Client: A premier Dairy Company located near Kolkata
Problem: Set up 35 years ago, the dairy has been catering to the milk requirements of Kolkata residents. It held the highest market share in packaged milk. In recent years, the monopolistic status was eroded by a number of aggressive new entrants. As a result, there was a continuous drop in its market share.
Diagnosis and Corrective Actions
1. Distribution: The initial analysis revealed that the apparently extensive network had many gaps. The profitability and motivation of the outlet operators were low.
Corrective steps: A team of experienced and skilled Sales Supervisors were deployed by MF to monitor and motivate the existing dealer network. The slab-based commission structure was introduced to motivate retailers to achieve higher sales. Suitable retailers were selected to fill the distribution gaps identified. The distribution network was extended based on existing delivery routes.
2. Product Range: The milk range offered consisted of a low quality, low-priced milk (double toned) and a high-quality, high-priced (cow milk). There was a gap for a medium quality, medium – priced product. This gap was being exploited by competitors.
Corrective steps: Market Forces recommended that toned milk be introduced in poly packs. Due to production constraints, this was implemented, but in loose form. This halted the progress by competitors to a large extent.
3. Consumer Perceptions: Initial fact-finding by Market Forces revealed that consumers did not have faith in loose milk outlets, and suspected short-weight and adulteration.
Corrective steps: A team of house-to-house promoters was deployed by Market Forces. They visited over 25,000 households and convinced them about the following things:
A. Testing equipments would be provided to consumers to verify quality at all outlets
B. A single phone call from them would bring the Quality Control staff to check the outlet
C. Awareness about the wide range of milk and milk products was increased through distribution of leaflets
D. Consumption pattern, satisfaction levels were recorded by a structured questionnaire
4. Competitors: The competitors were increasing their market share by aggressively promoting their products through trade and consumer schemes, and also utilizing the delivery linesmen of the market leader.
Corrective Steps: Detailed data was collected regarding the terms and conditions of competitor activities. A special trade scheme was launched to motivate retailers. A special leaflet highlighting the dangers of unhygienic loose (khatal) milk was printed and used by the house-to-house team.
5. Logistics: The location of the plant was very far from its major markets in Central and South Kolkata, resulting in delayed deliveries, sharply reduced life of milk and annoyed customers.
Corrective steps: Market Forces suggested that a 2nd packaging plant be set up on the EM bypass, initially for poly packing the milk and subsequently for producing milk products also. This suggestion was accepted at the highest level and announced in the Milk Day press conference.
Results: The declining trend was reversed and an effective growth of Rs. 6.84 Crore was achieved within 9 months. Sales went up by 10,641 litres per day. In terms of Cost : Benefit this translates into a turnover increase of Rs. 76/- for each Re. 1/- paid for our services.