MKTA - 011

Amul Evolution of Marketing Strategy

If Amul has become a successful brand if, in the trade lingo, it enjoys brand equity then it is because we have honored our contract with consumers for close to fifty years. If we had failed to do so, then Amul would have been consigned to the dustbin of history, along with thousands of other brands. For close to fifty years now, Amul has honored its contract with the consumer. The contract that is symbolized by the Amul brand means quality. It means value for money. It means availability. And it means service.
Varghese Kurien, Chairman GCMMF1

Introduction
Gujarat Cooperative Milk Marketing Federation (GCMMF), the largest food company in India, recorded a turnover of Rs 2882 crore ($ 0.65 bn) in 2003-04. Its flagship brand Amul was the market leader in butter, whole milk, cheese, ice cream and dairy whitener. GCMMF was the largest cooperative movement in India with 2.2 million milk producers of Gujarat organized in 10,552 cooperative societies. GCMMF collected 5 million litres of milk per day from its shareholders who owned 3.2 million buffaloes, one million cows and 0.3 million crossbred cows. The Federations extensive marketing network comprised 3000 distributors and 500,000 retailers spread across the country.

Initially, when the Bombay government refused to deal with the cooperative, the farmers called a strike. The government finally relented when Bombay went without milk for a fortnight. The successful union registered itself as the Kaira District Cooperative Milk Producers Union Ltd. (KCMPUL), Anand, in Gujarat in December 1946. Under the chairmanship of Tribhuvandas Patel (Patel), the Kaira Union, headquartered in Anand, began with two milk societies, and a daily milk collection of 250 litres. When it started operations, the cooperative included two tiers. At the base was the primary village dairy cooperative society (DCS) of milk producers. Several such village cooperatives together formed the district milk producers union at the second level, which was entrusted with procurement and processing of milk. By appointing qualified technologists and professional managers, the cooperatives helped the farmers to leverage modern management practices and technology.
1

The Amul Saga, www.Indiaseminar.com, 2001.

2004, ICFAI Knowledge Center. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means electronic or mechanical, without permission. To order copies, call 0091-40-2343-0462/63/64 or write to ICFAI Center for Management Research, Plot # 49, Nagarjuna Hills, Hyderabad 500 082, India or email icmr@icfai.org. Website: www.icmrindia.org

Amuls genesis was linked to the freedom movement in India. Sardar Vallabhbhai Patel, an eminent Indian freedom fighter encouraged the dairy farmers from the Kaira district in Gujarat to form a cooperative to counter the exploitatively low prices offered for their milk by the monopoly milk supplier of the area, Polsons Dairy. The dairy farmers met in Samarkha (Kaira district, Gujarat) on the 4th of January 1946, and decided to set up a milk producers cooperative that would deal directly with the Bombay government, the final buyer of their milk. This was the origin of the Anand model.

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Background Note

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Varghese Kuriens (Kurien) association with KCMPUL began soon after the inception of the cooperative. He had obtained a masters degree in Mechanical Engineering from Michigan State University in 1948 and subsequently completed an assignment at the Governments Research Creamery in Anand when Patel met him. Patel named Kurien, KCMPULs General Manager in 1950. In 1954, when the Bombay Milk Scheme refused to take all the milk that KCMPUL had produced, the cooperative found itself saddled with surplus milk. Apart from marketing milk in and around Anand, KCMPUL embarked on a wide range of dairy processing activities. To differentiate its high quality products, KCMPUL decided to brand its produce. In 1955, KCMPUL adopted the brand name Amul for its products. Amul, derived from the Sanskrit word Amulya, meaning priceless, also stood for Anand Milk Union Limited.

Amuls Business Model

Amul followed a unique business model, which aimed at providing value for money products to its consumers, while protecting the interests of the milk-producing farmers who were its suppliers as well as its owners. As milk was a perishable item, the farmer suffered a loss if it was not sold before the end of the day. Amul bought all the milk offered by the milk producer, made timely payment, and shared with the producers the profit generated from marketing the milk and milk products under the Amul brand name. This arrangement offered an incentive to the milk producers to increase production and use modern dairy techniques to enhance productivity, while lowering costs. GCMMF decided to sell all its products under the Amul brand name. This enabled GCMMF to spend just 1% of its turnover on advertising campaign as against 6-7% that would be spent on promoting multiple brands. A few products like ghee, milk and baby foods were also sold under the Sagar brand name for the local market and were not advertised nationally. Amul was the market leader in butter, ghee, cheese, and dairy whitener right from the start. Amul remained focused on three basic business principles: be customer driven; adapt quickly to the changing environment; anticipate change and act today to meet tomorrow's challenges. While entering new product categories, Amuls game plan was to attack existing players through aggressive pricing, better quality, and superior distribution. Amul retained a competitive edge in the market by offering quality products at competitive prices. Right from the early years, Amul focused on building a strong distribution network. Amul also followed a strategy of forging alliances with other co-operatives across the country to help it in the critical functions of procurement and manufacturing. Apart from keeping capital costs low, these alliances proved critical in the case of low-shelf life products like milk and curd. The ability to outsource products from other co-operatives helped GCMMF keep its wage cost low. Its wage costs in 2000-01 were 0.8% of sales, as compared to 5% in case of Hindustan Lever Limited (HLL). By 2000, Amul controlled 80 % of the butter market, 65 % of the baby food market, 60 % of the cheese market, 60 % of the dairy whitener market, 90 % of the whole milk market in Western India, and 27 % of the ice cream market. Amul enjoyed a 40 % share in the skimmed milk powder category, and a 60 % share in the dairy whitener category.

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3 Exhibit I Amul- Tapping Other Farmer Cooperatives

Amuls ability to tap into other farmer co-operatives proved a great help when it entered the ice cream sector. Initially several dairy cooperative brands had planned to enter the ice cream market under their own brand name. But in 1997, these cooperatives entered into agreements with GCMMF to sell their ice cream across India under the Amul brand name. Subsequently, Amul was able to leverage the capacity of 180 dairy cooperatives with a combined milk procurement capacity of more than 11 million litres per day, at locations geographically close to the target markets throughout India. In 2002, GCMMF had 10 such alliances with other state federations. It was on the strength of such an arrangement with Maharashtra Dairy and Pune Milk Co-operative in Maharashtra, that Amul was planning to re-launch its brand in the 35 lakh litre a day liquid milk market in Mumbai. "We realised that if we were to succeed as a food company, we could do so only by procuring and manufacturing through other co-operative federations, ' B M Vyas, managing director, Amul, said in an interview with a business magazine. He believed that Amuls strength lay in its ability to tap other cooperatives. ''If I wanted to enter sugar-boiled confectionery, all I had to do was tie up with a sugar cooperative.2 Thus, Amuls strategy for the confectionery business was built around an alliance with CAMPCO, the Karnataka-based cocoa farmer's co-operative. Source: Dhobhal, Shailesh. The taste of Competition, Business Today, 30th September 2001, pp.44-50.

The cooperative model pioneered by Amul - a union of primary village dairy cooperatives- came to be known as the Anand pattern cooperative system. It was a three-tier structure that comprised village societies, district level dairy unions and a state level federation. Each tier was economically independent of the others and comprised representatives elected from the tier below it. The organizations at each level were governed by their own bylaws, and were managed by democratically elected boards. The facilities at all levels were entirely owned by the farmer. The farmer held the societys shares, the society the unions shares, and the union, the federations shares. Milk producers in a village joined hands and formed a dairy cooperative society (DCS), which sold the milk to the union. Membership was voluntary and open to any person who owned cattle and was willing to supply surplus milk to DCS. Each DCS was obligated to hold an annual general meeting, and prepare annual reports as per government rules. In the annual general meeting, the members elected a management committee, which framed the plans and policies for managing the day-to-day affairs of the cooperative. The profits/losses were divided among the members in proportion to their investment in the society. DCS members brought milk to the village co-operative centre every morning and evening. The quantity of milk was measured (later it was weighed) and a sample was drawn to test the fat content of each farmers supply. Based on the quantity and fat content, the amount to be paid was calculated. Payment for milk supplied in the morning was made the same evening; that for the milk supplied in the evening was made the following morning. After the introduction of computers in 1995, many societies weighed and measured fat simultaneously, and made the payment immediately on receipt. In 2003-04, GCMMF had 10,852 societies, each maintaining its own profit and loss account.
2

Dhobhal, Shailesh. The taste of Competition, Business Today, 30th September 2001, pp.44-50.

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Organizational Structure

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The village cooperative societies were affiliated to the district milk producers union. The union processed the milk that it procured from the village dairy cooperatives at its processing plants. The district unions elected a board of directors from the chairmen of the village societies, held annual general meetings, and issued annual reports. The district unions board of directors was responsible for framing appropriate policies; managing operations; collecting and transporting milk from the village cooperative; ensuring regular and timely payment to the village cooperatives; offering technical support to the milk producers to enhance milk production; and processing and marketing milk and milk products within the state. Other functions included long-term and strategic planning, communicating with the members, overall control of the village co-operatives, and representing the union on legislative and regulatory forums. The district union had a team of professionals and staff to look after services such as emergency veterinary health care, supply of balanced cattle feed, breeding services, artificial insemination services, and the provision of improved varieties of fodder seeds. The Union gave an undertaking to buy the entire quantity of milk offered by the farmer irrespective of the season. Even during winter (when the milk production was at its peak) the cooperatives bought the entire milk from the producers. Surplus milk was dried and used during the lean season. In winter, the cooperatives paid 80% of the lean season price to the milk producers as against 50% paid by the traditional milk traders. By 1965-66, Amul had 518 DCS with 110,000 members. It collected 65,905 tonnes of milk, and could process 500,000 litres of milk a day. It sold products worth Rs 92.2 million3. As district unions multiplied, the Kaira cooperative felt the need for a separate body that would market products more effectively and economically. With this in mind, they formed GCMMF Ltd. in 1973 under the chairmanship of Kurien. GCMMF commenced marketing of all KCMPUL products under the Amul brand name in April 1974. GCMMF coordinated the operations of the union, provided a platform for sharing the common benefits, avoided unnecessary competition among the unions, and marketed milk and milk products outside the state. The federation also took over the operation of the milk processing units, allocated the surplus produce to various value processing activities, and marketed the produce. It was also responsible for recruiting the best available management talent for human resource management, administration, finance and marketing. Amul educated its members in their rights and responsibilities4. Farmers freely demanded accountability from the management at Amuls annual general meetings. To ensure that Amul remained responsive to members needs, an open door policy was followed. Members were encouraged to approach officers with their problems. In a landmark speech delivered in 1963, Patel outlined a set of conditions he believed were necessary for a cooperatives success: professional management; a watchful but non-interfering board; accountability of the cooperatives to its members; and no political interference.5 Amul faithfully followed this edict for the next four decades.

3 4

www.amul.com Shukla, Seema. How milk and poppadum showed the way, www.business-today.com, 19th January 2003. Keynote Address to the Indian Dairy Science Association 1963, www.Indiadairy.com

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Product Development
Amuls product development was driven both by the spirit of the cooperative system and profitability. Being a cattle farmers cooperative, Amul was committed to buying all the milk offered by the farmer. The perishable nature of milk made it imperative for Amul to process the surplus milk and enter new product categories as production increased. The largest margins were in whole milk that contributed to 50% of the federations turnover, followed by milk powder, butter and cheese. Thus, increasing the share of fresh milk in total sales was always a priority. Other milk products ensured that what could not be sold as fresh milk was nevertheless, consumed. In the first round of value addition in the 1950s, Amul launched butter, milk powder, ghee, condensed milk, baby food and cheese. Lower prices and limited competition helped Amul become the market leader in all these categories. As more farmers entered the cooperative, and as yields increased, GCMMF had to ensure that all its members produce was sold. The 1960s and 1970s saw the addition of sweet butter milk powder, a second brand of baby food (Amulspray), a high protein weaning food (Balamul), Amul Milk Chocolate and Nutramul, a malted cocoa beverage. Amul Cheese Spread and Amul Dairy Whitener were launched in 1983. Amul launched ice cream and condensed milk in 1996, after a 13 year-long gap. The supply of milk grew phenomenally as cooperatives mushroomed. Amul introduced several new products in the late 1990s and early 2000s. In 1997-98 Amul Shrikhand, Amul UHT milk in tetra pack, Amul choco shake, Amul elaichi shake and Amul Lassi were launched. A year later the Amul Mithaee range and the UHT milk range were widened with the launch of Amul Taaza milk and Amul Fresh Cream. The company strengthened its presence in the fresh milk segment with brands like Amul Gold, Amul Smart and Amul Shakti. In November 2000, the Amul Cheese range was extended with the launch of Amul Paneer and Amul Pizza Cheese. In 2001, GCMMF entered the curd segment with plain curd- Amul curd, and sweetened curd, Amul Mishti Doi. In 2002, 15 per cent of GCMMF's revenues came from value-added offerings like long life milk, ice cream, curd, and gulab jamuns. In May 2001, frozen pizzas under the Snocap brand were launched. The federation ventured into soups in May 2003. The ready to drink soups, launched in one-litre tetra packs, received a lukewarm response. The initial enthusiasm for frozen pizzas in the first few months, did not translate into demand. By 2002, Amul officials were also admitting that frozen pizzas had not met with anticipated success.

Butter

Launched in 1955, butter was one of the first milk products offered by Amul. It was also the first time Amul successfully challenged the hegemony of an established brand. Amuls earliest competitor, Polson had been the monopoly milk supplier to the Bombay Milk Scheme. Amul displaced Polson to emerge as the undisputed leader in the butter market. Amuls market share was not disturbed even when rival cooperatives and private companies entered the table butter market in the 1960s. A number of multinationals entered the dairy sector when it was liberalized in 1991. Britannia, Le Bon, Dabon and Hi-Life were some of Amuls competitors in the segment. To steal a march on competition, Amul launched low fat Amul Lite Bread Spread meant for the weight conscious people. Amul Butter continued to remain the market leader with 86 % market share in 2003. In 2001, Amul launched Amul cooking butter targeted at the South Indian market where people preferred to melt the butter in-house and make ghee.

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6 Cheese
GCMMF launched processed cheese in 1959 followed by cheese powder in the early 1970s. In the 1980s the popularity of cheese increased. Amul launched Amul Cheese Spread, a form of bread spread, which was an instant success. The liberalization of the dairy industry in 1991 saw multinationals like Britannia, Le Bon, Dabon and Hi-Life enter the cheese market. To make its presence felt, Britannia resorted to aggressive marketing. It beat Amul to launch cheese slices that promised taste and convenience. The immense popularity of cheese singles saw Amul launching its own cheese slices in November 1997. Amuls monopoly in cheese was threatened with its market share reduced to 50 percent in 1999. To make up for the lost ground, GCMMF spruced up its supplies, adopted a new pack design for the brand with attractive graphics and trendy color schemes, and announced the launch of economical cheese packs (Rs 38 for a 200 gm cheese pack). It also decided to educate the consumers that the fat content in cheese was only 27%, a little higher than 23% in paneer. The Amul Cheese range was extended with the launch of Amul Paneer (cottage cheese), Amul Emmental Cheese (Swiss cheese) and Amul Pizza Cheese (Mozerella cheese) in November 2000. Amul aimed at creating an institutional market for its mozerella cheese.

Ghee, Skimmed milk powder and Baby food

Milk and UHT Milk

Amul was the market leader in the Gujarat whole milk market with a 90% market share in 2002. Apart from supplying milk to parts of Maharashtra and Rajasthan, GCMMF also sold milk to the NDDB owned Mother Dairy in Delhi. The 1980s saw the launch of Amul ultra high temprature (UHT) milk in tetra pack. Treated at high temperature, the sterile, bacteria free milk required no refrigeration and could be consumed directly. The UHT milk range was widened with Amul Taaza milk and Amul Fresh Cream in the 1990s. Nestle entered the segment in the 1990s with Nestle Doodh but could not overtake Amul Taaza, which was the market leader with a 65% share of the Indian market in February 2004. As B M Vyas, managing director, Amul mentioned, Yes, Nestle was trying very hard to market its
6

Srivastava, Shuchi. A taste of Amul, Times Food Processing Journal, April/May 2003, pp.1-2.

In the baby food segment, Nestle was Amuls main competition. Amul launched Amulspray, its baby food brand in 1966. Though priced lower than Nestles Lactogen, Amulspray could not make a place for itself at the upper end of the market. Amul was the market leader with a 65% market share in the value for money segment of the baby food market in 20036. In the premium segment, Nestles Lactogen was the market leader with a 75% market share. The 1950s also saw Amul launching whole and skimmed milk powder, condensed milk, baby food, and cheese under the Amul brand name.

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Amul launched ghee (clarified butter) and skimmed milk powder in 1955. Amul Ghee was an instant success. The ghee business was fragmented, as it was cost effective to have the source of milk procurement closer to the demand centers. Realizing the prominence of regional brands in the saturated fats market, Amul decided to treat Sagar and Amul ghee as regional brands. With a 20% share in the ghee market, Amul decided to restrict its brands to Gujarat and Maharashtra, and promote them exclusively at the time of festivals.

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brand of long life milk (Nestle Doodh), but we beat them on sheer price and geographicallyspread manufacturing capacities.7 Amul Taaza was immensely popular in the overseas markets like Singapore, UAE, Australia and Hong Kong. Amul replaced its staid looking flavored milk brand, Amul Shakti with a new brand Amul Kool. This new milk drink, with a minimum shelf-life of 90 days at room temperature came in specially designed disposable glass bottles.

Pricing
Amuls philosophy had all along been to deliver value for money to its customers. Despite being priced economically, Amul maintained its product quality. Apart from tasting good and being good, the brand aimed at representing the highest hygiene standards. The value for money maxim also extended to addressing customer complaints. Amuls vision was to give the farmers the best price for their milk and the consumers the lowest price for the products they bought. Amul had used price as its main weapon to dislodge its first competitorPolson Butter, in the early 1960s. When government rules restricted the quantity of milk and butter Polson could produce, Polsons effective prices increased. This spelled the death knell for Polson. With its lower price, Amul became the undisputed leader in the butter category. Since then, Amul made it a point to keep its price as low as possible in all product categories. In the early 1990s, Britannia launched cheese slices, which were an instant success. To counter Britannias first mover advantage, Amul launched cheese slices priced below Britannias cheese slices, and recovered some of its lost market share. When Amul Launched Mithaimate in 1996, Nestles Milkmaid was the undisputed market leader. Again with its lower prices, Amul overtook Milkmaid, to drive its condensed milk brandMithaimate to market dominance, capturing a 30 % share of the market in the process. In the ice-cream category, Amuls aggressive pricing strategy nullified its late mover disadvantage and it managed to dislodge Hindustan Lever Limited (HLL), the market leader in the category. GCMMF launched Amul ice cream in 14 flavors in Gujarat and Bombay in the summer of 1996, at a price discount of 30 % relative to Kwality Walls. HLLs Kwality Walls brand was the leader in the Indian ice cream market since the early 1990s. In less than a year, Amul cornered a 35% share of the Gujarat ice cream market and a 30% share of the Bombay ice cream market. And, its ice cream distribution network covered 34% of India. In 2001, Amul was offering a 1.25-litre party pack for Rs 65 in the take away segment, whereas Kwality Walls charged the same for a 750 ml pack. Amul sold its 500 ml vanilla pack for Rs 35 against Rs 40 for a 400 ml pack of Kwality Walls. In 2001 summer, Amul launched a 180 ml Megabite cone for Rs 20 and positioned it against Kwality Walls Super Cornetto that was selling at Rs 30 for a 135 ml cone. Amuls ice cream sales doubled within a year, forcing HLL to lower prices. Kwality Walls share declined from 41.1% in 2001 to 34.8% in February 2002, even as Amuls share rose from 31.7% to 37.6% during the same period8. With its volumes halved in ice-cream market, HLL decided to
7 8

Dhobhal, Shailesh. The taste of Competition, Business Today, 30th September 2001, pp.44-50. A C Nielson ORG-MARG survey, 2002, www.blonnet.com, 5th April 2002.

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concentrate only on the premium segment in 2002. Kwality Walls also withdrew from smaller cities and mini metros and decided to restrict itself to the six metros of Mumbai, Delhi, Kolkata, Chennai, Bangalore, and Hyderabad. Having established itself as the undisputed leader in the value for money segment, Amul decided to enter the premium segment and launched its super premium ice creams Amul Utterly Delicious in 2004. Even in the premium segment, Amul offered greater variety at competitive prices. Despite the high profile and expensive promotions to salvage the situation, Amul gave HLL a run for its money in the ice cream sector. In 2004, Amul was the market leader in the ice-cream category with 32 % market share, while Kwality Walls had 8 % market share, and Vadilal and Mother Dairy had 7 % market shares each9. In some cases however, Amuls low pricing strategy had not worked. Nutramul, Amuls malted drink could not challenge Bournvita (Cadburys) dominance. Similarly, Amul Chocolate (2% market share in 2003) could not make any significant dent in Cadburys market share (70% in 2003), despite having a price advantage. In 2001, Amul launched pizzas under the SnoCap brand name in the Rs 20-25 range, 50% cheaper than those offered by Dominos, Pizza Hut and Nirulas, the main players in the metro markets. After the initial positive response, the pizzas were not very successful.

Distribution

Amul broke the annual business plan for each product town-by-town and distributor-bydistributor. Amul created more than 225 Amul Quality Circles for its wholesalers and distributors across the length and breadth of the country. GCMMFs wholesalers met every month in these quality circles and discussed ways of improving the distribution process and resolving distribution problems. Over 80 % of the distributors and 60% of the sales force visited GCMMFs plants in Anand in 2002-2003 as a part of Amul Yatra. Apart from encouraging quality initiatives, this also helped maintain a close relationship with the distributors and retailers. Incidentally, Amuls distributor margins were lower than that of the competition in all product categories. The distributors were encouraged to make money by selling higher volumes.
9

Mehta, Mona. Amul ice creams: GCMMF targets middle east HK, www.financialexpress.com, 13th April 2004. 10 Damodaran, Harish; Bhushan, Ratna. After pizzas, Amul plans foray into sugar, www.blonnet.com, 10th January 2003.

GCMMF occasionally flexed its distribution muscle either to make life tough for new entrants, or to push its new offerings10. When Nestle launched butter in the Delhi and Mumbai markets, it found that the refrigerators of the key retailers it had identified for the launch were overflowing with Amul Butter.

GCMMFs formidable distribution network comprised 300 stock keeping units, 46 sales offices, 3,000 distributors, 100,000 retailers with refrigerators, an 18,000-strong cold chain, and 500,000 non-refrigerated retail outlets. In addition, Amul entered direct retailing in 2002 and launched Utterly Delicious outlets in select metros. To handle products with shorter shelf life, it became important to shorten the distribution chain. After the introduction of information technology, Amul products were also available in Amul cyber stores where they could be ordered from anywhere around the world.

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Amul realized that availability was the key to winning the ice cream battle and its traditional distribution network was not geared for it. Thus, corner shops, local STD booths, local kirana shops, chemists, bakers with deep freezers were roped in. In addition to this, Amul concentrated on increasing the number of pushcarts11 in its distribution chain across the country to promote impulse purchase. When Amul launched frozen pizzas in 2001, it decided to retail the pizzas through its ice cream cold chain. After the initial positive response, the pizzas were not successful. Senior Amul officials attributed this to Amuls low distribution margin and lack of adequately trained retail staff.

Advertising and Sales Promotion

Over the years, Amuls advertising philosophy had been to be simple, fresh and innovative. The clean, emotion-based ads refrained from using hi-tech special effects, and aimed at maintaining the perfect balance between the traditional and the modern. According to FCB Ulka, Amul's main advertising agency, Amul was all about taste, in the context of needs, and emotions.12 The core theme of the Amul Butter campaign was to be subtle, spot on humourous and topical. Amul ads remained focused on the core theme even as they adjusted to changing times. When Amul Butter was launched in 1955, it had a staid and boring image. Sylvester daCunha, managing director of ASP, the agency that clinched the Amul account in 1966, introduced the Amul Butter girl. The Amul Butter account moved with Sylvester daCunha when he set up his own agency, daCunah Associates. In 1967, Sylvester decided to incorporate in the ads, a current topic relating to either film or politics or any other facet of life, and present it in a humourous fashion. The campaign, a caricature on the situation, carried a punch line in the form of a pun, mentioning the use of Amul butter in the chosen context. A mixture of Hindi and English was used to make the punch lines catchy. The mainstream audiences easily identified with the product. The Amul Butter girl was present in all the advertisements either as a mascot, or playing one of the characters in the spoof. All the ads ran with the captionAmul Butter--Utterly Butterly Delicious. The ads were displayed on hoardings at busy road intersections for 7 to 10 days and were then replaced by new Amul Butter campaigns. The creative team worked towards being spot on to the extent that they had two campaigns featuring the two finalists ready, on the night of a Wimbeldon Tennis tournament finals in 1985. Once the match was over on Sunday night (India time), the campaign featuring Boris Becker, the winner was put on the hoardings that very night so that Monday morning commuters could share a laugh almost immediately. In 1969, when Bombay first saw the beginning of the Hare Rama Hare Krishna movement, Amul came up with the clincher, Hurry Amul, Hurry Hurry. From the early 1970s, Amul began playing the role of a social observer. People looked forward to Amuls evocative humour. If the Naxalite movement was happening in Calcutta, Amul was there on the hoarding saying, Bread without Amul Butter, cholbe na cholbe na (wont do, wont do). If there was an Indian Airlines strike, the campaign was Indian Airlines wont fly without Amul Butter.
11 12

Mobile ice cream ven. Dhobhal, Shailesh. The taste of Competition, Business Today, 30th September 2001, pp.44-50.

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The ads had their share of controversies with womens groups and political parties protesting every once in a while. When the Amul girl was shown wearing a Gandhi cap, senior political leaders were very offended. During the Ganesh festival, the Amul ad Ganapati Bappa More Ghya (Lord Ganesh take more) upset Shiv Sena activists, who threatened to destroy the advertising agencys office. According to daCunah, the complete support and freedom given by Amuls management played an important part in the success of the campaign. The immense popularity of the utterly butterly delicious campaign ensured that the brand enjoyed a very high recall value. It also helped other Amul products. Thus, when cooperatives like Mehsana Dairy (which later merged with GCMMF) and Andhra Pradesh Dairy (modeled on GCMMF), entered the fray with competitively priced Sagar Butter and Vijaya butter in the 1960s, they did not offer any serious competition to Amul Butter. The popularity of the campaign was unabated even after 38 years. The campaign was headed for the Guinness Book of World Records as the longest running outdoor campaign. The ultimate compliment to the campaign came when a British company launched a brand of butter called Utterly Butterly. When Amul launched its milk chocolates in 1974, the advertising theme was, Amul - a gift for someone you love campaign on television as well as in the print media. The campaign caught the fancy of the consumers. The TV and the print ads showed a boy gifting an Amul chocolate to a girl, a husband gifting it to his wife, a grandchild gifting an Amul chocolate to her grandfather. Amul milk chocolates managed to significantly dent Cadburys market share after the campaign was aired. In 1997, the 50th anniversary of Indias independence, GCMMF asserted Amuls brand identity with an advertising campaign titled Amul: The Taste of India. Amuls association with Sardar Vallabhbhai Patel, an eminent Indian freedom fighter and a former deputy of Mahatma Gandhi, fuelled the nostalgia generated by the celebrations. It was also decided to make the campaign a common thread in all the Amul product advertisements. Ulka, the ad agency handling the Taste of India campaign observed that its strategy was to help Amul compete with every other dairy brand, whether cooperative or private. Amul spent close to 40 per cent of its annual advertising budget on the Taste of India campaign in 2001.

Looking Ahead

The liberalization of the dairy industry in 1991 had seen a number of multinational players like Britannia, Le Bon, Dabon and Hi-Life enter the sector. Analysts wondered whether a co-operative with limited financial means could stand up to the might of these MNCs, and if its low pricing strategy would continue to stay relevant. MNCs like Pizza Hut, Domino's, Hindustan Lever Limited and Cadbury had also become competitors. Amul had proved its detractors wrong and firmed up ambitious growth plans. Amul planned to increase its turnover to Rs 10,000 crore ($ 2.2 billion) within the next four to five years.13 Apart from increasing its presence with new product launches in the dairy sector, Amul had plans to enter other perishable categories like fruits and vegetables. It was planning to expand the distribution network for Amul ice-creams from 26,000 to 35,000 retail outlets and expand exclusive Amul Preferred Outlets from 110 to 600 across the country14. According to Kurien, the cooperative was not averse to buying over outfits or taking over hobbling food businesses in related areas, whether cooperative or in the private sector, and turning them around.15
13 14

Amul to treble growth in five years, www.blonnet.com, 13th July 2000. Mehta, Mona. Amul ice creams: GCMMF targets middle east HK, www.financialexpress.com, 13th April 2004. 15 Amul to treble growth in five years, www.blonnet.com, 13th July 2000.

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Amul was planning to set up 1000 Utterly Delicious outlets in the next five years16 and introduce home delivery of products from its outlets. Beside expanding its presence in urban and semi urban regions, the cooperative was finalizing plans to set up a Rs 400 million dairy plant in Manesar, Haryana. Amul was also planning to set up additional ice cream production facilities in North and South India. The cooperative had plans to add 5000 more retail outlets for its ice cream venture and become a Rs. 1000 crore ($ 220 million) ice-cream brand by the year 2010. In the words of Dr. Kurien: Based on the current population demographics and projections, we estimate that rural women will comprise 21% of Indias total population by 2020. Dairying is very important to our rural women, for many, it is their main source of employment and income. Population gives us one picture. The other is provided by the demand for household commodities. In India, the estimated consumption of milk is 153 mmt by 2010 and 271 mmt by 2020. Our commitment to the producer and our contract with the consumer is the reason we are confident that cooperative brands, like Amul, will have an even bigger role to play in the next fifty years17.

16

Kaushik, Neha. Amul plans 1000 Utterly Delicious outlets in five years, www.blonnet.com, 6th June 2003. 17 www.india-seminar.com, 2001.

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12 Exhibit II The Anand Cooperative Model

Source: www.nddb.org

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13 Exhibit III Gujarat Cooperative Milk Marketing Federation (GCMMF): An Overview

Members: No. of Producer Members: No. of Village Societies: Total Milk handling capacity: Milk collection (Total - 2002-03): Milk collection (Daily Average 2002-03): Milk Drying Capacity: Cattlefeed manufacturing Capacity: Source: www.amul.com 12 district cooperative milk producers' Union 2.28 million 11,132 6.7 million litres per day 1.86 billion litres 5.08 million litres 510 metric Tons per day 1450 Mts per day

Year 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03

Rs (million) 11140 13790 15540 18840 22192 22185 22588 23365 27457

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Source: www.amul.com

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355 400 450 455 493 493 500 500 575

Exhibit IV GCMMF - Sales Turnover

US $ (in million)

14 Exhibit V Amuls product profile

Cartegories butter Products Amul Butter Amul Lite Amul cooking butter Amul Processed Cheese Amul Cheese Spread Amul Cheese Slices Amul Paneer Amul Mozzarella Cheese (Pizza Cheese) Amul Emmental Cheese (Swiss Cheese) Infant milk food Whole milkpowder Dairy whitener Skim milk powder Ice cream ghee Ethnic sweet Amulspray Amul Amulya Sagar Amul ice-cream Year of launch 1955 1994 2001 1959 1983 1997 2000 2000 2000 1966 1955 1983 1955 Market position 1 1 1 1 1 Running neck to neck with Britannia 1

Cheese

C
1996 1955 1982 1998 1974 2003 1996 1976

chocolates

Malted milkfood Source: GCMMF.

Condensed milk

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Nutramul

Amul Chocolate Amul Chef (cooking chocolate) Amul Mithaimate

Amul Shrikhand Amul Gulabjamun

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Amul Ghee, Sagar Ghee

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1 1 1 1 1- in the regional market 1 3 1 1 4

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15 Exhibit VI List of Products Marketed by Amul

Breadspreads: Amul Butter Amul Lite Low Fat Breadspread Amul Cooking Butter

Cheese Range: Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Frozen and Tinned Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

Amul Taaza 3% fat Milk Amul Gold 4.5% fat Milk Amul Slim-n-Trim 0% fat milk Amul Chocolate Milk Amul Fresh Cream Amul Snowcap Softy Mix Amul Taaza Double Toned Milk

Pure Ghee: Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee

Infant Milk Range: Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food

UHT Milk Range:

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Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix

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Milk Powders: Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener

Sweetened Condensed Milk: Amul Mithaimate Sweetened Condensed Milk

Fresh Milk: Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 3% fat Amul Smart Double Toned Milk 1.5% fat

Amul Icecreams:

Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti) Nut-o-Mania Range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival, Badshahi Badam Kulfi, Shista Pista Kulfi) Utsav Range (Anjir, Roasted Almond) Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate) Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black Currant) Sundae Range (Mango, Black Currant, Chocolate, Strawberry) Millennium Icecream (Cheese with Almonds, Dates with Honey) Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi, Shahi Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi) Cool Candies (Orange, Mango) Cassatta Tricone Cones (Butterscotch, Chocolate) Megabite Almond Cone Frostik - 3 layer chocolate Bar Fundoo Range - exclusively for kids SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango, Pineapple) Health : Isabcool

Chocolate & Confectionery: Amul Milk Chocolate Amul Fruit & Nut Chocolate Amul Eclairs

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Amul Masti Dahi (fresh curd) Amul Butter Milk Amul Lassee

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Curd Products:

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Brown Beverage: Nutramul Malted Milk Food

Milk Drink: Amul Shakti Flavoured Milk

Ready to Serve Soups: Masti Tomato Soup

Source: www.amul.com

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18 Figure (i) Amul Product Profile Bread Spreads Amul Butter Amul Lite The Low at Fat Bread Spread

Powder Milk

Amulya Dairy Whitener

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Amul Spray

Amul Instant Full Cream Milk Powder

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Fresh Milk Amul Fresh Milk . Amul Gold Milk

Amul Taaza

Amul Slim and Trim Milk

Fresh Cream

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Chocolate Milk

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Flavoured Milk

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20 Cheese Amul Pasteurised Processed Cheese Amul Cheese Spreads

Amul Emmental Cheese Swiss Cheese

Amul Pizza Mozzarella Cheese Pizza

For Cooking Amul Pure Ghee

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Amul Paneer

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Utterly Delicious Pizza

Mithai Mate Sweetened Condensed Milk

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Cooking Butter Masti Dahi

21 Masti Soups

Desserts Amul Ice Creams Amul Shrikhand

Kulfi Mix

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Healthy Drink Nutramul
Source: www.amul.com

Amul Mithaee Gulab Jamuns

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Gulab Jamun Mix Amul Chocolates The perfect gift for someone you love.

22 Figure (ii) Amul Topicals

"On the success of the series, "Harry Potter" - August 2000.

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MILLENNIYUM Happy 2000.

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On Wimbledon Champions 2004: Men's Singles winner-Switzerland's Roger Federer & Women's Single winner-Russian Maria Sharapova - July'04.

23

2001 2002: Taliban regime fleeing from Kabul.

2001 2002: On the film "The Lord of the Rings".

D
1994-1995: World Cup (football) hosted by the United States of America. Source: www.amul.com

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24 Figure (iii) The Amul Butter girl

Source: www.amul.com

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25

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1. Joglekar, Shilpa. Amul set to swallow co-operative brands, www.financialexpress.com. 29th December 1998. 2. The Amul Saga, www.indiaseminar.com, 2001. 3. Amul to treble growth in five years, www.blonnet.com, 13th July 2000. 4. Vasan, Vimala. Amul to expand presence in Gulf, www.blonnet.com, 31st August 2000. 5. Damodaran, Harish. SnoCap pizzas from Amul stable part of strategy to double cheese sales, www.blonnet.com, 19th July 2001. 6. Dhobhal, Shailesh. Taste of competition, Business Today, 30th September 2001, pp. 44-50. 7. Shukla, Seema. How Milk and Poppadum showed the way, www.business-today.com, 19th

8. Damodaran, Harish; Bhushan, Ratna. Amul utterly keen on creaming Hind Lever, The www.blonnet.com, 5th April 2002. 9. Vasan, Vimala. Amul finds cream in gulf market, www.blonnet.com, 3rd July 2002. 10. Amul New Products, www.blonnet.com, 13th November 2002. www.blonnet.com, 10th January 2003.

pp.1-2.

14. Kaushik, Neha. Amul plans 1000 Utterly Delicious outlets in five years, www.blonnet.com, 6th June 2003. 15. Kaushik, Neha. Amul launches cooking chocolate, www.blonnet.com, 20th June 2003. 16. Doodh se soup tak, www.deccanherald.com, 23rd June 2003. 17. Mathew, Vinod. Amul Shakti set for image makeover --- To fill Dharas shelf space, www.blonnet.com, 4th August 2003. 18. Chakravarty, Chaitali. Amul plans to milk Delhi market, www.timesofindia.indiatimes.com, 3rd November 2003. 19. Kaul, Pummy. Amul makes a new pitch targeting youth, www.agencyfaqs.com, 15th December 2003. 20. Roy, Paulomi. Amul vs HLL: A Premium lick, www.business-standard.com, 20th March 2004.

13. Bhatnagar, Mohini. Amul focuses on ice creams, www.domain-b.com, 2nd May 2003.

12. Srivastava, Shuchi. A taste of Amul, Times Food Processing Journal, April-May 2003,

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11. Damodaran, Harish; Bhushan, Ratna. After pizzas, Amul plans foray into sugar,

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January 2003.

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21. Mehta, Mona. Amul ice creams: GCMMF targets middle east HK,

www.financialexpress.com, 13th April 2004. 22. Sharon, Meghdoot. GCMMF ups milk film unit capacity, www.business-standard.com, 24th April 2004. 23. Sharon, Meghdoot. Amul
th

plans

ice

cream

unit

in

Delhi

in

year,

www.businesstandard.com, 28 April 2004. 24. Ray, Joydeep. Amul goods to travel to Pakistan, www.business-standard.com, 12th May 2004. 25. Amul to focus on long-life milk brand Taaza, www.business-standard.com, 18th May 2004. 26. At 40, Amul products to sport a young look, www.business-standard.com, 10th June 2004. 27. Sharon, Meghdoot. Amul gives packaging contract to US firm, www.business28. Amul to hit big in export route, www.timesofindia.indiatimes.com, 1st July 2004. 29. www.amul.com 30. www.nddb.org 31. www.ssdairy.com standard.com, 16th June 2004.

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