INTRODUCTION

THE BRAND AMUL

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word
amul (

) is derived from the Sanskrit word amulya (

), meaning invaluable. The

co-operative is sometimes referred to as Anand Milk Union Limited.

Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3 million milk
producers in Gujarat.
Amul spurred India's White Revolution, which made the country the world's largest producer
of milk and milk products. In the process Amul became the largest food brand in India and
became the world's largest vegetarian cheese and has ventured into markets overseas.
The Gujarat Co-operative Milk Marketing Federation Ltd. that is GCMMF (AMUL) has the
largest distribution network for any FMCG company. It has nearly 50 sales offices spread all
over the country, more than 5000 wholesale dealers and more than 700000 retailers.
In September 2007, Amul emerged as the leading Indian brand according to a survey by
Synovate to find out Asia's top 1000 Brands. In 2013, Amul was named the Most Trusted
brand in the Food and Beverages sector in The Brand Trust Report, published by Trust
Research Advisory.
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I have chosen this topic as Amul is one of the leading brands in the milk products. It gives us
curiosity to know what tactics and major strategies Amul adopts to gain its position in the
market.

COMPANY INFORMATION
The GCMMF is the largest food products marketing organisation of India. It is the apex
organisation of the dairy cooperatives of Gujarat. Over the last five and a half decades, dairy
cooperatives in Gujarat have created an economic network that links more than 3.1 million
village milk producers with millions of consumers in India. The cooperatives collect on an
average 9.4 million liters of milk per day from their producer members, more than 70% of
whom are small, marginal farmers and landless labourers and include a sizeable population of
tribal folk and people belonging to the scheduled.
The turnover of GCMMF (AMUL) during 201011 was 97.74 billion (US$1.5 billion). It
markets the products, produced by the district milk unions in 30 dairy plants. The farmers of
Gujarat own the largest state of the art dairy plant in Asia Mother Dairy, Gandhinagar,
Gujarat which can handle 3.0 million litres of milk and process 160 MTs of milk powder
daily.
On 18 August 2012, Vipul Chaudhary of Mehsana district's milk cooperative was elected
chairman of GCMMF, following a court's intervention.

MISSION
As we take strides towards our future, we need a mission which create an objective for our
organization so that we can direct our efforts in order to achieve organizational growth, this
mission must be backed up by a set of action plans which may help us in achieving our
objectives in a best possible manner Amul has prepared a comprehensive roadmap in order to
guide that the dairy cooperatives of Gujarat to have a group turnover of Rs. 27000 crores by
the year 2020. The company is planning on its expansion and through expansion the company
will create fresh avenues for growth by catering to the rising demand for new products, this
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would include increasing the capacity for major product categories including milk powders,
Ice-cream, paneer, cheese, curd, ghee and other dairy products. Milk drying capacity will also
be enhanced. in order to to strengthen the presence of company in the large market, for liquid
milk Special emphasis will be given to metropolitan cities.The company is planning to double
its processing capacity of its plants to 20.7 million kg per day.The basic raw material of Amul
products is milk and for increasing milk production nutritious feed should be provided to
animals. For this very purpose the company is planning to expand its cattlefeed
manufacturing capacity by 2020. Amul's achievement of its mission will not only be
beneficial for the organization but it will be helpful for the development of economy as a
whole.

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OBJECTIVES OF THE STUDY

To know about the brand Amul and its organizational structure.

To know about the Amul Products being marketed.

To know the marketing strategies adopted by Amul.

To know the product promotion strategy of Amul its characteristics, reasons for the
growth of product promotion, advantages, disadvantages, objectives and the push and
pull strategy.

To know the Amuls marketing mix and its competitors product mix,

To know the product portfolio of Amul, SWOT analysis, BCG matrix of Amul
products, Porters 5 Forces Model, the supply chain and the three tier Amul model.

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DESIGN OF STUDY
Primary data:
Primary data are first hand informations. These informations are collected directly from the
source by means of field studies. Primary data are original and are like raw materials. It is the
most crude form of information. The investigator himself collects primary data or supervises
its collection. It may be collected on a sample or census basis or from case studies.
In this project there is no primary data collected.
Secondary data:
Secondary data are the Second hand informations. The data which have already been
collected and processed by some agency or persons and are not used for the first time are
termed as secondary data. According to M. M. Blair, Secondary data are those already in
existence and which have been collected for some other purpose. Secondary data may be
abstracted from existing records, published sources or unpublished sources.
Internal data sources
Internal secondary data are existing data generated by the firm for example, accounting
reports and reports of previous research projects. Internal secondary data provide valuable
performance evaluation information and serve as a foundation for future research efforts. The
main advantages of internal secondary data are their accessibility and low costs and the ease
with which they can be incorporated into most research projects.
External data sources
External secondary data are data generated by a source other than the firm. Major types
include: Periodicals, government data, private research organization and internet search
engines. In this study all the secondary data is collected from external data source.

OVERVIEW OF THE COMPANY

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BRIEF HISTORY
Amul the co-operative registered on 1 December 1946 as a response to the exploitation of
marginal milk producers by traders or agents of the only existing dairy, the Polson dairy, in
the small city distances to deliver milk, which often went sour in summer, to Polson. The
prices of milk were arbitrarily determined. Moreover, the government had given monopoly
rights to Polson to collect milk from Anand and supply it to Bombay city.
Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai
Patel under the leadership of local farmer leader Tribhuvandas K. Patel. He advised them to
form a cooperative and supply milk directly to the Bombay Milk Scheme instead of Polson
(who did the same but gave them low prices). He sent Morarji Desai to organise the farmers.
In 1946, the milk farmers of the area went on a strike which led to the setting up of the
cooperative to collect and process milk. Milk collection was decentralized, as most producers
were marginal farmers who could deliver, at most, 12 litres of milk per day. Cooperatives
were formed for each village, too.
The cooperative was further developed and managed by Dr.Verghese Kurien with H.M.
Dalaya. Dalaya's innovation of making skim milk powder from buffalo milk (for the first
time in the world) and a little later, with Kurien's help, making it on a commercial scale, led
to the first modern dairy of the cooperative at Anand, which would compete against
established players in the market.
The trio's (T. K. Patel, Kurien and Dalaya's) success at the cooperative's dairy soon spread to
Anand's neighbourhood in Gujarat. Within a short span, five unions in other districts
Mehsana, Banaskantha, Baroda, Sabarkantha and Surat were set up. To combine forces
and expand the market while saving on advertising and avoid competing against each other,
the GCMMF, an apex marketing body of these district cooperatives, was set up in 1973. The
Kaira Union, which had the brand name Amul with it since 1955, transferred it to GCMMF.
In June 2013, it was reported that the Kaira District Cooperative Milk Producers Union
Limited, better known as Amul Dairy, had signed a tripartite agreement to start a dairy plant
in Waterloo village in upstate New York. The plant will initially manufacture paneer and
ghee. Amul will use an existing dairy plant owned by New Jersey-based NRI Piyush Patel for
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manufacturing. The plant is strategically located, as it close to supply centres from where raw
material is procured, and is near New Jersey, which has a large Indian population.
Amul said that it will be able to produce and supply Amul products in the US as well as
Canada and export it to Europe, under the arrangement.
Adding to the success, Dr. Madan Mohan Kashyap (faculty Agricultural and Engineering
Department, Punjab Agricultural University Ludhiana), Dr. Bondurant (visiting faculty) and
Dr Feryll (former student of Dr Verghese Kurien), visited the Amul factory in Gujarat as a
research team headed by Dr. Bheemsen. Shivdayal Pathak (ex-director of the Sardar Patel
Renewable Energy Research Institute) in the 1960s. A milk pasteurization system at the
Research Centre of Punjab Agricultural University (PAU) Ludhiana was then formed under
the guidance of Kashyap.

THE EXTRAORDINARY STORY OF AMUL

Every day Amul collects 447,000 litres of milk from 2.12 million farmers (many illiterate),
converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs
60 million) to over 500,000 retail outlets across the country. Its supply chain is easily one of
the most complicated in the world. How do managers at Amul prevent the milk from souring?

Walk in to any Amul or Gujarat Cooperative Milk Marketing Federation (GCMMF)office,

and you may or may not see a photograph of Mahatma Gandhi, but you will certainly see one
particular photograph. It shows a long line of Gujarati women waiting patiently for a union
truck to come and collect the milk they have brought in shining brass matkas. The picture is
always prominently displayed. The message is clear: never forget your primary customer. If
you don't, success is certain. The proof? A unique, Rs 2,200 crore.

ORGANISATION STRUCTURE
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It all started in December 1946 with a group of farmers keen to free themselves from
intermediaries, gain access to markets and thereby ensure maximum returns for their efforts.

Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as
Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat
network now covers 2.12 million farmers, 10,411 village level milk collection centers and
fourteen district level plants (unions) under the overall supervision of GCMMF.
There are similar federations in other states. Right from the beginning, there was recognition
that this initiative would directly benefit and transform small farmers and contribute to the
development of society.

Markets, then and even today, are primitive and poor in infrastructure. Amul and GCMMF
acknowledged that development and growth could not be left to market forces and that
proactive intervention was required. Two key requirements were identified. The first, that
sustained growth for the long term would depend on matching supply and demand. It would
need heavy investment in the simultaneous development of suppliers and consumers.

Second, that effective management of the network and commercial viability would require
professional managers and technocrats.

To implement their vision while retaining their focus on farmers, a hierarchical network of
cooperatives was developed, which today forms the robust supply chain behindGCMMF's
endeavors.

The vast and complex supply chain stretches from small suppliers to large fragmented
markets. Management of this network is made more complex by the fact that GCMMF is
directly responsible only for a small part of the chain, with a number of third party players
(distributors, retailers and logistics support providers) playing large roles. Managing this
supply chain efficiently is critical as GCMMF's competitive position is driven by low
consumer prices supported by a low cost system.

Organization Structure is divided into two parts:

External Organization Structure
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Internal Organization Structure

External Organization Structure :

External Organization Structure is the organization structure that affects the organizationfrom
the out side.
State Level Marketing Federation

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

Villagers

As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a cooperativeorganization. The villagers of more than 10000 villages of Gujarat are the bases of
this structure.They all make village milk producers union, district level milk producers union
and then a state levelmarketing federation is established. The structure is line relationship,
which provides easy way tooperation. It also provides better communication between two
stages.

Internal Organization Structure:

The following is internal organisation chart of Amul
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Organization Structure Chart

Chairman

Managing Director

General Manager

Ass. General Manager

Finance

Production

Marketing

Sales & Purchase

Personnel

Dept.

Dept.

Dept.

Dept.

Dept.

Senior

Senior

Senior

Senior

Senior

Manager

Manager

Manager

Manager

Manager

Finance

Production

Marketing

Manager

Manager

Manager

Manager

Manager

Accountant

Officer

Marketing

Officer

P.R.F.

Sales

Personnel

Executive

Officers

Supervisor

F.S.R.

Salesmen

Executive

PRODUCTS

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Amul's product range includes milk powders, milk, butter, ghee, cheese, Masti Dahi,
Yoghurt, Buttermilk, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured
milk, basundi, Amul Pro brand and others. Amul PRO is a recently launched brown beverage
just like bournevita and horlicks offering whey protein, DHA and essential nutrients. In
January 2006, Amul launched India's first sports drink, Stamina, which competes with Coca
Cola's Powerade and PepsiCo's Gatorade.
Amul offers mithaimate which competes with Milkmaid by Nestle by offering more fat at
lower price. In August 2007, Amul introduced Kool Koko, a chocolate milk brand extending
its product offering in the milk products segment. Other Amul brands are Amul Kool, a lowcalorie thirst quenching drink; Masti Butter Milk; and Kool Cafe, ready to drink coffee.
Amul's icecreams are made from milk fat and thus are icecreams in real sense of the word,
while many brands in India sell frozen desserts made from vegetable fat.
Amul's sugar-free Pro-Biotic Ice-cream won The International Dairy Federation Marketing
Award for 2007.

LIST OF PRODUCTS MARKETED:

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)

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Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

Amul Amrakhand

Amul Mithaee Gulabjamuns

Amul Mithaee Gulabjamun Mix

Amul Mithaee Kulfi Mix

Avsar Ladoos

UHT Milk Range:

Amul Shakti 3% fat Milk

Amul Taaza 1.5% fat Milk

Amul Gold 4.5% fat Milk

Amul Lite Slim-n-Trim Milk 0% fat milk

Amul Shakti Toned Milk

Amul Fresh Cream

Amul Snowcap Softy Mix

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

Milk Powders:

Amul Full Cream Milk Powder

Amulya Dairy Whitener

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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 4.5% fat

Amul Slim & Trim Double Toned Milk 1.5% fat

Amul Saathi Skimmed Milk 0% fat

Amul Cow Milk

Curd Products:

Amul Flaavyo Yoghurt

Amul Masti Dahi (fresh curd)

Amul Masti Spiced Butter Milk

Amul Lassee

Amul Icecreams:

Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi)

Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted
Almond)

Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black
Currant, Santra Mantra, Fresh Pineapple)

Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae)

Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch,

Megabite, Cassatta)

Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic)

Chocolate & Confectionery:

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Amul Milk Chocolate

Amul Fruit & Nut Chocolate

Brown Beverage:

Nutramul Malted Milk Food

Milk Drink:

Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose,

Chocolate)

Amul Kool Cafe

Amul Kool Koko

Amul Kool Millk Shaake (Mango, Strawberry, Badam, Banana)

AMUL BRAND BASKET

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Brand Amul owned and managed by Gujarat Cooperative Milk Marketing Federation
(GCCMF) has 123 brands listed under its name. Liquid milk however contributes to 40% of
the Amuls revenues.

MARKET SHARE
The brand positions itself as a brand of both masses and classes, unlike competitors like
Nestle. Gujarat Co-operative Milk Marketing Federation (GCMMF), owners of Amul brand
of milk and dairy products, posted sales of Rs 11,670 crore for the year ended March 2012,
almost 55% more than Nestle Indias Rs 7,541-crore sales.
Amul owns 85 percent share in butter market and 75 percent in cheese share market. It may
be mentioned here that Amul is the market leader in Rs 600 crore cheese market in India with
65-66% share. It also has 88% market share in butter, 63% share in infant milk and 45%
market share in dairy whitener. Amul also enjoys a 26% share in the 25,000-crore packaged
milk market.
With expected growth rate of 20 percent, 12% growth rate can be attributed to price rise and
another 8 percent to rise in demand for dairy products.
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AMUL BRAND BUILDING

GCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly
50 sales offices spread all over the country, more than 5,000 wholesale dealers and more than
7,00,000 retailers.

AMUL is also the largest exporter of dairy products in the country. AMUL is available today
in over 40 countries of the world. AMUL is exporting a wide variety of products which
include Whole and Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk, Clarified
Butter (Ghee) and Indigenous Sweets. The major markets are USA, West Indies, and
countries in Africa, the Gulf Region, and SAARC neighbors, Singapore, The Philippines,
Thailand, Japan and China.

In September 2007, Amul emerged as the leading Indian brand according to a survey by
Synovate to find out Asia's top 1000 Brands.

In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector in The
Brand Trust Report, published by Trust Research Advisory.

AMUL INTERNATIONAL MARKET

The Gujarat Cooperative Milk Marketing Federation (GCMMF), the country's largest milk
marketing federation, had a turnover of Rs 5,255 crore during 2007-08 and this would grow
to Rs 6,000 by the end of this fiscal. The largest milk brand in Asia, today Amul is the largest
exporter of dairy products in the country. Amul is today available in over 40 countries. It is
exporting a wide variety of products. The major markets are the US, West Indies, countries in
Africa, the Gulf region, the Saarc neighbours, Singapore, the Philippines, Thailand, Japan and
China, according to B M Vyas, managing director, GCMMF. In an interview to Financial
Express, Vyas said, "We have demonstrated that if a level-playing field is provided, Indian
dairy products are successful in the global market. Growth in consumer pack exports has
been
creditable
and
we
have
consolidated
our
exports."
From conventional milk products like paneer and cheese, the brand has evolved over over
time and now caters to the wellness market as well with its sugar-free and probiotic milk
products. According to Vyas, the company is continuously introducing innovative products
that meet the aspirational needs of the consumers. Amul has introduced a range of milk-based
products such as flavoured milk, buttermilk, yoghurt, probiotic products and energy drinks.

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"Although if you analyse the household expenditure of Indian homes, the bulk of the money
is spent on milk and products like butter, ghee, cheese, and a very small amount on items like
ice creams and pizzas. However, it is important for us to register our presence in the entire
food basket of the Indian household where and dairy product is involved. Our recent forays
into pizzas, paranthas is through our Amul parlours, which are one-stop shops for all our
products. We have plans for creating a large chain of such outlets to be managed mainly by
franchisees throughout the country. Currently, we have 1,500 parlours and plan to open
10,000
of
them
by
2010,"
Vyas
said.
Amul liquid milk contributes as much as Rs 2,000 crore to GCMMF's sales. Apart from this,
direct sale by District Cooperative Milk Producers Unions accounts for another Rs 1,500
crore. With the introduction of pouch milk in towns like Jaipur, Kanpur, Lucknow, Bhopal
and Pune, besides the metros of Delhi, Kolkata and Mumbai, Amul liquid milk has crossed
the
boundaries
of
Gujarat.
During 2007, the 13-member unions of GCMMF took a revolutionary step forward by
integrating liquid milk marketing operations in all districts of Gujarat under the common
brand name of Amul. Consequently, Amul has now emerged as the largest milk brand in
Asia.
Amul is an institution covering 13,000 villages benefiting 2.7 million farmers. "We would
want this coverage to expand further with more farmers to join the Amul umbrella nationally.
Coming to business, we would be handling more than twice the quantity of milk and our sales
turnover would be nearly Rs 20,000 crore in the next five years."
India is a developing country. Therefore, the focus is India. However, if there was a need to
export in order to attain equilibrium in the domestic market, it would be under Amul brand in
consumer packs only and that too to cater to the Taste of India.
"India is the largest milk producer in the world and GMCCF is the largest food products
marketing organisation in India. We are confident that Amul would emerge as the world's
largest food products organisation in the not too distant future," Vyas said.

AMUL MARKETING STRATEGY

AMULs business strategy is driven by its twin objectives of
(I)

long-term, sustainable growth to its member farmers, and

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(II)

Value proposition to a large customer base by providing milk and other dairy
products a low price. Its strategy, which evolved over time, comprises of elements
described below.

Simultaneous Development of Suppliers and Customers:

From the very early stages of the formation of AMUL, the cooperative realized that sustained
growth for the long-term was contingent on matching supply and demand. Further, given the
primitive state of the market and the suppliers of milk, their development in a synchronous
manner was critical for the continued growth of the industry.

The organization also recognized that in view of the poor infrastructure in India, such
development could not be left to market forces and proactive interventions were required.
Accordingly, AMUL and GCMMF adopted a number of strategies to assure such growth. For
example, at the time AMUL was formed, the vast majority of consumers had limited
purchasing power and was value conscious with very low levels of consumption of milk and
other dairy products.

Thus, AMUL adopted a low price strategy to make their products affordable and guarantee
value to the consumer. The success of this strategy is well recognized and remains the main
plank of AMUL's strategy even today. The choice of product mix and the sequence in which
AMUL introduced its products is consistent with this philosophy. Beginning with liquid milk,
the product mix was enhanced slowly by progressive addition of higher value products while
maintaining desired growth in existing products.

Even today, while competing in the market for high value dairy products, GCMMF ensures
that adequate supplies of low value products are maintained. On the supply side, as
mentioned earlier, the member-suppliers were typically small and marginal- farmers had
severe liquidity problems, were illiterate and had no prior training in dairy farming. AMUL
and other cooperative Unions adopted a number of strategies to develop the supply of milk
and assure steady growth. First, for the short term, the procurement prices were set so as to
provide fair and reasonable return.

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Second, aware of the liquidity problems, cash payments for milk supply was made with
minimum of delay. For the long-term, the Unions followed a multi-pronged strategy
of education and support. For example, only part of the surplus generated by the Unions is
paid to the members in the form of dividends. A substantial part of this surplus is used for
activities that promote growth of milk supply and improve yields. These include provision of
veterinary services, support for cold storage facilities at the village societies etc. In parallel,
the Unions have put in place a number of initiatives to help educate the members.

To summarize, the dual strategy of simultaneous development of the market and member
farmers has resulted in parallel growth of demand and supply at a steady pace and in turn
assured the growth of the industry over an extended period of time.

Cost Leadership:
AMULs objective of providing a value proposition to a large customer base led

naturally to a choice of cost leadership position. Given the low purchasing power of the
Indian consumer and the marginal discretionary spending power, the only viable option for
AMUL was to price its products as low as possible. This in turn led to a focus on costs and
had significant implications for managing its operations and supply chain practices (described
later).

Focus on Core Activities:

In view of its small beginnings and limited resources, it became clear fairly early that

AMUL would not be in a position to be an integrated player from milk production to delivery
to the consumer. Accordingly, it chose a strategy to focus on core dairy activities and rely on
third parties for other complementary needs. This philosophy is reflected in almost all phases
of AMUL network spanning R&D, production, collection, processing, marketing,
distribution, retailing etc.

For example, AMUL focused on processing of liquid milk and conversion to variety of dairy
products and associated research and development. On the other hand, logistics of milk
collection and distribution of products to customers was managed through third parties.

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However, it played a proactive role in making support services available to its members
wherever it found that markets for such services were not developed. For example, in the
initial stages, its small and marginal member farmers did not have access to finance,
veterinary service, knowledge of basic animal husbandry etc.

Thus to assure continued growth in milk production and supply, AMUL actively sought and
worked with partners to provide these required services. In cases where such partnerships
could not be established, AMUL developed the necessary capabilities and provided the
services. These aspects are elaborated later in this section.

Managing Third Party Service Providers:

Well before the ideas of core competence and the role of third parties in managing the

supply chain were recognized and became fashionable, these concepts were practiced by
GCMMF and AMUL. From the beginning, it was recognized that the core activity for the
Unions lay in processing of milk and production of dairy products. Accordingly, the Unions
focused efforts on these activities and related technology development. Marketing efforts
(including brand development)were assumed by GCMMF. All other activities were entrusted
to third party service providers. These include logistics of milk collection, distribution of
dairy products, sale of products through dealers and retail stores, some veterinary services
etc. It is worth noting that a number of these third parties are not in the organized sector, and
many are not professionally managed.

Hence, while third parties perform the activities, the Unions and GCMMF have developed a
number of mechanisms to retain control and assure quality and timely deliveries (see the subsection on Coordination for Competitiveness later in the paper for more details). This is
particularly critical for a perishable product such as liquid milk.

Financial Strategy:
AMULs finance strategy is driven primarily by its desire to be self

-reliant and thus depend on internally generated resources for funding its growth and
development. This choice was motivated by the relatively underdeveloped financial markets
with limited access to funds, and the reluctance to depend on Government support and thus
be obliged to cede control to bureaucracy.

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AMULs financial strategy may thus be characterized by two elements:

(a) Retention of surplus to fund growth and development, and
(b) Limited/ no credit, i.e., all transactions are essentially cash only.

For example, payment for milk procured by village societies is in cash and within 12hours of
procurement (most, however, pay at the same time as the receipt of milk).Similarly, no
dispatches of finished products are made without advance payment from distributors etc. This
was particularly important, given the limited liquidity position of farmer/suppliers and the
absence of banking facilities in rural India.

GCMMF is the marketing arm of the network and manages the physical delivery and
distribution of milk and dairy products from all the Unions to customers. GCMMF is also
responsible for all decisions related to market development and customer management. These
activities, which range from long-term planning to medium-term and short-term operational
decisions are described below.

As mentioned earlier, introduction of new products and choice of product mix and markets
should be consistent with the growth strategy, and synchronous with growth in milk supply.
GCMMFs demand growth strategy may be characterized by two key elements:
(i)

developing markets for its high value products by graduating customer segments
from low value products, and

(ii)

Maintaining a healthy level of customer base for its base products (low value
segment). This strategy often requires GCMMF to allocate sufficient quantity of
milk supply to low value products, thereby sacrificing additional profits that could
be generated by converting the same to high value products.

Interestingly, advertisement & promotion (a la FMCG) was not considered to be enough of

value addition and hence the budget was kept relatively small. Instead, GCMMF preferred a
lower price with emphasis on efficiency in advertising. In this context, GCMMF provides
umbrella branding to all the products of the network. For example, liquid milk as well as
various milk products produced by different Unions is sold under the same brand name of
AMUL. Interestingly, the advertising has centered on building a common identity (e.g., a

Page 21

happy & healthy cartoon AMUL girl) and evoking national emotion (e.g., the key
advertising slogan says AMUL - The Taste of India).

GCMMF also plays a key role in working with the Unions to coordinate the supply of milk
and dairy products. In essence, it procures from multiple production plants (the thirteen
Unions), which in turn procure from the Village Societies registered with each Union.
GCMMF distributes its products through third party distribution depots that are managed by
distributors who are exclusive to GCMMF. These distributors are also responsible for
servicing retail outlets all over the country. GCMMF sales staff manages this process.
Retailing of GCMMFs products takes place through the FMCG retail network in India most
of whom are small retailers. Liquid milk is distributed by vendors who deliver milk at homes.
Since 1999, GCMMF has started web based ordering facilities for its customers. A welldefined supply chain has been developed to service customers who order in this manner.

PRODUCT PROMOTION

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DEFINITION:
Product promotion refers to many kinds of incentives and techniques directed towards
consumers and traders with the intention to produce immediate or short-term sales effects.
Product promotion includes incentive-offering and interest-creating activities which are
generally short-term marketing events other than advertising, personal selling, publicity and
direct marketing. The purpose of Product promotion is to stimulate, motivate and influence
the purchase and other desired behavioural responses of the firms customers.
Product promotion offers a direct inducement to act by providing extra worth over and above
what is built into the product at its normal price. These temporary inducements are offered
usually at a time and place where the buying decision is made. Not only are Product
promotions very common in the current competitive market conditions, they are increasing at
a fast pace. These promotions are direct inducements. In spite of the directness, Product
promotions are fairly complicated and a rich tool of marketing with innumerable creative
possibilities limited only by the imagination of promotion planners. Product promotion is
often referred to by the names of extra purchase value and below-the-line selling.

Today we find companies in almost all sectors offering some sort of a promotion scheme.
These sectors range from automobiles to beverages, from financial services to foods, from
household durables to services, from household products to business products, from personal
care to textiles and apparel.

CHARACTERISTICS OF PRODUCT PROMOTION

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Writing about Product promotion tools, Prof. Philip Kotler observesthey have 3 distinctive
characteristics.

Communication:

They gain attention and usually provide information that may lead the customer to the
product.

Incentive:

They incorporate some concession, inducement, or contribution that gives value to the
consumer.

Invitation:

They include a distinct invitation to engage in the transaction now (offer valid till or till
stocks last)

REASONS FOR GROWTH OF PRODUCT PROMOTION

There are a number of reasons that are favorable to the growth of Product promotion:

Increasing Competition

Customers Have Become More Price Sensitive

Product promotions Generally Create an Immediate Positive Impact On Sales

Products have become more standardized

Consumer Acceptance

Advertising Has Become More Expensive and Less Effective

Trade Has Become More Powerful

Emphasis on Sales Volumes

Product promotions Maximize Profits

Introducing an Element of Interest:

Impulse Buying Is Increasing

Product promotion Specialists Are Available

Excess Stocks

ADVANTAGES OF PRODUCT PROMOTION

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Product promotions have a significant effect on the behavior of consumers and trades people.
Such promotions can bring in more profits for the manufacturers because they permit price
discrimination.
1. Price discrimination
2. Effect on consumer behaviour
3. Effect on trade behaviour
4. Regional Differences

DISADVANTAGES OF PRODUCT PROMOTION

While Product promotion is a powerful and effective method to produce immediate short
term positive results, it is not a cure for a bad product or bad advertising. In fact, apromotion
is speed up the killing of a bad product.
1. Increased price sensitivity
2. Quality image may become tarnished
3. Merchandising support from dealers is doubtful
4. Short-term orientation

OBJECTIVES OF PRODUCT PROMOTION

Product promotion is a tool used to achieve most of the five major promotional objectives
discussed in the Promotion Decisions tutorial:
Building Product Awareness
Several Product promotion techniques are highly effective in exposing customers to products
for the first time and can serve as key promotional components in the early stages of new
product introduction. Additionally, as part of the effort to build product awareness, several
Product promotion techniques possess the added advantage of capturing customer in
formation at the time of exposure to the promotion. In this way Product promotion can act as
an effective customer information gathering tool (i.e., sales lead generation), which can then
be used as part of follow-up marketing efforts.

Creating Interest
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Marketers find that Product promotions are very effective in creating interest in a product. In
fact, creating interest is often considered the most important use of Product promotion. In the
retail industry an appealing Product promotions can significantly increase customer traffic to
retail outlets. Internet marketers can use similar approaches to bolster the number of website
visitors. Another important way to create interest is to move customers to experience a
product. Several Product promotion techniques offer the opportunity for customers to try
products for free or at low cost.
Providing Information
Generally Product promotion techniques are designed to move customers to some action and
are rarely simply informational in nature. However, some Product promotions do offer
customers access to product information. For instance, a promotion may allow customers to
try a fee-based online service for free for several days. This free access may include receiving
product information via email.
Stimulating Demand
Next to building initial product awareness, the most important use of Product promotion is to
build demand by convincing customers to make a purchase. Special promotions, especially
those that lower the cost of ownership to the customer (e.g., price reduction), can be
employed to stimulate sales.

Reinforcing the Brand

Once customers have made a purchase Product promotion can be used to both encourage
additional purchasing and also as are ward for purchase loyalty (see loyalty programs below).
Many companies, including airlines and retail stores, reward good or preferred customers
with special promotions, such as email special deals and surprise price reductions at the
cash register.

PULL STRATEGY FOR PRODUCT PROMOTION

In case of using a pull strategy, marketing efforts are directed at the ultimate consumer and
consumer promotions such as consumer contests and sweepstakes, rebates, coupons, free
samples, consumer premiums, etc are used. If this strategy is also chosen to include
advertising, then, there are large advertising expenditures. The objective of such promotional
Page 26

efforts would be to create sufficient consumer demand to pull the product through the
channels that is the consumers are encouraged to demand the product from retailers who in
torn place orders with wholesaler or manufacturer to meet the consumer demand. This
strategy may require little promotional efforts from the resellers except to stock input the
product on shelves.

A PULL STRATEGY IS APPROPRIATE WHEN

The product demand as high.

It is possible to differentiate the product on the basis of real or emotional features.

Brand consumers show high degree of involvement in the product purchase,

There is reasonably high brand loyalty and

Consumers make brand choice decision before they go to the store.

PUSH STRATEGY FOR PRODUCT PROMOTION

If a firm decides to use push strategy, its efforts are directed at resellers and the manufacturer
becomes very dependent on their personal selling abilities and efforts. The promotional
efforts are focused at pushing the product through the distribution channels; the resellers may
be required to display, demonstrate and offer discounts, to sell the product. The
communication to resellers is generally through trade circulars or the sales force.

PUSH STRATEGIES GENERALLY APPROPRIATE FOR

Product categories where there is low brand loyalty

Where many acceptable substitutes are available in the market.

Relatively new products are to be launched

When the brand choice is often made in response to displays in the stores,

The product purchase is unplanned or on impulse and

The consumer is familiar and has reasonably adequate knowledge about the product.

Manufacturers, who cannot afford to engage in sustained mass advertising, often use push
strategy and offer effective incentives to dealers.
Retailer promotion: Buy Cadburys products worth Rs.3000/- and get any 30chocolates
worth Rs.5 each free.
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Through this offer the company is pushing its product to the retailers and now that the retailer
has enough incentive the retailer stocks more and thus it becomes essential for the retailer to
push the product to the consumers.

DEVELOPING DEMAND
At the time Amul was formed, consumers had limited purchasing power, and modest
consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price
strategy to make its products affordable and attractive to consumers by guaranteeing them
value for money.

INTRODUCING HIGHER VALUE PRODUCTS

Beginning with liquid milk, GCMMF enhanced the product mix through the progressive
addition of higher value products while maintaining the desired growth in existing products.
Despite competition in the high value dairy product segments from firms such as Hindustan
Lever, Nestle and Britannia, GCMMF ensures that the product mix and these quence in
which Amul introduces its products is consistent with the core philosophy of providing milk
at a basic, affordable price.

THE DISTRIBUTION NETWORK

Amul products are available in over 500,000 retail outlets across India through its network of
over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory
of the entire range of products.
GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the
cheque system adopted by other major FMCG companies. This practice is consistent with
GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it
also minimizes dumping.
Wholesale dealers carry inventory that is just adequate to take care of the transit time from
the branch warehouse to their premises. This just-in-time inventory strategy improves dealers'
return on investment (ROI). All GCMMF branches engage in route scheduling and have
dedicated vehicle operations.
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UMBRELLA BRAND
The network follows an umbrella branding strategy. Amul is the common brand for most
product categories produced by various unions: liquid milk, milk powders, butter, ghee,
cheese, cocoa products, sweets, ice-cream and condensed milk.

Amul's sub-brands include variants such as Amul spray, Amul spree, Amulya and Nutramul.
The edible oil products are grouped around Dhara and Lokdhara, mineral water is sold under
the Jal Dhara brand while fruit drinks bear the Safal name.

By insisting on an umbrella brand, GCMMF not only skill fully avoided inter-union conflicts
but also created an opportunity for the union members to cooperate in developing products.

MANAGING THE SUPPLY CHAIN

Even though the cooperative was formed to bring together farmers, it was recognised that
professional managers and technocrats would be required to manage the network effectively
and make it commercially viable.

COORDINATION
Given the large number of organisations and entities in the supply chain and decentralised
responsibility for various activities, effective coordination is critical for efficiency and cost
control. GCMMF and the unions play a major role in this process and jointly achieve the
desired degree of control.

Buy-in from the unions is assured as the plans are approved by GCMMF's board. The board
is drawn from the heads of all the unions, and the boards of the unions comprise of farmers
elected through village societies, thereby creating a situation of interlocking control.

The federation handles the distribution of end products and coordination with retailers and
the dealers. The unions coordinate the supply side activities.

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These include monitoring milk collection contractors, the supply of animal feed and other
supplies, provision of veterinary services, and educational activities.

MANAGING THIRD PARTY SERVICE PROVIDERS

From the beginning, it was recognised that the unions' core activity lay in milk processing
and the production of dairy products. Accordingly, marketing efforts (including brand
development) were assumed by GCMMF. All other activities were entrusted to third parties.
These include logistics of milk collection, distribution of dairy products, sale of products
through dealers and retail stores, provision of animal feed, and veterinary services.

It is worth noting that a number of these third parties are not in the organized sector, and
many are not professionally managed with little regard for quality and service.

This is a particularly critical issue in the logistics and transport of a perishable commodity
where there are already weaknesses in the basic infrastructure.

ESTABLISHING BEST PRACTICES

A key source of competitive advantage has been the enterprise's ability to continuously
implement best practices across all elements of the network: the federation, the unions, the
village societies and the distribution channel.

In developing these practices, the federation and the unions have adapted successful models
from around the world. It could be the implementation of small group activities or quality
circles at the federation. Or a TQM program at the unions. Or housekeeping and good
accounting practices at the village society level.

More important, the network has been able to regularly roll out improvement programs
across to a large number of members and the implementation rate is consistently high. For
example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., all employees of
GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their
various quality concerns.

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Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a
process check at the end to record how the meeting was conducted. Similar processes a rein
place at the village societies, the unions and even at the wholesaler and C&F agent levels as
well.

Examples of benefits from recent initiatives include reduction in transportation time from the
depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of
Zero Stock Out through improved availability of products at depots and also the
implementation of Just-in-Time in finance to reduce the float. Kaizens at the unions have
helped improve the quality of milk in terms of acidity and sour milk.
(Undertaken by multi-disciplined teams, Kaizens are highly focussed projects, reliant on a
structured approach based on data gathering and analysis.)
For example, Sabar Union's records show a reduction from 2.0% to 0.5% in the amount of
sour milk/curd received at the union.

The most impressive aspect of this large-scale roll out is that improvement processes are
turning the village societies into individual improvement centers.

TECHNOLOGY AND E-INITIATIVES

GCMMF's technology strategy is characterized by four distinct components: new products,
process technology, and complementary assets to enhance milk production and e-commerce.

Few dairies of the world have the wide variety of products produced by the GCMMF
network. Village societies are encouraged through subsidies to install chilling units.
Automation in processing and packaging areas is common, as is HACCP certification. Amul
actively pursues developments in embryo transfer and cattle breeding in order to improve
cattle quality and increases in milk yields.

GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ
Internet technologies to implement B2C commerce.

Today customers can order a variety of products through the Internet and be assured of timely
delivery with cash payment upon receipt.
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Another e-initiative underway is to provide farmers access to information relating to

markets, technology and best practices in the dairy industry through net enabled kiosks in the
villages.

GCMMF has also implemented a Geographical Information System (GIS) at both ends of the
supply chain, i.e. milk collection as well as the marketing process. Farmers now have better
access to information on the output as well as support services while providing a better
planning tool to marketing personnel.

AMUL MARKETING MIX

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One of the most conservative FMCG entities, GCMMF spends a mere 1% of its turnover on
promotions. GCMMF has written and re-written rules of the game. Amul butter girl is one of
the longest running ad campaigns in the country for 41 years. Intelligent marketing of milk,
ice-cream and butter milk. Intelligent Marketing

1 Expansion to foreign shores GCMMF had signed an agreement with Wal-Mart to stock its
shelves with products under its Amul brand name. Amul processed cheese, pure ghee,
Shrikhand, Nutramul, Amul's Mithaee Gulab Jamuns are fewof the products marketed in the
US markets. 50 per cent of Americans being medically obese, and if Amul is really looking to
capture the hearts of the second-and third-generation Indians, offering low-fat versions of its
brands, would makes lot of commercial sense. Hence targeting the large Indian community in
the US markets with its niche products like mithai, packaged ready to eat foods market it can
definitely expand its market to a large extent.

2 Moving consumers from loose milk to packaged milk and gradually move them up the
value chain (tetra pack to beverages) Being exposed to a brand, it is natural for a customer to
try more products Defense Strategy

3 Wide range of product categories caters to consumers across all market segments. For
example, Amul Kool is targeted at children, while teenagers prefer Kool Caf, as it has a cool
imagery associated with it. Segmentation

4 Changing retail environment Striking out on its own, with Amul Outlets or parlours to
deliver consumers total brand experience Launched in 2002, there are now over 4700 Amul
parlours across the country, which contributed 3% to the brands total turnover in year 2009.
Targeting
5 Given this wide product portfolio, Amuls approach is to promote its brands in a rotational
cycle of two to three years. After ice-creams were launched in 1996, the category was revisited in 1999, in order to improve availability of the product and make it affordable. The
focus shifted to cheese in 2001, Amul Masti Chaas in2004-05 (sales of Masti dahi grew by
25%), Nutramul and Kool Kafe in 2006 and this year the focus is on Amul Koko cold
chocolate drink Promotion
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6 Uses a variety of media to communicate Most famous is billboard campaign The endearing
polka dressed girl and pun at various issues increased brands fan following. Promotion Amul
food festival, which has been held for the last four year between October and December in
about 50,000 retail outlets. The Chef Of India contest invites people to come up with recipes
using as many Amul products as possible. The recipe can be submitted on Amuls website.
Slogan Likho Disneyland Dekho Contest Promotion

7 Amul Maharani contest: in this contest questions about Amul are asked Promotion

8 AMUL sponsored the Singing Competition AMUL Star Voice of India, Amul music ka
maha mukabla, Amul Master Chef Part I and II Promotion

Products

Dairy Products

Cooking Products

Place

Rural And Urban Market

International Market

Price

Low Pricing Strategy

Promotion

Advertisement

Page 34

STPD ANALYSIS
SEGMENTATION
Wide range of product categories caters to consumers across all market segments.

TARGETING
Changing Retail Environment
Striking out on its own, with Amul parlors and outlets to deliver the customer atotal brand
experience.
Launched in 2002, there are now 4700 Amul parlors across the country.

PROMOTION
Uses A variety of media to communicate
Most famous Billboard Campaign
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The endearing polka dotted girl and pun at various issues increased brands fan

COMPETITORS
Britannia
HLL
Mother Dairy
Nestle
Cadbury

PRODUCT MIX COMPETITORS

Page 36

Page 37

AMULS SUCCESSFUL PRODUCT PROMOTION STRATEGY

1. Product Positioning Strategy- Low price Amul Ice - Creams made Kwality walls life
hell. Chocolate milk was launched Amul Kool koko
2. Product Re-Positioning Strategy- Jaldhara Narmada Neer
3. Product Overlap Strategy Amul Processed Cheese Vs Cheese Spread Nutramul Energy
Drink Vs Amul Kool
4. Product Design Strategy Use of Utterly Butterly Girl since 1967
5. Product Elimination Eliminated Jaldhara bottled water Successful ProductStrategy
6.Diversification Strategy Dairy Products E.g.: Fresh Milk, Milk Drinks & Desserts, and
Bread Spreads, Cheese Products Non Dairy Products Egg: Veg. Oils, Snacks, Instant Food

Page 38

AMUL PRODUCT PORTFOLIO

Category

Market Share

Market Position

Butter

85 %

Milk Powder

40 %

Cheese

50 %

Ice- cream

24.75% (HUL 28.22 %,

Mother Dairy 8.66 % )

Sweets

50 %

Chocolate Drink

90 %

Chocolate

10 % ( Cadbury 70 % )

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SWOT ANALYSIS OF AMUL (GCMMF)

STRENGTHS
1. The company is having Indian origin thus creating feeling of oneness in the mind of the
customers.
2. It manufactures only milk and milk products, which is purely vegetarian thus providing
quality confidence in the minds of the customers.
3. It is aiming at rural segment, which covers a large area of loyal customers, which other
companies had failed to do.
4. People are quite confident for the quality products provided by Amul.
5. Amul has its base in India with its butter and so can easily promote chocolates without
fearing of loses.
6. The prices of chocolates of Nestles are comparatively cheap as compared to other
companies.

WEAKNESSES
1. There are various big players in the chocolate market, which acts as major competitors
restricting their growth.
2. Lack of capital invested as compared to other companies.
3. Improper distribution channel in India.

OPPORTUNITIES
1. There is a lot of potential for growth and development as huge population stay in rural
market where other companies are not targeting.
2. The chocolate market is at growth stage with very less competition so by introducing new
brand and intensive advertising there can be a very good scope in future.

THREATS
1. The major threat is from other companies who hold the majority share of consumers in
Indian market i.e. Cadburys and Nestle.
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2. There exists no brand loyalty in the chocolate market and consumers frequently shift their
brands.
3. New companies entering in Indian market like Fantasie fine poses lot problems for Amul.

BCG MATRIX OF AMUL PRODUCTS

Page 41

GCMMFS SUPPLY CHAIN

Page 42

THE THREE-TIER "AMUL MODEL"

The Amul Model is a three-tier cooperative structure. This structure consists of a dairy
cooperative society at the village level affiliated to a milk union at the district level which in
turn is federated into a milk federation at the state level. Milk collection is done at the village
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dairy society, milk procurement and processing at the District Milk Union and milk and milk
products marketing at the state milk federation. The structure was evolved at Amul in Gujarat
and thereafter replicated all over the country under the Operation Flood programme. It is
known as the Amul Model or Anand Pattern of dairy cooperatives.
The main functions of the VDCS are:

Collection of surplus milk from the producers of the village and payment based on
quality and quantity,

Providing support services to the members like veterinary first aid, artificial
insemination services, cattle-feed sales, mineral mixture sales, fodder and fodder seed
sales, conducting training on animal husbandry and dairying,

Selling liquid milk for local consumers of the village,

Supplying milk to the District Milk Union.

DISTRICT COOPERATIVE MILK PRODUCER'S UNION (DUGDH SANGH)

(RAW MATERIAL) The main functions of the union are:

Procurement of milk from the village milking societies of the district,

Arranging transportation of raw milk from the VDCS to the Milk Union,

Providing input services to the producers like veterinary care, artificial insemination
services, cattle-feed sales, mineral mixture sales, fodder and fodder seed sales,

Conducting training on cooperative development, animal husbandry and dairying for

milk producers and conducting skill development and leadership development
training for VDCS staff and Management Committee members,

Providing management support to the VDCS along with supervision of its activities.

Establish chilling centres and dairy plants for processing the milk received from the
villages.

Selling liquid milk and milk products within the district

Process milk into milk products as per the requirement of State Marketing Federation.

Decide on the prices of milk to be paid to milk producers as well on the prices of
support services provided to members.

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STATE COOPERATIVE MILK FEDERATION (FEDERATION)

The main functions of the federation are as follows:

Marketing of milk and milk products processed/manufactured by Milk Unions,

Establish a distribution network for marketing of milk and milk products,

Arranging transportation of milk and milk products from the Milk Unions to the
market,

Creating and maintaining a brand for marketing of milk & milk products,

Providing support services to the Milk Unions and members like technical inputs,
management support and advisory services,

Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions,

Establish feeder-balancing dairy plants for processing the surplus milk of the Milk
Unions,

Arranging for common purchase of raw materials used in manufacture/packaging of

milk products,

Decide on the prices of milk and milk products to be paid to Milk Unions,

Decide on the products to be manufactured at Milk Unions and capacity required for
the same.

Conduct long-term milk production, procurement and processing as well as marketing

planning.

Arranging finance for the Milk Unions and providing them technical know-how.

Designing and providing training in cooperative development and technical and

marketing functions.

Conflict resolution and keeping the entire structure intact.

Today, there are around 176 cooperative dairy unions formed by 1.25 lakh dairy cooperative
societies, having a total membership of around 13 million farmers on the same pattern, who
are processing and marketing milk and milk products profitably, be it Amul in Gujarat or
Verka in Punjab, Vijaya in Andhra Pradesh, Milma in Kerala, Gokul in Maharashtra, Saras in
Rajasthan or a Nandini in Karnataka. This process has created more than 190 dairy
processing plants spread all over India with large investments by these farmers institutions.

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These cooperatives today collect approximately 23 million kg of milk per day and pay an
aggregate amount of more than Rs.125 billion to the milk producers in a year.
IMPACT OF THE "AMUL MODEL"
The effects of Operation Flood Programme are appraised by the World Bank in an evaluation
report. It has been proved that an investment of Rs. 20 billion over 20 years under Operation
Flood in the 1970s and 80s has contributed in increase of Indias milk production by
40 million metric tonnes (MMT), i.e., from about 20 MMT pre-Operation Flood to more than
60 MMT at the end of Operation Flood.
Thus, an incremental return of Rs. 400 billion annually have been generated by an investment
of Rs. 20 billion over 20 years. Indias milk production continues to increase and now stands
at 90 MMT. Despite this fourfold increase in production, there has not been a drop in the
prices of milk during the period while production has continued to grow.
Due to this movement, the countrys milk production tripled between the years 1971 and
1996. Similarly, the per capita milk consumption doubled from 111 gms per day in 1973 to
222 gm per day in 2000.

CONCLUSIONS, RECOMMENDATIONS AND LIMITATIONS

Conclusion :
As we know that Amul is very big organization and market leader in dairy products. It has maximum market
share in Milk, Butter and Cheese, which are its main/core products. As we know Amul is a co-operative
organization but chocolate and sweets industry is a industry we cant ignore. With the help of research, we can
find out its week points in chocolate and sweet product and can increase its market share through rectify

Page 46

mistakes. People have believed in Amuls product and they will accept its chocolates and sweets also
if effective actions were taken. The conclusions are:

1. Amul must come up with new promotional activities such that people become
aware about Amul Chocolates like Chocozoo, Bindaaz, and Fundoo.

2. Quality is the dominating aspect which influences consumer to purchase Amul

product, but prompt availability of other brands and aggressive promotional
activities by others influences the consumer towards them and also leads to
increase sales.
3. In comparison to Amul Chocolate, the other players such as Cadbury, Nestle, are
provide a better availability and give competition to the hilt.
4. People are mostly satisfied with the overall quality of Amul Chocolate, but for the
existence in the local market Amul must use aggressive selling techniques.

Recommendations:
In order to maintain and increase the sales , the following recommendations regarding Amul;
particularly regarding advertisement, distribution, promotional policies, etc, are hereby
suggested:
1. First and foremost Amul should take proper action in order to improve service,
because although being on a top slot in Butter and milk supplies it does not get the
sales in chocolate, which it should get.
Page 47

2. Company should use brand ambassador which attracts each age segment i.e.Saniya
Mirza, Shaktimaan, Amitabh Bacchan, Superman, Krrish, Jadoo etc.

3. Amul should give local advertisements apart from the advertisements given at the
national level. Local advertisement must mention the exclusive Amul shops of the
city.

4. Try and change the perception of the people through word of mouth about Amul in
advertisements, because they are the best source to reach Children and families.

5. Though Amul chocolate advertisements are rarely shown on television yet many
people could recall it as per the data of research. It shows that there is only need to
give advertisement only to rememorize customers. Because Amul is very strong brand
name.

6. Company should launch chocolate in new attractive packing to change image of Amul
chocolate in consumers mind.

7. Company should introduce Product promotion schemes like free weight, pranky,
tattoo, contest, free gifts etc.

8. Advertisement can be done with the help of animations that attracts children and
teenagers because chocolates are consumed largely in this segment.

Limitations :
1. The project is not descriptive but its concise and crisp in nature.

2. The information gathered is from the secondary data which can be one of the
limitations of this study.

Page 48

APPENDIX
AMUL RANKED NO. 1 "INDIAN" BRAND FOR THIRD CONSECUTIVE YEAR
IN ASIA

The "Campaign" magazine published from Hong Kong and Singapore has ranked Amul as
the No. 1 "Indian" brand in its list of Top 1000 Brands of Asia for the third consecutive year.
Amul is also ranked as No.1 dairy brand, ahead of leading food anddairy brands of the Asia
region like Dutch Lady, Dumex, Magnolia etc.
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It has overall ranked Amul as the 89th Best Brand in its ranking of Top 1000 brands of Asia
based on a consumer survey conducted in Australia, China, India, Japan, Korea, Hong Kong,
Malaysia, Singapore, Taiwan and Thailand.

Amul's has featured in the list of top 100 brands of Asia consistently for last 3 years. There is
no other "Indian" brand in the list of Top 1000 brands ahead of Amul (#89). The other Indian
brands ranked as per the survey are Kingfisher (# 116), Big Bazaar (#184),ICICI Bank (#
215), State Bank of India (#216) and Airtel (# 221) to name a few.

Asia's Top 1000 brand listing is based on a proprietary survey by the Campaign Magazine.
Leading Research Agency TNS interviewed people 3322 consumers aged 15-64 years old
across the 10 countries. Two questions were asked to determine the best brands in each of the
14 major product/service categories. The questions were pertaining to the best and second
best brand that would come to the respondent's mind for a particular product/service
category. The definition of best was one the respondent would trust the most or the one that
had the best reputation in the product/service category.

The survey reaffirms the faith Indian customers have in the Amul brand and also the fact that
a brand created by India can feature among the top brands globally.
This survey has been published in "Campaign" issue of July 2011

THE FEDERATION HAD POSTED A TURNOVER OF RS 11,668 CRORE IN THE

PREVIOUS FISCAL.
Gujarat Cooperative Milk Marketing Federation, which markets products under the Amul
brand, today posted 18 per cent jump in turnover at Rs 13,735 crore for 2012-13.
The federation had posted a turnover of Rs 11,668 crore in the previous fiscal, and it expects
to hit Rs 17,000-crore turnover in 2013-14.
It did not reveal net profit, but federation sources say that it pays dividend to all shareholders
which is calculated as price difference of milk (difference between procurement and selling)
amounting to nearly Rs 500 crore.

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"Amul expanded its distribution footprint to reach 1,200 new geographical markets with
addition of 306 new distributors, 65 new super-stockists and 900 new sub-stockists,"
federation's Chairman Vipul Chaudhary said at the annual general meeting in Anand.
"Plan for 2013-14 includes further expanding distribution reach to 700 new markets with
addition of more distributors and super-stockists," he added.
Amul further consolidated its status as the largest single-brand retail in the country by adding
3 Amul Parlors almost every day during 2012-13, taking the total number of exclusive stores
to 7000, a federation statement said.
Commenting on growth prospects, Chaudhary said that GCMMF would seek to achieve
turnover of Rs 17,000 crore in 2013-14.
GCMMF Managing Director R S Sodhi said the sale of dairy products across the board have
been robust and exports to new geographies have perked up, consolidating the federation's
leadership position in the global dairy market.
"Our exports have risen from Rs 95 crore in 2011-12 to Rs 140 crore in 2012-13, and we are
targetting exports of Rs 300 crore in FY 2014, of which up to Rs 90 crore has already been
achieved," Sodhi said.
Meanwhile, GCMMF has begun selling its SMP (Skimmed Milk Products) and WMP
(Whole Milk Powder) through Global Dairy Trade platform from June this year, providing it
direct access to over 900 big customers globally, he said.
"Our per day milk handling capacity currently is 160 lakh litres, which is set to reach 200
lakh litres per day over the next two years," Sodhi said, adding "We managed to achieve 20
per cent growth in milk procurement during 2012-13."
During 2012-13, Amul long-life Ultra High Temperature (UHT)

AMUL LAUNCHES INDIAS FIRST MILK ATM

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Gujarat: It is quite normal for Automatic Teller Machines (ATMs) to dispense money. But,
in a pioneering move, Amul has gone a step further and launched Indias first Any Time Milk
(ATM) vending machine.
An ATM from where people will now be able to withdraw other basic products like milk,
chocolates, yogurt etc is not a joke but a reality. The pilot project of this 24x7 ATM began
with the installation of a vending machine at the gate of Amul Dairy in Anand town of
Gujarat on Sunday.
According to the company officials, Amul plans to install 1100 more such ATMs. These
ATMs will be installed at different public places in Anand and Kheda towns, enabling the
consumers to buy milk whenever needed.
For Rs 10, the ATM would dispense a 300 ml pouch of Amul Taaza milk. The ATM, fitted
with refrigeration facility, has a capacity to hold 150 pouches at a time.
According to the company officials, if these ATMs prove to be a hit, then Amul will install
them in other parts of the country also.

ACHIEVEMENTS OF THE "AMUL MOVEMENT"

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The dairy cooperatives have been able to maintain democratic structure at least at the grassroot level with the management committee of the village level unit elected from among the
members in majority of the villages.

The dairy cooperatives have also been instrumental in bridging the social divide of caste,
creed, race, religion & language at the villages, by offering open and voluntary membership.

ACHIEVEMENTS OF GCMMF
Amul is one the topmost brand in Milk Production. Lets see what Amul achieved in its
AMUL history.

2.8 million milk producer member families

13,759 village societies

13 District Unions

8.5 million liters of milk procured per day

Rs. 150 million disbursed in cash daily

GCMMF is the largest cooperative business of small producers with an annual

turnover of Rs. 53 billion

The Govt. of India has honoured Amul with the Best of all categories Rajiv Gandhi
National Quality Award.

Largest milk handling capacity in Asia

Largest Cold Chain Network

48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets

Export to 37 countries worth Rs. 150 crores

Winner of APEDA award for nine consecutive years

BIBLIOGRAPHY

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1. www.amul.com
2. www.google.com
3. www.marketresearch.com
4. www.dairy.com

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Gender

Male
Female

Age

15-25
26-35
36-45
46 above

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Do you consume amul product?

Yes
No

Which product do you consume?

Amul milk
Amul cheese
Amul Butter
Any other

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From Where do you buy your amul product?

Retail store
Hypermarket
Exclusive amul store
Any other

How frequently do you purchase an amul

product?

Once a day
Once a week
Once a month

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which competitors dairy product do you use?

Gokul
mother diary
Nutrial
4th Qtr

Have you ever found defect in any amul

product?

Yes
No

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Which is the best advertisement you can

recollect of amul?

White revalution
Amul Milk
Amul ice cream
Other

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