A STUDY ON CONSUMER BUYING BEHAVIOR TOWARDS TWO WHEELER BIKES

Submitted By:Ankit Bir PandeyExam Roll No: PU Registration No:

A Graduate Research Report Submitted toSouth Asian Institute of Management (SAIM)Pokhara University

Submitted for the degree ofMaster of Business Administration (Global Business)

KathmanduFebruary, 2015

Acknowledgement

First of all I would like to express my sincere gratitude to my thesis supervisor Dr. Bijay K.C., Dean, South Asian Institute of Management (SAIM) for his continued guidance, encouragement, motivation and support at each step of the study. His regular and extensive guidance, constructive comments, suggestion and encouragement are the main source of inspiration to accomplish this study successfully. Lastly, I would also like to express my sincere thanks to SAIM Family and my friends for their kind support during my study period. Likewise, I would also like to thank all the respondents who took time off their busy schedule to fill up the research questionnaire. This study may not be possible without their help and cooperation.

Ankit Bir Pandey

Approval Sheet

Recommendation for ApprovalThis GRP report prepared and submitted by Mira Khadgi in partial fulfillment of the requirements for the degree of Master of Business Administration (Global Business) has been supervised by me and recommends it for acceptance.

Dr. Bijay K.C. Date: ...

Acceptance of the External ExaminerI approve the GRP submitted by Mira Khadgi. The grade sheet has been submitted to the Dean, School of Business, and Pokhara University through the college on a separate evaluation sheet.External Evaluator .. Date:

Viva ExaminationThe candidate has successfully defended the GRP. We recommend it for acceptance. The grade sheet has been submitted to the Dean, Pokhara University through the college on a separate evaluation sheet.External Examiner: ..Dr. Bijay K.C. ..Other members: Date:

Certificate of Authorship

I hereby declare that this submission is my own work and that, to the best of my knowledge and belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree of a university or other institution of higher learning, expect where due acknowledgement is made in the acknowledgements. ...................................... Mira Khadgi

Contents

CHAPTER 11INTRODUCTION11.1Background11.2 Statement of Problem51.3 Objectives of the study71.4 Significance of the study81.5 Limitations91.6 Operational Definitions9CHAPTER 212LITERATURE REVIEW AND THEORETICAL FRAMEWORK122.1 Literature Review122.2 Theoretical Framework372.3 Research Gap38CHAPTER 339RESEARCH DESIGN AND METHODOLOGY393.1 General Background393.2 Research Plan and Design403.3 Description of the Sample403.4 Instrumentation403.5 Data Collection Procedure and Time frame413.6 Validity and Reliability413.7 Analysis Plan42CHAPTER 443DATA PRESENTATION AND ANALYSIS434.1 Presentation of Results434.2 Analysis of Survey Data47CHAPTER 568SUMMARY AND CONCLUSION685.1SUMMARY OF FINDINGS685.2 RECOMMENDATION705.3CONCLUSION71Bibliography73Appendices74

List of Tables

Table 1: Evolutions of Dairy Companies in Nepal4Table 2: Age group of the respondents.44Table 3: Occupation of the respondents46Table 4: Time of purchase of pouch milk..47Table 5: Number of packets of milk purchase...48Table 6: Satisfaction of pouch milk with other substitutes...52Table 7: Importance of attributes of the product...53Table 8: Satisfaction about the product.54Table 9: Mean of attributes of product in general and satisfied about the product...55Table 10: Cross tabulation between age and milk brand...57Table 11: Cross tabulation between milk brand and number of packets of milk..63Table 12: Mean of product attributes according to the gender..64Table 13: Mean of satisfaction level and the brand of milk..66

List of Figures

Figure 1: Buying Decision Process....24Figure 2: Theoretical Framework......37Figure 3: Gender of the respondents..43Figure 4: Education level of the respondents.45Figure 5: Brand of milk..49Figure 6: Reasons behind the purchase of particular brand...50Figure 7: Modes of advertisement.56Figure 8: Comparison between the milk brand and quality...58Figure 9: Comparison between the milk brand and availability59Figure 10: Comparison between the milk brand and taste.....60Figure 11: Comparison between the milk brand and nutrition..61Figure 12: Comparison between the milk brand and packaging...62

List of Abbreviations

DDC: Dairy Development Corporation DOA: Department of AgricultureGoN: Government of NepalFAO : Food and Agriculture OrganizationLtd.: LimitedNDDB: Nepal Dairy Development BoardPvt: PrivateSMP: Skim Milk PowerTQC: Total Quality ControlTQM: Total Quality ManagementWFP: World Food Program WMO: Whole Milk Powder

EXECUTIVE SUMMARYMilk is one of the most nutritionally essential foods to human beings as it contains nearly all nutrition. Hence, it is advisable to consume an adequate amount of milk and milk products for healthy lifestyle.At present there are different brands of milk available in the market such as DDC, Sitaram, Today Milk, NDs Dairy and others which make the marketers of these products to differentiate and sell their products to the consumers. These brands of milk are competing with each other in order to survive in the market.To get a better grasp of the target consumers, the marketers have to better understand the buying behavior of the consumers. The main objective of this study was to identify the consumers buying behavior towards the pouch milk. To better understand the consumer buying behavior a sample size of 150 respondents were chosen. From the study it was found that DDC was the most popular brand followed by Sitaram and Today Milk. The dairy market is dominated by DDC as most of the consumers prefer DDC over other brands. Products have different attributes like quality, availability, price, taste, nutrition, packaging etc. The attributes of the product play a vital role in buying behavior. The main reason for the purchase of the particular brand of milk was availability followed by quality. Availability of the pouch milk is important when the consumers decide to purchase pouch milk. Many consumers purchase that brand of pouch milk which is easily available in the market. The dairy companies know the importance of making their product available to the consumers and thus they create a strong distribution channel. Since, milk is an edible product; quality of the product surely plays a vital role in the purchasing decision. The study showed that DDC is very popular among consumers of all ages, followed by Sitaram and Today Milk. Although various substitutes to pouch milk are available in the market, ranging from powered milk to skimmed milk, the pouch milk still has a fair share of market as about 56% of the consumers said they are satisfied with the brands of pouch milk they are consuming compared with the other substitutes available in the market. Consumers naturally places higher importance on nutrition, freshness, quality and availability but the dairy companies are yet to achieve the full potential of the mentioned product attributes. Hence, the dairy industry should focus on safety and quality of the product through an effective pricing system which provides strong incentives for farmers and other value chain actors to improve product quality. Also, dairy companies should use media and promotions in an effective and better way to achieve the believes and also to create the brand image in the consumers mind.

CHAPTER 1INTRODUCTION

1.1 BACKGROUNDMilk is the most nutritionally essential food to humans and contains nearly all nutrients. Therefore, it is advisable to consume an adequate amount of milk and milk products for healthy lifestyle. However, there is a significant gap between developed and developing countries in terms of fluid milk consumption. In developed countries, fluid milk consumption patter has changed significantly over the last several decades. Due to health concerns, aging of the population, increased education and income level factors in developed countries low fat milk consumption has shown an increase but per capita consumption of whole fat milk has decreased. In contrast, consumption of fluid milk in developing countries has not peaked yet and unpacked fluid milk takes a significant share of fluid milk consumption.Organize dairy development activities in Nepal began in 1952 with the establishment of a Yak cheese factory in Langtang of Rasuwa district under Food and Agriculture Organization (FOA) assistance in 1953. In 1954, a Dairy Development Section was established under the Department of Agriculture (DOA) and also a small scale milk processing plant was started in Tusal, a village of Kavre district. In 1955, a Dairy Development Commission was formed. The first five year plan (1956-61) stressed on the need to develop a modern dairy industry. Accordingly, in 1956, a Central Dairy Plant, with an average milk processing capacity of 500 liters per hour was established in Lainchaur, with the financial assistance from New Zealand and technical assistance from FAO. Around the same time, a second mini milk processing plant was established at Kharipati, in Bhaktapur district. The plant started processing milk and marketing activities from 1958. In the process, prior to 1960, two additional cheese factories were established under the DOA in other two alpine districts of the country. In 1960, a Cheese Production and Supply Scheme were also established. The Dairy Development Commission was converted to the Dairy Development Board in 1962. So as to meet the growing demand for milk in Kathmandu, the Board was converted to Dairy Development Corporation (DDC) in 1969.HISTORY OF MILKDairying not only represents one of the basis agricultural industries of consumers engaged in producing milk and milk products but also a way of life for most of the consumers to satisfy their necessary want of food. The history had already proved that the consumers of central Asia and Arab as well as Africa were well known about the consumption of milk. They had also known to make different products from milk such as curd, butter, cheese etc. Hindu culture and religion also had known the importance of milk from very ancient time, which is known from the help of Hindu Vedas written in 1400 B.S., has mentioned the use of butter as a food. The ancient Greeks and Romans also had used milk, cheese, and butter as a common food. They had known how to make cheese, butter and sweets and also the way of making skimmed milk. In recent days, milk and milk products are sold in bottles, plastic packets, cartons and cans only after the pasteurization.Since traditional system as household of valley consumed milk from Gwalas of dairying was defective and unhygienic, man being a conscious animal thought about regulating the dairy system in a scientific way the result of which it is come to know that the man succeeded dairying is a scientific way after 19th century.Nepalese consumers are being more and more conscious about the healthy diet. So, it has been realized that every household in Nepal has importantly bearing with dairy products. It has become necessary to make available the pouch milk for the consumers.It is only after 1951 that HMG of Nepal realized the need for the development of dairy program inside the country to provide better and hygienic food for the consumers. For the welfare of general consumers the dairy scheme was formulated and handled by the livestock section under the Department of Agriculture, which was established at Singh Durbar. But this scheme could not provide adequate quantity of milk. The demand for milk and milk products gradually increased up which forced the Government to established a separate institution named Dairy Development Center at Bhotahity in year 1955. To increase the processing capacity as to meet increasing demand, there was inadequate space. That is why this center was shifted to Lainchour in the year 1958 adding some new equipments and machines and has received ISO: 22000:2005 certifications. This center got a lot of popularity among the consumers of Kathmandu when the new products from new machines came into the existence. Due to many reasons like rapid growing populations, establishment of various offices and institutions, development of tourism and migration of rural consumers led to the multiplicity of the demand and expand the activities of dairy scheme more effectively. This center was shifted to the name of Dairy Development Commission in the Fiscal Year 1962/63 and later on HMG changed this commission in the name of Dairy Development Corporation in B.S. 2026 (1969) under the Corporation Act, B.S. 2021 (1964). Its aim and objectives are to provide guaranteed market and fair price to the rural milk producers and to supply hygienic pasteurized milk and other standard dairy products to the urban consumers. Prior to the establishment of the Corporation a separate Dairy Development Board was constituted to carry out the task of dairy development in Nepal in a wider scale. The dairy development activities in Nepal started in Tusal Village of Kavre district B.S. 2009 (1952) on experimental basis with a small-scale milk processing plant under the Department of Agriculture. In the year B.S. 2010/2011, at the initiative of Dairy Development Board, the Central Dairy Plant was established and it started milk collection, processing and marketing activities from the year B.S. 2014 (1957).DDC expanded its activities by establishing various other milk supply schemes. It aims to promote and develop dairy industry through country multiplying the collection and distribution centers with the sound management. It has also aims to promote public health supplying standard quality of dairy products at a reasonable price rate. Though the progress achieved by the DDC is satisfactory. Due to many reasons like rapid growing population, consumers being conscious about health diet; dairy products demand etc. made many entrepreneurs to establish such other corporations in Nepal. Nepal Dairy Development Board (NDDB) was also established at Pulchowk, Lalitpur.Table 1Evolutions of Dairy Companies in NepalS .N.Name of Manufacturing CorporationPlaceEstablished Year(B.S.)Name of Product

1.Dairy Development CorporationLainchour, Kathmandu2026DDC

2.Nepal Dairy Pvt. Ltd.Mahabauddha, Kathmandu2037Nepal Dairy

3.Himalaya Dairy Products Pvt. Ltd.Eteetole, Lalitpur2039Today Milk

4.Bhaktapur Dairy Pvt. Ltd.Bhaktapur2039Sheetal

5.Sainju Dairy Pvt. Ltd.Kharipati, Bhaktapur2047Amrit

6.Sitaram Gokul Milk Ktm. Ltd.Dudh Pokhari, Kirtipur2052Sitaram

7.Kharipati Dairy Pvt. Ltd.Kharipati, Bhaktapur2052KDC

8.Kalika Dairy Company Pvt. Ltd.Kharipati, Bhaktapur2058

9.Kathmandu Dairy Pvt. Ltd.Babarmahal, Kathmandu2053Snow Fun

These corporations are giving their best services to consumers of Kathmandu. Emergence of such corporation held high level competition among them. The equipment cost is very high as it is imported from foreign countries, totally automatic and computerized. The high cost of establishment and high level of competition emerge the need of sales promotion.Due to patent right, as corporation being governed by the Board of Directors formed by Nepal Government of Nepal, high capacity and scientific equipment, DDC is in the top position among other corporations. World Food Program (WFP) had supported DDC for about a decade in the early years. The New Zealand and Danish Government had contributed towards the establishment and rehabilitation of milk processing plants. USAID and Danish Government have been the major donors.1.2 STATEMENT OF PROBLEMAfter the restoration of democracy in 1991, Nepal government followed a policy of liberalization and privatization. This encouraged foreign investments as well as private to invest in different sectors. As a result it not only led the country towards the industrialization but also brought competition. In the field of dairy, before restoration of democracy there was only one company, Dairy Development Corporation (DDC, Nepal) to supply the dairy product in the country. After the restoration of democracy, due to the changes in the government policies, private sector also entered in this filed but they are still emerging and operating in small scale.Dairy Development Corporation (DDC) is one of the leading public enterprises (Government owned) which collects milk, produces diary product and distributes them to the customers. DDC was established in 1969 with the main objectives of providing guaranteed market and fair price to the rural milk producers and supplying hygienic pasteurized milk and other standard dairy products to the urban consumers. This corporation was established by the government to provide a guaranteed market for milk to the rural farmers with fair price, supply pasteurized milk products to urban consumers, develop organized milk collection system to meet increasing demand for pasteurized milk and milk products, develop an organized marketing system for milk and milk products in urban areas. The private sector started getting involved in the dairy-processing sector from late 1970s with very small-scale operations in Kathmandu. Today, there are many private dairies of various sizes both within and outside the Kathmandu valley. Prominent among the private dairies with modern milk processing facilities are Nepal Dairy, Himalaya Dairy, Sitaram Dairy, Anmol Dairy, Kathmandu Dairy, Adhunik Dairy etc in Kathmandu Valley; Sujal Dairy in Pokhara Valley, and Kamdhenu Dairy in Sunsari. These dairies produce pasteurized milk and other dairy products such as yoghurt, ice-cream, butter, ghee and the like. Besides, there are many small scale mechanized dairies and numerous cottage type dairies handling limited quantity of milk for producing different milk products particularly pasteurized milk, ghee, ice cream and yoghurt. According to available information, altogether 250 dairies of varying scale are in operation in Nepal.Milk products being available in the local urban markets indicate that there is ample demand for the modern as well as traditional dairy products. The demand for dairy products in the urban markets is expected to grow in the future mainly due to the increasing population and rise in income. Additionally, exposures to outer world mainly through the TV have particularly attracted the educated younger generation to consume the modern dairy products. Today, consumption of milk has become more popular in the market of Kathmandu Valley from the past years due to the changing lifestyle of the people. People rarely consume cows and buffaloes milk these days. With the rapid urbanization, these pouch milks have become more popular. Since the hygienic quality of milk in Nepal indicated that the current situation need real improvement and lack of refrigeration facilities of milk during transportation from production to site. Therefore, maintaining standardization, quality and hygiene during production of pasteurized milk has been very crucial for all dairy companies.In recent years, competition has grown high because many companies are involved in manufacturing milk in Nepal. Due to the entry of new players in dairy business the milk market has become complex and challenging. Various brands of locally produced as well as imported modern and traditional milk products of varying categories are sold in the urban markets of Nepal, Kathmandu Valley being the main market of the milk products. The major milk products available in the markets are imported Skim Milk Powder (SMP), Full Cream Milk or Whole Milk Powder (WMO), infant milk formula, dairy whitener, cheese, butter, sweetened condensed milk, ice cream and ghee; and locally produced cheese, butter, ghee, ice cream, paneer and yoghurt. Milk products from more than 20 countries from Asia, Europe, Australia and North America complete in the Nepalese market. Different varieties with various sizes and from ordinary to advanced packaging are available for most of the products.Recently, private companies like Himalaya Dairy, Sita Ram Gokul Milks Ltd. and others are promoting and marketing their products aggressively to be ahead in the milk market. Also, with the recent increase in price of pouch milk from all the dairy companies including DDC, there has been a change in customer perception and the consumer may be thinking of switching to substitute products. Therefore, how has the consumers brand preference of milk changed, it will be the main objective of this thesis. The prime questions under this research will be:-What is the present situation of dairy industry? How far are consumers sensitive towards brand? And how do the factors like price, packaging, availability, and quality etc. of pasteurized milk affect the buying behavior of the consumers?1.3 OBJECTIVES OF THE STUDYThe main objectives are:1. To evaluate the dairy industry in Nepal.1. To identify the consumers preference towards the different brands of pouch milk in Kathmandu Valley.1. To identify the factors like, price, quality, taste, packaging, availability that influence the purchase decision of pouch milk.1. To know whether promotion plays an important role in buying decision.1. To know the level of satisfaction towards the quality, taste, nutrition etc. of the products that are purchased by the consumers1.4 SIGNIFICANCE OF THE STUDY Consumer buying behavior is the study of when, why, how and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economies. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand what consumer wants. It also tries to assess influences on the consumer from groups such as family members, friends, reference groups, and society in general. Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. This study need to understand the behavior and preferences of milk consumers in the study area.Milk has become more popular in the market of Kathmandu Valley from the past years due to the changing lifestyle of the people. People rarely consume the cow and buffalo milk these days. With the rapid urbanization, these pouch milks have become more popular.Therefore, the study would contribute to both milk manufacturing company and also their marketers by identifying the influencing factors that would affect the consumers decisions for purchase of milk.This study would provide a better insight into these areas:1. The identification of influencing factors in buying decision of milk.1. The role of branding in buying decision.1. The substitute brand in the unavailability of the product.1.5 LIMITATIONS The limitations of the study are as follows: Due to the limitation of time and resources this study only confines to Kathmandu Valley only. The studies consider only those consumers who are the consumers of pouch milk. The sample size taken for this study is 150 respondents of Kathmandu Valley. There might be chance of response errors because of factors such as unawareness of the respondents, hesitation of respondents, misinterpretations etc. The findings of the result are based on the research done via questionnaire. The survey is conducted via online with the help of Google document and also the questionnaires were distributed individually to the respondents.1.6 OPERATIONAL DEFINITIONSMarketing: Marketing is identifying and meeting human and social needs. According to Kotler and Keller (2009) the shortest definition of marketing is Meeting needs profitably.Consumer Behavior: According to Kotler and Keller (2009), Consumer Behavior is the study of how individuals, groups, organization select, buy, use, and dispose of goods, services, ideas or experiences to satisfy their needs and wants.The consumer buying behavior is influenced by various factors such as cultural factors, personal factors and social factors. (Kotler and Keller, 2009).Buying Behavior is the decision processes and acts of people involved in buying and using products.

Need to understand: Why consumers make the purchases that they make? What factors influence consumer purchases?Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to analyze buying behavior for: Buyers reactions to a firms marketing strategy has a great impact on the firms success. The marketing concept stresses that a firm should create a Marketing Mix that satisfies customers, therefore need to analyze the what, where, when and how consumers buy. Marketers can better predict how consumers will respond to marketing strategies.Brand: The American Marketing Association defines a brand a name, term, sign, symbol, or design, or combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors (as cited in Kotler and Keller, 2009).A brand is a promise to deliver on what an organization claims.Brand is defined as the recognition and personal connection that forms the hearts and minds of the clients and other key audiences through their accumulated experience at every point of contact. One must ensure the brand that emerges in a positive one, leading to trust, loyalty and advocacy of the offerings. Branding at its best is more than a marketing responsibility. It must both reflect and inform decisions and guide all of points of contact. A brand is everything an organization stands for. It represents a way of thinking and a management lens through which decision are made.

Brand PreferenceBrand preference is a phenomenon in which consumers associate specific qualities with a particular brand name, and will choose the products marketed under that brand above the similar products offered by competitors. This type of consumer activity is found with a number of different types of goods and services, with consumers gravitating toward brand names in telecommunications services, electronics, supermarkets, restaurants, and even basic products like food condiments. In this scenario, consumers will only consider other brands if the favored brand is not currently available, or the pricing or claims of a competitor is attractive enough to merit consideration.The development of brand preference normally occurs as the result of an ongoing effort of the brand owner to convince consumers that the goods and services sold under that brand are the most desirable in terms of quality and sometimes price. Providing a consistently high quality often helps to establish the brands reputation, sometimes to the point that the products marketed under the brand become the standard by which similar products are judged.

CHAPTER 2LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.1 LITERATURE REVIEWAccording to Howard K. Wolf & Prem R. Pant, The purpose of literature review is to find out what research studies have been conducted in ones chosen field of study, and what remains to be done. It provides the foundation for developing a comprehensive theoretical framework from which hypothesis can be developed for testing. The literature survey also minimized the risk of pursuing the deal ends in research. (Howard K. Wolf & Prem R. Pant, A Hand Book for Social Science Research and Thesis writing 1999, p30).In order to develop a framework for the study consumer behavior it is helpful to begin by considering the evolution of the field of consumer research and the different paradigms of thought that have influenced the discipline. As described in this article a set of dimensions can be identified in the literature, which can be used to characterize and differentiate the various perspectives on consumer research.2.1.1 Market/ Marketing: Meaning & ConceptThe market is the place where buyer and seller meet and function, goods & services offered for sale and transfer for ownership of little occur.A market consists of all the potential customers sharing a particular need or want that can be satisfied through the exchange and distribution. The market depends on the number of persons who exhibit the need interest others and are willing to offer these resources in exchange for what they want. (Kotler Philip & Armstrong Gray, Principles of Marketing, 1999, p. 215).A market will be defined as people with needs to satisfy, the money to spend and the willingness to spend it. Thus, in the market demand for any given product or service the market three factors to consider market= people with need or wants plus money to spend plus willingness to spend it. (Stanton William, J., Fundamentals of Marketing, 1978, p.72)Marketing is the management function, which organizes and directs all those business activities involved in an assessing and converting customer purchasing power in to effective demand for a special customer. So, product or service and in making the product or service to the final, as to achieve the particular or other objective set by the company.According to Philip Kotler, Marketing is a social process by which individuals and group obtain what they need and what though through cresting offering and freely exchanging products and services of value with others. (Kotler & Philip, Marketing Management, Analysis, Planning, Implementation & Control, 1997, p.9)Marketing is typically seen as the task of creating, promotion delivery goods and services to consumer and business. In fact, marketing people are involved in marketing types of entities- goods, services, experiences, events, person, places, properties, organizations, information, and ideas. (Kotler Philip, Marketing Management, 1999, p.3)According to American Marketing Association, Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas; good services to create exchange that satisfy individual and organizational goods. (Koirala K.D, Marketing Management, 1999, p.1)Thus, through these definitions we can deduce that, Marketing is a social process preformed by individuals and groups marketing are also concerned with creating offering and exchanging products and services.Marketing has been developing together with development in human civilization. We trace three-four hundred years back to the history of human civilization. We find marketing of that time by modern standard was relatively uncultured. They did not need mechanism or tools or techniques of marketing as used today. But now all the situations have changed and the needs and wants have also changed. Human aspiration for excellent and better status have given birth to thousands of discoveries, inventions and established thousands of units of different types of industry to fulfill that aspiration. These changes in turn not only indented different sophisticated tools and techniques and effective strategies for successful marketing but also made the marketing a most competitive field.In recent years some have questioned whether the marketing concept is an appropriate philosophy in a world faced with a major demographics and environmental challenges. The societal marketing concept holds that the organizations task is to determine the needs, wants and interest of target markets and deliver the desire satisfaction more effectively and efficiently than competition in a way that preserve or enhances the consumers and the societys well beings. The concept calls upon marketers to balance three considerations. Namely Company profits, Consumer satisfaction and Public interest. (Kotler Philip, Marketing Management, 1999, p.29)2.1.2 Marketing Mix: ConceptMarketing mix is one of the key concepts in modern marketing. It refers to set of variables that the business uses to satisfy consumers need, namely product, price, promotion and place. Each company should deeply study the marketing mix to run the business. A successful company will have effective knowledge over the marketing. Marketing mix is the set of marketing tools that organizations use to pursue their marketing objective in the target market. (Agrawal G.R, Marketing in Nepal, 1999, p.28)2.1.3 Product: ConceptA product is anything that can be offered to the consumer satisfaction. Products can differ in size, quality, feature, brand, packing etc. This is the most important variable of marketing mix, a company should deeply think over the quality of the product before market penetration. (William J/Michael J. and Bruce J, Fundamental of Marketing, 1994, p.211)In marketing we need a broader definition of product to indicate that consumers are not really buying set of attributes, but rather benefits that satisfy their needs. A product is a set of tangible and intangible attributes, including packing, color, price, quality, an brand, plus the sellers services and reputation A product may be a good, service, place, person, or idea.2.1.4 Products Quality: ConceptQuality is the improved form of product, to satisfy the needs of the consumers, improving product quality has become a top priority for marketing. There is an intimate connection among product quality, customer satisfaction and objective achievement. The dimensions of quality can be performance of the product, durability of the product, serviceability of the product & feature of the product etc. Quality is the Totality of features and characteristics of a product that bear on its ability to satisfy stated or implied needs (Agrawal G.R., Marketing in Nepal, 1999, p.161). While considering the physical product apart from the additional attributes, real or fancied, bestowed on it by an effective marketing program, the manufacturers attention is usually centered on product quality. In this context product quality is often measured in terms of the purity or grade of materials used the technical perfection of design, and exacting standards of production. The level of quality is usually set in terms of either meeting of beating competition. Once a level of product quality, in this sense, has been determined, most firms carry out rigorous programs of quality control and product testing to ensure that technical standards of product quality are upheld.2.1.5 Brand& Branding: Meaning & ConceptBrand is the name of the product. Branding differentiates the products from marketers, sellers & consumers. They convey attributes, image, values & benefits.A Brand is a name, terms, signs, symbol, or design or a combination of the intended to identify the goods or service of one seller or group of seller and to differentiate from those competitors. (Kotler Philip, Marketing Management, 1999, p.404). It is clear from above definition that brand identifies the goods to market. It can be a name, trade mark, logo or other symbol. It differs from other assets such as patents and copy rights; which have expiry date. Branding constitutes an important part of product mix. The word brand is comprehensive encompassing others narrower terms. A brand name consists of words, letters or number that can be vocalized. A trademark is the part of the brand that appears in the form of a symbol, design or distinctive color or letter. A brand mark is recognized by sign and differentiates its product from competing products.Nowadays, market is being much more competitive. Every company should carry out a research before launching a new brand. As the customer is the king of the market in todays liberal economy companies cannot afford to be only product oriented. There is no specific formula for success. Market is different from place to place, consumers need taste and interest may vary from one place to another. In many cases affordability, geographical location, culture and religion also determine peoples need. Therefore, success of brand largely depends on the different factors such as innovation, quality, attractive, packing, reasonable price, availability, good publicity brand positioning, unique selling proposition, value addition relationship etc.2.1.6 Price and pricing: Meaning & ConceptPrice is an important component of marketing mix. Price is the value of goods and services in terms of money. It depends upon the willingness and ability to pay, which in turn depends upon the value in use and value in exchange. Pricing is the process of determining the price of the product. The price determined by the company or the marketers should be responded by the consumers in the target market. It is another variable of marketing mix that creates revenue. Consumers pay price to buy products for their need satisfaction. It may be fixed on the basis of cost demand and competition. It may involve discount, allowances, credit facility etc. Price has become the important variable of marketing mix because a marketing manager always look forward for the price of the product so that he can penetrate the market as their capacity to pay.Traditionally, price had operated as the major determinant of buyer choice. This is still the case in poorer nations, among poorer groups, and with commodity-type products. Although non price factors have become more important in buyer behavior in recent decades, price still remains one of the most important elements determining company market share and profitability. Consumers and purchasing agents have more access to price information and price discounters. Consumer shops therefore, carefully force retailers to lower their prices. Retailer put pressure on manufacturers to lower their price. The result is a market place characterized by heavy discounting and sales promotion.Price is the marketing mix element that produces revenue, while the others produce costs. Price is also one of the most flexible elements. It can be changed quickly, unlike product features and channel commitments. At the same time, price competition is the number one problem facing by the companies. Yet many companies do not handle pricing well. The most common inflexibilities in handling them are: Pricing is cost-oriented. Price is not revised often enough to capitalize on market changes. Price is set independent of the rest of the marketing mix rather than as an intrinsic element of market positioning strategy, and Price is not varied enough for different product items market segments, and purchase occasion. (Kotler Philip, Marketing Management, 1999, p.456)In setting its pricing policy, a company usually follows the following six step producer:-1. It selects its pricing objective survival, maximum current profit, maximum market share, maximum market skimming, or product quality leadership.2. Its estimates the demand curve, the probable quantities will select each possible price.3. It estimates how its cost varies at different levels of output, at different levels of accumulated production experience, and for differentiated marketing offers.4. It examines competitors cost, price and offers.5. It selects a pricing method.Finally, it selects the final price, taking into account psychological pricing, and the influence of other marketing mix elements on price, company pricing policies, and the impact price on other parities.Company do not usually set a single price, but rather a pricing structure that reflects variations in geographical demand and cost, market segment requirements, purchase timing order levels, and other factors.Several price adaptation strategies are available:-I. Geographical pricing.II. Price discounts and allowancesIII. Promotional pricingIV. Discriminatory pricingProduct mix, pricing, which are included setting prices for product lines, optional features, captive products, two part items, by-product, and product bundles. (Kotler Philip, Marketing Management, 1999, p.482/83)2.1.7 Promotion: Meaning & ConceptPromotion is the element of an organizations marketing mix that serves to inform, persuade and remind the market of a product and for the organization selling it, in hopes of influencing the recipient feelings, beliefs, or behavior. (William J/Michael J. and Bruce J, Fundamental of Marketing, 1994, p.456)Promotion is another variable of marketing mix which communicates to the ultimate consumer about goods and services. It involves those activities which inform, educate and stimulate the demand for the product. Company should follow effective promotional medias to inform the consumer about the product. A good marketing manager always looks towards effective promotional media to compete with other brands. This variable is very important to stimulate sales. (Agrawal G.R. Marketing Management in Nepal, 2059, p.47)The marketing mix activities of product planning, pricing, and distribution are performed mainly within a business or between a business and the members of its distribution channels. However, through its promotional activities, a firm communicates directly with potential customers.2.1.8 Place: Meaning & ConceptPlace is another variable of marketing mix which takes product to consumer. It is concerned with distribution, channels of distribution and physical distributions. It is also concerned with selecting channels of distribution and place for the physical movement of the product.A good marketing manager always thinks of an effective channel and physical distribution system for the smooth flow of the goods at the right time at the right place and to the right person or market. (Agrawal G.R.,Marketing Management in Nepal, 2059, p.4)Philip Kotler defines marketing mix as the set of marketing tools that the firm uses to pursue its marketing objectives in the target marketing. The popularized a four factor classification of these tools called the four Ps (product, price, promotion and place).2.1.9 Advertising and other promotional activities: ConceptThe word advertising is derived from the Latin word Adverto. Ad means towards and verto means turn. So, the meaning of advertising is to turn people towards specific thing. In other words, advertising is to draw peoples attention to certain goods. Advertising is one of the main tools in marketing used tools in marketing used to influence the consumers awareness, interest and response to the product in order to increase the firms sale and profit. It is an important element in modern marketing process but it can produce consistently profitable result only when the entire structure is sound and coordinated.Advertising is the most visible marketing tool, which seeks to transmit an effective message from the marketer to a group of individuals. The marker pays for sponsoring the advertisement. Activity advertising unlike salesmanship, which interacts with the buyer face, is non-personnel. It is directed towards a mass audience, and coast at an individual, as in personnel selling.Advertising is defined as a firm of mass communication where message in through different sources and is acquired by the consumers. It is referred as non-personal, presentation because non-personal media are used to convey the message. Basically, media of mass communication are only two viz., publications and electronic media such as radio and television.The advertiser needs to have comprehension of psychology. The effective advertising needs to be familiar with certain effects that lead to certain response. Advertising is a method of communication, which is one of the most important aspects of human behavior.Today business organization, social organization, political organization and governmental and non-governmental organizations are also using advertising as tools of promoting and services as well as political candidates for votes.Advertising can be understood as form of communication, which aims at bringing about some change in the behaviors of the target audience, particularly the potential buyers of non-buyers towards the product or service advertised. A generally theoretical model seeks to identify a step wise behavioral progression of non-buyers towards buying action.Simply advertising stimulates the potential buyers to go to the store to buy actual advertised products. In general, advertising is done in expectation of tangible gains such as favorable attitudes, better image of the firms, and increased sales. The techniques of advertising depending upon the situation however, it is the matter of decision of the marketing manager to blend all promotional tools advertising, personal selling, and sales promotion to arrive at a right mix. Each of the promotional tools has got unique characteristics and is complementary.It should be made clear here that advertising and promotion though seems same are not exactly the same thing. Promotion is a broad from whereas advertising is just a part of promotion. Promotion generally includes publicity, personal selling, public relation and advertising, but advertising comprises the most of the portions that comprises promotion. Advertising promotion consists of other four element personal selling, sales promotion, public relation and publicity.a. Personal SellingPersonal selling consists of face to face communication between the sales persons to their prospects. Unlike advertising, it involves personal interactions between the source and the destination. The most effective method of promotion probably is to have sales persons call upon every target consumer. For many institutions, especially those that appeal to the mass market, this world be terribly inefficient. As a result, they employ mass marketing techniques such as advertising. Personal selling is very important in industry.b. Sales PromotionAccording to the American Marketing Association, sales promotion consists of those marketing activities, other than personal selling, advertising and publicity that stimulate consumer purchasing and dealer effectiveness, such as display, shows, and expositions, demonstrations, and various non-recurrent selling efforts. Sales promotion has increased considerably in importance in recent years as management has sought measurable, short-term sales result. Sales promotion should receive the same strategic attention that a company gives to advertising and personal selling.

c. Public RelationMarketers engage in public relation in order to develop a favorable image of their organizations and product in the eyes of the public. They are public at large, labor union, the press and environmental groups. Public relation activities include sponsoring, lobbying and using promotional messages to persuade members of the public to take up a desired position. The term public relation refers to a firms communications and relationships with the various section of the public. These sectors include the organization customers, suppliers, shareholders, employee, the government, the general public and the society in which the organization operates.

d. PublicityPublicity is a means of promoting the mass market, and is similar to advertising except that it is freely found in the additional portion of the news media, and pertains to newsworthy events. The most common type of publicity is news releases, photographs and feature stories. Promotion can be directed towards final consumers, middlemen, or a company own employees. Public relations and publicity are the last two promotional methods. Public relations are the broad, overall promotional vehicle for improving or maintaining an organizations image and its favorable relationship with its public. Publicity is any promotional communication regarding an organization and its products that are not paid for by company benefiting from it. Typically these two activities are handled in a department separate from the marketing department is a firm2.2 The Buying Decision Process: The Five Stage ModelThere are five stages of consumer buying behavior which plays an important role in the understanding of how consumers go through different stages while buying a product.a. Problem RecognitionThe buying process starts when the buyer recognizes the problem or need to have something which is initiated or triggered by internal or external factors. With internal factors, one of persons normal needs like hunger, thirst, sex which rises to a threshold level and become a drive; or a need can be aroused by external stimulus. Marketers need to identify the circumstances that trigger a particular need by gathering information from a number of consumers. They can then develop marketing strategies that trigger consumer interest. The marketers can know about the consumption behavior and form the strategies for their brand to be more successful. b. Information SearchThe next step in the model is the information. The major information sources can be divided under the following groups and they are as follows: Personal: This group includes family members, friends, neighbors and many other who are directly related with the buyer. Commercial: This includes advertising, website, salespersons, dealers, displays and many more other sources and the advertisements are the major sources for the marketers today. Public: This group includes mass media, consumer rating organizations and many other sources which directly or indirectly relate with the product. Experimental: This group includes the person handling, using and examining the product. The past experience about the product also plays a vital role. c. Evaluation of AlternativesThe next step of the buying process is the evaluation of the alternatives. In this stage a consumer goes through identifying various alternatives for the product and selecting the best among them which satisfies the every need of the consumer. Some basic concepts will help us understand consumer evaluating processes. First, the consumer is trying to satisfy a need. Second the consumer is looking for certain benefits from the product solution. Third the consumer sees each products as a bundle of attributes with varying abilities for the delivering the benefits sought to satisfy this need. The attributes of interest to buyers vary by product. Consumers will pay more attention to the products which will offer post purchase benefits.d. Purchase DecisionIn this stage the consumer selects the best option and purchases the product.e. Post Purchase BehaviorAfter the purchase of the brand of product consumer might experience dissonance that might occur from hearing either good favorable things or non-favorable things about other brands and will alert to information that supports his/her argument about the purchase decision of the brand. ( Kolter & Keller, 2009). Figure 1 Buying Decision Process

Need Recognition and Problem AwarenessInformation SearchEvaluation of AwarenessPurchasePost- Purchase Evaluation

Dairy industry also accelerates diversifying to develop special food ingredients. Food ingredients derived from milk can be deployed advantageously to improve the sensor quality attributes, which include fractionated castigates. They proclaim concentrated enzymatic hydroly states are prepared by employing innovative energy efficient unit process. Packaging is another area which receiving intensive R&D inputs for developing low cost biodegradable material to prevent further damage to the environment and ensure greater food safely.

There are four type of consumer buying behavior:A .Routine Response/ Programmed BehaviorBuying low involvement frequently purchased low cost items; need very little search and decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.B. Limited Decision MakingThis involves those products which are bought occasionally. When you need to obtain information about unfamiliar brand in a familiar product category, perhaps it requires a moderate amount of time for information gathering. Examples include ClothesKnow product class but not the brand, greeting card- like the message written but not the brand.C. Extensive Decision MakingThese are complex high involvement, unfamiliar, expensive and/or infrequently brought products. It requires high degree of economic/performance/ psychological risk. Examples include cars, homes, computers, education. Spend a lot of time seeking information and deciding.Information can be entertained from the companies, friends and relatives, store personnel etc. This require going through all six stages of the buying process.D. Impulse buying, no conscious planningThe purchase of the same product does not always elicit the same Buying Behavior. Product can shift from one category to the next. For example: going out for dinner for one person may be extensive decision making (for someone that does not go out often at all), but limited decision making for someone else. The reason for the dinner, whether it is an anniversary celebration, or a meal with a couple of friends will also determine the extent of the decision making. Consumer behavior is affected by many uncontrollable factors. Just think, what influences you before you buy a product or service? Your friends, your upbringing, your culture, the media, a role model or influences from certain groups?Culture is one factor that influences behavior. Simply culture is defined as attitudes and beliefs. But how are these attitudes and beliefs developed? As an individual growing up, a child is influenced by their parents, brothers, sister and other family member who may teach them what is wrong or right. They learn about their religion and culture, which helps them develop these opinions, attitudes and beliefs. These factors will influence their purchase behavior however other factors like groups of friends, or people they look up to may influence their choices of purchasing a particular product or service. Reference groups are particular groups of people who may look up to that have an impact on consumer behavior. Opinion leaders are those people that you look up to because your respect their views and judgments and these views may influence consumer decisions. So it may be a friend who works with the IT trade who may influence your decision on what computer to buy. The economical environment also has an impact on consumer behavior; do consumers have a secure job and a regular income to spend on goods? Marketing and advertising obviously influence consumers in trying to evoke them to purchase a particular products or service. Peoples social status will also impact their behavior. What is their role within society? Are they Actors, Doctors, office worker and mothers and fathers also? Clearly being parents affects your buying habits depending on the age of the children, the type of job may mean you need to purchase formal clothes; the income which is earned has an impact. The lifestyle of someone who earns Rs. 250000 would clearly be different from someone who earns Rs. 25000. Also characters have an influence on buying decision. Whether the person is extravert (outgoing and spends on entertainment) or introvert (keeps to themselves and purchases via online or mail order) again has an impact on the types of purchases made.Rees (1992), in his study revealed that factors influencing the consumers choice of food are flavor, texture, appearance, advertising, reduction in cooking time, fragmentation of family means and an increase in snacking. Demographic and household roles have been changed and produced changes in eating habits. Consumers are responding to messages about safety and healthy eating. They are concerned about the way in which the food is produced and want safe, natural and high quality food at appropriate price.Some published articles regarding the situation of milk market The Kathmandu Post (1st September, 2013), Demand for milk products soars as Teej approaches; the article explains that there is a stiff competition among the different brands of milk and milk products. The information provided from that article concludes that the most widely celebrated Hindu festivals Teej, has given a big boost to demand for milk and products like ghee, curd, butter, cheese, paneer and ice cream. Some dairies have doubled their production to meet the market demand. According to Siya Ram Prasad Singh, General Manager of DDC says, they are witnessing a big growth in demand for dairy products and are finding it difficult to fulfill demand for some of DCC products.Similarly, Bishwo Ram Khadka, president of the Dairy Producers Association, said that the rival of the festive period had given a boost to the countrys dairy market. An increase in demand for dairy products is normal during the festive period. This time too, the market has swelled significantly, said Khadka. Apart from the festive demand, the consumption pattern of dairy products has been rising constantly over the past few years. The dairy market is estimated to be growing around 10 percent annually, said Khadka. According to him, increasing urbanization and awareness among the people about the benefits of dairy products have played a key role in the growth of the countrys dairy market. The inflow of remittance has brought economic prosperity to the people living in remote villages. Due to this, consumption of dairy products in villages has gone up, The supply of milk from farmers has been decreasing constantly since the past few months. However, there wouldnt be a shortage of items like milk as DDC had purchased adequate amounts of powdered milk and has been importing milk from India.Meanwhile, Khadka added that the market might face a shortage as consumption goes up in villages during this period, and farmers will have less to sell to dairy firms.

The Kathmandu Post (27 November, 2013), the article explains that the dairy industry in Parsa has been producing less milk than its capacity as cows and buffalos are not being reared commercially. Even though farmers in the neighboring districts of Chitwan and Makwanpur have been raising cows and buffalos with great success, the locals are least interested in doing so.According to Shyam Badan Yadav, manager of the milk factory says, the dairy has not been able to get milk in adequate quantities as farmers have been reluctant to engage in raising animals for milk.The farmers here have not been able to turn rearing animals into a business, said Yadav. Most farmers seem to be doing it just to fulfill their immediate needs. Kalash Dairy, which has been operating for the past three years, has a daily requirement of 10,000 liter of milk. However, it can hardly obtain 3,000 liter to 4,000 liter.The dairy produces products like milk, ghee, curd, butter and ice cream, among others. The products are sold in the market from two sales outlets in Birgunj. According to the company, consumers like their products, but they have not been able to fulfill demand due to the unavailability of raw materials.According to Yadav, business has suffered due to its inability to operate at full capacity despite mounting demand. Earlier, the dairy had bought a number of buffalos and given them as gifts to neighboring farmers to develop the habit of rearing animals in them.However, this plan did not succeed as the farmers showed no interest. Due to the difficulties of procuring milk for its plant, Kalash Dairy has planned to set up a separate operation named Kalash Cattle Farming to raise cows on its own. The project is at the final stages of preparation.

Samuel (2009), conducted research on the Consumer Behavior and Satisfaction of AMUL Milk. The following results were found out: Females are the main decision maker for the milk. As per the data 65% of female and 35% of male makes purchase decision. Based on the occupation of the customer, it is found in the survey that 65% are the housewives and 35% are from various occupations such as a businessman, employee etc for the AMUL milk. Income less than 5000 to 10,000 is more attracted to AMUL milk. As per the data, 79% of the respondents income is under this group. The main purchasing factors for the AMUL milk are Quality and Brand image. The data reveals that 42% influences on Quality and 32% influenced for the Brand. 88% of the total respondents are using product since from a long time. The majority of the respondents are using AMUL milk & milk products from more than 3 years. 96% of the respondents think that purchasing AMUL milk is value for the money i.e. AMUL milk is valuable product for them. It is found in the survey that consumer are influencing through Word of Mouth. Panchal (2010), conducted research on the Consumer preference and brand recall ability of milk in Baroda district in India showed the following result: People from the age group of 21-40 consume more milk. It is also found out during the study that milk is the brand that remains at the top of the mind among maximum number of respondents. While ghee and thick shake is not at the top of the mind among any of the surveyed consumers. It is also been found out that milk is 1st favorite brand among the surveyed respondents and while rajwadikadhi and dry sweets were not preferred as the 1st favorite brands by the any of the consumer. While it is also found out that ice-cream is the 2nd favorite brand among most of the consumers. It was also found out that milk and ice-cream is the most recommended brands to others by the consumers whereas rajwadikadhi is the least recommended brand to others. It was also found out that out of 100 respondents, 49 respondents daily consume their 1st favorite brand while not a single respondents consume their 1st favorite brand in once in a six months. From the research it is also found out that maximum consumers daily consume their 2nd favorite brand. The average amount spent by the maximum number of consumers (39 respondents) on the Baroda dairys products is between the range of Rs. 401 to Rs. 600 and the least (3 respondents) amount spent by the consumers is below Rs. 200. It is also found out that out of total 100 respondents, maximum respondents i.e. 92 are satisfied with the quality of the milk that they are consuming now. 63 respondents are agreeing towards the price charged by the milk producers while 13 respondents are not agreeing towards the same. The attribute price is more important for the majority consumers while purchasing the milk products. It is also found out that the quality attribute is the most important for the consumers while making the purchase of the products of the dairy. Further, it is also found out that availability attribute is also more important for the consumers. While it is also found out that the variant attributes is somewhat important for 52 consumers and least important for just only 3 consumers out of the 100 surveyed. Moreover, it is also found out that the packaging attribute is somewhat important for 43 respondents and it is least important for only 2 respondents. The attribute quantity is more and most important for 51 respondents while it is little and least important for only 10 respondents.Smith (1999) conducted the research A study of milk marketing by selected dairy companies in Port Elizabeth and the following conclusions were drawn: The trend of milk consumption has been decreasing in United States of America. Consumers are more using alternative beverages to the milk. Dairy industry is doing little to increase awareness of the benefits of the milk or to create the favorable image. It is important to segment the market and each segment requires different advertising means. The increasing competitiveness in the milk industry is forcing dairy companies to sell the milk at low profit margins. Packaging which is one of the components of marketing has caused slight problem to dairies. The cheapest way of packaging is in the form of sachets. However, the high rate of breakage/leakage. The high percentage of breakages has forced producers to look for alternative methods of packaging. Promotion is that mix element that is essential for the survival of the milk industry. The lack of promotion is regarded as one of the major reasons for the less consumption of milk. The cheapest milk on the shelf sells. 84% of the respondents purchased fresh milk. Price was the most important factor. 52.4% respondents purchased the cheapest milk on the shelf. The most respondents use milk for whitening tea/coffee. The general perception that people had bout milk was that it was very healthy and was as enjoyable tasting beverage.Virdi (2007) in their research titled Consumer Behavior Regarding Branded vis--vis Unbranded Milk found out the following results: There is relationship between the income level and the use of branded milk. With the variation in the income level, the tendency to switch between branded and unbranded milk amplifies. There is no association between profession and the use of branded milk. There is no association between the purchase of the particular brand and the factor affecting its choice.According to the research conducted by Hatiril (2004) the following results were found out: The average annual household income was $ 7380 out of which 28.2% were spending on food expenditures. 35.14% of households purchase unpacked fluid milk, 32.29% and 32.57% choose processed-unpacked and processed fluid milk as primary fluid milk purchasing sources. The monthly per-capita consumption quantities of unpacked and processed fluid milk were found as 3.60 and 2.36 kg respectively. The majority part of unpacked fluid milk consumption (67.5%) was devoted to other usages such as yogurt, cream-cake etc. About 32.5% of unpacked milk was purchased for drinking purposes. The households choices of fluid milk sources were significantly influenced by the number of children. Specially, households who have children under the age of six are less likely to choose unpacked fluid milk over the processed fluid milk, whereas more likely to consume processed-unpacked and processed fluid milk as the primary source. Results show that average household size is significant with a positive sign for unpacked fluid milk alternative and a negative but not significant for processed-unpacked fluid milk choice. This finding suggests that households whose average size is higher than average tending to choose unpacked fluid milk alternative. High-income level has a significant influence on the households decision in choosing of fluid milk alternatives. Households with high-income level appeared to choose less likely unpacked and processed-unpacked fluid milk choices than low-income level households. Households with middle-income level were more likely than low-income level households to choose unpacked and processed-unpacked fluid milk, but it was found statistically not significant. Households choices of purchasing fluid milk sources were significantly influenced by the price level. In fact, survey results showed that there is about twofold price difference between unpacked and processed fluid milk. Price difference between unpacked and processed fluid milk was the most important factor on household choice.

According to the research conducted by (Kumar, 2008) on the AMUL Pouch Milk in different cities in India, the following results were found out: In the cities where the research was conducted in the cities, milk purchase is an activity which is associated with timing of morning walk of men and for ladies; it is done along with dropping children at their bus stop. Regarding the consumer preference about the variants of the milk, 55% of respondents were willing to try if consistently available in the market at reasonable prices. About the consumer perception regarding the pouch milk in the market where the dominant players are loose milk, around 40% using loose milk identified lower prices of loose milk and credit facility provided by the local milkmen as the major factor for their preference to pouch milk. There were a significant proportion of respondents, especially among loose milk consumers who saw smaller pack sizes at reasonable price a value preposition. Consumers with low purchasing power who are willing to buy good quality milk but are unable to do so because smaller pack sizes are not available in the market. Availability and healthiness are the most significant factors for the people. The three important factors for the consumer satisfaction was the three most important factors for consumers are quality of the milk, timeliness of supply and price of the milk used. The three most important factors for retailer were identified as timeliness of supply, margins available and consumer demand.

Kripa Shakya (2011), conducted a research on Consumer Buying Behavior and Satisfaction of pouch milkIn this study, the researcher analyzed the buying behavior of consumers on pouch milk. Objectives: To know the factors that influences the purchase decision of pouch milk. To know the brand preferences of the consumers To know whether promotion plays an important role in buying decision. To know what importance does a brand name plays in purchasing of a brand of pouch milk.Findings: DDC is the most favorite brand in Kathmandu Valley. Quality was the most important factor that influences the purchase decision of pouch milk. Monthly family income did not have influence on the monthly expenditure on milk. Type of housing had relationship with the total consumption of milk. The respondents of all age group gave importance on the television advertisement. Occupation did not have significant relationship with familys recommendation, brand, promotions, quality and availability.Miru Vaidya (2011), a student from ACE, conducted a research on Consumer Buying Behavior in regards on pasteurized milk market. This was a research done as a part of graduate research project. It was done in order to understand the buying behavior of consumers in Kathmandu valley. A market survey was conducted with the help of a structured questionnaire whereby respondents were asked to fill in their responses in the questionnaire presented. The research tried to see what are the most preferred brands of pasteurized milk in the market. It tried to understand the consumer response towards price, taste, availability, health etc. Findings: It turned out that the most preferred pasteurized milk from the consumers is DDC milk and Sitaram milk. It was found out that male were focused on brand name whereas the female were focused on the health. In case of references, 71.7% were influence by the family to buy pasteurized milk. According to the survey, the most attractive promotional tool was newspaper whereas TV ad becomes a secondary to buy them. In Nepal first DDC Corporation is established as first company to produce DDC pasteurized milk. Within decades various dairy companies have been established making tough competitors. According to this survey, consumers are being more sensitive in quality of milk in the market. According to the consumes perception on quality, 97.3% consumers preferred the hygiene milk then after freshness, taste and packaging respectively. Regarding availability of product, consumers are only satisfied with the availability of the milk.

2.2 THEORETICAL FRAMEWORKFigure 2

PriceQualityBrandAvailabilityAdvertisementConsumer buying behavior of pouch milkDemographyPackagingNutritionTasteTheoretical Framework

The theoretical framework of the research was based on the dependent and independent variables that were related to the consumer buying behavior where the buying behavior decision is itself the dependent variable whereas the other influencing factors are the independent variables. As the theoretical framework is concerned, the researcher also has taken inference from the marketing mix concept which includes independent variables demography, quality, availability, taste, nutrition, packaging, advertisement and brand whereas dependent variable is buying behavior of consumers.

2.3 RESEARCH GAP There is a gap between the present research and the previous researches. Previous researches conducted on the topics concerning on the brand. Most of the study were based on brand name only rather than attributes of the milk. Most of the previous researches did not disclose what attributes of milk affects the buying behavior of the consumer. Thus, to fill up those gaps the current research is conducted.

CHAPTER 3RESEARCH DESIGN AND METHODOLOGY

3.1 GENERAL BACKGROUNDResearch methodology is a way to solve the problem. Market research specifies the information requires addressing these issues, designs the methods of collecting information, manages and implements and data collection process analyzed the results and communicate the findings and their implication.The research design is a plan of how we are going to answer our research question (Saunders etal, 2007). It is based on the research questions to decide whether we employ qualitative or quantitative technique. They explain that a quantitative method is based on conclusions derived from numbers, data is standardized and results are in numbers and final analysis is conducted with the help of statistics and diagrams. Whereas qualitative data is based on results expressed through words, it is a non standardized data required to be categorized and analysis is based on conceptualization. Quantitative research methods have been known for their advantages but are also criticized by some academics. It has been discussed by ( Jick, 1979) that quantitative research is not efficient in understanding the setting or context in which people talk but on the other had qualitative research makes up for such weaknesses. It is also believed that quantitative research is not efficient in taking the data of daily life activities but qualitative research helps the researcher understand the daily life patterns of the target population because of the personal interpretations made by the researchers. (Churchill, 1995) explains that we cannot generalize the data in qualitative research when studying a large group of people because we can only study few of them. But in the case of quantitative research you can generalize your research as you study all the participants. In this way, quantitative research eliminates the weaknesses of qualitative research and both the methods complement each other.3.2 RESEARCH PLAN AND DESIGN A descriptive as well as exploratory research was carried out for the purpose of this research. Further the data used in this research will be qualitative as well as quantitative. The findings of this research will be based upon the primary survey. The data will be collected by formulating a set of questionnaire and the questionnaire shall be distributed to all the respondents who are the consumers of pouch milk. The findings will be totally based on the data and facts provided by the respondent. Apart from questionnaire the export opinion will be also obtained depending upon the necessity of the research. The secondary data will also be obtained from various sources such as internet, books, journals, articles so that it will be easy for the researcher to formulate research problems and research questions.3.3 DESCRIPTION OF THE SAMPLEThe population of the study area was the residents of Kathmandu Valley. The sample size for the survey was 150. The sample was chosen from online via Facebook, Gmail by inquiring if they buy pouch milk or not. The sample was chosen targeting only the users of pouch milk. The sample was chosen taking into consideration of various elements like age, occupation, education, etc. 3.4 INSTRUMENTATION Instrumentation can be basically explained as the tools used in data collection and analysis. Thus, the major tool used in data collection was questionnaire. These were distributed to many individuals on the basis of convenience and needed information was collected. There was only one set of questionnaire instruments designed to seek information about the buying behavior of consumers in Kathmandu Valley which included 18 questions. These questions were both in the form of multiple choices and open ended.The questionnaire was broadly divided into three parts. First the demographics of the consumer was analyzed and then the brand aspects questions were asked and third how satisfied are the consumer with the choice of brand they are consuming. The related graduate research project, journal, and articles are referred for the preparing of literature review. In order to analyze the collected date SPPS and Microsoft Excel was used. They served as a basis for tabulation, calculation and interpretation of the data collected from the field.3.5 DATA COLLECTION PROCEDURE AND TIME FRAMEThe data for the research was collected via various journals and articles and from various websites. After having an idea dairy industry and various brands of pouch milk available in the market a questionnaire comprising of 18 questions was prepared. The questions aimed to identify demographics of the consumer, their brand preference and their satisfaction using those brands. To make it easy for the customers online questionnaires was circulated via facebook, Gmail and through friends to get prompt response from the respondents.Primary Data CollectionThe primary data was collected via questionnaire to 150 samples. Questionnaire related to the topic were asked and their response was recorded using Google document application. The analysis was done taking various relations between the groups.Secondary Data CollectionThe secondary data for this research was collected through various other reports regarding the topic and other topics which were similar. Various URL sites of dairy companies was visited to know about how they operate and to get a glimpse of the dairy market. 3.6 VALIDITY AND RELIABILITY Validity is the extent to which differences in observed scale scorers reflect true differences among objects on the characteristics being measured, rather than systematic or random errors. In order to test the validity of the research, the questionnaires were pre tested with a certain group of respondents. The response received was that the questions are clear to understand and could be easily be responded to. Also, the validity was high because the questionnaire was prepared in guidance of an expert, a professional researcher who oversaw the entire questionnaire making process and helped to come with a standard set of question.Reliability is the extent to which a scale produces consistent results if repeated measurements are made on the characteristic. To check the quality of data different cross checking questions were put in the questionnaire and various relation between variables were done to verify the result matched or not.3.7 ANALYSIS PLAN For identifying the categorical responses on the problem in the subject, SPPS and Microsoft Excel have been used as a tool for analysis. The reason for using this technique is, it is more analytical and scientific to deal with. The response collected from the respondents has been coded and entered into SPSS worksheet.After the coding, the appropriate analysis has been done on the data collected. Various tools like frequency, cross tabulation and mean were carried out to draw the interferences from the collected responses.After the coding, the analysis stage starts with SPSS extracting from googledocs. Microsoft Excel was also used for the analysis and management of data. Necessary tables and charts were drawn using the Microsoft Excel. The tables and charts presented in this report with explanation so that conclusion can be drawn which are required to meet the research objectives.

CHAPTER 4DATA PRESENTATION AND ANALYSIS

4.1 PRESENTATION OF RESULTS The results are based on the survey done among the consumers buying behavior of pouch milk. A total of 18 questions were asked to the respondents to find out the buying behavior of milk. The survey questionnaire was written down in Google doc and sent to respondents within Kathmandu Valley via Facebook and Gmail and also the questionnaire were distributed individually to the respondents. The answers of the 150 respondents were analyzed and the results are as below:The demographics of the sample size are as follows:4.1.1 Gender of the respondentsGender plays a vital role in purchase decision. Gender classification is required to marketers because different gender exhibits different perception towards products. The gender of the consumers is defined below with the help of following figure.Figure 3 Gender of respondents

(Source: Field Survey, 2014)In the figure above 150 respondents were taken as the sample size among which 37% of the respondents were male and 63% of the respodents were female. 4.1.2 Age Group of the respondentsThe buying behavior of the consumers is highly influenced by the age group of the consumers. Different age groups have different demand and desire of the product by nature. The following table shows the affect of the age group on buying behavior of consumers of this study.Table 2 Age Group of the RespondentsAgeFrequencyPercent

15-255738.00%

26-357751.30%

36-451610.70%

Total150100%

(Source: Field Survey, 2014)The above table represents the age group of the respondents. The majority of the respondents are of age group of 26-35 and it is 51.3% of all the respondents. Age group from 15-25 is of 38% and age group of 36-45 is of 10.7% whereas there was no respondent in the age group above 45.

4.1.3 Education level Another major factor that influences the buying behavior of the consumer is education level of the respondents. Education level of consumers largely affects their own buying behavior. Figure 4Education level of the Respondents (Source: Field Survey, 2014)In the figure above the sample size was divided in five categories SLC, Plus 2, Bachelors, Masters and Others. Among the respondents of 150, 4% of the respondents have done SLC, 7.3% have done Plus 2, 44% are from Bachelor and 44.7% are from Masters.

4.1.4 Occupation of the respondentsOccupation of the respondents is also the main factor of buying behavior. Consumers are from different occupations in the study. To find out the occupations of the respondents this question was kept. The main occupations of the consumers are: Student, Business, Unemployed, Housewife and others. The figure of occupations of the consumers of pouch milk is defined below with the help of table.Table 3Occupation of the RespondentsOccupationFrequencyPercent

Student6845.30%

Business2114.00%

Unemployed85.30%

Housewife1610.70%

Others3724.70%

Total150100%

(Source: Field Survey, 2014)In the table above the respondents are from different occupational backgrounds. Here, maximum of the respondents are from the student group. The business is 14%, 5.30% are unemployed, 10.70% are housewife and 24.70% are others.

4.2 ANALYSIS OF SURVEY DATA 4.2.1 Time of purchase of pouch milkThe time of purchase of pouch milk was asked in this question. The objective was to identify the time of the day when consumers purchase the pouch milk. The results are shown in the table below.Table 4Time of purchase of pouch milk

Time of purchaseFrequencyPercent

Mostly in the morning12281.3%

Not fixed, buy as needed2818.7%

Total150100%

(Source: Field Survey, 2014)Table 4 represents the percentage distribution of time of purchase of pouch milk of the respondents. The following were observed in the definite description of the respondents; 81.3% of the respondents said that they purchase milk mostly in morning whereas 18.7% said they purchase as they need. There was no respondent who purchase pouch milk in afternoon and in evening. So, it is clear that most of the consumers purchase the pouch milk mostly in the morning for breakfast, which is the most important meal of the day.

4.2.2 Purchase of packet of milk at a timeConsumption quality varies with various respondents. Some consumers buy less quantity and some buy large quantity of milk depending upon their requirement and also the size of their family. The data is collected to know how many packets of milk they purchase at a time.Table 5 Number of packets of milk at a timeNo. of packets purchasedFrequencyPercent

One3523.30%

Two7449.30%

Three2416%

Four96%

More than four85.30%

Total150100%

(Source: Field Survey, 2014)Table 5 represents the percentage distribution of purchase of pouch milk at one time. About 23.30% of the respondents said that they purchase only one packet of milk, 49.30% purchase two packets of milk, 16% purchase three packets, 6% purchase four packets and only 5.30% of the respondents purchase more than four packets of milk.Therefore, it is evident that most of the consumers prefer to buy two packets of pouch milk. This may be due to the reasons that in most of the retail shops pouch milk is available only in early morning therefore consumers tend to buy pouch milk on bulk as per their requirements.

4.2.3 Brand of milkThis question was asked in order to find out which brand of pouch milk people purchased/consumed the most and the results are in the figure below: Figure 5 Brand of Milk

(Source: Field Survey, 2014)From the survey, it was found that 64% of the respondents consume DDC, 17.3% consume Sitaram, 12% consume Today Milk, 4% consume NDs dairy fresh and 2.70% consume others. Other brands include KDC, RDC, Nandini, Anmol etc.Thus, it is clear that the dairy market is dominated by DDC as most of the consumers prefer DDC over other brands. The reason for DDC being a choice of many is because it ranks first in collecting milk. The pouch milk offered by the company is most trusted product by the consumers and as a result DDC is able to retain and attract new consumers.

4.2.4 Reasons for purchase of the particular brand There are different reasons for purchasing a pouch milk and it varies among consumers. Therefore a question based on the reason behind the purchase of the particular brand of pouch milk was asked. There were six options in the questionnaire i.e. Quality, Availability, Price, Taste, Nutrition and Packaging. The findings are given below:Figure 6 Reasons behind the purchase of particular brand

(Source: Field Survey, 2014)

Out of 150 respondents 65.30% gave priority to the availability of pouch milk and 61.30% gave priority to quality. The availability of the pouch milk is important when the respondents decide to purchase pouch milk. Many consumers purchase that brand of pouch milk which is easily available in the market. The dairy companies know the importance of making their product available to the consumers and thus they create a strong distribution channel. Since, milk is an edible product; quality of the product surely plays a vital role in the purchasing decision.About 40% of the respondents purchase the particular brand because of the taste. Taste is one of the most important qualities that determine the acceptability of milk. Even though milk is highly nutritious, people will not drink it if they do not like it. Hence, milk should be produced under conditions that give good taste initially. Only about 15.30% of the respondents think price is an important factor when they purchase because pouch milk is easily affordable compared to its substitute products. About 16.70% of the respondents say they purchase the milk due to nutrition value. Since, milk is widely recognized as a nutritious drink for people of all ages it's a good source of protein, calcium, vitamin D, potassium and other vitamins and minerals. Although it is important, respondents seem to be indifferent towards the packaging of the milk as only 8.70% of the people think that packaging is an important factor.4.2.5 Satisfaction with pouch milk Although various substitutes to pouch milk are available in the market, ranging from powered milk to skimmed milk, pouch milk still has a fair share of market. This question was asked in order to find out whether consumers were really satisfied with pouch milk over the available substitutes and the findings are represented in table below.

Table 6 Satisfaction with pouch milk compared with other substitutes

Satisfaction with pouch milk compared to other substituteFrequencyPercent

Highly satisfied128%

Satisfied8456%

Neutral4530%

Dissatisfied96%

Total150100%

(Source: Field Survey, 2014)According to the survey the respondents are s