PARAG MILK FOODS PVT LTD

SELLING AND DISTRIBUTION OF PARAG MILK FOODS

PRODUCTS UNDER HORECA SEGMENT

Summer Internship Project

Submitted By : Chintan Bharat Vora

Date:15th July2015

Project put across in detail introduction on NBFC, their types, and rules and regulations regarding
raising funds through private placement .Structured product which still underrated, less known and
tagged as black box is revealed in this project by in-depth explanation in order to create awareness on
this platform which is outperforming still unknown to many of us.

STRUCTURED PRODUCTS: BLACK BOX OR PLATFORM TO RAISE FUNDS THROUGH PRIVATE PLACEMENT BY NBFCs

ACKNOWLEDGEMENT
If words are considered as a symbol of approval and token of appreciation then let the words play the
heralding role expressing my gratitude.
During the perseverance of this Project, I was supported by different people, whose names if not
mentioned would be inconsiderate on my part. I take this opportunity to express my profound gratitude
and deep regard to my mentor Mr.SANDEER NAIR sales mangager for his exemplary guidance,
valuable feedback and constant encouragement throughout the duration of the project. His valuable
suggestions were of immense help throughout my project work. His perceptive criticism kept me
working to make this project in a much better way. Working under him was an extremely knowledgeable
experience for me.
I would also like to give my sincere gratitude to MR.KIRAN MAV because of whom I am able to
complete my project.
Last but not least, I would like to thank my parents and my friends for their support and feelings without
which this project would have not been possible.

Chintan vora

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DECLARATION
I, chintan bharat vora hereby declare that this project report is the record of authentic work carried out
by me during the period from 28th April to 30th June 2015 for which I have got the certificate from the
company for the project which was based on selling and distribution of parag milk foods products in
HORECA Segment.

Signature
Chintan vora
Roll no- 115
PGDM Marketing

Date

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Executive Summary:

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Table of Content:
Sr. No.

Content

Pg No.

Introduction

1.1.

Introduction of Non-Banking Financial Companies (NBFCs)

1.2.

NBFC v/s Bank

1.3.

Guidelines to set up NBFCs

11

1.4.

Avenues available for NBFCs to raise funds

13

1.5.

Top NBFCs in India

17

1.6.

FDI in NBFCs

19

1.7.

Future prospects

24

2.

Research Methodology

2.1.

Research Objective

29

2.2.

Sample size and type

29

2.3.

Data collection and Analysis

30

2.4.

Findings and conclusion

34

3.

Private wealth management concept

35

3.1.

Structured products

37

3.2.

Derivatives

38

3.3.

Structured products at Anand Rathi

42

3.4

Conclusion

48

4.

Bibliography

49

5.

Appendix

50

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THE OBJECTIVES OF THE PROJECT

PARAG MILK FOODS PVT LTD

Parag Milk Foods Pvt. Ltd was established in the year 1991 in the city Mumbai, Maharashtra. It was set
up by the ever inspiring and devoted owner Mr. Devendra Prakash Shah. With the hard work and
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commitment of their dedicated owner and their entire team they have emerged as the major
Manufacturer, Exporter and Supplier of the 100% natural Dairy Products. Parag milk foods pvt ltd is an
ISO, HACCP and EIA certified company and they have also received many awards from the Dairy
Sectors.
Parag milk foods pvt ltd is renowned as the chief Manufacturer, Exporter and Supplier of the premium
quality Dairy products. They offer a great variety of products made from the 100% pure cow milk from
our own farm, at very competitive prices. They also provide the customized production and packaging
services to the clients to meet their specific requirements. Parag milk foods pvt ltd believe in
establishing long term relationships with our clients rather than becoming their mere business associates.
Parag milk foods is a prominent name in the entire industry because of the quality of the products they
offer to the clients. A great care is taken to assure the best quality of products for which company have
established a separate and complete QC Lab. Their experts carry out the task of quality checking in
accordance with the set industrial standards.
Their peerless success is greatly dependent upon the high tech manufacturing plant spread over an area
of about 50 acres. They make use of the technically advanced equipments and machinery to carry out the
varying process like manufacturing, packaging, etc. The company is also backed up by the separate
R&D and QC labs to deliver the exclusive range Dairy Products to the clients.

BACKGROUND AND HISTORY

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The size of the Indian dairy industry is approximately US$70bn. The Indian Dairy Industry has been
growing @ 5% per annum.
The average per capita consumption of dairy products in India is around 300 gm compared to the global
average of 700 gm per day.
In 1992, Parag Milk Foods Pvt. Ltd. was founded by Mr. Devendra Shah at Manchar (in the milk belt of
Maharashtra). In earlier co-operative times, there were milk holidays and the farmers had to dump their
milk

into

garbage

as

co-operatives

didnt

take

milk

from

them

on

holidays.

Mr. Shah tapped this opportunity and started processing milk collected from farmers during holidays and
thus was born Parag Milk Foods Pvt Ltd.
From 1992 to 1998, we were primarily into collection and processing of milk. After that, we started
manufacturing dairy products such as Ghee and Milk Powders. Simultaneously, we were exporting these
dairy commodities too.
In 2008, we established one of Indias largest cheese plants and started manufacturing value added milk
products. We also own one of the largest and modern dairy farms in India with rotary milk parlour.
Today, we are the youngest, strongest and one of the largest private dairy players in India.

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INTRODUCTION:
Indian Dairy Industry:

India has tremendous milk production in 40years and has become the world largest milk

producing nation with a gross output of 54.6millions in 2001.

The Indian dairy has achieved this strength of a producer-owned and professionally managed co-

operative system.
More than 10milion dairy farmers belong to 96,000 local dairy cooperatives,who sell their

products to 170 milk producer cooperative unions.

Rising consumption coupled with better margins in the value added dairy products (VADPs) are

driving the dairy players to get into the growth and higher profitable trajectory
Change in demographics and rapid urbanization have resulted into manifold surge in the demand
for VADPs

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Milk products such as curd which were largely home products are currently available under
various brands. Due to convenience, health benefits and increased consumerism, milk derivatives
like buttermilk, low fat yogurt and flavored milk are nowadays part of regular consumption.

The traditional way.

For decades, dairy players in India have been engaged in the liquid milk processing activity only.
Backed by operation White Flood in 1970s, the milk industry in India witnessed the first wave of
development in the milk production which gave India its status of the largest milk producer in the world.
This was spearheaded by the Co-operatives model which was supported by the GoI. Ownership being
with the farmers instilled trust among the member milk producers in the cooperative model, which also
ensured transparent returns. In addition, cooperatives also provided various services like cattle
vaccination, cattle insurance, artificial insemination, installation of coolers at village level etc to improve
productivity.
Further, there was minimal involvement of private players in the industry as approximately 80% of the
retail price of the liquid milk went back to the farmers leading to low operating margins (4-5%). This
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was despite the consistent upsurge in the retail prices of the liquid milk. Consequently, the dairy
companies were left with insufficient internal funds to plough back into the operations for adoption of
modern technologies or development of milk variants.
The above reasons coupled with factors such as evolving tastes and preferences, higher affordability, etc,
lead to the entities venturing into the VADP segment for better profitability.

Going the creamy way.

Over the past decade, significant transformation took place in the Indian demographic space which led
to heightened consumer interest in VADPs. This shift in the dynamics of the industry proved beneficial
for the manufacturers since margins in VADPs are more than double the margins in the liquid milk
segment. The profitability in liquid milk space ranges from 4-5%, whereas the profitability in VADPs
ranges from12% to 18%, attracting private participation in the industry.

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As per the industry estimates, the share of VADP in the milk and milk derivatives segment is growing
currently at around 25% every year and is expected to grow at the same rate until 2019-20.
Product innovations are likely to accelerate Indias dairy market which is anticipated to improve industry
margins by attaining greater scale, higher capacity use and an increasing contribution from new milk
variants. Further, the development of processing and packaging technology along with improvement in
retail and cold storage infrastructure has increased the shelf life of dairy products

The growth trajectory

As per NDDB, the Indian dairy industry is all set to experience high growth rates in the next eight years
with demand likely to reach 200 million tonnes by 2022 from 132 million tonnes in 2013. Presently,
only 20% of the milk production comes from the organized sector comprising co-operatives and private
dairies. The paramount factors driving the growth in the dairy sector include rising disposable incomes,
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advent of nuclear families and fast/instant food gaining ground in India. Other factors such as structural
changes in food habits, expansion of fast food chains and popularity of pizzas and pastas aided the usage
of milk variants of mozzarella cheese, processed cheese and flavored milk etc.
Increasing participation from the private sector
Consumer preference towards VADPs is taking forward the dairy sector. Besides brown-field/ greenfield expansion, global dairy companies too are venturing into milk derivatives business in this part of
the world.
The most recent one is the 100% acquisition of Tirumala Milk Products Pvt Ltd by Groupe Lactalis SA,
France, one of the largest dairy players in the world. Another French dairy major Danone has also
increased its presence in the Indian dairy sector with slew of product launches such as flavored curd,
yoghurt etc.
Other investments include Nestle Indias acquisition of 26% stake in Indocon Agro and Allied Activities
Pvt
Ltd and Hatsun Agro Products Ltd acquiring 100% stake in Jyothi Dairy Pvt Ltd.
Companies such as Parag Milk Foods Pvt Ltd, Prabhat Dairy Pvt Ltd have augmented their capacities in
the recent past to meet the increased demand of milk products.

DRAWING INVESTORS ATTENTION

India consumption story and diversification by dairy players into VADPs are drawing interests of
investors which have led to surge in the PE deals.
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The prominent deals include investment by IDFC and Motilal Oswal in Parag Milk Food Pvt Ltd,
Rabobank group and India Agribusiness Fund in Prabhat Dairy Pvt Ltd, IFC into Modern Dairies Ltd
and Blackriver Investment in Dolda Dairy Ltd.
In one of the most recent investments, Fidelity Growth Partners, India, along with participation of the
existing social venture investor, Aavishkaar, have invested in Odisha-based Milk Mantra Dairy Pvt Ltd.
Recent deals in the sector are the indication that the investors perceive value in the deals and see growth
prospects in the Indian dairy space.
Right product mix likely to have a positive impact on the credit profile of dairy companies Traditionally,
the credit risk profile of dairy companies was characterized by low profitability and moderate liquidity.
The dairy companies rated by CARE are largely in the BBB or BB category (refer the graph below)
primarily on account of moderate solvency profile.
However, Mother Dairy Fruit And Vegetable Private Ltd, Co-operatives associated with Gujarat
Cooperative Milk Marketing Federation and some private dairies are in the AA and A rating category
on account of their superior procurement and marketing channels and high share of VADPs in product
portfolio. During FY14, the credit profile of CARE rated dairy companies have broadly remained stable.

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PRODUCT LINE AND FEATURES

Parag milk foods pvt ltd offer an exclusive range of Dairy Products to the widely spread clients. The
product range includes a vast variety of Milk, Milk Powder, Dahi, Ghee, Butter, Cheese, Cheese Powder,
Cheese Spread and Gulab Jamun Instant Mix. Their products are manufactured from the premium
quality and 100% pure cow milk, procured from our own cow farm. They never leave a gap to satisfy
our clients fully with our top quality DairyProducts.
The company also provide the customized production and packaging services to our clients to meet their
specific requirements. Their products serve the purposes of various industries like retail industry,
hospitality. Our products are highly appreciated for their vast features like quality, purity, range, superb
taste, etc. They offer the Dairy products at really affordable prices to the clients, spread across the globe.

CHEESE

CHEAP QUALITY
BETTER QUALITY
SUPERB TASTE

FEATURES

RANGE

CHEDDAR CHEESE
MOZZARELLA CHEESE
PIZZA CHEESE
PROCESSED CHEESE

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VARIOUS PACKAGING

AVAILABLE IN

1. CHEDDAR CHEESE
The Cheddar Cheese Manufactured, Exported and Supplied by them is of the best quality. The demand
for Cheddar Cheese has increased to a large extent due to its great quality and other excellent features.
They deliver the Cheddar Cheese to the clients with good packaging and company also offer a
customized packaging to meet their specific requirements

FEATURES

made from mature cheddar cheese

traditionally aged over 6 months
rich and natural taste
store under refrigerator 4c

2. MOZZORELLA CHEESE
Company experts thrive hard to Manufacture, Export and Supply the premium quality Mozzarella
Cheese to the clients, widely spread all over the world. The Mozzarella Cheese, manufactured by the
company is highly prized, due to its peerless quality and enormous features.

FEATURES

made from pasteurized cow milk

using Italian technology
excellent stretch ability
high melt ability

3. PIZZA CHEESE

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To make Pizza tastier, you can definitely count upon the finest Pizza Cheese Manufactured, Exported
and Supplied by the company. Their Pizza Cheese is highly appreciated and demanded by the clients,
because of its peerless quality and taste.

FEATURES

high melting property

firm and smooth texture
excellent stretch ability
blend of mozzarella and cheddar cheese

4. PROCESSED CHEESE
Over the years, the company have succeeded in developing a great clientele base for the premium
quality Processed Cheese,Manufactured, Exported and Supplied by our prominent company. The
Processed Cheese is manufactured from the blend of Cheddar and it is available to the clients at really
affordable prices.

FEATURES

made from blend of cheddar

cheese of different ages
easy to shred

5. SHREDDED CHEESE
They manufacture, export and supply tasty Shredded Cheese that is an excellent addition to any type of
dish. Made from the finest milk, the Shredded Cheese is contains a number of essential nutrients. They
can offer different varieties of Shredded Cheese that can be melted or just sprinkled over any dish.

FEATURES

great taste
superior quality
highly nutritious
low fat content

6. CHEESE SLICE
Cheese Slice can be used in pastas as well as other vegetarian and non-vegetarian dishes to add a
special taste. Made from processed cheddar cheese, the Cheese Slice is offered in different variants to

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suit different tastes. Moreover, the Cheese Slice is processed under completely hygienic conditions to
preserve its quality. Worlds best German UHT technology ensures longer shelf life of Cheese Slice.

FEATURES

longer shelf life

rich and natural taste
high calcium content

BUTTER
The company is a Manufacturer, Exporter and Supplier of the premium quality Butter. The demand for
our Butter has gradually increased over the years, because of its better quality and taste. We offer a
varying range of Butter at really affordable prices to the buyers.

FEATURES

pasteurized table butter and unsalted butter

mild taste and firm consistency
made by modern continuous butter making machine

GHEE
They are a prominent Manufacturer, Exporter and Supplier of the preeminent quality Ghee. Their top
quality Ghee is made from the natural or pure clarified milk fat and it is available at very economical
prices. Their Ghee is highly appreciated amongst our clients, owing to its enormous features.

FEATURES

100% pure clarified milk fat

Sweet aroma of pure ghee
No added colour
Store at ambient temperature

DAHI
The best quality Dahi Manufactured, Exported and Supplied by their company is highly appreciated
amongst the buyers. The demand for the Dahi has increased to a great extent over the years, owing to its
superb quality and cost effectiveness. Their Dahi is manufactured by the natural cow milk and it is full
of nutrients.
FEATURES

Economical
Natural
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Superb taste
Great nutritional value

MILK
They thrive hard to Manufacture, Export and Supply fresh Milk. Their Milk is highly appreciated
because of its best quality and nutritional contents. The Milk offered by the company is 100% pure milk
and it is available at really affordable prices.

FEATURES

Pure milk
Top quality
High nutritional value
economical

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COMPETITORS
1.

AMUL

When its about dairy company in India, the first thing that comes in mind is Amul. Amul is the oldest
and largest dairy company in India, which was founded in the year 1946 by Verghese Kurien.
Amul operates more than 50 milk processing plants in India and planned for investment of Rs 5,000
Crore for set up of 10 more milk processing plants in the country. Amul has shown a tremendous growth
rate of 32.1% and turnover of more than Rs 18,000 Crore during the financial year 2013-14. Amul is a
name of quality and trust in India and holds the major part of milk products in India. Some of its popular
products include Milk, Butter, Ghee, Milk Powder, Chocolate, Paneer, etc. Brown Ghee, Cheese Spread
and Whipping Cream are some of the newly launched products of Amul.
2. MOTHER DAIRY

Mother Dairy was founded in the year 1974 and it is owned

by the National Dairy Development Board (NDDB). Mother Dairy collects milk from
Dairy Cooperatives, test for its quality, process in its state-of-the-art milk
processing plants and supply the processed milk products in the market.
Mother Dairy holds a significant market share of dairy products in the Delhi-NCR
region and has 6 dairy manufacturing plants in the country.

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Apart from dairy products, Mother Dairy also produces edible oils, processed foods,
fruit beverages, juices, etc. Some of its most selling products include Milk, IceCreams, Dahi, Lassi and Flavoured Milk.

3. KARNATAKA CO-OPERATIVE MILK FEDERATION (KMF)

Karnataka Co-Opeartive Milk Federation (KMF) is ranked 3rd in the list of

top 10 dairy companies in India. KMF is one of the largest Dairy Cooperatives in India and leader in
Dairy products in South India. KMF sells its Milk Products under the brand name of Nandini.
The product line of KMF is vast and consist of more than 60 Milk Products. Some of the products of
KMF include Toned Milk, Curd, Lassi, Ghee, Milk Powder, Ice Cream, Chocolates, etc.

4. KWALITY LIMITED

Kwality Limited is an ISO certified Dairy Company, which was established in the
year 1992. Kwality Limited has 6 Milk Processing Plants in the country and sells its milk products under
the brand name of Dairy Best.
Kwality produces various good quality milk products and export them to over 20 countries across the
globe. Some of its key products are Milk, Ghee, Curd, Lassi, Paneer and Ice Cream.

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5. AAVIN

Aavin is a brand of milk products owned by Tamil Nadu Co-operative Milk

Producers Federation Limited. Aavin was established in the year 1958 and since its inception it has
continuously provided quality rich products.
Aavin holds a significant market share of milk products in South India and produces various products
like Toned Milk, Full Cream Milk, Flavoured Milk, Ghee, Cheese, Butter, etc.
6. MILMA

MILMA stand at 6th in the list of top 10 dairy companies in India. Kerala Co-operative Milk Marketing
Federation is popularly recognized as MILMA was formed in the year 1980.
The product line of MILMA includes Milk, Curd, Paneer, Chocolate, Ice Cream, Ghee, etc.

7. OMFED

Orissa State Cooperative Milk Producers Federation, popularly termed as OMFED is a Dairy Company
in Odisha, which was started in the year 1985.

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The main products of OMFED include Toned Milk, Ghee, Curd, Cheese, Lassi, Butter and Ice Cream.
Apart from milk products, OMPED also produces Fruit Juices, Jam, Pickle, Turmeric Powder, Cattle
Feed Products, etc

8. DUDHSAGAR DAIRY

Next on this list is Dudhsagar Dairy, a Dairy Company in Gujarat, which was started in the year 1963.
Dudhsagar Dairy is a fast growing dairy company and it achieved a growth rate of 25% in turnover
during the financial year 2013-14.
Milk, Ghee, Milk Powder, Yoghurt, Ice Cream and Flavoured Milk are the main products of Dudhsagar
Dairy.
9. AP DAIRY

Andhra Pradesh Dairy Development Cooperative Federation Ltd. (AP Dairy) has found 9th place in the
list of top 10 dairy companies in India. AP Dairy was started in the year 1960 and since its inception it
has continuously provided excellent quality milk products.
AP Dairy sells its milk products under the brand name of Vijaya. The key products of AP Dairy
include Milk, Curd, Paneer and Ghee.

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10.

DYNAMIX DAIRY

Dynamix Dairy is a Dairy Company in Maharashtra, which was started in the

year 1995. The main products of Dynamix Dairy are Milk, Milk Powder, Cheese, Butter and Ghee.

LEARNING FROM INTERNSHIP

COMMUNICATION SKILL
NEGOTIATIONS SKILLS
SELLING SKILLS
PRESENTATION SKILLS
IMPROVMENT IN PATIENCE LEVEL
IMPORTANCE OF PUNCTUALITY IN WORK AREA

CONTRIBUTION TO THE ORGANISATION

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CALLING 85
QUOTES 5
SAMPLES 3
PRODUCTIVITY IN VALUE - 0
SUGGESTED 3BIG IDEAS TO THE ORGANISATION
1. MARKETING ,OPERATIONAL,BUSSINESS

REFERENCE

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1.4. Conclusion:

Structured product is not a black box, it may not be that simple but its not that complex either.
Structured product is not an Alternate asset class like Mutual fund but, its a platform providing
participation to investor in debt (through debentures) and equity (Nifty) to help them to diversify
portfolio and hedge risk against it.
Structure product also helps in making money like other asset class, as given above SENSEX
and NIFTY are the best performing compare to gold, real estate, and FD in past 20 years and
same is predicted in future.
Structured Products arent very risky, the approximate size of Structured Products market in
India today is Rs. 57.19 Billion and there is no single default or delay by any issuer is
encountered till date, since the inception of structured products in India
Rating is important criteria but not the only criteria to evaluate risk of issuer of structured
products. There are other criteria also which helps to determine risk of issuer like, Due diligence
on balance sheet, Line of business activity, Parentage, Understand the risk mitigating measures
of the options desk (% of OTC contracts.etc)
100% principal protection may not be necessary on all structure products, non principal
protected or partial principal protected products can have better Risk Reward payoff ,3 Years
Rolling Returns of nifty from 2004 to 2014 suggest that, Nifty has never dropped below 21% in
any of the 3560 observations.
Its a cost effective and easy exit mechanism as fees charged for total tenure is 2%. And exit is
possible at any point of time.
Structured Products market in India is not developed because,
Booming stock market
Preference for traditional products
Long term options not available (max 3months)
OTC derivatives use by SP issuers is not permitted*
In India there is a restriction on direct access to derivatives
Size required for direct access is huge

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As we can see above number of HNIs are increasing in India. By the year 2020 average age of
Indians will be 29 years. As study shows young people are generally risk taking and
experimental so India has potential market for structured products.

Glossary:

Floor: Present Value of desired capital to be preserved at maturity. If the product comes with an
80% capital guarantee, the floor is 80% of the initial capital.

Cushion: Portfolio value less Floor. In the above example cushion will be 100-80 i.e.20%

Multiplier: Leverage applied to cushion always expressed in terms of percentage.

Decay multiple: Its an indicator that denotes if market fall down by x% coupon will fall
proportionately. for example if DM is 1time, it means if market fall by 2% then coupon will fall by
4%

Participation Rate: It indicates effect of % change in market on coupon. For example if PR is

100% then if market is up by 1% coupon will increase by 2%.

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2. Bibliography:

Indianmirror
- https://www.indianmirror.com
Dairybiz
- https://www.cii.in
Indian dairy industry report
- https://www.indiamicrofinance.com
Economic Times website
- http://economictimes.indiatimes.com
Paragmilkfoods.com
- http://www.paragmilkfoods.com
Investopedia
-http://www.investopedia.com
LinkedIn (fill up questionnaires) - www.linkedin.com

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3. Appendix: (Questionnaire)

1.

Institutions name

2. institution
canteen

canteen

resturant

hotel

3. Which dairy products you use? (multiple options can be selected)

milk

cheese

dahi

Others

paneer butter

4. Which company you prefer? (multiple options can be selected)

Parag milk foods
amul
britannia
mahananda
Others ( please specify)
5. name of your supplier from where you purchase your product other than parag milk foods?

6. If you are parag milk foods customer than give your review
good

very good

excellent

not satisfied

7. Have you heard about our parag milk foods pvt ltd ?(Select any one option)
a) Yes
b) No
8. If yes,then what is the source? (Select any one option)
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Friends
Tv ad

neighbours

newspaper

hoardings

9. Samples required

31 | P a g e