A meeting of the top executives of the Tamil Nadu Milk Marketing Federation (TNMMF) is underway in the federation’s plush conference room at its headquarters. In addition to the CEO, the federations Vice Presidents of Marketing and Finance, as well as senior managers of purchase and transportation, are also present.
The TMMMF was set up in 1983 when it launched milk bottles in half and one-liter sizes all over the state of Tamil Nadu. Soon the federation also launched a number of milk products like curd, butter, cheese, and ghee. Curd was sold loose at the federations outlets in Chennai only.
The federation replaced the glass bottles for milk with polyethylene pouches. The glass bottles were bulky and hence took up a lot of space in transportation and storage. Moreover, half of the liter bottle would cost Rs. 10/- to the federation, and although bottles could be recycled, breakage normally nullified this advantage. The polyethylene pouches saved both Space and money for the federation. However, a major drawback still persisted. The pouches, like bottles, required to be stored under refrigeration, and yet their shelf life was not more than a day.
Today’s meeting was called for a presentation by a sales team of Jetra Pak Pvt. Ltd. This company had developed tetra packs for packing milk. According to the claims of the sales, team tetra packs offered a number of
Advantages over the pouches are currently being used by the federation. To begin with, because of the Ultra High Temperature (UHT) treatment given to the milk before packing in tetra packs, the shelf life of the milk could be increased to about three months without refrigeration. The UHT treatment, it was claimed, was far better than the traditional pasteurization being presently used. This also does away with the need for a high-cost cold chain for distribution. At the same time, tetra pack milk makes boiling redundant. Adulteration of any type is also totally ruled out. The sales team of the tetra pack had a high pike of these advantages rationalizing it with the argument that better living standards and health consciousness had made consumers more demanding. Nuclear families and working couples leave them with hardly any time to boil and cool the milk before consumption; it was claimed. The tetra packs were absolutely safe against any adulteration, and this was a great advantage that they offered. The cost of a liter of milk in these tetra packs would work out to be approximately Rs. 20-24 as against Rs. 15-17 for a pouch of the same.
While many of those attending the meeting were convinced about the use of tetra packs by TNMMF for marketing its milk, a few, like the marketing manager, were skeptical about it. Two issues were particularly troubling to the Marketing Manager. Given the habit of Indian consumers to consume only boiled milk even if pasteurized, it was doubtful whether they will be willing to give up this habit easily. Moreover, will the price-sensitive Indian consumer be willing to shell out extra money for the benefit of not boiling milk? The meeting ended with a clear division of opinion amongst those present.
Questions to be answered:
Analyze the advantages of marketing in tetra packs compared to pouches from the view of consumers.
2] Given the pros and cons, do you feel that the TNMMF should switch over to tetra packs? Give reasons for your answers.
3] Analyse reasons for acceptance/rejection by the consumer based on perception.
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