in the dairy. Its prepared using masala ingredients.

AREAS OF OPERATION

As a district milk union under KMF, individually the union has no opportunities to
expand their operation because the MYMUL is structured under KMF as a district
milk union of Mysore district. The union itself acts as a branch of KMF but the union
has opportunities by way of marketing its milk products out of its limited market
borders means of its district market borders The district milk unions are controlled by
the KMF, which acts as a mother organization to all other district unions in
Karnataka. The union receives all types of demand orders from in and outside the
country. Especially the milk powder has more demand from foreign countries. The
union will produce other milk products according to their demand rate.

PROCUREMENT:

To procure the surplus milk available in the primary milk producers’ Co-operative
societies of the union jurisdiction area.
• Organising dairy co-operative societies at village level.
• Organising milk procurement route to procure milk.
All the dairy co-operative societies in the union jurisdiction will be a shareholder to
the affiliated federal body where in the dairy co-operative societies will be assisted in
procuring milk in both shifts and providing technical input support to the producer
members and to make remunerative payment to the dairy co-operative societies on
the quality parameter.

TECHNICAL INPUT ACTIVITIES

It is one of the fundamental objectives of MYMUL to carry out activities for enhancing
Milk production in its Milk shed area. In view of this, various technical input services
like veterinary health care, artificial insemination services, vaccination, supply of
balanced cattle feed and quality fodder seed etc. are provided for enhancing milk
production and economic development of farming community.

ANIMAL HEALTH AND EMERGENCY SERVICES

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The union is taking special care to promote the health of the cattle of member milk
producers. Veterinary health care facilities have been extended to all the DCS.
Emergency veterinary routes, Health camps, Vaccination against Foot and mouth
disease are being provided to all functional societies. Mass deworming programme is
carried out twice in a year at all DCS. There is also a backup of Veterinary First Aid
Services to needy milch animals through trained DCS staff. Introduced Trio-NB-Sac
and 'Godhara Shakthi' to improve quality of Milk.

STEP (Support to Women Training & Education Program)

The Programme of STEP aims

• To organize exclusive Women Dairy Cooperatives and to take up employment

cum income generation activities.
• To provide need based and extensive training for skill upgradation.
• Mobilizing women in formation of Self help Groups as a tool for income
generating activity and for easy access to credit.

2.7 COMPETITIORS OF MYMUL:

The major competitors of MYMUL are as follows:

• Jersey
• Dodla
• Arogya
• Gomatha
• Thirumala
• Swastika
• Loose milk vendors
• Heritage

Jersey:

 Plant located at Andhra Pradesh

 Sale in union jurisdiction 45tlpd (100 tlpd in city)

 MRP is 35/litre seller rate rs.37 based on quantity

 Commission ranges from 40-70piasa/litre

 Quality perception-thick and longer shelf life

 Flexible distribution-retailers, wholesalers or anyone willing to sell

22
  Payments cash and carry or while collecting empty crates on return trip.

 Availability- mostly retail outlets and now capturing institutional sales by any
means.

 Vigorous advertisement especially at the point of purchase.

Dodla:

 Plant located at Nellore

 Availability of raw materials at cheaper rate.

 sale in union jurisdiction 18tlpd

 MRP rate Rs.60 per litre-seller rats Rs.64

 Commission ranges from 40-50paisa.

 Quality perception-thick and long shelf life.

 Flexible distribution-retailers or anyone willing to sell

 Returns will be accepted

 Payment-cash and carry or while collecting empty crates on return trip.

 Channel members are playing critical role in boosting the sales.

 Packing is attractive with multi colour pricing on sachets.

 Consumers perceive that milk is good for making curds.

Arokya:

 Plant located at Bangalore.

 Sale in union jurisdiction 10tlpd.

23
  MRP rats Rs.64 per litre

 Commission ranges from 60paisa per litre.

 Availability- mostly retail outlets like bakeries, condiments and departmental

stores.

 Packing is attractive with multi colour pricing on sachets.

 Concentrating on value added products and not much on milk

Loose milk vendors:

 Market share is next to Nandini.

 Loose milk from erode and local cattle rears.

 MRP rate Rs.30 to Rs. 32 per litre

 Majority of the milk is heavily adulterated and no uniform quality.

 Sales from 50ml and above

24
2.8 SWOT ANALYSIS

A SWOT analysis is a strategic planning tool used to evaluate the strengths,

weaknesses, opportunities and threats involved in a project or in a business venture
or in any other situation requiring a decision.

Environmental analysis

Internal Analysis External Analysis

Strengths Weakness Opportunities Threats

SWOT Analysis

25
SWOT Analysis of the Organization

STRENGTHS:

• Market leader.
• “Nandini” is a trusted house hold brand name.
• Two lakh farmer members.
• Provides excellent veterinary, AI, vaccination, Extension facilities, Feeds and
Fodder seeds supply etc., in the field, which cannot be thought off by any
private operator. Hence earned lot of goodwill from member producers, who
patronize the union throughout the year.
• Has earned the distinction of not failing to deliver the milk to market on time
throughout the year.
• There are days with no power supply, no water supply; but there is no day
without NANDINI milk supply.
• Highly remunerative and timely payment to producers.
• Union is in good financial position.
• ISO 9001-2000 certificate.
• Good institutional support from KMF, NDDB, etc.,

WEAKNESS
• Lack of flexibility in deciding about its operation. No authority over issues like
pricing, offering volume discounts etc.,
• Political interference.
• Organizational structure does not permit incentive/ reward for good
performance.

26
OPPORTUNITIES
• Since the Mysore district is under Cauvery basin, perennial greens are
available to the cattle.
• Institutional markets, bakeries, hotels etc., are not fully tapped and these can
be captured preferably by direct marketing.
• Diversification of milk products like Peda, Mysore Pak.... etc.,
• Exploit the “Human Face”, by positioning in the market as an organisation with
social responsibilities of serving the milk produced by paying remunerative
price and serving customer by offering hygienic quality product at a reasonable
price throughout the year. Union is not in the business to maximise the profit
as in the case of private dairies and is acting as price stabilizing force in the
market. Projecting these to the customers will reinforce the positive image of
the organisation in customer’s minds as a caring organisation which service to
them as its motto.

THREATS
• After liberalization, entry barriers in the dairy industry eased for new entrants.
• The competition from Co-operatives like Dodla, Heritage, Kamadenu.... etc.,
• Private dairies procure milk at low cost from producers and sell milk resorting
to unethical trade practices. It is a marketing war in which union has to fight by
rules and other private dairies do not fight by rules. Hence, there is no level
playing field for organization with social responsibilities to compete with
organizations with purely profit motive.
• Some private dairies are selling homogenised milk, which appears rich. The
union cannot homogenize all its huge quantity of milk due to lack of
homogenizing capacity and increase in processing cost.
• Plans of major companies like Reliance, ITC to enter into milk market in future.

2.9 Market Share of MYMUL:

• 60-70% of market share- Nandini.
• 05-10% of market share- loose milk vendor.

• 10-20% of market share- other private brands

27
 2.10 PRESENT PROJECTS/STATUS

1 Establishment of Mega Dairy Plant of capacity 10 – 15 LLPD with 60 MTPD capacity Milk
Powder plant for Hassan Milk Union at Hassan.

2 Auto storage system & retrieval system for 60 Lakh liters capacity new godown of storing
UHT & PET bottle milk at Hassan Milk Union, Hassan.

3 Setting up of 1 LLPD expandable to 1.5LLPD Dairy and UHT Milk Plant on Design, Build,
Finance, Operate and Transfer (DBFOT) Basis of PPP mode at Haveri chilling centre, Haveri,
Karnataka.

4 Construction of Hostel at Belgaum dairy premises for Farmers children’s in association of

Belgaum Milk Union & KMF.
5 Construction of new Godown & expansion of Canteen building and other infrastructure
developmental works at Mother Dairy - Yelahanka, Bengaluru.

6 Establishment of different capacity Cattle Feed Plants under PPP mode at Sadali, Kolar
District & Dadesuguru, Raichur district.

7 Setting up of Packaging materials manufacturing Plant on Design, Build, Finance, Operate and
Transfer (DBFOT) Basis of PPP mode at Challaghatta, Bengaluru.

8 Various Infrastructure developmental works for Kalburgi Milk Union at Karlburgi Dairy
Premises.

9 Construction of Canteen building, packing materials godown, expansion of Processing hall ,

installation of Boiler and RO plant for Ice cream plant at Bellary.

10 Various Infrastructure developmental works under progress for Hassan & Tumkur Milk
Unions.

2.11 FUTURE PROJECTS/PLANS

1 Establishment of Mega Dairy Plant of capacity 10 LLPD for Tumkur Milk Union at Tumkur.

2 Construction of Raw material godown/ molasses storage tank of different capacities at various
KMF cattle feed Plants.

3 Hi-tech mega Nandini Dairy Food Park is proposed to be set up in North Karnataka.

4 KMF is intended to consolidate the overall electricity consumption of KMF units and District
Milk Unions under the Solar Group Captive Generation System as a centralized system for all
unions and KMF units.

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5 KMF is intends to establish Mother Dairy Unit-2, which includes central milk processing unit ,
milk products unit and other developmental activities at Bengaluru region.

6 Establishment of New Nandini Packaging Film Palnt.

7 It is proposed to build a Hostel in association with the unions at suitable places for the
children’s of the farmer as requested by the various unions.

2.12 BALANCED SCORECARD

A balanced scorecard is a performance metric used in strategic management to
identify and improve various internal functions of a business and their resulting
external outcomes. It is used to measure and provide feedback to organizations. Data
collection is crucial to providing quantitative results, as the information gathered is
interpreted by managers and executives, and used to make better decisions for the
organization.
The balanced scorecard was first introduced by accounting academic Dr. Robert
Kaplan and business executive and theorist Dr. David Norton. It was first published in
1992 in the Harvard Business Review article “the scorecard measures that drive
performance." Both Kaplan and Norton took previous metric performance measures
and adapted them to include nonfinancial information.

Purpose Behind the Balanced Scorecard

The balanced scorecard is used to reinforce good behavior in an organization by
isolating four separate areas that need to be analyzed. These four areas, also called
legs, involve learning and growth, business processes, customers, and finance.

The balanced scorecard is used to attain objectives, measurements, initiatives, and

goals that result from these four primary functions of a business. Companies can

29
easily identify factors hindering business performance and outline strategic changes
tracked by future scorecards.

The balanced scorecard can provide information about the company as a whole
when viewing company objectives. An organization may use the balanced scorecard
to implement strategy mapping to see where value is added within an organization. A
company also utilizes a balanced scorecard to develop strategic initiatives and
strategic objectives.

The Four Legs of the Balanced Scorecard

Information is collected and analyzed from four aspects of a business:

1. Learning and growth are analyzed through the investigation of training and
knowledge resources. This first leg handles how well information is captured
and how effectively employees utilize the information to convert it to a
competitive advantage over the industry.
2. Business processes are evaluated by investigating how well products are
manufactured. Operational management is analyzed to track any gaps,
delays, bottlenecks, shortages, or waste.
3. Customer perspectives are collected to gauge customer satisfaction with
quality, price, and availability of products or services. Customers provide
feedback about their satisfaction with current products.

4. Financial data such as sales, expenditures, and income are used to

understand financial performance. These financial metrics may include dollar
amounts, financial ratios, budget variances, or income targets.

30
Kmf-mymul does not follow balanced scorecard approach.

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 CHAPTER- 3

ORGANISATION DESIGN

3.1 A review of choice in design

A review of choice in design is the determination and start of the general approach
and strategy adopted for a particular organizational study. The research has
undertaken a comprehensive plan of the sequence of operation for the descriptive
study to achieve the research objectives with the arrangement of condition for
collection and analysis of data.

Primary data:

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This is the process where first hand information was collected. The research derives
it after completing certain activities. Primary data is collected directly from the dairy.

Secondary data: The Secondary Data is readily complied data from statistical
statements and other sources. The data can be obtained from either published or
non-published sources

3.2 ORGANISATION STRUCTURE:

• The organization chart and accompanying baggage that show who reports to whom
and how tasks are both divided and integrated. Since mymul is a co-operative
sector unit. The structure of the organization is democratic. Major decision however
is taken is at top-level management of the company.

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 CHAPTER-4

BUSINESS LEVEL FUNCTIONS AND PROCESSES

4.1 HUMAN RESOURCES MANAGEMENT;

HR Practices of MYMUL:
The following are the HR practices of MYMUL:

1. House rent Allowance: -

It is allowance provided to all permanent employees at the rate of 13% of basic pay.

2. Conveyance Allowance: -
Companies provide conveyance facilities to each employee from the place of
residence to the place of work. MYMUL: also provides this allowance because it is
situated 10 km away from MYSORE. Conveyance allowance of Rs. 225/month for
persons owning Scooters/Motorcycle, Rs. 500 for moped whereas Rs 1000

3. Provident and Pension Fund: -

This contribution is equal to that of employee contributions i.e, 12% of salary and it is
divided between provided and pension fund as 8.33% and 3.67% respectively. The
total accumulated is balanced in the individual PF account and is paid to employee at
the time of his retirement or on his leaving the service. In the event of the death of the
employee accumulated balance is paid to his legal heirs

4. Gratuity: -
The amount of gratuity payable is generally 15 days average salary. For this purpose
salary includes only basic pay, DA and completed service.

5. Compensation for disablement: -

The employees are covered under the group saving Life Insurance scheme. Who
contributes to the fund are as follows:
• Below SDC - Rs. 30
• Above SDC - Rs. 60
• Below superintendent - Rs. 90
• Above superintendent - Rs. 120
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• Out of this 12% is kept for insurance
• In the event of disablement of any nature, insurance company will compensate as
per the terms and conditions

6. Leave Facilities: -
All permanent employees as on the date of settlement will be given leave facilities as
mentioned below.
• Earned leave
• Casual leave
• Commuted/half day leave
• Maternity leave

7. Medical Reimbursement: -
Contribution from employees is 1.75% (except washing allowance and conveyance
allowance), Rs 25 from management.
Total 6.5% should be remitted to ESI within stipulated time of 21 days. If an employee
becomes fully handicapped, company will provide him Rs. 170/month depending
upon the salary scale. If an employee earns less than Rs. 25 then management
contribute Rs. 25 to ESI

Training and Development:

At MYMUL, training and development is an ongoing process. The workers are trained
to operate machines, reduce scrap and avoid accidents whereas the supervisors,
managers and executives are provided training which will enable them to grow and
acquire maturity of thought and action. The training and development efforts at
MYMUL are designed to help the employees satisfy their personal goals – through
higher level of skills and competencies; facilitate higher contribution at their present
jobs and to prepare them for the next level of the organization. The employees who
are deployed for training are considered to be on duty and they get the TA and DA as
per the rules of MYMUL. Normally the training programs conducted at MYMUL are:
• Workshop on good quality Ghee.
• Computer Basics.
• ISO Quality System Awareness Programmer.
• Workshop on Sale Tax.
• Quality Audit Programmers.
• Marketing management.

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• Materials management.
• Workshop on First aid.
• Reclaim Grades for Milk Packaging Application and Food Laws.
• Total Energy Management Programmed.
• Marketing and Brand Management
• Improving sales effectiveness.

Classification of employees

• Permanent employee: A permanent employee is one who is on the permanent

rolls of the union against the specific cadre and enjoying all such benefits as
specified under the regulatory rules of MYMUL or all such benefits which may
be excluded from time to time. Employees who are recruited are deemed to be
permanent employees subject to declaration of probation and confirmation by
an order.
• Probationer employee: A probationer employee is one who is provisionally
employed to fill a permanent vacancy in a post for a period of probation which
will not exceed 2 years on aggregate and whose name is entered on the rolls
of the probationer employees
• Apprentice: It means a learner who is engaged to undergo apprenticeship
training and who is paid a stipend and whose terms and conditions of
apprenticeship are governed by the provisions of The Apprenticeship Act of
1961. The Union Dairy is not obliged to employ him on completion of his
apprenticeship period
Functions:
1. Recruitment of candidates
2. Selection of best suited and right person
3. Training and development of employees
4. Framing of rules
5. Creating a good working environment
6. Motivating the employees to work hard
7. Maximizing the performance of employees
8. Maintenance of records

36
 9. Maintenance of industrial relations
10. Employee Service and Benefits
• 11. Compensation
4.2 Recruitment
Procedure of appointment
• If a post is to be fulfilled by competitive examination, then after giving adequate
publicity in the leading Kannada newspaper and one of the national dailies (as
the appointing authority may determine).
• The appointment procedure will be carried in the order of merit subject to
reservation in Rule 3.6 from the list of candidates prepared by the selection
committee or expert panel.
• If it is by selection, after giving such adequate publicity in leading newspaper
at least one in Kannada and English to the recruitment as the appointing
authority may determine in the order of merit
• In case of the post being fulfilled by internal promotion from its own staff it is
done by a selection of a person on the basis of merit and suitability in all respect

4.3 MARKETING

Departmental Hierarchy: Marketing department comprises of departmental head and

further divided into two categories and further into officers then to superintendents.
Salesmen and dispatcher. The hierarchy is as under.

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 MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

ZONAL MANAGER

SUPERINDENTENT

MARKETING ASSISTANT
HELPER

FUNCTIONS
• A To capture the market share.
• To collect information about revenue.
• Maintain sales and other accounts.
• To attain major market shares.
• They conduct the market survey to analyze the consumers’ feedback of their
product.

Marketing Strategies adopted by MYMUL:

“Procure more, produce more, sell more, and earn more”
• By procuring and producing more MYMUL achieves economies of scale which
results in least cost distribution on each unit sold.
• It raises consumer awareness for Nandini by pamphleteering, raising health
issues related to consumption of adulterated milk and soon.
• 981 no of retailer ship during 2011-12 75 no till October 05 were commissioned.
• As per the demand for milk and milk products available throughout the day, 26
numbers of Franchise Outlets, 19 no of parlors are made functional.

38
• For the retailers who were not in a position to install chest cooler insulated boxes
numbering around 900 were distributed during the said period. Milk and milk
product were preserved in the insulated boxes and sold.
• Around 40 numbers of 400 liters capacity chest coolers under the cold chain
development has been distributed

Promotional Activities:

Door to door campaigning: - This is done through the sales force team by questioning
the consumers, reasoning them, issuing brochures etc. This is carried on periodically.
• Organizing meeting:- Organizing meetings is important public places and inviting
important period like doctor, professional, government officers etc.
• Visit to Non -Govt. Organizations:- Visiting to NGOs and creating awareness
about the product and its benefits, inviting them to the plant and showing them
the production procedures.
• Visit of school children to the dairy and promoting their products through them by
issuing samples.
• Inviting the consumer forum and creating awareness to them.
• Participating in trade shows, exhibitions and educate people
• Through advertising in major media’s like T.V., News Papers, hoardings etc…
• It seals its product under the brand name ‘NANDINI’

4.4 QUALITY CONTROL DEPARTMENT

Functions: The main function of quality control section is to control the quality and
produce best quality products. In Q.C section, the milk is tested before processing and
even after processing. Before processing the milk, it is tested for adulteration, fat
content in the milk. Milk 8% is rejected and above 8% of fat is accepted. After the milk
is processed again, it is tested for bacteria fat contents, acidity etc. Then the reports
are prepared after conducting tests. Then these reports are further submitted to KMF
for further clearance and approval. If my defects are found, then KMF notifies and
recommends for further better performance

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Quality Control Techniques Adopted:

The various tests conducted in order to maintain the quality of milk are as under:

1. Garber Test: - To know the fat content present in the milk. It is mixed with sulphuric
acid. (MILK + H2SO4)

2. Milk Test: - To know the fat content present in the milk through electronic device.

3. Lactometer: - To know the stability of the milk and is conducted by mixing the milk
with water and using lactometer, stability is tested.

If milk water quantity is more in the milk the lactometer will immerse inside.

• MBRT test and ethylene blue radiate Test.

• Acidity Test.

• PFA Test and Prevention of food Adulteration Test

PROCEDURE

EACH TANKER IS WEIGHTED AT THE HEATING AT 78 DEGREE C

MILK IS UNLOADED TO RAW
WEIGH BRIDGE & THE SAMPLE AND MAINTAINED AT 45
MILK SILOS (4 SILOS WITH A
MILK IS TESTED IN ELECTRONIC FAT CAPACITY OF 1 LAKH LITRES)

AFTER PROCESSING, THE MILK IS HMST WHERE CHILLING OF MILK AT 5

CONVERTED INTO 4 TYPES OF PASTEURIZED MILK DEGREE IN PASTEURIZE

MILK I.E. FCM, TM, CTM

NEXT THE MILK IS SENT FOR DISPATCHING SECTION, MILK IS

PACKING SECTION KEPT AT 5 DEGREE C IN THE

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4.5 FINANCE DEPARTMENT:

MANAGER

DEPUTY
MANAGER

ACCOUNTS
OFFICER

SUPERINDENTENT

ACCOUNT
ASSISTENT 1

ACCOUNT
ASSISTANT 2

HELPERS

Functions:
The main functions of financial department are as under:
1. To manage cash.
2. To manage bills.
3. To manage transportation bills.
4. To manage pay bills.
5. To manage accounts.
6. Prepare IBP

1. Cash: -
There are two cash counters in the financial section,
I) Collection of sales proceeds counter.
II) Cash counter

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 i. Collection of sales proceeds counter: This is for cash collection of
sales proceeds of milk and milk products. Cash remitted by challan system
from various milk distribution routes for sale. A receipt is passed for the net
amount collected from each of the distribution root salesmen and this is being
recorded in a on-line account. This entire amount collected by the end of the
day is remitted to bank the same day to the current account of the milk union.

ii. Cash counter: Another cash counter is for handling impressed cash and cheques.
Impressed cash means amount required for meeting various payment. Receipts are
being issued for collection of cash towards receipts of EMD (Security deposit repayment
of advance drawn and such other outstanding) all these things are recorded in a
cashbook called petty cash book. This cashbook is being closed at the end of day a
verified by accounts office\Asst. Manages finance. Cheques are also being drawn for
payments of bills whenever payments are required through cheques. For receipt of any
cheques received from outside official, general receipts are being passed in cash counter
using tally ERP9.

2. Bills:
Bills are being received from various suppliers and usually the purchase section
after getting the Material Receipts Information (MRI) from stores duly certified for
quality and quantity, sends bills to finance section in the related files and these
bills are processed and entered in the control register and after scrutiny from
preauditors bills are put up for passing before MD through Assistant Manager
Finance. After the approval of MD the cheques are drawn in the name of the
parties. File with entries of cheque No. and a copy of the voucher is returned to
purchase section / to the concerned section. And the payment vouchers are
accounted in com

3. Transportation Bills: -
Following are the types of transportation bills:
i) Procurement Transportation Bills (PTC)
ii) Distribution Transportation Bills (DTC)
iii) Mobile veterinary root bills
iv) Cattle feed transportation bills
v) LN2 transportation bills (Liquid Nitrogen)
42
vi) Hire vehicle transportation bills

4. Pay Bills: -
Attendance data are being received from time office as per the punch card entries,
further the attendance of chilling center staff and field staff are being received from
concerned section once in a month duly certified by section needs. Based on these
attendance extracts pay bill of all the 950 employees of the milk union are being
prepared through computers and salary is being distributed through Canara Bank
main Branch, Syndicate Bank of BDCC Bank by way of crediting the account of
respective employees in the Bank. These are various heads under which salary
recoveries are made such as Employees Provident Fund (EMF), Employees State
Insurance Scheme (ESI), Professional Tax, LIC, GSLIS (Group Saving Linked
Insurance Scheme), pay advance, Bank loan and such other deductions under
about 45 account heads. These salary recoveries are being sent to respective
departments such as Regional PF commissioner, ESI office,
Professional Tax Office, LIC of India, different banks where employees avail loans
through cheques. The account section prepares salary.

5. Accounts: -
The functions of account section are: •
To maintain record of day-to-day transactions, update entries in computer.
• Prepare monthly nominal accounts.
• Prepare annual financial statements such as receipt and payments, trading, and
P/L a/c and balance sheet and also to produce the same to statutory auditors
and get it audited

Sources of Finance:
The main source of finance is sales realization (Retained Earnings). Sales are
purely on cash / cheques basis. As the nature of the product is highly perishable
i.e., that milk and other milk products. Hence because of this the product needs
to be immediately sold to the end users, as result money is generated
immediately and routinely. Hence this forms the only source and can be classified
as short-term source finance. The other products of milk and as their perish
ability period is little more i.e., for a products of 3-4 months and sales are realized

43
 and money gained out of it can be classified as long-term source of finance.
Sometimes they even get grants from the government.

4.6 OPERATIONS;
MILK PROCUREMENT

The Milk produced by 99405 farmers at village level will be collected every day
morning and Evening at DCS. Under Clean Milk Production program, to maintain
the freshness & quality of the milk 121 Bulk Milk Coolers covering 377 DCS of
Total Capacity 1,92,802 liters were installed at DCS level. During the year the
Unions daily average milk procurement is 9.32 Lakhs Kgs, which works out to be
551 kgs per day per DCS. The milk procurement has increased by 2.15 % when
compared to the last year.
MYMUL is offering the most remunerative milk procurement price to member
producers. The operational efficiency is reflected on procurement prices paid to the
member producers. The average milk procurement price paid during the year was Rs.
19.06 for every Kg of Milk supplied to the Union, which is 80% of total cost of
production

Sal & Admin Misc Int & Bank Chrgs

Ret. Margin 7% 0% 0%
2%

Packing
2%

Process Milk Purchase

9% 72 %

Transport
1%

Milk collected at DCS will be transported to Chilling Centers, through 102 Milk

44
 Procurement Can Routes, by traveling 16,775 KM’s every day. 37 Bulk Milk Cooler
(BMC) Routes are also in operation, which collects milk from 121 BMC centers of
373 DCS directly transported to mysore Dairy through insulated tankers.

Cost consumption at mymul:

Transportation 4%

Process 5%

Packing 3%

Retail margin 3%

Sales & administration 6%

Miscellaneous 5%

Interest and bank charges 2%

Milk purchase 72%

45
 CHAPTER-5
SUMMARY OF FINDINGS, CONCLUSION AND SUGGESTION

5.1 SUMMARY OF FINDINGS

 MYMUL has a wide marketing network throughout the state.

 The customer awareness level towards Nandini milk is excellent because all
the 100 respondents are aware of it.
 Proper training programs for farmers are an additional service provided by the
company which is improving Nandini’s popularity among the farmers and
ensures quality and consistency of supply of milk from them.
 Majority of respondents belongs to the age group of 22-50 years.
 Majority of respondents are of female category.
 Majority of the respondents have chosen TV as the best media to increase the
sales.
 Majority of the respondents buy the products because of their own decisions.
 Majority of respondents have suggested creativity in advertisement makes it
most memorable.
 Majority of respondents say Nandini’s advertisement convey enough required
information about its products.
 Majority of the respondents say picturization strategies impress the customers
more.
 Majority of the respondents buy Nandini products because of their availability.

46
5.2 SUGGESTIONS

 The company should make more use of the different medias available like
television, radio and other medias which can attract lot of customers.
 It can be suggested that advertisements should be made more attractive and
innovative to draw the attentions of the customers.
 It can be suggested that different offers must be made available and that will
attract customers.
 Most of the customers buy Nandini products due to its ease availability, so
maintain products available to customers through effective distribution
channels.
 It can be suggested that the company should have their upper held priorities
towards revising their pricing strategies to popularize the products for the mass
greater reach outs in the future period of time.
 Company can reduce the price of the product by adopting few cost reduction
techniques, so it will help attract different classes of people.
 Bonus and incentives can be given to the dealers in order to motivate them.

47
5.3 CONCLUSION:

Though the study is not exhaustive, the data obtained is enough to understand the
attitude of the customers towards Nandini products.

The result of the survey proves that, Indians in spite of being price conscious,
nowadays they are more health concerned and quality oriented. To be dominant
players in the market, sales promotion is very crucial weapon. To maintain and retain
the tough customers and also, to build a good rapport with the channel partners.

According to market research the consumer had given positive response regarding
all aspects of Nandini products. It shows Nandini is attracting consumers and
prospecting in business. But in a competitive field, one should not satisfy with one’s
present performance. In order to maintain higher competitive efficiency, regular
market research will help an organisation to ascertain the consumer preference and
according to them for creating and maintaining brand image in the minds of people.

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 BIBLIOGRAPGHY

BOOKS REFERRED:

 Philip Kotler, “Marketing Management, 11th edition, Pearson education Asia

Publication.
 Pingali Venugopal, “Sales and Distribution management”, SAGE RESPONSE
PUBLISHERS, Response edition.

WEBSITES:

 www.kmfnandini.com
 www.mymul.com

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