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Marketing Strategies for Cattle Feed Products in Kerala: an Empirical Study

Article in International Journal of Scientific Research · December 2013

DOI: 10.15373/22778179/DEC2013/168

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Research Paper Volume : 2 | Issue : 12 | December 2013 • ISSN No 2277 - 8179

Management
Marketing Strategies for Cattle Feed KEYWORDS : Branded cattle feed, Pur-
chasing pattern, Buyer behaviour, Cattle
Products in Kerala: an Empirical Study feed marketing strategies.

John M P Ph.D Scholar, Karpagam University, Coimbatore, Tamil Nadu – 641 021 (INDIA)
Dr. Manoj P K Assistant Professor, Department of Applied Economics, Cochin University Science and
Technology Kochi, Kerala – 682 022 (INDIA)

ABSTRACT Cattle feed industry is a major segment of animal feed industry. This industry is gradually evolving into an
organized sector and the feed manufactures are increasingly using modern and sophisticated methods that
seeks to incorporate best global practices. This industry has got high potential for growth in India, given the fact that the country
is the world’s leading producer of milk and its production is expected to grow at a compounded annual growth rate of 4 per cent.
Besides, the concept of branded cattle feed as a packaged commodity is fast gaining popularity in rural India. There can be a positive
change in the demand for cattle feed because of factors like (i) shrinkage of open land for cattle grazing, urbanization and resultant
shortage of conventionally used cattle feeds, and (ii) introduction of high yield cattle requires specialized feeds. In the above context,
this paper looks into the dynamics of cattle feed market in Kerala, emerging purchasing pattern and buyer behavior in respect of cat-
tle feed products in the state, and lastly offers a few strategies for effective marketing of cattle feed products.

INTRODUCTION OBJECTIVES OF THE STUDY

Cattle feed industry, a major ingredient of animal feed indus- • To make a systematic study of the dynamics of cattle feed
try is currently evolving from a fragmented industry into an market in Kerala with a view to assess the current demand
organized sector. The feed manufactures are using increasingly pattern, general market trend and growth prospects;
modern and sophisticated methods in an effort to incorporate • To study the purchasing pattern and buyer behaviour with
best global practices. Cattle feed industry has got high potential respect to cattle feed products;
for growth, given that India is the world’s leading producer of • To formulate meaningful marketing strategies for effective
milk, and production is expected to grow at compounded an- marketing of cattle feed product in Kerala based on the cur-
nual growth rate of 4 per cent. The demand outlook will require rent market structure and future growth prospects.
dairy companies to step up production and get higher animal
yields on the back of superior feed and nutrition. The way the METHODOLOY OF THE STUDY
rural farmers makes their purchases of feed and have their buy- Methodology
ing priorities is quite different from those of their urban coun- The study is both analytical and exploratory. It is analytical to
terparts. Hence one need to find out the demand patterns, con- the extent that it seeks to analyze the current market structure,
sumer’s likes and dislikes, time of demand and the Mean Time growth trend and pattern, and future prospects of cattle feed
Between purchase (MTBT) of feed. Even at current production industry in Kerala. It is exploratory as it seeks to trace the fu-
levels, with the thumb rule of 0.5kg of feed per liter of milk, In- ture prospects from the current position, identify the changing
dia’s annual production of 91 million tones of milk implies that demand patterns and to formulate a marketing strategy in tune
the potential market for cattle feed should be approximately 45 with the market dynamics.
million tones annually. On top of this, 0.25kg of cattle feed per
liter of milk is required for maintenance of the animals but is Data Collection: Both primary and secondary data are collected
rarely implemented in the country. The vast majority of cattle for the study. Primary data are collected from samples of (i) 400
and buffalo in India are fed through grazing and the use of basic dairy farmers and (ii) 100 dealers of cattle feed products, using
mixes and concentrates, and the market for compound animal two different carefully designed and pre-tested Questionnaires,
feed is estimated to be around 5.5 million tones only (CLFMA ie. separately for farmers and dealers. Besides opinions of 21 ex-
of India, Mumbai, 2012). The private players produce around perts in this field are also collected using an Interview Schedule.
1.2 million tones, the dairy cooperative and government sector Secondary data are collected from authentic sources like pub-
produces around 2.5 million tones of feed that is sold to farm- lications of the Ministry of Agriculture of the State and Central
ers- members involved in milk production at subsidized price, Governments, Reserve Bank of India, National Council for Agri-
and the rest is produced by home mixers. cultural Research (NCAR), other Government publications (like,
Economic Review, Economic Survey, NSSO surveys etc.), reputed
BRANDED CATTLE FEED INDUSTRY research journals etc.
The concept of branded animal feed as a packaged commodity,
though not a very recent concept, is gaining popularity in the ru- Sampling Frame: A Multi-stage Sampling methodology is adopt-
ral folks in the recent past. The packaged feed, as a product pos- ed for data collection. In the First Stage (Geographical Sam-
sesses, various factors such as hygiene, quality, convenience to pling) three regions in Kerala are selected viz. Southern, Central
handle, etc. to its advantage. The age old feeding pattern prac- and Northern. The total of 14 Districts in Kerala are allocated
ticed in India is a mixed variety consisting of green grass, dry into one of these regions based on their geographic locations.
grass, cotton seed cake, coconut cake, rice bran etc. From the Accordingly, Northern region comprises of Kasargod, Kannur,
time immemorial, the cows were fed by grazing in open areas. Wayanad, and Kozhikode districts; Central region consists of
But, as time elapsed, due to changes both environmentally and Malappuram, Palakkad, Thrissur, Ernakulam, Kottayam and
socially, problems evolved to continue with the age-old pattern. Idukki districts; and Southern regions comprises Alappuzha,
The Indian milk scenario witnessed a total metamorphosis by Pathanamthitta, Kollam and Thiruvananthapuram districts. In
the advent of Operation Flood. This has considerably increased the Second Stage (Random Sampling) a sample comprising of
the per capita consumption of milk and this sparked of a high proportionate number of farmers and dealers are selected from
demand for feed. On analyzing the factors related to the cattle each of the 14 Districts in Kerala (falling under 3 distinct re-
feed demand, it is seen that there can be a positive change in the gions viz. Southern, Central and Northern) so that representa-
demand in the market situation. The major factors contribut- tiveness of the entire state is ensured. Random Sampling (lot-
ing to this are: (i) Shrinkage of open land for cattle grazing, ur- tery method) is adopted to identify the members to be included
banization and resultant shortage of conventionally used cattle in the sample from among the total population.
feeds, (ii) Introduction of high yield cattle requires specialized
feeds. Based on the above multistage sampling procedure, 400 farm-

IJSR - INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH 9

 Volume : 2 | Issue : 12 | December 2013 • ISSN No 2277 - 8179
Research Paper

ers are included in the sample (120 from Southern region, 180 ity, per se, is not a significant factor influencing buying decision.
from Central region and 100 from Northern region) and simi-
larly 100 dealers are also selected (30 from Southern region, 45 Other Major Findings from the Field Study
from Central region, and 25 from Northern region). Opinions It is found that 29.75 per cent of the farmers use all types of
of 21 experts in the field are also studied. Thus, there are 521 feeds and 18.50 per cent depends only on branded feeds. Hence,
respondents in the study viz. 400 farmers, 100 dealers, and 21 there is good scope for bringing conventional feed users to-
experts. (Table I). wards branded products. The consumption of pellet form of
feed is increasing and has got regional brand leaders. The con-
Analytical Tools and Software Packages: sumers of pellet feed showed a positive attitude towards the
Various popular statistical tools of data analysis like Chi-Square animal farming and further use of pellet.
test, ANOVA are used for the analysis of data. Statistical pack-
ages like SPSS, STATA etc. are used for data analysis. There is not a definite buying pattern. 37 per cent farmers buy
as and when required and 21 per cent on weekly basis. Brand
ANALYSIS AND INTERPRETATION shifting is favourable towards KSE in Central Kerala and Milma
Expected Growth of Animal Population in the South. In both the regions KFL comes a close second.
Growth of animal population will have a direct and positive In the northern region this is not the situation. Strategically
impact on cattle feed consumption. Increase in cattle feed con- planned market promotion should be a key factor for market
sumption is linked to increase in animal population. Table No. II penetration in this situation. It is observed that 69 per cent of
shows the growth trend in animal population in Kerala in future. the farmers have a positive approach on using cattle feed for
It is noted that 59.25 per cent of farmers felt that there would better yield against 5.7 per cent with negative. Price, conveni-
be increase in animal population in the future, whereas only 15 ence, availability and quality are the major factors influencing
percent expect a negative growth. This is a positive sign for cat- the purchase decision of farmers. Of these, 12.25 per cent at-
tle feed industry. tributes to convenience, 11.66 per cent to availability and 4.74
per cent to price exclusively. Quality as a single reason has a
Present Feed Consumption Pattern very low per cent. Besides, 56 per cent of farmers seek advice of
The pattern of present feed consumption was studied to pro- Doctors on cattle feed.
vide new insights into the present behavior of farmers. It was
felt that, knowing this aspect, would help to frame appropriate The customer satisfaction level is medium on an average. The
strategy for capacity building in feed production and promotion major attribute to the satisfaction level is quality. The availabil-
of cattle feed could be made more effectively. Table III shows ity of cattle feed is rated high. But in the case of Kerala Feeds,
details of current feed consumption pattern. The study reveals this is not so. It is found that 68.5 per cent gives a negative re-
that 27.75 per cent gives conventional/natural and branded sponse. Only in Central Kerala the availability is rated reason-
feed, 29.75 per cent gives all the category of feeds. In effect, as able with 46.67 per cent.
high as 57.50 per cent feeds animal with branded feeds along
with other feeds. This shows the market is nearing maturity Majority of cattle feed dealers are in the business for more than
and has absorbed well the ready-made compounded cattle 10 years. Dealers have a definite role in sales promotion as 56
feeds as their regular feed for milking cows. per cent of farmers seek their advice on product quality. The
business meets do not have much bearing on market promo-
Composition of Cattle Feed Market tion. But gifts given to them have got definite influence. Sales
Among the users of the branded cattle feed products as high commission is the most favoured benefit expected by the deal-
as 60 percent use the pellet type products and only less than ers. Experts give a positive opinion on the use of CCF and 84
one-third of them (19.50 percent) use mash type products. per cent prefer pellet form. There is a definite positive reaction
Among the users of the pellet type products, more than one- regarding trend of organic feed.
fourth (15.05 percent) uses the KFL (Kerala Feeds Ltd.) brand
products, and are closely followed by the users of MILMA brand SUGGESTIONS BASED ON THE FINDINGS
products (14.05 percent), and then by those of KSE (Kerala Sol- The demand for compounded cattle feed (CCF) is registering
vent Extractions Ltd.) with 11.80 percent share. Table IV is self- a gradual increase. Market consolidation is happening, with
explanatory in this regard. a preference for CCF that also pelletted product, compared to
conventional products. KFL, Kerala Solvent Extractions, MILMA,
Cattle Holdings and Consumption Pattern Koyenco and Prima Feeds are the leading brands in the State
Analysis to find the average cattle holding and consumption pat- enjoying considerable market share. KFL has achieved a good
tern in respect of both pellet and mash type of feeds has been market standing since its commissioning. However, KFL has not
done in the three regions under study (Table V). It is noted that been able to increase its sales level to further heights, particu-
mash consumption is quite higher than pellet consumption. larly in southern and northern regions, as the production levels
Mash consumption is 129.675 kg per cattle per month whereas are getting saturated. In order to retain the market share and to
pellet consumption is 59.345 kg. The average mash consump- achieve a higher market share, it is essential for KFL to increase
tion per month is 676.365 kg while that of pellet consumption the production through expansion, merger or acquisition. Thus
is 371.82 kg. to overcome its inability to meet market demand in Southern
and Northern regions, in addition to the ongoing expansion of
Milk-yield and Use of Branded Cattle Feed the existing unit, setting up of a new unit would be the quite ad-
Frequency of farmers who felt the yield trend is positive is as visable. KFL can further enhance their market share by locating
high as 67.75 percent and only 7.75 percent among them felt plants both in Northern and Southern parts of Kerala, for more
a negative need, while 20.25 percent felt no change in the per effectively catering to the needs of those regions, preferably ad-
cent felt there is no change. It is noted that there is a positive jacent to the railway line suitable for railway siding.
attitude towards branded cattle feed is highest in the central re-
gion. (Table VI). The cattle feed produced should be of the high quality as the
consumers are found to be quality conscious and this will ensure
Factors Influencing Buying Decision market consolidation. A restructuring of market plan based on
Understanding factors that influence purchase will enable mar- logistic need to be implemented. To increase the market penetra-
keter to design a more effective marketing strategy that suitably tion, systematic, strategically planned, aggressive schemes are to
addresses these factors which in turn will expand market and be developed. Options like creation of district-wise sole selling
thus generate more revenue. A number of factors (Table VII) in- agents, introduction of new schemes like extra quantity, distribu-
fluencing the purchasing behavior of buyers have been studied. tion of food supplements along with the cattle feed, gifts to the
Based on the feedback from the farmers under study, the most dealers, simple and effective brochures, advertisements, massive
important influencing factors have been identified to be price & promotion for quality poultry feed to be used in households as
quality, convenience, availability and so on. It is noted that qual- supplementary feed etc. in a professional way, may be thought off.

10 IJSR - INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH

Research Paper Volume : 2 | Issue : 12 | December 2013 • ISSN No 2277 - 8179

In short, meticulously planned and carefully designed market- 6 Fodder and 8 8 23 12.78 12 10 43 10.75
ing strategies are vital for sustained business growth and prof- branded
itability of cattle feed manufacturers in Kerala. For the public 7 All the feed 36 36 47 26.11 36 30 119 29.75
category
sector player viz. KFL which is already having a good reputation
Total 100 100 180 100 120 100 400 100.00
and brand equity, an expansion strategy to more effectively ca-
ter to Northern and Southern parts of Kerala is found to be an (Source: Survey Data)
imperative for survival and growth, rather than an option.
Table IV: Composition of Cattle Feed Market in Kerala
CONCLUDING REMARKS Name of the
The compounded Cattle Feed (CCF) though not a relatively new Cattle Feed Pellet type Mash type Rest of the
entry in the market, is gaining momentum and acceptability in Sl. Manufacturer Feeds (in Feeds (in Market (in
Percentage) Percentage) Percentage)
the recent past. It attracted the farmer’s attention because of No (Brand)
many reasons. The live stock population in Kerala mainly con- 1 KSE 11.80 03.80
sists of cows, buffaloes and goats. On the basis of the results of 2 MILMA 14.05 04.70 (All other
3 KFL 15.05 -- types of Cattle
the survey, it can be reasonably assumed that the demand for Feed products
compounded cattle feed will grow by 5 per cent on an average 4 SKM -- 02.00 are included
in the coming years 5 MBS -- 02.00 under this
6 Others 19.10 07.00 category)
Table I: Sample Size and its Distribution across the Regions Total 60.00 19.50 20.50
in Kerala (Source: Survey Data)
Sl. Target Group Sample Size Percentage
No. (No) Table V: Cattle Holdings and Consumption of Cattle Feed

1. Farmers Within Among

Groups Groups Sl. Item Unit Northern
Kerala
Central Southern Whole
Kerala Kerala Kerala
Northern No
1.1 Region 100 25 percent Average
1.2 Central Region 180 45 percent 1 cattle
holding per No. 2.60 8.26 3.80 4.887
76.78
Southern month
1.3 Region 120 30 percent percent
Average
Sub Total 400 100 2 pellet
consumption kg 220.64 542 201.65 371.82
percent
per month
2. Dealers Average
2.1 Northern 25 25 percent 3 mash
consumption kg 176.93 680 672.73 676.365
Region
per month
2.2 Central Region 45 45 percent Pellet
19.19
2.3 Southern
Region 30 30 percent percent 4 consumption
per cattle kg 84.86 65.62 53.07 59.345
per month
Sub total 100 100
percent Mash
100 04.03 5 consumption
per cattle kg 68.05 82.32 177.03 129.675
3. Experts 21 percent percent per month
Grand Total 521 100 100.00 (Source: Survey Data)
(1+2+3) percent percent
Table VI: Milk Yield and Branded Cattle Feed
Table II: Expected Growth in Cattle Population Northern Central Southern
Kerala Kerala Kerala Whole Kerala
Northern Central Southern Whole Kerala Sl. Response
Sl. Response Kerala Kerala Kerala
Percent

Percent

Percent

No No Percent
Nos Percent Nos Percent Nos Percent Nos Percent
Nos

Nos

Nos

Nos

1 Positive 67 67 98 54.44 72 60 237 59.25 1 Positive 62 62 143 79.44 66 55 271 67.75

2 Negative 13 13 29 16.11 18 15 60 15.00 2 Negative 3 3 22 12.22 6 5 31 7.75
3 No change 16 16 43 23.89 24 20 83 20.75 3 No change 32 32 13 7.22 36 30 81 20.25
Non
4 Noresponse 4 4 10 5.56 6 5 20 05.00 4 response 3 3 2 1.12 12 10 17 4.25
Total 100 100 180 100.00 120 100 400 100.00 Total 100 100 180 100 120 100 400 100
(Source: Survey Data)
(Source: Survey Data)
Table VII: Factors Influencing Buying Decision of Branded
Table III: Present Feed Consumption Pattern Cattle Feed Products
North Central South Whole North Central South
Kerala Kerala Kerala Kerala Kerala Kerala Kerala Whole Kerala
Sl. Response Sl. Response
No
Percent

Percent

Percent

Percent

No
Percent

Percent

Percent

Percent

Nos

Nos

Nos

Nos
Nos

Nos

Nos

Nos

1 Conventional/ 2 2 5 2.78 6 5 13 03.25 1 Price 8 8 13 7.22 6 5 27 6.75

natural feed
2 Fodder 8 8 8 4.44 6 5 22 05.50 2 Convenience 12 12 23 12.78 18 15 53 13.25
3 Branded feed 16 16 34 18.89 24 20 74 18.50 3 Availability 11 11 19 10.56 12 10 42 10.5
Conventional/ 4 Quality 0 0 1 0.56 3 2.5 4 1
4 natural and 6 6 6 3.33 6 5 18 04.50
fodder Price and
5 Convenience 2 2 4 2.22 3 2.5 9 2.25
Conventional/
5 natural and 24 24 57 31.67 30 25 111 27.75 Price and
branded 6 Availability 5 5 8 4.44 3 2.5 16 4

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 Volume : 2 | Issue : 12 | December 2013 • ISSN No 2277 - 8179
Research Paper

7 Price and 31 31 70 38.89 42 35 143 35.75

Quality
8 Convenience and 2 2 2 1.11 2 1.67 6 1.5
Availability

9 Convenience and 2 2 2 1.11 2 1.67 6 1.5

Quality
10 Availability
Quality
and 12 12 19 10.56 12 10 43 10.75
11 All the factors 11 11 18 10 12 10 41 10.25
12 Not applicable 2 2 -- ---- 2 1.67 4 1
13 Not responded 2 2 1 0.56 3 2.5 6 1.5
TOTAL 100 100 180 100 120 100 400 100
(Source: Survey Data)

REFERENCE 1. Abhishek Sinha, Manager,Strategic Advisory-F&A, Rabo India Finance, MumbaiDairy India “Cattle Feed Industry in India”, Dairy India –Sixth
Edition, pp-280. | 2. U.C.Mathur,(2008),”Rural Marketing”, New delhi, Excel Books, p-xi | 3. Dr.Dinesh T.Bhosale, Regional Technical Manager
(Rumunants), Alltech Asia Pacific Region, Pune, “Biosafety of Feed ingredients and its Impact on Milk quality”, Dairy India – Sixth Edition pp-282-293. | 4. C.R Kothari, Research
Methodology, New Age Publications, Second Edition, New Delhi, 2007. | 5. John M.P & Manoj P K, “Cattle Feed Market in Kerala: A Study of Purchasing Pattern and Buyer Behaviour”,
Global Research Analysis, Vol.2, Issue 9, Sept. 2013, pp. 32-33. |

12 IJSR - INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH

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