A Module on Dairy Business By Prof. Shankar Bhusari

What is dairy business? Milkman owns few cows or buffalo and sells milk to prefixed customers. A shop-owner buys milk from someone and sells it to customers. A company take milk from farmers and process it in own plant and sells it to customers. Business is done by every entity but their model of doing business is different.

Model of Milkman: Milkman location is in vicinity or at-least within 10-12 kms from his customers. He has control on Tabela. Personal attention to milking animals. He takes out milk twice a day but deliver to customer once. A family member is responsible for delivery and payment collection. Money is collected at the end of the month.

Model of Milkman: Rate is variable from customer to customer. Quality is manipulated as per the rate. Payment delayed – quality is deteriorated. Milk is not hygienic. Milk is not standardized. Milk is not pasteurized. Milk is not homogenized.

Customer prefer milk from milkman because, Milk is cheap. Milk gives cream. Payment is at the end of month. Milk is delivered at home.

Customer do not prefer milk from milkman because, Delivery timing is odd. Water is always added in milk. Too many quality fluctuations. Milk is not processed and packed. Customers do not vary quantity as they required. Which water is added in milk?

Model of Shop-owner: A shop-owner gets milk packets delivered at their home or at the place of sell. Shop-owner can buy milk packet or liquid milk from single supplier or company OR from multiple supplier or companies. Shop owner controls shops and his customers. Shop owner manages good relationship with company executives or with their milk suppliers. Shop owner invest money in this business. Shop owner purchases milk daily and pay payment daily to his supplier or company

Model of Shop-owner: Shop owner purchases milk daily and pay payment daily to his supplier or company On many occasion, he offer credit to consumers. Credit is normally offered to home delivery consumers, tea-stalls or hotels. Quality of milk purchased from shop owner is mostly depending on quality of company to which he is associated. Better the quality of company and its products better will be good-will of the shop. Higher will be the everyday’s sale against cash better will be the buying capacity of shop owner. Freezer makes lot of difference to quality of milk stored in the shop.

Customer prefer to buy milk from shop owner because, Shop is available in vicinity of residence. 12-16 hours availability of milk sachets from the shop. Shop owner offers flexibility to sell milk in varied price range. Shop owner offers flexibility to sell milk in different quantities. Shop owner offers flexibility to sell milk in different timing. Shop owner or home delivery boy offers home delivery too. Shop owner does not change the quality of milk or milk products.

Model of Milk selling companies: Company is buying milk from farmers Company does processing, standardization and branding of their milk and milk products. Company sells milk through channel – Company – Distributors – Dealers & Retailers & Shop owners – Consumers like family tea-stall or hotels Company takes payment everyday or in advance. Companies are not directly link with consumers. Companies promote its brand popularize it only on the basis of marketing gimics and quality of products.

How Milk Market is changed over period of last 20 years? Milk was collected from dairy plant and payment of same is deposited to dairy before one day in advance. Above ideology is broken by 1st competitor – provided door delivery at the shop. 2nd competitor entered the market with additional offers of collecting order & payment from the door of the shop/house. Next competitor has not taken payment in advance. Asked for payment in afternoon, once the packets sold by the shopkeeper. The result is, There is extensive competition among dealers and retailers in selling milk packets. Dealer margin has gone up. Milk is available throughout the day at the shop.

Milk Sachets -Products Condensed Milk Buffalo Milk Full Cream Milk Standardized Milk Cow Milk Toned Milk Double Toned Milk Skimmed Milk Reconstituted Milk

Milk Sachets - Variants Condensed Milk Buffalo Milk Full Cream Milk Standardized Milk Cow Milk Toned Milk Double Toned Milk Skimmed Milk

Branding & Milk Sachets Reliance - Dinshaw’s – Amul – Haldiram – Mahananda – Gowardhan - Kisan – Jurcy – Arrey – Purna – Astrack – Pawan –