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Chapter 111 INTRODUCTION111 History of Indian Dairy IndustrySince Paper

Words: 2510, Paragraphs: 78, Pages: 9

Paper type: Essay , Subject: Gdp

Categories: Gdp, Psychology

Chapter 1


1.1.1 History of Indian Dairy Industry:

Since time immemorial, India has been practising agriculture and dairying as a cottage industry which provided them source of employment and self-consumption. In India, the secondary and tertiary sectors are considerably depended on primary sector which comprises agriculture and allied activities, thus makes India an agrarian economy.

The main shortcoming faced by Indian farmers is lack of centralized group or union which can oversee and mainstream the dairy activities and work for the welfare of farmers. Despite large number milk farmers, most of them are illiterate and practise dairying as a source of livelihood rather than profit generation. At that time, Polson ltd., a privately owned company, emerged as a dairy brand and enjoyed the status of monopoly due to its significant market reach. Polson ltd. procured milk from farmers of Kaira village through its middlemen and supplied to Government Milk Scheme Bombay region. Later on, middlemen started exploiting the farmers and they got low returns rather than fair returns for milk supplied.

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Aggrieved over the exploitation, a group of farmers of Kaira village expressed their concern to Sardar Vallabhai Patel, a renowned freedom fighter. He advised the farmers to seek support and co-operation from Shri Moraji Desai. The latter convened a meeting with the farmers and suggested formation of a co-operative union which consist of group of milk farmers for milk procurement directly from farmers and selling to other regions thus eliminating roles of middlemen. This led to the creation of ‘The Kaira District Co-operative Milk Producers’ union’ with the support of Shri Tribhuvandas Patel who was instrumental in setting up such co-operative union at village level in Anand. The co-operative union is registered formally on December 14, 1946. In 1955, it was decided to sell milk and milk products under the brand name ‘Amul’.

Shri Tribhuvandas Patel invited Mr. Verghese Kurien alongwith H.M. Dalaya to suggest a solution for fluctuation in milk production, milk processing and marketing. Due to his shrewd recommendation, Amul has become a successful brand among top dairy competitors, providing stable livelihood to lakhs of milk farmers.

After India’s independence, it faced negative growth in dairy sector which put political leaders in pressure as they witnessed implications of food scarcity faced by India during British rule. The Indian political leaders came to know about success of Anand with the efforts of Dr. Verghese Kurien. Taking the due consideration of situation, the then Indian Prime Minister Lal Bahadur Shastri set up National Dairy Development Board in 1965 and appointed Dr. Verghese Kurien as the chief of the Board. Subsequent to formation of NDDB, he launched ‘Operation Flood’ also known as White Revolution.

The objective of ‘Operation Flood’ was to achieve self-reliance in dairy production thus eliminating imports of dairy products, to avert another situation food scarcity faced by Indians during British rule and finally, to emerge India as the largest milk producing country by surpassing US, to generate sustainable employment in dairy sector. It was carried out in following three phases:

Phase 1(1970-80): European Economic Community supplied skimmed milk powder and butter oil through World Food Program. During this phase, NDDB focused on improvisation of organized dairy sector in four metropolitan cities such as Mumbai, Delhi, Chennai, Kolkata through marketing and speedy development of dairy production and procurement.

Phase 2(1981-85): With careful execution of Phase 1‘Operation Flood’, Indian Dairy Sector witnessed increased milk-sheds from 18 to 136 and urban markets expanded the outlets for milk to 290. By the end of 1985, 43,000 village cooperatives with 4,250,000 milk producers were declared self-reliant in dairy industry. Domestic milk powder production rose from 22,000 tons (pre-project figure) to 140,000 tons by 1989. In this way self-reliance in dairy production and processing has become a reality with the help of European Economic Community.

Phase 3(1985-96): During this phase, it gave importance to veterinary first-aid health care services, feed and artificial insemination services for cooperative members, along with intensified member education. Additional 30,000 new dairy cooperatives added to the 43,000 existing societies organized during Phase 2. Apart from this, women participation became significant which gave rise to Women’s Dairy Co-operative Societies. Phase 3 increased emphasis on research and development in animal health and animal nutrition. In general, Phase 3 promoted research and development in animal health and nutrition.

Summing up, Through Operation Flood, India emerged as the World’s largest milk producing country from milk deficient country and it surpassed US in 1998. As of 2017, India produces about 21% of total milk. In the process of Operation Flood, India’s milk production rises by 280% from 20.80 million tonnes and continued to rise.

1.1.2 Structure of Indian dairy industry:

Indian dairy sector is categorised into two sector viz. organized and unorganized. Organized comprises of co-operatives and private companies whereas, unorganized includes milkmen/local vendors and self-consumption at home.

As per annual report of FY17 of Dept. of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture and Farmers Welfare, GOI. Organized sector procure 20% of total milk capacity whereas milkmen/local vendors supply 34% to the market and 46% accounts for self-consumption.

This implies immense potential for unorganized sector to commercialise the surplus milk to the Indian market with special emphasis on standardisation in milk testing, milk processing, sales & marketing and exports.

As per GDP of 2016-17, 18% (2,484,006 crores) of total contribution was from agriculture and allied activities whereas the contribution of livestock is 4.62% (639,912 crores). Comparing with GDP of 2015-16, contribution of agriculture and allied activities rose by 11.6% (258,637 crores) contribution of livestock increased by 9.6% (55,842 crore).

Consumption of dairy products in rural and urban India

Product 2004 2011 Annual growth

Kg/year Percentage


Milk 47.0 52.7 1.6

Ghee 0.2 0.2 0.0

Yoghurt 0.2 0.3 6.0

Condensed/Powder 0.1 0.0 -14.5

Butter 0.0 0.0 —

Ice Cream 0.5 1.4 16.6

Other 2.1 2.0 -0.5

Product 2004 2011 Annual growth

Kg/year Percentage


Milk 62.1 66.0 0.9

Ghee 0.5 0.6 2.5

Yoghurt 0.5 0.8 6.8

Condensed/Powder 0.1 0.1 -4.0

Butter 0.1 0.0 -10.9

Ice cream 5.0 10.3 10.9

Other 6.1 9.0 5.8

Considering GDP figures and amount of consumption of dairy products, it is well evident that India shows steady positive demand with for dairy products post Operation Flood.

Despite India being the largest milk producer in the world, its yield continues to remain miserably low at 1.1 per ton per head during 2010-12. USA tops among other countries on the world’s highest milk yield with 9.7 tonnes per head followed by European Union (6.6 tonnes per head) during the same period.

The enormous gap in milk yields and reliance on other animals for milk purpose such as sheep, goats and camels which inherently have lower milk yields compared to milch cows is responsible, to a large extent for huge disparity between the share of milk production and inventories between developed and developing countries especially India.

It is evident that india achieved substantial milk growth in quantitative terms, but it has a long way to come along in qualitative terms. Nevertheless, It is remarkable achievement that Operation Flood provided impetus for both creating consumer demand for more dairy products and boosting employability in dairy sector.



Name of company Shrikrishna Foods

Type Micro enterprise

Industry Dairy

Founder Mrs Meera Ambarkar

Commenced on November 2018

Address Bopapur(Wani), Deoli, Wardha, Maharashtra

Phone no. +917875740083

FSSAI no. FSSL21518269000771

Vision: Shrikrishna Foods will lead the way to the future of dairy with its quality products and enriching lives around by creating value for its consumers. We are committed in providing quality along with constant innovation and our respect for mother cow; we aim to get rewarded with a smile.

Mission: Dairy business is the business of health, hence we run on ‘health first’ mantra. Our whole purpose is to provide our consumers with healthy dairy products made of pure cow milk from farmers across the state and introducing a new area of employment.

1.2.1 History:

Few years back, family of Ambarkars started dairy farming under the leadership of Dinkar Ambarkar. From then they started production of paneer, ghee, curd, lassi and shrikhand using milk procured from farmers and sold locally. Mrs Meera Ambarkar joined and assisted the family business of dairy production. She has done Bachelor’s degree in Mass Media, MBA in Marketing and HR, Degree in Dairy Technology from College of Agriculture, Pune. Having expertise in marketing, she augmented the production and commercialised the dairy products under the brand name as “MURALI”. The firm is into constant upgradation of production as well as promotion with an intention to capture the market with better consistency in quality.


1) This study provides the details regarding dairy brands and corresponding profit margin to the shopkeepers.

2) Shopkeepers keep those products and its associated brand in accordance to consumer demand. So ultimately, consumer psychology can be understood.

3) This study provides the relationship between each dairy brands that how closely they interlinked.

4) This study paves way for emerging dairy firm how to position oneself in Wardha city.

5) Due to increased demand for dairy products, it is worth understanding how dairy firms play in a specific market.

6) Existing brands can use the collected for future references identify the current scenario of market of Wardha city.



1) To indirectly understand the consumer demand.

2) To identify and understand market potential of Wardha city for a particular brand.

3) To understand the market penetration of each brand available in Wardha city.

4) To review the Indian dairy sector and understand the developments and challenges.

5) To understand the pricing pattern of a new dairy brand with respect to existing dairy brands.

6) To learn the level of competition among dairy brands in Wardha city.

7) To explore the opportunities and threats for new entrants in the market.

8) To analyse among branded dairy products available in the market.



1) The study covers shops which include retail shops, super shops and other dairy firm in Wardha city.

2) The study includes the existing dairy brands and its available quantities kept by shopkeepers.

3) The study focuses on quoted price and amount profit margin on dairy product available to the shopkeepers.

4) Level of competition and interdependence of one brand with other can be analysed through this study with help of profit margin.

5) The study revolves around the following aspect of shopkeepers’ preferences in selection of dairy products and its brand over other brands

6) The study explores the extent of market coverage of each dairy brand in Wardha city. Market coverage is defined by the influence of a particular brand in a particular region or market.




1) The study is only limited within Wardha city.

2) The collected data cannot rule out the possibilities of errors and biasness. Nevertheless, due care has been taken regarding accuracy of collected data.

3) Few shopkeepers within Wardha city were reluctant to provide information. Hence they cannot be included in sample size.

4) The study only focuses on branded dairy products whereas non-branded dairy products are not part of this study. Hence, those shops who only sell non-branded dairy products are excluded from this study.

5) The study is only limited to

(a) Cottage Cheese (Paneer)

(b) Curd

(c) Clarified Butter (Ghee)

(d) Lassi

(e) Shrikhand.

6) Milk and ice cream are not included due to lack of its standard price for each brand.

7) Milk cooperatives such as Go-samvardhan, Sarvagya etc. are not included in as they do not sell abovementioned products but rather sale of milk and other milk stuff.


Chapter 2


1. Dr.Trilochan Nayak (2013) clarified that consumer behaviour also encompasses a vast area including consumer motivation, preferences, purchasing patterns, buying process, shopping behaviours etc. It gives emphasis on response to the question, ‘why, when, where, what and how do the consumers buy’. But understanding of consumer is demanding, as it is associated with human behaviour which is highly unpredictable and undependable. The study on consumer behaviour becomes so complicated and yet necessary and puts a major trouble to the present day marketer. The survival and growth of a business concern mostly is influenced by the ability of the marketer to comprehend the consumer action and reaction. Hence, consumer behaviour is one of the aspects in marketing where the marketers always have to concentrate and have to be conscious and cautious.

2. Suku Bhaskaran (1996) opined that the cultural and dietary habits of Indians should result in substantial increases in consumption as incomes increase. Extensive use of milk and dairy products are seen in religious and social festivities. There is a high correlation between income and demand for dairy products in India. Empirical evidence suggests that per capita consumption of dairy products in Indian households could exceed that in similarly tiered Western households. As such, it would appear that there is potential for high dairy consumption per capita in India as incomes improve. India’s large population base and the significant number of people with upgrading lifestyle could propel considerable expansion in demand for milk and dairy products.

3. Denford Chimboza and Edward Mutandwa (2007) conducted study on measuring the determinants of brand preference in a dairy product market. They concluded that choice of a given dairy product or brand can be elaborated in terms of four factors namely promotion, price and availability, packaging and product quality. There exists necessity for marketers to take these factors into consideration when initiating product innovations in the dairy market. In terms of priorities, there is need to expand brand recognition through promotion and ensuring that brands are priced competitively. Promotional vehicles that could be used in this respect include radios, TVs, newspapers, road shows and also e-commerce. Moreover, the program should focus on ensuring product availability at strategically located markets to increase convenience to local consumers.

4. Deepa Ingavale and H.M Thakar (2012) observed that the change in purchase decisions was due to marketing-related factors such as availability, advertisement, product quality, and price of the products. Multinational corporations work intensively on creation of brand preference for branded milk products such as branded butter, cottage cheese, milk powder and proper market segmentation will help to customise these products with respects to consumer demands. All Companies are required to build their brands with the help of packaging, point of purchase advertising, delivery vehicles, retail outlets, marketing communication and sponsorships etc.

5. Subhasis Sen and Kannan Rajagopal (2015) remarked that consistent innovation in marketing and consumer involvement are the two factors that validates the success of market penetration. Consequently, the firm can enjoy windfall gains through sustainability of products and services in a market.

6. Venkatesh Shankar and Ruth N. Bolton (2004) observed that price consistency, price-promotion intensity, price-promotion coordination, and relative brand price determines retailer’ positioning for sustainability in a market. This reveals that promotion of a product and a service plays a vital role for brand recognition and further adoption. Relative brand price conveys retailer’s perceived value on brand selection and adoption other than its intrinsic value.

7. C. Jothi Mary (2013) said that the concepts of marketing start with the consumer needs and behaviour in meeting these needs. The real challenge is to understand what a customer takes into consideration when he selects a particular brand. Such a study is associated with consumer behaviour. A consumer always attempts to equate a product with one’s needs and satisfaction levels which differ from individual to individual as well as ever-changing in nature. Consumer-oriented thinking helps the marketer to outline consumer needs from the consumer’s perspective. ?

Chapter 3

About the author

This sample paper is done by Joseph, whose major is Psychology at Arizona State University. All the content of this work is his research and thoughts on Chapter 111 INTRODUCTION111 History of Indian Dairy IndustrySince and can be used only as a source of ideas for a similar topic.

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