ISSN: 2321-7782 (Online)

Volume 1, Issue 7, December 2013

International Journal of Advance Research in
Computer Science and Management Studies
Research Paper
Available online at: www.ijarcsms.com

Marketing Effectiveness of Channels of Distribution

on Dairy Industry
(With Reference to Sangam Dairy Vadlamudi of Guntur (D.T), (A.P), India)
S Ayyappa Naik Nenavath
Faculty Member
Dept of Commerce and Business Administration
Acharya Nagarjuna University
Guntur, A.P. - India

Abstract: India is basically an agrarian country and it has a large live-stock population which makes animal husbandry an
important subsidiary occupation of the farmers. Animal husbandry contributes much to the rural economy by providing
milk, meat, draught power and manure. A marketing channel performs the work of moving goods from producers to
customers. It overcomes the place, time and possession gap that separate the goods and the services from those who would
use them. Between the company and the final user there are deferent marketing intermediaries performing a variety of
function and bearing a variety of names wholesalers ,retailers , agents and distributors are some them . In this paper
examine to the effectiveness of the strategy regarding channels of distribution of milk on the opinions of the customers,
findings and suggestions.

Keyword: National commission, Animal, Distribution, Channels.

I. INTRODUCTION

India is basically an agrarian country and it has a large live-stock population which makes animal husbandry an important
subsidiary occupation of the farmers. Animal husbandry contributes much to the rural economy by providing milk, meat,
draught power and manure. With the basic objective of rural upliftment, Government has introduced a large number of rural
development schemes. Among them, dairying was an important one. This was mainly because, as pointed out by the National
Commission on Agriculture “there is a growing realization that promotion of dairying not only contributes towards national
health building but also creates substantial employment opportunities. Properly organized and developed dairying could be
effectively used as an instrument of social justice.

An important feature of dairying in our country is that while most of the milk is produced is rural areas, market for milk
exists mainly in urban areas, so dairy farmers face several problems in marketing their milk. To overcome these problems a
large number of dairy co-operatives have been established in various parts of the country. Those societies provide a stable
market for milk producers in rural areas and a dependable source of milk to the urban consumers and thus have become
intermediaries between the two. The dairy co-operatives provide the necessary inputs to dairy farmers and procure their
marketable surplus of milk at reasonable price. By providing necessary inputs and ensuring regular market for milk, dairy co-
operatives give great inducement to farmers to take up dairying as a means of livelihood.

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S Ayyappa Naik Nenavath et al.., International Journal of Advance Research in Computer Science and Management Studies
Volume 1, Issue 7, December 2013 pg. 443-450
II. OBJECTIVES AND METHODOLOGY

Need for the study:

Today dairying industry has become permanent phenomenon along with the manufacturing industry. Revolutionary
changes have taken place in the dairy Industry right from the procurement at the gross root level from the farmer, processing
and preservation and distribution of the same unto the ultimate customers, taking the unprecedented experiment of Anand,
Gujarat as a model. In the process, lot of problems have to be faced by the farmer, collection centers, issues involved at the
factory regarding strategies related to the strategy regarding channels of distribution of milk. Against this back ground, an
attempt is made in this study to make an in depth enquiry in to all the identified issues of Dairy marketing in a scientific manner.

Hypotheses:

 It is also hypothesized that the present strategy’s of distribution of the milk to the ultimate customer is effective.

Objectives of the Study:

The broader objectives of the study are to evaluate the effectiveness of the strategies of the Sangam Dairy regarding
customer preference and satisfaction of the products.

 To assess the effectiveness of the strategy regarding channels of distribution of milk to the ultimate customer based on
the opinions of the customer.

Methodology:

Survey method is adopted for the study and both secondary and primary sources of data are used. The secondary data
sources include Dairy India, Indian Dairyman, Yozana, kurukshera, National Journal of Rural Development, Indian journal
Agricultural Economics, Kisan world etc., Primary data are collected from respondents on preferences and satisfaction about the
Sangam dairy the strategy regarding channels of distribution of milk for the product in selected municipalities of Guntur and
Ponnuru Towns.

Tools for data collection:

The schedules are constructed to collect the primary information from the sample respondents in Guntur district, A.P, India.
Data are collected by employing stratified random sampling method.

Scope of the study:

Guntur district of Andhra Pradesh state has been purposively selected for the present study. Moreover, Guntur district has
been found to be on par with the other leading district of the state, so far as the coverage of dairy products used by the
respondents of Sangam dairy. The Guntur district has one municipal corporation at Guntur and ten other municipalities which
include Tenali, Vinukonda, Sathenapally, Macherla, Narsaraopet, Ponnuru, Repalle, Mangalagiri, Bapatla and Chilakaluripet.

Size of the Sample:

The present study has employed stratified Random sampling technique for the selection of the sample town’s respondents.
The study has selected two municipalities at random accounting for 10 per cent of the total municipalities. One is Guntur
Municipal Corporation and other is Ponnuru municipality. Among the municipalities, required numbers of 2 wards each have
been selected at random. From these wards sample customers to the extent of 10 per cent have been selected. The sample wards
and respondents selected are distributed as follow:

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Volume 1, Issue 7, December 2013 pg. 443-450
Sample size of wards and respondents
Guntur Municipal Corporation Ponnuru Municipality
Selected No of wards(52 wards) No of Respondents Selected No of wards(31 wards) No of Respondents
11 40 4 40
21 40 20 40
Total 80 80
Sources: Guntur & Ponnuru municipality office

Thus, the present study covers two municipalities of the district and covers 160 respondents or customers both the Guntur
Municipal corporation (80 respondents) and the Ponnuru Municipality (80 respondents) representing two sample municipalities.

III. DISTRIBUTION

A marketing channel performs the work of moving goods from producers to customers. It overcomes the place, time and
possession gap that separate the goods and the services from those who would use them. Between the company and the final
user there are deferent marketing intermediaries performing a variety of function and bearing a variety of names wholesalers,
retailers, agents and distributors are some them . Each channel member generates deferent levels of sales and cost. Marketing
channel decisions are very imported decisions and influence the all other marketing decisions. AMA defines ‘A channel
distribution or a marketing channel is the structure of intra-company org evicts and extra-company agents and dealers,
wholesalers and retails through which commodity, product or services are marketed. A product or services must under
dependent organization involved in the process of making product or services available for the use or consumption by the
customer use.

Channels levels in the consumer goods markets:

We have already noted that there are intermediary performing a variety of functions between the producers and ultimate
users. As such, we can use the number of intermediaries involved in distribution as a criteria for designating the length of the
channel. There are: zero – level channel, one – level channel, two – level channel, three – level channel.

1. Table indicating to the response regarding from which distributor you get products.
Distributor Guntur Town Ponnuru Town

No of respondents Percentage to total No of respondents Percentage to total

Sangam 43 53.75 44 55
Modal 10 12.5 12 15
Jercy 27 33.75 24 30
Total 80 100 80 100
Source: primary data

Choice of distributor:

Table No 1 demonstrates the response of the customers regarding from which distributor you get the products. It can
observed from the table that a big majority of respondents of about 43 out of 80 accounting for 55 per cent from Ponnuru town
in relation to 43 out of 80 accounting for 53.75 per cent from Guntur town, stated that they get the product Sangam dairy
distributor as compared to others. Against this tendency, about 12.5 per cent customers from Ponnuru town as compared to 30
per cent customer from Guntur town stated that they get the product from Model and Jercy distributors respective.

2. Table indicating to the response regarding length of relationship with distributor:

Relationship to the Guntur Town Ponnuru Town
distributor No of respondents Percentage to No of respondents Percentage to
total total
2 months 8 10 7 8.75
6 months 46 57.5 48 60

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S Ayyappa Naik Nenavath et al.., International Journal of Advance Research in Computer Science and Management Studies
Volume 1, Issue 7, December 2013 pg. 443-450
1 year 10 12.5 9 11.25
2 years 9 11.25 11 13.75
3 years 7 8.75 5 6.25
Total 80 100 80 100
Source: primary data

Length of Relationship with the distributor:

Table No 2 demonstrates the response of the customers regarding longevity of relationship with distributor. It can be
observed from the table that majority of the customers of about 48 out of 80 accounting for 60 per cent from Ponnuru town in
relation to about 46 out of 80 accounting for 57.5 per cent from Guntur town have stated that they have 6 months relationship
with distributor. Similarly, about 11 out of 80 accounting for 13.75 per cent and about 9 out of 80 accounting for 11.25 per cent
from respective towns stated that relationship with the distributor was 2 years. However it is observed from the table that 10 per
cent and 8.75 per cent from respective towns stated that the respondent’s relationship with the distributor was 2 months only.

3. Table indicating to the response regarding the time of getting products after placing on order to distributor
Placing on order to Guntur Town Ponnuru Town
the distributor No of respondents Percentage to No of respondents Percentage to
total total
In time 55 68.75 48 60
Few days late 18 22.5 26 32.5
Few weeks late 7 8.75 6 7.5
Total 80 100 80 100
Source: primary data
Time of supply of products:

Table No 3 demonstrates the response of the customer regarding the time of getting product after placing an order to the
distributor. It is satisfying to observe from the table that about 55 out of 80 accounting for 68.75 per cent from Guntur town as
compared to 48 out of 80 accounting for 60 per cent respondents from Ponnuru town stated that the products are delivered after
placing an order to the distributor in time. Closely followed is that 26 out of 80 accounting for 32.5 per cent from Ponnuru town
in relation to the 18 out of 80 accounting for 22.5 per cent from Guntur town the customers stated few days late after placing on
order to the distributor. Against the above tendency, 8.75 per cent of customers from Guntur town as compared to 7.5 per cent
from Ponnuru town stated that they have recovered the delivery of products of after few weeks. From the above analysis it is
pertinent to note that the majority of the customers are satisfied with the delivery of products from the distributor.

4. Table indicating the response regarding the relationship with distributor:

Relationship with Guntur Town Ponnuru Town
distributor No of respondents Percentage to total No of respondents Percentage to total
Excellent 15 18.75 12 15
Good 59 73.75 53 66.25
Poor 6 7.5 15 18.75
Total 80 100 80 100
Source: primary data

Kind of relationship with distributor:

Table No 4 demonstrates the response of the respondent regarding the relationship with distributor. It is satisfying to
observe from table that about 59 out of 80 respondents accounting for 73.75 per cent from Guntur town as compared to 53 out
of 80 respondents accounting for 66.25 per cent from Ponnuru town have stated that they have good relationship with
distributor. Closely followed is that about 15 out of 80 accounting for 18.75 per cent from Guntur town stated that the
relationship with distribution is excellent in relation to 15 out of 80 accounting for18.75 per cent from Ponnuru town who
stated, relationship with distributor is poor. Contrast above situation, the least no respondents accounting for 7.5 per cent from

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S Ayyappa Naik Nenavath et al.., International Journal of Advance Research in Computer Science and Management Studies
Volume 1, Issue 7, December 2013 pg. 443-450
Guntur town have poor relationship with distributor and 15 per cent from Ponnuru town have stated that relationship with
distributor is excellent.

5. Table indicating the response regarding Sangam dairy provide free schemes would customer buy it
Free schemes Guntur Town Ponnuru Town
No of respondents Percentage to total No of respondents Percentage to total
Yes 56 70 62 77.5
No 24 30 18 22.5
Total 80 100 80 100
Source: primary data

Free schemes offered:

Table No 5 indicates response of the respondents regarding the fact that Sangam dairy provide free schemes to the
customer. It can observed from the table that majority of the respondents of about 59 out of 80 accounting for 70 per cent from
Guntur town stated that Sangam dairy products provided free schemes in relation to about 62 out of 80 accounting for 77.5 per
cent from Ponnuru town who stated the same. As against this tendency, meagre percentages of 30 and 22.5 per cent from
respective towns have stated that that they were not buying the Sangam dairy products through free schemes.

6. Table indicating to the response regarding the frequency of distribution of stocks.

Frequency of Guntur Town Ponnuru Town
distributor of stocks No of Percentage to No of Percentage to
respondents total respondents total
Daily 44 55 37 46.25
Once in 2 days 13 16.25 9 11.25

Once in 3 days 5 6.25 20 25

Whenever stocks 18 22.5 14 17.5
Total 80 100 80 100
Source: primary data

Frequency of distributor of stocks:

Table No 6 demonstrates the response of respondents regarding the frequency of distribution of stocks. It is satisfying to
observe from the table that about 44 out of 80 respondents accounting for 55 per cent from Guntur town as compared to 37 out
of 80 respondents accounting for 46.25 per cent from Ponnuru town have stated that they have distribution of stocks which is
daily. Closely followed is that 20 out of 80 accounting for 25 per cent from Ponnuru town have the distribution the stocks once
in 3 days in relation to 18 out of 80 accounting for respondents from Guntur town have distribution stocks whenever stocks
available. Contrast to the above situation, the least number of respondents accounting for 6.25 per cent from Guntur town have
distribution of stocks once in 3 days and 11.25 per cent of respondents from Ponnuru town stated the frequency of distribution
stocks once in 2 days.

7. Table indicting the response regarding the distribution delivery based on timeliness following dimension.
Dimension of the Guntur Town Ponnuru Town
timeliness No of respondents Percentage to No of respondents Percentage to
total total
Poor 5 6.25 9 11.25
Average 40 50 41 51.25
Good 15 18.75 12 15
Very good 8 10 10 12.5
Excellent 12 15 8 10
Total 80 100 80 100
Source: primary data

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Volume 1, Issue 7, December 2013 pg. 443-450
Timeliness of delivery:

Table No 7 demonstrates to the response of the respondents regarding the distribution delivery based on the timeliness
dimension. It is satisfying to observe from the table that about 41 out of 80 accounting for 51.25 per cent from Ponnuru town as
compared to 40 out of 80 accounting for 50 per cent from Guntur town have stated that the distribution delivery based on the
timeliness distribution dimension is average. Closely followed is that 15 respondents out of 80 accounting for 18.75 per cent
from Guntur town and 12 respondents out of 80 accounting from Ponnuru town stated that the timeliness delivery distribution is
good. Contrast to above situation, the least number of respondent accounting for 6.25 per cent from Guntur town have
timeliness of distribution dimension was poor as against 10 per cent from Ponnuru town who have timeliness of distribution
dimension was excellent.

8. Table indicating the response regarding delivery distribution based on reliability.

Dimension of the Guntur Town Ponnuru Town
reliability No of respondents Percentage to No of respondents Percentage to
total total
Poor 5 6.25 9 11.25
Average 42 52.5 46 57.5
Good 21 26.25 15 18.75
Very good 8 10 7 8.75
Excellent 4 5 3 3.75
Total 80 100 80 100
Source: primary data

Delivery based on reliability:

Table No 8 demonstrates the response regarding delivery distribution dimension of the reliability. It can observed from the
table that about 46 out of 80 respondents accounting for 57.5 per cent from Ponnuru town as compared to 42 out of 80
respondents accounting for 52.5 per cent from Guntur town have stated that they have distribution delivery dimension of the
reliability which is average. Closely followed is that 21 out of 80 respondents accounting for 26.25 per cent from Guntur town
in relation to 15 out of 80 accounting for 18.75 per cent from Ponnuru town have good dimension reliability of distribution.
From above analysis, it is pertinent to note that average of reliability of dimension of distribution by majority of customers in
both towns. Contrast to above situation, the least number of respondents of 3.75 per cent from Ponnuru town and 5 per cent
from Guntur town have dimension of reliability of distribution which is excellent.

9. Table indicating to the response regarding distributor attends to problems of customers immediately:
Distributor attends to Guntur Town Ponnuru Town
the problems No of Percentage to No of respondents Percentage to
immediately respondents total total
Strongly agree 9 11.25 13 16.25
Agree 42 52.5 49 61.25
Disagree 11 13.75 12 15
Strongly disagree 18 22.5 6 7.5
Total 80 100 80 100
Source: primary data

Pattern of attendance to problem:

Table No 9 demonstrates the response of the respondents regarding distributor attends customers problems immediately. It
can be observed from the table that majority of the respondents of about 49 out of 80 respondent accounting for 61.25 per cent
from Ponnuru town and about 42 out of 80 accounting for 52.5 per cent from Guntur town stated that they were agreeing that
the distribution attends to your problems immediately. Contrast to the above situation, its is observed from the table that about
18 out of 80 accounting for 22.5 per cent from Guntur town stated that they strongly disagree with the aspect that distributor

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S Ayyappa Naik Nenavath et al.., International Journal of Advance Research in Computer Science and Management Studies
Volume 1, Issue 7, December 2013 pg. 443-450
attends to the problems immediately as against 7.5 per cent from Ponnuru town. However it is exciting to observe from above
the table that about 13 out of 80 accounting for 16.25 per cent from Ponnuru town stated that they strongly agree with the
aspect, immediately as against 11.25 per cent from Guntur town. As against this tendency, about 15 per cent and 13.75 per cent
from respective towns have stated that they disagree with the aspect of that distributor is attending to the problems immediately.

10. Table indicating to the response regarding guessing of the stock from the distributor.
Guess the stock Guntur Town Ponnuru Town
form distributor No of Percentage to No of Percentage to
respondents total respondents total
On cash 62 77.5 71 88.75
On credit 5 6.25 3 3.75
Cheque 13 16.25 6 7.5
Total 80 100 80 100
Source: primary data

Guessing of stock from the distributor:

Table No 10 demonstrates the response regarding basis of guessing the stock from the distributor. It can be observed from
the table that about 71 out of 80 respondents accounting for 88.75 per cent from Ponnuru town as compared to 62 out of 80
accounting for 77.5 per cent from Guntur town have stated that they have guessed the stock from the distribution on cash.
Closely followed is that 13 out of 80 accounting for 16.25 per cent from Guntur town in relation to 6 out of 80 accounting for
7.5 per cent from Ponnuru town have guessed the stock from distributor on the basis of payment by cheque. From the above
analysis, it is pertinent to note guessing of the stock on cash basis from the distributor was done by majority of customer in both
towns. Contrast to above situation, the least no of respondent accounting for 3.75 per cent from Ponnuru town and 6.25 per cent
from Guntur town have guessed the stock from distribution is on credit.

IV. FINDING

 It can observed from the table that a big majority of respondents of about 43 out of 80 accounting for 55 per cent from
Ponnuru town in relation to 43 out of 80 accounting for 53.75 per cent from Guntur town, stated that they get the product
Sangam dairy distributor as compared to others.

 It can be observed from the table that majority of the customers of about 48 out of 80 accounting for 60 per cent from
Ponnuru town in relation to about 46 out of 80 accounting for 57.5 per cent from Guntur town have stated that they have 6
months relationship with distributor.

 It is satisfying to observe from the table that about 55 out of 80 accounting for 68.75 per cent from Guntur town as
compared to 48 out of 80 accounting for 60 per cent respondents from Ponnuru town stated that the products are delivered
after placing an order to the distributor in time.

 It can observed from the table that majority of the respondents of about 59 out of 80 accounting for 70 per cent from Guntur
town stated that Sangam dairy products provided free schemes in relation to about 62 out of 80 accounting for 77.5 per
cent from Ponnuru town who stated the same.

 It is satisfying to observe from the table that about 41 out of 80 accounting for 51.25 per cent from Ponnuru town as
compared to 40 out of 80 accounting for 50 per cent from Guntur town have stated that the distribution delivery based on
the timeliness distribution dimension is average.

 It can be observed from the table that majority of the respondents of about 49 out of 80 respondent accounting for 61.25 per
cent from Ponnuru town and about 42 out of 80 accounting for 52.5 per cent from Guntur town stated that they were
agreeing that the distribution attends to your problems immediately.

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
Volume 1, Issue 7, December 2013 pg. 443-450
It can be observed from the table that about 71 out of 80 respondents accounting for 88.75 per cent from Ponnuru town as
compared to 62 out of 80 accounting for 77.5 per cent from Guntur town have stated that they have guessed the stock from
the distribution on cash.

V. SUGGESTION

 Though majority of the customers have been delivered with products immediately after placing an order however, it
appears that a segment of customer could not get the product on in time. In order to satisfy the needs of all customers to get
the products timely, additional arrangements have to be made by the Sangam dairy such as keeping the outlets open for
additional time.

 As noted in the analysis, there is variance with regard to the distributor attending to the problems of customers. Unlike the
complaining cells are set up at the factory office and gates, the grievances cells have to install at important places in the
towns so as to facilitate the redresssal of the grievances of milk customers at a quicker phase.

 As the analysis reveals that good numbers of respondents have complained that they were not served with dairy products in
bulk as and when needed unlike they have been served to other segment of customers. In this context, it can be suggested to
the Sangam dairy, that the system of need identification has to been introduced and accordingly the supply of milk products
in bulk has to be made so that no customer will have grievance that milk products are not supplied in bulk.

 From the analysis, it is evident that majority of customers have preferences for specialty store of retail forms organization
and another segment has also preferences of convenience store of retail form of organization to get their milk products as
compared to other organization form like whole sale. Hence, it is prudent that specialty stores and convenience stores of
retail form of organization have to be strengthened and new outlets have to be given permission as far as possible.

 As it is evident from the analysis that a segment of the customers in Ponnuru town complained that they have poor
relationships with distributing agencies. In order to ward off this problem, the management of the Sangam dairy has to
conduct orientation programme for the distributors as to how to maintain better relationship customer and necessary skills
have to be imparted in order to make the distributors sail smoothly with customers.

References

1. Jayachandran s “Marketing Management” excels books, New Delhi, 2006, p: 315.

2. Anonymous (1995), “Dairying India: Contributions and Constraints”, Monthly Commentary, Vol 36 (10), p. 11 -115,1995.
3. Rao,N., Kumar P., Govind pal and Chandra sen. (2004). “Economics of milk Production” kanpur (Dehat) Distict, Uttar Pradesh. “Indian Journal of
Agricultural Economics, Vol, 59, pp 624-625,2004.
4. Planning Commission (2002) Report of the working Group on Animal Husbandry & Dairying for the Tenth Five Year Plan, 2002-2007, Government of
India, New Delhi,2002.
5. Economic Survey (2005-2006), “Economic Division”, Ministry of Finance, Government of India, New Delhi.

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