customer segmentation on premium cattle feed

CONSUMER SEGMENTATION OF CATTLE FEED IN

RELATION TO PREMIUM, POPULAR AND CLASSIC

PRODUCTS OF

GODREJ AGROVET LTD IN ANDHRA PRADESH

(SOUTH INDIA)

BY

SURYA PRAKASH GOTHWAL

Organizational Traineeship Segment

PGDBM 2009-11 BATCH

Submitted To

Mumbai

April-June, 2010

CENTRE FOR MANAGEMENT EDUCATIONSurya Prakash Gothwal (0935)

VAIKUNTH MEHTA NATIONAL INSTITUTE OF CO-OPERATIVE MANAGEMENT, PUNE-07 TABLE OF CONTENT

- PREFACE

- ACKNOWLEDGEMENT

- EXECUTIVE SUMMARY

CHAPTER -1 INTRODUCTION TO THE SUBJECT

1.1 THEORETICAL FOUNDATION

1.1.1 History of Indian Feed Industry

1.1.2 Introduction to Feed Industry

1.1.3 The live Stock Industry of India

1.1.4 Ingredients in Animal Feed

1.1.5 Uses of Compounded Feed

1.1.6 Future of Indian Feed Industry

CHAPTER – 2 INTRODUCTIONS TO THE ORGANIZATION2.1 OVERVIEW OF INDUSTRY

2.1.1 History

2.1.2 Landmark

Surya Prakash Gothwal (0935) Page 1

2.1.3 Godrej Mission

2.1.4 Godrej Values

2.2 PROFILE OF ORGANIZATION

2.3 PRODUCT RAGE OF THE COMPANY

CHAPTER-3 OBJECTIVES OF THE STUDY & RESEARCH METHODOLOGY

3.1 OBJECTIVES OF THE STUDY

3.2 SCOPE OF THE STUDY

3.3 RESEARCH METHODOLOGY

3.3.1 Sources of Data

3.3.2 Methodology & Presentation of Data

3.3.3 Tools & Techniques used for analysis

3.3.4 Analysis of Data

3.4 LIMITATIONS OF THE STUDY

CHAPTER-4 DATA PRESENTATION, ANALYSIS & INTERPRETATION

CHAPTER-5 FINDINGS & RECOMMENDATIONS

5.1 QUESTIONNAIRE

5.2 BIBLOGRAPHY


PREFACE

This project report is the result of six weeks training at Godrej Agrovet Ltd. Summer

training is an integral part of “Master in Business management” course and it aims at providing a

firsthand experience of industry to students. This practical experience helps the students to view

the real Business World closely.

I was really fortunate of getting an opportunity to pursue my Summer Training in

reputed, well established, fast growing and professionally managed organization like Godrej

Agrovet. My Project assigned, CUSTOMER SEGMENTATION OF CATTLE FEED IN

ANDHRA PRADESH (SOUTH INDIA) Required a lot of extensive study, as I did a lot of study

of feed industry at various Region of Andhra, I discussed some professors and students at

Veterinary college of HYDERABAD. It gave me a great deal of exposure and practical

experience.


ACKNOWLEDGEMENT

This acknowledgement is not merely a catalogue of names but an expression of a deep sense of

gratitude to all those who helped me in this project directly or indirectly. I owe a great deal to

VAMNICOM for laying the building blocks of logic and pragmatism in my life. This report, in a

way is a reflection of these values. The organizational traineeship segment (OTS) provided me

with a unique opportunity of working with an organization. An individual cannot do project of

this scale. I take this opportunity to express my acknowledgement and deep sense of gratitude to

the individuals for rendering valuable assistance and gratitude to me. Their inputs have played a

vital role in success of this project.

I am grateful to Chandan Y. Birodkar, Sr. Executive-HR Godrej Agrovet Ltd. who provided

me an opportunity to undertake a project, which enabled me to interact with dealers, customers

of company to have better understanding, practical exposure of industry.

I express my sincere thanks to my project guide Dr. Sanjay Toke, DGM- Product

Management (Animal Feed) Godrej Agrovet Ltd , for his generous support, constant direction

and mentoring at all stages of training.

I am really grateful to Mukul Bhartiya NCM- Aditya Birla Retail Ltd. (Faculty Guide) for

his guidance in making final report.

I am also indebted to Dr. A.Y. Rajendra at Banglore who was a real source of help and

assistance to me during the course of project.

I am also thankful to Mr. M.V. Anand Manager-Sales at Andhra Pradesh who helped me in

finding the markets for Godrej feed.


I am grateful to Dr. Kondal Reddy- LPT Department, Dr. Nalini Kumari, Associate

Professor Naga Laxmi- Nutrition Department at Veterinary College in Hyderabad who give

me some guidelines about cattle feed composition, various brand of cattle feed available in

Hyderabad.

I am also thankful to Mr. Sudhakar (Bangalore), Mr. Rajesh (Nizamabad-AP), Mr.

Nagabhusanam (Adhilabad-AP) who helped me in collecting information for my project.s

I take this opportunity to thank all Farmers, Dealers, milk collection customers who spared their

precious time to provide me with valuable inputs for project without which it would have not

been possible.

Last but not the least; I would also like to thank my family and friends especially Suka Dev and Rajesh

for their continuous support.

I firmly believe that there is always a scope of improvement. I welcome any suggestions for

Further enriching the quality of this report.

Surya Prakash Gothwal


EXECUTIVE SUMMARY

The object of this management training of marketing imparted is to provide us an

insight into the methods, both culture and the ground realities of an industry. I undertook my

training at the Godrej Agrovet Ltd. from 5th April, 2010 up to 22th May, 2010 for a period of 6-

7 weeks. I was allotted the duty to survey rural area in order to know farmers behavior towards

different feed brands. And I went to Dealer’s shop, Distributers and milk collection centers for

the collection of information required for the analysis of the given work. This report is the

reflection of what I have assimilated during the training period at Godrej Agrovet. I have studied

about all the marketing aspects and all other expenses of the company. The first few pages talk

about the introduction of the subject and also of the organization. This is followed by literature

review followed by the objectives of the study and research methodology. The last part consists

of findings, Recommendations, and bibliography.

The objectives of the study which I undertook in Godrej Agrovet Ltd. were to know

the market value of Godrej feed and its competitors. One of my objectives was to study the

buying behavior of farmers like before purchase behavior and after purchase behavior, for this I

have made structure questionnaire and interpretation for the same has been done and also in

order to make it more effective I have used tables, pie charts, and bar charts. Another objective

of my study was to study the actual results given by different feeds by having a comparison

study of quantity of milk given by cattle’s, for this I have made structure questionnaire and

interpretation for the same has been done and also in order to make it more effective I have used

tables and bar charts. Another objective was to study the perception of dairy farmer that how

they perceive different feed brands when they look of at price and other services, for obtaining

the information I went to various farmers personally and now I am able to know about views and


their expectations. I found No. of cattle feed brands in the market which are giving competition

to Agrovet’s products. I also found that there are some complaints about Godrej feed by the

consumer and same has to be looked upon. I also found that consumer has a good perception

toward Local feed and some other brands than Godrej and it is fulfilling their expectations. As

from my all study, I have concluded that Godrej feed has not capture as such market as in other

cities or states. Instead of Godrej has got first place in Indian feed industry, but in the area a very

few people are aware about Godrej feed.

According to me from various reasons, the biggest reason of non-awareness about

the product is less manpower for marketing and less advertisement of the product. Other brands

that is more preferable than Godrej due to good supply chain, good advertisement strategies used

by them. According to me Godrej should spend a lot of money in order to create a good brand

image and awareness of the product to consumer. Godrej can also think about some good

marketing strategies that can implement in the rural area. As we come to know that some farmers

who have visited to Godrej Agrovet are very impressed by services and various features provided

to farmers. I think the best place for Godrej Agrovet in Chittoor should be in Palamner area

which is 30 Km. far from Chittoor instead of in Chittoor area. People are expecting more good

results from Godrej feed. Overall I found there is no doubt with the quality of Godrej feed users

except some bad stock and looking for a good and loyal relation with the company. It has been in

some cases that agents are not fully satisfied with whatever gets from the company, in monetary

terms or in any other forms of non financial incentives. More emphasis is being given to the

production side in the company rather than to marketing side though marketing and sales

activities are responsible for earning revenue for the company. Less emphasis is being given on

marketing research, which provides the company with the information regarding the market & its

dynamics. Product promotion is an area which required to be geared up. The study revealed that

marketing is the area which seems to be neglected because the company products were in great

demand.

However the Scenario is changing, which makes it necessary for the company to

establish a full-fledged marketing department. The company should change its stance from

production oriented to marketing oriented. Hence the company may concentrate on direct sales


marketing through personal selling or marketing representative follow up with industrial

consumers. The company should develop a marketing information system, at present through its

depot managers and existing agents further with the help of personal selling staff. The company

is advised to formulate a promotion mix keeping in mind a changing scenario of market. To

begin with, the company may advertise the product and the company brand in industrial journals

like “Indian Feed” & in future introduce sales promotion through additional agents and personal

selling staff which would constitute a proper mix. I hope that my experience at Godrej will not

only help me in my future in marketing field but also in my current studies.


CHAPTER-1

INTRODUCTION

TO

SUBJECT


I.I THEROTICAL FOUNDATION

1.1.1 HISTORY OF INDIAN FEED INDUSTRY

The Indian feed industry is about 35 years old. It is mainly restricted to dairy and poultry feed

manufacturing; the beef and pork industry is almost non-existent in our country. The quality

standards of Indian feeds are high and up to international levels. Raw materials for feed are

adequately available in India. The industry's production is about 3.0 million tonnes, which

represents only 5 percent of the total potential, and feed exports are not very high. The feed

industry has modern computerized plants and the latest equipment for analytical procedures and

least-cost ration formulation, and it employs the latest manufacturing technology. In India, most

research work on animal feeds is practical and focuses on the use of by-products, the upgrading

of ingredients and the enhancing of productivity. The country has entered into a period of

liberalization and this is bound to influence the Livestock industry. The per capita consumption

of milk, eggs and broiler meat will grow. The Indian feed industry is undergoing a very exciting

phase of growth for the next decade.

1.1.2 INTRODUCTION TO FEED INDUSTRY

Feed manufacturing on a commercial and scientific basis started around 1965 with the setting up

of medium-sized feed plants in northern and western India. Feed was produced mainly to cater to

the needs of dairy cattle. The poultry sector was not developed at that time and was restricted to

backyard production, with the desi kept mainly for the production of eggs. Today, the Indian

feed industry is worth approximately Rs 45 billion that is about US$1 billion.

1.1.3 THE LIVESTOCK INDUSTRY OF INDIA

India's animal wealth is quite large in terms of its populations of cattle, poultry, sheep and

goats, camels, horses and pets. Recently, aquaculture has also been growing in

importance in India.


Dairy cattle

Worldwide, India is number one in milk production, at 78.0 million tons per annum, and the

dairy industry is spread across the whole country. India has one of the largest populations of

cattle and buffalo in the world. In a total of 288 million head, there are 10 million crossbred

cows, 15 million good milk cows of local varieties and 36 million buffaloes of good milk

Varieties. The remainder of the cattle population is of a non-descript variety and a sizeable

proportion consists of bullocks.

Farms are located on the outskirts of cities and within cities. Almost all villages have a number

of cattle, but there are only a few organized dairy farms. In India, dairy is not so much an

industry as a smallholder farming activity. Growth in the milk sector has occurred mainly

through cooperative efforts. Cooperatives started by supplying milk collection centre, where

milk was collected from villagers in quantities as small as 1 liter, and gradually started to provide

other services to farmers, including education, artificial insemination, veterinary health support

and feeding. The small farmers became prosperous, loan facilities were made available through

banks, and member farmers started to share the profits from cooperatives. Cooperatives also set

up their own modern computerized feed plants. They have modern milk processing plants from

which they produce and market pasteurized milk, butter, butter oil, chocolate, ice-cream and

milk sweets, Which are very popular with Indian consumers? Today, the feed production from

cooperatives is about 0.6 million tons per year.

The National Dairy Development Board (NDDB), which has excellent facilities

for research on breeding, nutrition and health care, has played a pivotal role in setting up

cooperatives. Without NDDB and several of the existing dairy cooperatives, the milk sector in

India would have suffered. The dairy industry in India is expected to grow, but growth will be

restricted to individual small farmers. It is unlikely that India will see the advent of large,

organized dairy farming in the near future.


1.1.4 INGREDIENTS IN ANIMAL FEEDS

India is currently self-sufficient in livestock feeds and does not depend on imports. Instead, the

country exports large quantities of solvent extracted meals, which are a major source of foreign

exchange earnings.

Cereals and grains Maize, sorghum and bajra (a type of millet) are commonly used in

animal feeds. Wheat and rice are mainly retained for human consumption. In cattle feed, in

addition to these meals, others such as cotton seed, Groundnut seed and copra are used as

premium ingredients.


TABLE-1

TABLE-2

Livestock Population in India by Species


Share of Agriculture and Livestock Sector in GDP

(At current prices in Rs. Crore)

Year GDP (Total)GDP (Agriculture) GDP (Livestock Sector)

Rs. % Share Rs. % Share

2000-01 1,925,017 408,932 21.24 104,745 5.44

2001-02 2,097,726 442,464 21.09 109,254 5.21

2002-03 2,261,415 425,521 18.82 114,872 5.08

2003-04 2,538,171 483,030 19.03 118,316 4.66

2004-05 2,877,706 501,415 17.42 136,108 4.73

2005-06 3,275,670 557,118 17.01 143,208 4.37

2006-07 3,790,063 634,519 16.74 165,407 4.36

2007-08 4,320,892 718,278 16.62 189,990 4.40

Source : National Accounts Statistics-2008; Central Statistical Organisation;GOI

(In Million Numbers)

Species 1951 1956 1961 1966 1972 1977 1982 1987 1992 1997 2003

Cattle 155.3 158.7 175.6 176.2 178.3 180.0 192.5 199.7 204.6 198.9 185.2

Adult Female Cattle

54.4 47.3 51.0 51.8 53.4 54.6 59.2 62.1 64.4 64.4 64.5

Buffalo 43.4 44.9 51.2 53.0 57.4 62.0 69.8 76.0 84.2 89.9 97.9

Adult Female Buffalo

21.0 21.7 24.3 25.4 28.6 31.3 32.5 39.1 43.8 46.8 51.0

Total Bovines

198.7 203.6 226.8 229.2 235.7 242.0 262.2 275.7 288.8 288.8 283.1

Sheep 39.1 39.3 40.2 42.4 40.0 41.0 48.8 45.7 50.8 57.5 61.5

Goat 47.2 55.4 60.9 64.6 67.5 75.6 95.3 110.2 115.3 122.7 124.4

Horses and Ponies

1.5 1.5 1.3 1.1 0.9 0.9 0.9 0.8 0.8 0.8 0.8

Camels 0.6 0.8 0.9 1.0 1.1 1.1 1.1 1.0 1.0 0.9 0.6

Pigs 4.4 4.9 5.2 5.0 6.9 7.6 10.1 10.6 12.8 13.3 13.5

Mules 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2

Donkeys 1.3 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 0.9 0.7

Total Livestock

292.9 306.6 336.5 344.5 353.2 369.4 419.6 445.2 470.9 485.4 485.0

TABLE-3 Estimates of Milk Production – State wise ( tones)


State 01-02 02-03 03-04 04-05 05-06 06-07 07-0808-09

All India 84406 86159 88082 92484 97066 100869 104840 108463

Andhra Pradesh 5814 6584 6959 7257 7624 7939 8925 9570

Bihar ** 2664 2869 3180 4743 5060 5450 5783 5934

Gujrat 5862 6089 6421 6745 6960 7533 7911 8386

Haryana 4978 5124 5221 5222 5299 5367 5442 5745

Karnataka 4797 4539 3857 3917 4022 4124 4244 4538

Kerala 2718 2419 2111 2025 2063 2119 2253 2441

Madhya Pradesh 5283 5343 5388 5506 6283 6375 6572 6855

Maharashtra 6094 6238 6379 6567 6769 6978 7210 7455

Punjab 7932 8173 8391 8554 8909 9168 9282 9387

Rajasthan 7758 7789 8054 8310 8713 9375 9536 9491

Tamil Nadu 4988 4622 4752 4784 5474 5560 5586 5673

Uttar Pradesh 14648 15288 15943 16512 17356 18095 18861 19537

West Bengal 3515 3600 3686 3790 3891 3982 4087 4176

TABLE-4


1.1.5 USES OF COMPOUNDED FEED

In India, the term "compound feed" refers to feed that is nutritionally balanced and has been

manufactured using the facilities of an analytical laboratory and under the supervision of

nutritionists. There are also a large number of small-scale feed mixers who produce feed for local

consumption. Such feed is termed "self-mixed feed" or "home-mixed feed".

Cattle feed Cattle feeding practices are very traditional. Farmers choose their own ingredients

and prepare their own formulations, believing that by these means they are able to pay more

individual attention to their cattle. The productivity of the cattle is limited because of their poor

genetic make-up, so high-quality compound feed (industry feed) may not necessarily generate a

significant improvement in productivity and this has hampered growth of the cattle feed industry


Milk Production in India

Year Production (Million Tonnes) Per Capita Availibilty (gms/day)

2001-02 84.4 225

2002-03 86.2 230

2003-04 88.1 231

2004-05 92.5 233

2005-06 97.1 241

2006-07 100.9 246

2007-08 104.8 252

2008-2009 108.5 258

Source: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, GoI

because most farmers are reluctant to use compound feed fully. Instead they compromise by

using such feed in proportions of 5 to 60 percent, making up the balance with their own

formulations. It is only in the case of highly productive animals that compound feed has been

able to show its real potential and the importance of technology has been demonstrated.

The share of compound cattle feed manufactured by the industry, in relation to the overall

potential, is low for the following reasons:

The cattle population is fragmented and spread over large parts of the country. Farmers' low

level of education and strong traditional beliefs mean that there is generally little awareness of

compound cattle feed.

More than 50 percent of the country's total milk production comes from a very large number of

low-yielding cows and buffaloes. A further 25 percent of milk production comes from buffaloes

and only the remaining 25 percent of the total is produced by crossbred and improved cows.

Industrially manufactured compound cattle feed has proved its value for crossbred cows and

buffaloes but not for low-yielding cattle because of their genetic limitations. Home-mixed feed is

very frequently used for buffaloes and low-yielding cattle.

1.1.7 SCOPE OF INDIAN FEED INDUSTRY

The Indian economy is growing at the rate of 6 to 8 percent per annum. The livestock

industry in India is the second largest contributor to gross domestic product (GDP), after

agriculture, and accounts for 9 percent of the total. Consumption is likely to increase as follows:

per capita milk from 240 to 450 g per year; per capita eggs from 40 to 100 per year; and per

capita broiler meat from 1000 to 2000 g per year. A major change is occurring in India on the

economic front. The country has adopted a model that lays midway between liberal and public

sector production, but growth has been affected by the poor performance of most of the public

sector units, rising government costs and fiscal deficit, and the economy has suffered. A process


of liberalization was set in motion by the government and has been implemented for the last

eight to ten years. This has caused India to open up and invite investment from multinationals,

liberalize imports, reduce government expenditure and remove public sector businesses. It also

means that the days of nationalization, unnecessary government controls and restrictions will

soon be over thanks to progress in the country's economy. India has entered into an agreement

with its trade partners under the World Trade Organization (WTO). The changes brought about

by the liberalization process will be slow but certain. The government is opening up imports in a

phased manner, and it is expected that this process will be completed by April 2003. In the

meantime, about 930 items, including agricultural products, will be open for import under open

general license from April 2001, making it possible to import dressed chicken, milk and milk

products. Various livestock industry associations have taken issue with such imports in an

attempt to protect their members. If the livestock industry is affected, the feed industry will also

be affected.

The Government of India has raised the tariff on all poultry and poultry products

from 35 percent to the WTO boundary level of 100 percent. It therefore appears that there will

be a level playing field. In view of the expected rise in per capita consumption of chicken meat,

eggs and milk, livestock production and productivity will grow. The dairy industry, which is

cooperative based, is growing with the increased capacities of milk processing units. The

population of crossbred cattle and buffaloes is also growing. Milk is very popular in India. The

next decade will see significant changes in restructuring, mergers, acquisitions, amalgamations,

joint ventures, diversification, integration and efficient service chains, ecommerce and use of the

latest information technology in global tenders, trading, export/import and other commercial

activities. At the root of all these developments will be the scientific development of feed

manufacturing technology. The Indian feed industry will increasingly use biotechnology, more

scientific formulations, new molecules and natural and herbal products to improve animal

productivity. Indian agriculture will also use biotechnology and genetically modified organisms

(GMOs) to support the feed industry, which is entering a very exciting phase of growth for the

next decade.


CHAPTER-2

INTRODUCTION


TO

ORGANIZATION

2.1 OVERVIEW OF THE INDUSTRY

2.1.1 History

The Company celebrated its centenary in 1997. In 1897 a young man named

Ardeshir Godrej gave up law and turned to lock making. Ardeshir went on to make safes and

security equipment of the highest order, and then stunned the world by creating toilet soap from

vegetable oil. His brother Pirojsha Godrej carried Ardeshir's dream forward, leading Godrej

towards becoming a vibrant, multi-business enterprise. Pirojsha laid the foundation for the

sprawling industrial garden township (ISO 14001-certified) now called Pirojshanagar in the

suburbs of Mumbai. Godrej touches the lives of millions of Indians every day. To them, it is a

symbol of enduring ideals in a changing world. Time and again, with the launch of every new

product, Ardeshir Godrej changed perceptions in the Industry by adding exciting new

dimensions. Be it the manufacture of the finest range of security equipment or soap from


vegetable oils, the world was thrilled and stunned too. His dream had become a huge movement,

which was carried forward by another just as capable Godrej. The man, who did so, was

Ardeshir Godrej's own brother Pirojsha Godrej. He laid the foundation of the Godrej Empire.

2.1.2 LANDMARK

Incorporation

Established in 1897, the Company was incorporated with limited liability on March 3, 1932,

under the Indian Companies Act, 1913.

The Beginning

The beginning of the Godrej Group can be traced to India's freedom struggle. Its founder,

Ardershir Godrej, a lawyer by profession and a staunch nationalist, believed that India could

attain freedom only by being self-reliant. In doing so, India would overcome economic

degradation.

The Godrej Name

The Godrej Name displaced well-established foreign brands from the Indian market. The name

'Godrej' engraved into the shiny metal of the Godrej Locks came to be known as a symbol of

self-reliance, trust-worthiness, assertiveness and progressiveness for a new generation of Indians.

1971 Started as Animal Feeds division of Godrej Industries Ltd.

1984 Diversified into Agricultural Inputs

1992 Godrej Agrovet born as a separate corporate entity expanded into

Chemical Pesticides.


1993 Acquired Unicorn Biotech a Tissue Culture business.

1995 Foray into branded chicken- Real Good Chicken.

1997 Acquired Oil Palm Plantation business of Godrej Industries Ltd.

1999 Acquired India Poultry Farm breeding and hatchery business to

Become an integrated player.

2001 Acquired Hindustan Unilever Feed business - GOLDMOHUR

FOODS & FEEDS LTD. (Now a 100% subsidiary of Godrej Agrovet Limited)

2.1.3 GODREJ MISSION

Our Mission is to operate in existing and new businesses, which capitalize on the Godrej

brand and our corporate image of reliability and integrity. Our objective is to delight our

customer both in India and abroad.

We shall achieve this objective through continuous improvement in quality, cost and customer

service. We shall strive for excellence by nurturing, developing and empowering our employees

and suppliers.

We shall encourage an open atmosphere, conducive to learning and teamwork.

2.1.4 GODREJ VALUES


Commitment to Quality

Customer Orientation

Dedication & Commitment

Discipline

Honesty & Integrity

Openness & Transparency

Respect/Care & Concern for People

Trust

2.2 PROFILE OF THE COMPANY

Godrej Agrovet was formerly a division of Godrej Soaps Limited. It was set up as a

separate company with focus on the Agri-sector. Over the years, the company has developed and

nurtured a close relationship with farmers. Providing them with innovative Products as well as

educating them on world-class farming practices. Together with its subsidiaries Goldmohur

Foods and Feeds Limited and Golden Feed Products Limited , Godrej Agrovet has revenues

close to Rs 1000 Crores (US $ 250 million -FY 2007). The activities of the company are vast:

Compound Animal feeds, Agricultural Inputs, Integrated Poultry Business, Oil Palm Plantations,

Plant Biotech, Retailing of Fresh Farm Produce in urban areas, and rural retailing of a wide range

of products including Agricultural inputs.

Godrej Agrovet acquired Goldmohur Foods and Feeds Limited from Hindustan Lever, a

Unilever subsidiary in India, in 2001.Goldmohur Foods and Feeds Limited enjoys strong brand


equity due to its poultry and cattle feed brands. Goldmohur Foods and Feeds Limited have a

state-of-the-art R&D centre in Bangalore named 'ANIC' (Animal Nutrition Innovation

Centre). This centre is devoted to development of innovative animal feed products. Today,

Godrej Agrovet together with its subsidiaries has manufacturing facilities spread over 40

strategic locations and a network of over 10,000 distributors, dealers and C&F agents. In its

journey of growth, Godrej Agrovet has set new standards of corporate performance, reliably

delivering quality products and services to all its customers at competitive prices.

GLOBAL FORAYS: Having successfully grown to be the leader in many segments, Godrej

Agrovet feels confident to take on global competition and has started making its presence felt in

the international arena too. A joint venture with ACI Group of Bangladesh for poultry and feed

operations in Bangladesh, and acquisition of controlling stake in Al-Rahaba, which runs

broiler farms in UAE exemplify this confidence.

Board of Directors

Nadir B. Godrej Chairman

Jamshyd N. Godrej

Ardeshir B. Godrej

Balram Singh Yadav Executive Director & President

Dr. Sudheer L. Anaokar

Vijay M. Crishna

Tanya A. Dubash

Kavas N. Petigara

Amit B. Choudhury- additional Director

Nisaba A. Godrej


Strategic Tie-Ups:

Strategic tie-ups and acquisitions have been a way of life at Godrej Agrovet Limited.

Meaningful alliances and useful acquisitions have been providing impetus to its growth. The

acquisition of business has been in different segments ranging from Goldmohur Foods and Feeds

(Animal Feed), to India Poultry Farm (Poultry), Krithika (Oil Palm Plantations), and

Higashimaru (Marketing of Shrimp Feed). Strategic investments have been made in business,

which have a strategic fit and which complement our business e.g. Creamline (Diary), Polchem

(Bio-technology).

2.5 PRODUCT RANGE OF THE GODREJ AGROVET

ANIMAL FEED DIVISION

Godrej Agrovet has a rich experience of over 3 decades in the business of Animal Feeds.

Starting from humble beginnings of a single feed mill in Mumbai, it has grown into the largest

producer of commercial Animal Feed in India, with a strong presence in Dairy Feed, Aqua Feed

and Poultry Feed sectors. Its production facilities are spread over 40 locations across the country.

Despite the vast geographical and cultural diversity of India, Godrej Agrovet has managed to

develop quality feeds appreciated by farmers across the country. This can only be attributed to its

strong grass root level understanding of India. Godrej Agrovet's success in the livestock sector is

based on a single guiding principle what’s good for the consumer is good for the business. A

great example of this philosophy in action is Manthan - a highly creative and effective demand


creation model that guides and provides customized solutions to help cattle farmers increase milk

output and also market the end produce. Such successful initiatives have not only benefited the

farmers, but have also made Godrej Agrovet the leader in this business.

Key Highlights

No. 1 in cattle feed

1st to market poultry feed in crumb form

1st to market poultry feed in pellet form

No. 1 in commercial broiler feed

State-of-the-art R&D centre 'ANIC'

Strong brand equity for poultry feed brands

Segmenting Rural Markets:-

For the purpose of targeting decisions, rural markets can be segmented multiple

dimensions such as geographic ( north, west, south, east), demography ( age, gender, occupation,

and so users status), psychographic ( social class, life style) and behavioral (Benefit sought,

usage occasions, user status). One useful segmentation scheme for rural areas is the

socioeconomic classified (SEC) using the occupation of the chief wage earner and the type of

house that they live. This characteristic of these four classes have been described by Kashyap

and Raut as follows:-

SEC R1 Landlord farmers, educated, exposed to urban environment, their child studying in

nearby town; exhibit lifestyle closer to urban areas, adopted modern technology; owns

consumer-durable products such as tractor, refrigerator, and two-wheeler.


SEC R2 Rich farmer, with about 5 acres of land; may not be educated, but want their children to

be educated; aspires to have high social status; own some of the consumer-durable products like

television, tractor and two-wheeler.

SEC R3 Landholding size between 2 and 5 acres; children studying in village school;

conservative in technology adoption; own some consumer-durable products.

SEC R4 Agricultural labor has a low income; subsidized food grain and other products

distributed through the public-distribution system.

SEC classification developed for rural areas is useful to classify the consumer and to specify the

target segment. Another useful method of segmentation of 459 districts in India based on 42

socioeconomics indicators using various data sources. MICA rural rating are based on linear

combination of six variables, namely, the total number of cultivators, total cropped area, total

irrigated area, fertilizer consumption, bank credit, and value of agricultural output. Based on a

detailed analysis of data, the index classifies districts based on development index point. This

approach provides a useful basis for marketers to analyze and choose geographical market to

focus on.

CHAPTER-3


OBJECTIVES OF

THE STUDY &

RESEARCH METHODOLOGY

3.1 OBJECTIVES

To know the market value of Godrej feed and its competitors.

To study the buying behavior of dairy farmers like before purchase behavior and after

purchase behavior.

To study the actual results given by different feeds by having a comparison study of

quantity of milk given by cattle’s.

3.2 SCOPE OF THE STUDY


The scope of study was not limited up to one FEED Industry but it also covers the survey of

the sample that represents the whole population. It is done in order to know the customers

awareness of feed Industry.

3.3 RESEARCH METHODOLGY

3.3.1 SOURCES OF DATA

Primary data collection-

Farmers

Dealers/ Distributers

Milk Collection Centers

ii) Secondary data:-

AP Dairy Development Cooperative Federation

College of Veterinary Hyderabad

Veterinary Journals

Govt. Publications

Magazines

Websites

3.3.2 SAMPLING AREA

Sample is taken from 9 Districts of ANDHRA PRADESH.

• Chittoor

• Nellor

• Ongole (Prakasham)

• Vijayawada

• Krishna District

• West Godavari


• Hyderabad

• Nizamabad

• Adhilabad

3.3.3 SAMPLE PLAN

SAMPLE SIZE: A sample of minimum respondents will be selected from various areas

of ANDHRA PRADESH. An effort has been made to select respondents evenly. The

survey is carried out 171 Samples.

Farmers- 107

Dealers/Distributers- 42

Milk Collection Centers- 22

SAMPLING UNIT: - It indicates who is to be surveyed. The researcher must define the

target population that will be sampled. In this project sampling unit is all the farmers,

dairy farmers, feed buyers, etc of Andhra Pradesh.

SAMPLING TECHNIQUE: For the purpose of research random sampling is being used.

Randomly I catch the different people from different areas of different districts of

ANDHRA PRADESH.

It was difficult to get questionnaire filled by a farmer so I asked them

indirectly without a questionnaire and later filled that. The entire respondents are chosen

randomly.


3.3.4 METHODOLOGY & PRESENTATION OF DATA

The data so collected is than coded in the Excel tables to make the things presentable in

more effective. Diagrams and Bar charts, Pie charts which helps me out in easy and effective

presentation and hence results are being obtained.

3.4 LIMITATIONS OF STUDY

Carrying the survey was a general learning experience for me but i also faced

some problems, which are listed here:

First 5-6 days I faced Language problem because in the villages farmers use typical

Telugu.

It was difficult to get questionnaire filled by a farmer so I asked them indirectly without a

questionnaire and later filled that.


The market of Godrej Agrovet is too vast and it is not possible to cover each and every

dealer/Distributers, and Milk collection centers in the available short span of time.

Generally the respondents were busy in their work and were not interested in responding

rightly.

Respondents were reluctant to discover complete and correct information about

themselves and their organization.

Most respondents were not maintaining proper records of their feed consumption, so they

were unable to provide exact information.

Most of the respondents don’t want to disclose the information about the various other

companies’s from whom they buy feed.

Most of the respondents were using the feed of more than one company and they were

not able to properly differentiate among their product.

Due to human behavior information may be biased.


CHAPTER-4

DATA ANALYSIS

& INTERPRETATIONS

4.1 ANALYSIS AND INTERPRETATION OF SURVEY (FARMER)

4.1.1 Farmer Distribution Based on Age wise:-

Category(Age) No. of Respondent

20-30 9

30-40 36

40-50 32

More than 50 yrs 27


20-309%

30-4035%40-50

31%

>5026%

Farmers Distribution Age Wise

During the survey I analyzed Most of the Farmers were in the age of 30-50 yrs which is

65% of the total farmers. The reason for that because in 30-50 yrs of farmers were giving

good response for my survey. Above 50yrs were not showing the interest.

4.1.2 Cattle Head Distribution


Buffalo72%

cow28%

No. of Farmers=107

Total Cattle Population= 467

From my analysis 28% cow of total cattle were in Chittoor area only where I hardly

found 5-6 buffaloes, and rest other districts I found mix combination of cattle but as

farmers think buffaloes give more milk than to cow so they buy more buffaloes compare

to cow.

4.1.3 Distribution of farmers based on Their Livelihood sources:-


Above Bar graph shows 64% farmers were Agri-Dairy farmers and only 5% farmers

were depend on only Dairy 27%Farmers depend on Agriculture but they earns from

cattle’s milk as side business. Only 4% farmers were having poultry, horti-orchards.

4.1.4 Types of cattle Feed (Pellets/mash) using by Farmers


Most of the farmers are using cattle feed in the range of 10-20 Rs/kg. Some small and

poor farmers who do not believe in concentrate feed uses small quantity and lesser price

of feed.

4.1.5 Average Purchase of Compound (Pellets/ mash) Cattle Feed Bags /Month


Most of the farmers uses only 2-3 bags of compound feed which is depend on no. of

cattle feed. Generally they give 500-600grm to cow and 600-800 gram to buffalo per day.

Some big dairy farmers are using 7-9 bags/month or more than 10 bags/month uses twice

a day of cattle feed.

4.1.6 Feeding Schedule for concentrate feed


As bar graph shows most of the farmers use concentrate feed once a day because farmers

think that more concentrate feed generate heat in cattle’s body. Those who use twice a

day they expect more milk from cattle. And non user farmers are poor farmers and who

don’t believe in concentrate feeding.

4.1.7 Overall Andhra Pradesh Cattle Feed Status


As pie chart showing that there are lots of cattle feed brands in the market. And capturing

the whole market is not an easy task at present because various company brands are using

their strategy for getting the market. The reasons for Godrej-agrovet feed down due to

many farmers were tied up with big cooperative Dairies. And those cooperative providing

cattle feed, veterinary services, loan facilities, helps in open the bank accounts. Mayuri

Brand is famous among the farmers because of Tie up with the Dairies.

4.1.8 Farmers Distribution based on age wise in Nizamabad and Adhilabad

towards Godrej- Agrovet Feed


25-35 35-45 45-55 >550

1

2

3

4

5

6

7

2

7

6

55

1

2

4UserNon User

AGE

NIZAMABAD AND ADHILABAD

FA

RM

ER

S

Non user of the Godrej feed have some major reasons that keep away farmers from

Godrej feed like feed is less soluble in water and high price of the feed than to others.

Some of farmers were showing loyalty towards the other brand feed. Most of the users

are 30-50 yrs. Age group.

4.2 ANALYSIS AND INTERPRETATION OF SURVEY (DEALERS)


4.2.1 Nature of Dealers:-

67%

33%

Type of Dealer

Exclusive Non exclusive

Above 4.2.1 pie chart is showing that Most of the Dealers are exclusive in nature, which

shows loyalty towards the company product and it also shows scope for new feed product

which give high margin to the dealers.

4.2.2 Premium Cattle feed Price Range (Pellets/mash)


91% dealers are selling feed in the range of 500-700 Rs. Generally MRP for Pellets/mash

per bags are 430-540 Rs. Dealers does not buy high priced feed due to less margin

4.2.3 Margin of the Dealers


Most of the dealers are getting margin in the range of 60-80 Rs. Some of Dealers are

getting 100 Rs or more than 100 Rs per bag. In Nizamabad and Adhilabad District Godrej

dealers are getting 80-100 Rs. Which means farmers are getting feed with higher price

which is not good for a company, and farmers are not getting any discount or promotional

offer from company side?

4.2.4 Distribution of Cattle Feed (Pellets/Mash) as District wise:-


4.2.5


4.2.6

4.2.7


4.2.8

As above all bar charts 4.2.4 to 4.2.8 are showing the various position of cattle feed in

district wise.

Godrej cattle feed is not uniformly distributed in Andhra Pradesh, Godrej feed has high

market penetration in Nizamabad and Adilabad than to other districts.

IPL and SKM are uniformly distributed in Andhra Pradesh.

Potential Market for Godrej feed are Ongole (Prakasham), Nellore, Vijayawada where

most of the farmers are using only popular feed.

As some area of Andhra have good market demand for Godrej feed but due to lack of

supply and less distribution channel farmers are not getting Godrej feed.


4.2.9 Farmer’s expectation from Dealers

Most of the Farmers are very particular about the feed quality and they expect from the

dealers a quality feed which can increase the milk production.


4.2.10 Dealer’s Expectation from new product and company:-

Most of the Dealers expect a good quality feed product with good margin. As some of

dealers are facing shortage of feed so they expect sufficient supply of the feed.


4.3 ANALYSIS AND INTERPRETATION OF SURVEY (MILK

COLLECTION CENTERS)

4.3.1 No. of Subscribers at milk collection centers:-

41%

27%

23%

9%

No. of centers

40-60 60-80 80-100 >100

No. of Subcribers at Milk Collection

Average Milk Collection per day= 160 liters

As most of the Milk collection centers have 40-60 no. of Farmers as subscribers.

Milk collection man is getting average 160 liters milk per day.

As milk collection man is getting 1-1.5 Rs margin from cooperative dairies. He gives the

price 24-30 Rs per liter for milk to farmers on the basis of fat content.


4.3.2 Payment to Farmers:-

Most of the farmers are getting their payment biweekly. So they does not feel any

shortage of money. If farmers don’t have any shortage of money they can easily buy the

feed products.


4.3.3 Whether milk collection centers are selling cattle feed or not?

9

9.5

10

10.5

11

11.5

12

10

12

Series1

No

of C

ente

rs

Cattle Feed

YES NO

Most of the milk collection centers does not buy any cattle feed for the farmers. Because

most of farmers buy cattle feed direct from market. But they are agree with some big

company feed if they gets good margin and they can sell to farmers.


4.3.4 Promotational tools are using for competition with the other milk collection

Center in the same village:-

Most of the milk collection men say they gives timely payment to the farmers.

Some of them provide loan facility, veterinary services under cooperative milk dairy.


4.3.5 Milk collection center’s expectation from new feed product and company

Most of the milk collection centers expect good quality feed product and they expect

good margin if they sell their feed product.

71% milk collection centers expect good quality with better margin of the feed.


CHAPTER-5

FINDINGS & RECOMMENDATIONS


Findings

• Farmers look for specificity in feed. Ex.- customized feed for buffalo, cows etc

• A few Farmers are observed to highly loyal towards other brands like Nandi, SKM.

• I found 30-50 yrs age group farmers like Godrej feed because they are much experienced

about the cattle feed.

• As most of the farmers are using 10-20 Rs range of cattle feed so that price should not be

exceeded.

• As most of the farmers are using concentrate feed once in a day

• Godrej feed has got market share of 9% of total cattle feed consumption in Andhra

Pradesh, the consumption pattern of Godrej Agrovet is not uniformly distributed in

Andhra Pradesh.

• Godrej feed has good market penetration in Nizamabad and Adhilabad Districts as

compared to other districts.

• Dealers are the major source of information and purchasing force behind the Farmers.

• Some of Farmers are tied up with the milk Cooperative centers (Dairy) and the dairy are

providing to farmers cattle feed @ 10-15 Rs/kg which is available 18-22 Rs/kg in the

market.

• Dealers are stocking the premium cattle feed in the price range of 500-600 Rs

• 41% of the total milk collection centers are having 40-60 no. of farmers as subscribers.

• The farmers are not facing any shortage of money because they are getting payment

biweekly at milk collection centers.

• In Chittoor 4 km far from Palamaner in a Samudrapalli village there is a ISARAEL

based dairy project going to open. It’s a very big project in Chittoor which is 700 crore

rupees’ project.

• As Godrej dealers are getting margin of 80-100 Rs per bag which is higher than to other

brand feed due to this farmers are getting feed at higher prices.

• There is a shortage of feed in most of the areas due to lesser availability of outlets.


• Virgin market for Premium cattle feed since they are using traditional cattle feed like

Ground nut oil cake, Cotton oil cake, Rice bran, Wheat bran, Dalwaste.


RecommendationsPromotional activities should be carried out throughout the year in one form or

the other to attract the customers.

Varieties and Range of the products should be increased so that company can

capture the age group of 20-35 yrs. Farmers.

Awareness programs and other extension activities should be organized by

Godrej Agrovet Ltd regarding the Scientific methods of farming, Health, Hygiene

etc along with providing complete Agri-solution to the Farmers.

Potential Market for Godrej Agrovet Feed in the Andhra Pradesh are Nellore ,

Ongole (Prakasham), West Godavari.

As quality of the Godrej feed is good but the price of the feed is higher than others.

As some Farmers are loyal towards to some brands so that it’s better to focus on 30-

50 yrs age group segment in order to get higher volume of sale so that they will

initiate to other farmers.

As some farmers were complaining about feed solubility in water, for this company

should take some steps to avoid such type of problems.

Company should offer some discount offers and discount cards.

Company can tie up with the big cooperative dairies like Thirumalla, Vijaya dairy.

Gap between supply and demand should be rectifying.


5.2 QUESTIONNAIRES

FARMER’S QUESTIONNAIRE

1. LOCATION IDENTIFICATION:Investigator:................................................................, Date..................................,State:.................................................., District:.....................................................,Mandal/taluka/tehsil...........................................................................................,Village:.................................................................................., Code*:..................,Name of the farmer:.............................................................................................,Address:..............................................................................................................,

2. What is your main source of livelihood ?

(a) agriculture (b) farm dairy (c) both (d) other....................

3.LIVESTOCK RESOURCES DETAILS

Name of Livestock

No. Of units

Value of unit(Rs)

Total value(Rs)

Milk production /day

Selling milk(quantity)

Selling price

Buffalo

Cow

4.EARNING SOURCES:

Product Buffalo Cow Total Production Total earningsMilk

Ghee

Curd

Others

5.CATTLE FEED DETAILS:

Feed material

Quantity/day/unit Price/bag Brand name/company

milking Non-milking


Green fodder

Oil cakes

Others

Type of cattle feed using by farmer

a. Type 1 (>20 Rs) b. Type 2 (10-20 Rs) c. Type 3 (<10 Rs)

Total Expense on Concentrate= Rs. ................................................................ ( Raw material Rs. Pellet/Mash Rs. ) Total Expense on Roughages= Rs...................................................................... (Greens Rs. Dry Rs.)

6.Farm Spent:

a. Feed (roughage + Concentrates): Rs

b. Electricity

c. Labour

d. Medicine/Veterinary doctor consultation: Rs

e. Purchase of animals

f. Other

7.What is the schedule for feeding of concentrate feed?

(a) once a day (b) twice a day

8. Why do you prefer these cattle feed (rank factor in the scale 1-5)


1 – Highest rank, 5 – Lowest rank.

S.no Factors Rank

1 Enhance milk productivity

2 Easily available

3 Health

4 Saves cost

9. From whom you took advice in purchasing cattle feed? a) Neighbour/ farmer’s friends b) Shop keeper/ Dealer c) Own decision d) Extension officer e) Others10. Farmer’s feed Back regarding new cattle feed (company’s product) a. will try b. will not try c. Neutral

DEALER’S QUESTIONNAIRE

LOCATION IDENTIFICATION:

Investigator:................................................................, Date..................................,State:.................................................., District:.....................................................,Mandal/taluka/tehsil...........................................................................................,Village:.................................................................................., Code*:..................,Name of the Dealer:.............................................................................................,Addresss:..............................................................................................................,

(1) Type of Dealer?

a. Exclusive

b. Non exclusive

(2) Average sale per month of cattle feed company wise?


S.no Company name Average quantity (kgs) per bag

Price /bag Avg. Sale per month (no. Of bags)

Margin(per bag)

1

2

3

4

5

6

(3) Mention the different type of cattle feed sold by you price per kg and quantity?

S.no Name of cattle feed

Name of The Brand

Target cattle Price/bag margin (per bag)Dealer/Distribution

1

2

3

4

(4) For which cattle feed is mostly sold?

(a) cow (b)buffalo (c)cow & buffalo (d) other

(5) What is expectation of farmers buying Popular products (other than Premium)

a. Particular about Feed Qualityb. Very Particular/Less particular/ do not care/ any other c. Particular about Price d. Particular about results (milk production improvement)

(6) Which Brand products are preferred by farmers while purchasing?


a......................................b.....................................c......................................

(7) Difference between local, branded and cooperative cattle feed? Rank the criteria on scale of 1-5. (1-highest rank, 5- lowest rank)

S.no Reasons Branded Local Cooperative

1 Profit margins

2 Farmer’s satisfaction

3 Avoiding farmer’s complaint

(8) What is your expectation from product and company? Rank the criteria

On scale of 1-5. (1-highest rank, 5- lowest rank)

(9) Which inputs company should give to improve sales:

1. Superior quality

2. Competitive pricing

3. Better margin


S. no Reason Rank

1 Regular availability

2 Profit margin

3 Innovative product

4 Consistent quality

MILK COLLECTION CENTER’S QUESTIONNAIRE

LOCATION IDENTIFICATION:

Investigator:...................................................................................,Date..................................,State:........................................................................District:.....................................................,Mandal/taluka/tehsil...........................................................................................,Village:...........................................................................................Code*:..................,Name of the milk collection centre:.......................................................................,Addresss:..............................................................................................................,

3. No. of subscribing farmers:

4. How much liters milk collected per day :

5. Whom do you supply the milk:

processing centre directly to customer self processing other

Qty.

6. Which months milk production goes :

(a) Up: …………………………………………………….(b) Down: …………………………………………………

7. What do you purchase for cattle feed and what is its quantity?( if any)

Pellet Mash Other

Quantity

Brand

Pack size

8. What is the payment schedule to the milk producer :


Daily Weekly Biweekly Monthly

9. On what basis you decide the price for the milk (a) Fat content (b) SNF (c)

other…………………………………..

10. What they do to deal with competition with another Milk Collection centers in the same town (if so then ask this question)

(a) Dealer margin

(b) High milk price to the farmers

(c) Veterinary services

(d) Cattle feed to the farmers

(e) Loan facilities

(f) Timely Payment

11. What do you expect from product (Cattle feed)(a) Better margin(b) Superior quality(c) Technical services(d) Competitive pricing

5.2 BIBLOGRAPHYwww.google.comwww.apdairy.comwww.feedmachinery.com/articles/feedwww.oregonfeed.org/mehren.htmwww.godrejagrovet.comKotler Philip, Keller Kevin Lane, Koshy Abraham and Jha Mithileshwar Marketing Management: A South Asian Prospective.


http://www.apdairy.com/

customer segmentation on premium cattle feed

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