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Increasing Productivity: Not Through New Distribution Channels

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 4675 words Published: 26th Oct 2020

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The purpose of this research is to check out the dairy business of Fonterra in New Zealand. Fonterra was established in December 2001, it is a result of countries two dairy companies, New Zealand Dairy Group and Kiwi Cooperative Dairies. (Marnette, 2019)

Fonterra is the largest exporter of dairy product. The company is responsible for over 30% of dairy export share. On its official website it states that the company is owned by over 10,000 farmers and their families, sharing a common belief in the power of dairy to make a difference. The companies aim is to give everyone the goodness of dairy nutrition through our brands. The company currently exports their products in more than 140 countries and serves one billion people every day with their products. (Fonterra, 2019)

Even though the company always maintained top spot in dairy business but last year in quarterly report the company declared that the company sales were low. This project will be focus on “why the company witnessed low sales?” and “How the company will solve this problem?”

Research Questions

After finding the low sales faced by the Fonterra stated by them in their quarterly reports I have framed a question with which my entire research will be based on this question and we will be seeking the answer of this question in the following three sub questions.

How to increase the productivity of Fonterra through sales?

1. What actions should Fonterra take to improve their low sales?

2. What caused the low sales of Fonterra products?

3. Is the bad weather and increase prices to be blamed or any other reasons?


Growing demand

In a report by USDA, the data collected by them when plotted in a graph it stated that the milk demand for New Zealand will be higher than previous year. (Lee-Jones, 2018)

New stores

The company still faces competition from other companies in remote places where the company does not have stores, so if the company opens more stores the company will help in increasing the sales and more importantly it will help to create more employment in the country.

More profit for company

This is the best opportunity to increase the sales of the company as already forecasted about the demand, by opening stores the company will be able to attract more customers and then increase the profit of the company.

Research objective

1. Find the cause of low sales.

2. To see the impact of opening new stores.

3. Measures to improve.

Research Methodologies

The main goal of this research is to find the cause of low sales of Fonterra dairy products in New Zealand. One of the suggested ideas is to open new stores across some remote locations in the countries. This research will follow mixed methodology that is both quantitative and qualitative approaches. The research will consist of collecting data by asking 20 questions which will be related to experience with Fonterra’s product and about their competitions.  The research will also require me to interview the customers and to invite people for group sessions so that they can share their experience with me.

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Audience for research

The nature of the research requires the data to be collected from families who consume the product of Fonterra as well as people who use the other brands product. This will help to understand the perspective of both who uses Fonterra’s product as well as who does not. The contact detail will be collected from the Fonterra’s sales department, where they will ask the customers if they can share their details with me for research purposes. I will 


The research will require sample of 30 people who uses and 30 who does not uses Fonterra’s product for interviews as well as for group sessions. The other will require hosting polls in social platform and survey with 20 questions.

Brief Research

For this research I studied a literature review of a dairy company based in India named a Mother dairy which is also facing the loss in its sales like Fonterra in their own place where it was formed. The Mother Dairy was founded in 1974 which started off with selling only ilk and now it sells almost all edible that is found in your kitchen. The company in 2011 faced low sales I its own land by foreign companies dominating the dairy market. The company realized the problem and started working on it. The main causes were that the company did not have any cooperative to source milk like other brands,  the drinks market were dominated by Pepsi and Nestle, company does not sell in other part of the countries. As of now all the causes of the low sales are same as Fonterra was facing.

Mother dairy the released a proposal to increase their sales, they started to sell their products in 20 more cities in order to get recognized and take the share of other brands, started to setup new stores and in made a contract with stores to sell their product this way they gave people more choices . The company also made extra effort to focus on healthy food and came up with innovative idea of selling Indian snacks in frozen form; the company also took chances by hiring the fresher and making them work with experienced people to create a mix between young talent experience minds. (Goyal, 2011)

Like this the Fonterra can also high their sales, the company should focus on increasing their services to more country, opening more stores in remote areas where still other brands have not reached, and also to introduce new product so that people can get more options for a same kind of product and Fonterra also have a brand power people would surely prefer them over other brands. The Fonterra has many competitions but one with second highest sales is Arla (Owler, 2019) the main reason its sales are increasing because it has started selling remote areas  at cheaper price.

Disseminating research

the research can be shared with participants in many ways like giving your contacts detail to the participants but it is not a professional way so I chose to give links to my social page in survey page where I will publish the research work and moreover at the end of every survey I will collect their email address so that I can send them the research work in case they forget to visit my social website profile.

The research I prepared will be provided to NZCDI via mail. I will send both the physical as well as the soft copy in email; this will ensure that it will surely reach the University.

I will provide the research work to stakeholders to their official email address provided in their website. After receiving the research I will ask permission to let me present the research in a company meeting, this presentation will surely help me to interact with the stakeholders and express my ideas about the problem more openly.

Project Design

The project will take place in my locality that is in Auckland, it will help me to save a lot of time in travelling to other farther places. The other reason to research in my neighbourhood is that lot of people here consumes Fonterra products which will help me in my research. But for the people who live farther and remote places it is important to get their views as well which can be done with the help of internet. I will ask the Fonterra’s sale department to issue me the address of their customer so that I can invite them to participate in my survey which will help e to collect genuine data

I will post a poll in my social site and advertise about the survey which will cost me some dollars, when a person clicks on that poll then it will ask them if they want to take the survey, if they click on YES then they will be taken to that website where they will be asked to answer the questions.

The other approach is to personally interview the customers only if they want and ask them if they can also take a short survey. I will send them the letter for joining my survey and if they are interested they can contact me via the email and contact number provided, then I will share the consent form with them so that they can see all the details about the research and what will happen to the data collected and confidentiality of their personal details and compensation. After reading the consent form they can sign it if they want to participate. 

I also have to conduct group session where both the parties who uses the Fonterra as well as who does not uses to share their opinions and experiences with other brands.

The research will consist of online surveys which will have 20 multiple choice questions and a text box where they can write any extra opinion or their thoughts. This survey will take almost 7-8 minutes, but the survey being online it will not be a problem. The other approach will require me to interview the customers by me, this interview will also have the same survey questions but I will ask more questions and interact with about the company. This session will be around 10 minutes and moreover I cannot interview everyone because of how time consuming this can be. After the interview I will also ask them if they can join other customers in a community centre where we will have group sessions.

Analyzing the results

After getting all the data from the research now I have to summarize them in a usable form. The survey questions have four options and every four options have a value set by me, after calculating the data from both online and offline surveys I will take an average of both surveys and convert it into percentage. If the values received is in the range of 80-100% then the product is preferred by everyone in spite of price hike and other alternatives, if it is 60-80% then the people will only buy their product if it is cheaper than other, the 30-40% will buy any product whichever gives cheaper and best quality and the rest are who does not buy Fonterra’s products. I also have to analyze the audio conversation which will be recorded during the survey, the audio will include the questions like their experience with Fonterra‘s service and their product, their views on other dairy companies, if you are a Fonterra’s customer will you opt for other dairy company if they give same product with cheap price or if you are not a Fonterra’s customer what will it take you to buy their products quality, price or varieties etc. this audio data will then be converted to quantitative data which will help me to merge with the surveys data. All the result from the survey and recording will be analyzed by me and proper and unbiased result is prepared which will then be implemented in my research. The obtained result will be sent to all the participants through mail.

Final result

With this research my motive is to understand how a research is done and how it can be utilised and will help others. For me I would love to share my research papers with others so that they can benefit with my research. I want my research to benefit NZCDI by sharing my research with their students by giving this research as a sample for educational purpose and recognise my hard work. The company can ultimately use this research work for their benefit by analyzing the surveys by both their customers’ as well non customers. This way the company can improve the fields where they are lacking.

Budget of the project

The research is not funded all the expenses are paid by me.


Item & No.



Researcher salary










Accommodation and Meals








Administration e.g. photocopying








Research Equipment
(Note: NZCDI has research equipment available, please ask before including these pieces of equipment in the budget)


i.e. Dictaphones


Other costs(internet)














Business Ethics Proposal


The research that I am conducting requires me to collect data from people. As they are the only source for me to get the data I will invite them by sending an invitation letter. The letter will include all the vital information like my name, the research I am doing about company, the type of data that I will be collecting and more importantly telling them that participating in the survey is totally optional. I will also inform them about my email and postal address for contacting and to get further details. I have attached an invitation letter; the same copy of the letter will be mailed to the participants. 

As the research is being done by me the participants will only contact me so that confidentiality as well as the data remains with me and no other researcher, student or tutor will be involved. The participants will be only the Fonterra’s customers as well as other dairy brands user. The participants will be strictly unknown to me and no students and mentor will be involved as this may create an unfair advantage to me and I may get inappropriate data for my research.


The consent is the one of the most important step after the participant is ready for the research. the consent form will be mailed to the participants and will be collected by me personally or they can mail me. The consent form will include all the details that are usually found on a consent form, the form will let me explain the purpose of this survey. It will also reflect the risk involved and that no compensation will be provided moreover I also promised that their personal data will be kept confidential.

If the participants cannot sign consent form or in case they do not how to sign than I will read him/her the form orally in front of a witness which can be their friend or a family member. The oral consent will be recorded and will be provided to the consent in a digital format a CD or other form. The participants will be strictly above 25 of age; this will help me to get more mature and experienced information from them. After all the data is collected and analysed I will share the research work I have done as well as the data collected by them in mail or an email. As the research work is being done by a student It can be a little difficult to provide a compensation to the participants and it is completely optional to participate in my survey.


The research will require the participants to fill a survey which is included by me in a separate document, the survey will contain some questions and every answer will have particular points. After survey the participants will be required to share their experience and any other extra info they want to add. This data will be in written as well as be recorded, I will only use audio recording for this survey. The audio will be recorded via my phone, this recording is to ensure that while I am documenting the data received nothing get missed due to human error ad to maintain the dignity of the data collected. The audio will be kept as long as the research is being completed and will be stored in my laptop and a backup in my phone. The recording will be kept at least for 6 months so that I can refer them again in order revise my project. The recording will b owned by me and if any participants do not want to record their audio, I won’t record it. In the consent form it is already mentioned that all the data including audio will be kept confidential and no third party will have access to it.


The probability of harm (physical, psychological, social, legal, or economic) occurring as a result of participation in a research study. Both the probability and the magnitude of possible harm may vary from minimal to significant. The Federal regulations only define “minimal risk.” (HSPU, 2018)

Here I have mentioned all the risk involved and how I will manage them:-


How will it be managed?

Social risks

The personal data of the participants will be kept confidential so that no one can contact the participants even the company.

Cultural risks

In my survey I will be careful about using questions that may hurt people of different communities, races etc.

Physical risks

To avoid any type of physical risk I will take my survey in a restaurant so that the participant can be comfortable and moreover the survey will only last for maximum of 10 minutes.

Emotional risks

Emotional risk can be pretty common, if the questions ask about their personal life and want to avoid that question. I will also contact a psychiatrist and set an appointment for the participant

Intellectual risks

The participants has all the rights to skip any questions which he wish not to answer and moreover as already mentioned the data will be the personal details will be kept personal.


When doing a research which includes collecting data from people some way or the other there can be conflict, in my research I also expect someone from participants can create a conflict which will lower the pace of my research. To avoid the conflict or solve the conflict is very important; the main part of solving the conflict is that both the parties should come to an agreement the parties can be the researcher or the participants, two participants or the researcher and the company the research is being done.

  1. To understand the conflict is important, this will help to further make decide the solution, and to understand if it is really a conflict then with whom.
  2. After knowing the parties now I have to communicate with the parties, and know their problem. Suppose participants want he does not want to participate in the research after he gave all the information and now he wants to delete a data, this can become difficult for the researcher as his time and resources are wasted.
  3. Understand their problem by considering it yours, this will help to understand his situtaton moe easily and help me to make a better solution for this conflict.
  4. Finding a solution can be a bit tough as I have to find a solution where me and the participants can both benefit from the current situation.

Survey Questioners

Liker Scale Strongly Disagree=1, Disagree=2, Neutral=3, Agree=4, Strongly Agree=5

We use Fonterra products because….






Quality is better than others


No other substitute


Cheap price


More varieties


Brand power or brand image


Likert Scale: Strongly Disagree=1, Disagree=2, Neutral=3, Agree=4, Strongly Agree=5

Will you shift to other brands if …






They provide products at a cheap price


They provide more varieties


Better quality but higher price


Likert Scale Strongly Disagree=1, Disagree=2, Neutral=3, Agree=4, Strongly Agree=5

We don’t use Fonterra because….






Fonterra products are not available here


Most people prefer other brands


Cheap price


We don’t know about this brand


We prefer milk from local dairy stores


Other brands  provide better quality and varieties


Consent Form for Participation in a Research Study


                                         Research and Ethics Proposals


The purpose of this research is to find the solution for the company Fonterra as they are facing low sales in last quarter.

Your participation will involve you to fill a simple survey and share your experience about the product (if you use) or reasons why you do not use, the audio will be recorded.

Risks and discomforts

There are no known risks associated with this research as your name will be kept strictly confidential if you want.

Potential benefits

There are no known benefits to you that would result from your participation in this research. This research may help us to understand why the company sales are going low as expected and other reasons like the effect of bad weather, competition to the sales.

Protection of confidentiality

The data collected will only be used for research and your name will not be published in any of the website, social pages or and publication collected from this study. I will do everything we can to protect your privacy I know the value of keeping your name and other details to be found by any unknown.

Voluntary participation

Your participation in this research study is voluntary. You may choose not to participate and you may withdraw your consent to participate at any time. You will not be penalized in any way should you decide not to participate or to withdraw from this study.


I have read this consent form and have been given the opportunity to ask questions. I give my consent to participate in this study.

Participant’s signature_______________________________               

Date: _________________

A copy of this consent form should be given to you


Recruitment letter


I am writing to invite you to participate in my research study about Fonterra’s low sales. You're eligible to be in this study because you are a customer of Fonterra. I obtained your contact information from Fonterra’s sales department.

 "I would like to audio record your answers and may ask you to fill a simple survey and then we'll use the information to analyze the data to find the solution for our research.

Remember, this is completely voluntary. You can choose to be in the study or not.

Thank you very much.



  • Fonterra. (2019). About. Retrieved 03 27, 2019, from www.fonterra.com: https://www.fonterra.com/nz/en/about.html
  • Fox, C. (2018, 12 11). Global milk glut and weather reasons for reduction in Fonterra's farmgate milk price. Retrieved 03 27, 2019, from https://www.independent.ie: https://www.independent.ie/business/farming/agri-business/companies/global-milk-glut-and-weather-reasons-for-reduction-in-fonterras-farmgate-milk-price-37615214.html
  • Goyal, M. (2011, 16 05). Billion-dollar Mother Dairy's new strategies to win back market base and go national. Retrieved 03 27, 2019, from https://economictimes.indiatimes.com: https://economictimes.indiatimes.com/news/company/corporate-trends/billion-dollar-mother-dairys-new-strategies-to-win-back-market-base-and-go-national/articleshow/8324201.cms?from=mdr
  • Lee-Jones, D. (2018, 10 15). New Zealand Annual Dairy and Milk Supply Report 2018. Retrieved 03 27, 2019, from https://gain.fas.usda.gov: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Dairy%20and%20Products%20Annual_Wellington_New%20Zealand_10-16-2018.pdf
  • Mackenzie, D. (2015, 07 15). Competition big issue for evolving Fonterra. Retrieved 03 27, 2019, from https://www.odt.co.nz: https://www.odt.co.nz/business/competition-big-issue-evolving-fonterra
  • Marnette. (2019, 02 21). Fonterra. Retrieved 03 27, 2019, from en.wikipedia.org: https://en.wikipedia.org/wiki/Fonterra
  • Owler. (2019). Fonterra. Retrieved 03 27, 2019, from https://www.owler.com: https://www.owler.com/company/fonterra


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