A REPORT

ON

MARKETING AND DISTRIBUTION NETWORK OF AMUL ICE

CREAM

By
Jugal Piyush Thakkar
13BSP1020

Amul Ice Cream

A REPORT
ON
MARKETING AND DISTRIBUTION NETWORK OF AMUL ICE
CREAM

By
Jugal Thakkar
13BSP1020

Amul Ice Cream

A report submitted in partial fulfillment of the requirement of PGDM

Program of IBS Mumbai

Submitted to

Company Guide

Faculty Guide

Mr. Nitin Moghe

Prof. Hemant Purandare

31st May 2014

Authorization
This is to certify that the work titled Marketing and Distribution Network of Amul Ice Cream
is a bona fide record of research work done by Mr. Jugal Piyush Thakkar in partial fulfillment of
the requirement of the PGPM program at IBS Mumbai.
The performance was satisfactory during the course of the project.

Yours Faithfully
Jugal Piyush Thakkar
13BSP1020

Acknowledgement

Milestones achieved in the journey of life are never achieved alone and this is no exception. As I
complete this enlightening journey I would like to acknowledge and thank my Guide and
Companions who helped me put my best foot forward and made this story a success.
With immense gratitude I would like to present this paper which deals with the working of the
Ice Cream giant as its base work. It has been an enriching experience for me to undergo my
Summer Internship Program at Amul Ice Cream, which would not have been possible without
the support and goodwill of the people around me. I would like to express my sincere thanks to
all those people who helped me during this project.
I would like to express my special gratitude to my Faculty guide, Prof. Hemant Purandare for
guiding me right from the inception till the successful completion of the Summer Internship
Program. I sincerely acknowledge him for extending his valuable guidance, support for
literature, critical reviews of the project and report and above all the moral support he had
provided to me during all the stages of this project.
I would also like to express my deepest appreciation to my Company guide, Mr. Nitin Moghe,
Assistant Sales Manager of the organization for his kind co-operation, guidance and
encouragement which helped me throughout the project.

Table Of Contents

1. Executive
Summary
2. Company
Introduction

8
2.1 An Overview on Amul
2.2 GCMMF Overview
2.3 Amul Success Mantra
2.4 Sales Turnover
2.5 Areas of Operations
2.6 Production Analysis

10
10
11
12
13
13
14

3. The Launch of
Amul Ice Cream
3.1 Awards & Certification
3.2 Managing Competition
3.3 Need of Study

15
15
16

17

4. Learning Outcome
of SIP
4.1 Observations
4.2 My Experience
4.3 Methodology and Findings
4.4 Advantages and Drawbacks
4.5 Distribution Channel
5. End Note:
Recommendations
Conclusions
Bibliography

17
19
20
24
26

28
30
31

Executive Summary
Summer Internship Project aimed at enhancing sales of Ice-creams and promotion for Amul. In
order to execute the same, initial activities were visiting the outlets with salesmen, recording the
existing volume of sales & analyzing the emerging patterns in ice-cream consumption. This
helped in arriving at important conclusions regarding which flavors were popular, which were
demanded more by consumers, problems faced by the retailers, working of link between the
retailers & Distributors, issues encountered by the consumers and which outlets were the most
popular. Following this, strategies were devised in order to carry out the first part of the project.
The key areas that were identified were as follows

Increasing the sales at the existing outlets by implementing extensive branding and
promotion.

Converting the competitors outlets to start stocking & selling Amul products.

Increasing the popularity and improving service at Amul ice-cream parlors.

Seeking for new outlets and converting the leads.

Also convincing them to buy HDF.

Once these problem areas were analyzed, the next step was to execute the strategies for solving
the problems.
1. In order to enhance the sales at the existing outlets, the activities undertaken included
promoting the brand Amul by putting up banners, advertisements, POPs, placing brochures, print
ads, price lists & pamphlets for introducing new flavors of ice-cream.
2. Following this, the emphasis was on converting competitors outlets to start selling Amul icecreams. This was done by making them aware of the brand equity of Amul and informing them
about the rising demand of the new and existing product line offered by Amul. Convincing and
explaining new schemes.

3. To enhance the popularity of the ice-cream parlors, various schemes and plans were
suggested. One of them was to offer combo of different ice creams.
4. Offering with different toppings on ice cream. Also noting down the suggestions given by
parlors and outlets are noted.
The Second phase of the project was to conduct a survey regarding the services provided by
distributors and whether retailers are getting proper stock of goods, whether consumers are
satisfied with products and schemes are conveyed or not. It was very enriching to understand
how a salesman interacts with retailers and outlets. I was also briefed about schemes which
company introduces for outlets. Further, I was given task to convince retailers and outlets for the
same. Following which, I got an insight on the problems faced in ice cream industry from the
grass root level and above. Ice cream is a perishable product; also it is not stored in regular
refrigerators. It is required to be stored in Deep freezers and cold storages till the time it does not
reaches to final consumer. Mishandling of product may lead to losses.
I got an opportunity to explore the market and seek for new outlets and convince them for deep
freezers or to start ordering Amul ice cream if they already have deep freezers. It was my role to
make them aware about company policy and different schemes under which they can associate
with Amul.
Considering my suggestions, will give the company a better view on the actual scenario of the
market. Given a consideration to which, the company can improvise its current administration
and management for better quality service production.

Introduction
Gujarat Co-operative Milk Marketing Federation (GCMMF), custodian of the Amul brand is
India's largest food products marketing organization. With its wide product portfolio GCMMF
today has a turnover in excess of Rs. 6700 Cr. With a singular focus on marketing and
distribution, GCMMF today reaches consumers in all parts of the country. A state level apex
body of milk co-operatives in Gujarat, it has been an endeavor of GCMMF to provide
remunerative returns to the farmers and also serve the interest of consumers by providing quality
products which are good value for money. Amul turnover for the year 2013 is Rs. 13768 Crore.
GCMMF operates through 47 Sales Offices and has a dealer network of 5000 dealers and 10
lakhs retailers. This is one of the largest distribution networks in India.

Before Representing Amul we had to know what all things are offered by Amul. Products such
as Milk, milk powder, Butter, Cheese, Paneer, Ice cream, Lassi, butter milk, Curd, flavored milk
and ice creams are well known and seen in market. Other than the products well known and
listed herewith, Amul has products like Amul spray- a healthy and nutritive product for infants,
Amul Pizza. Amul always tries to innovate and offer best to its customer.
The project delves into the workings from the distribution aspect of an FMCG organization, in
detail. AMUL, being an FMCG company, attaches a lot of significance to the distribution aspect
of its business. The distribution channel of AMUL holds a lot of potential in affecting the
demand or sales of AMUL products through delivery on time, delivery of variety of products, the
retailer-friendliness of the policies being set by the distributors and equitable distribution of
products to all the retail outlets in a particular region, to name a few.
So, In order to plan retail coverage we map out the positions of Amul outlets, Amul parlors, and
competitors outlets. This project was carried out in Chembur, Govandi, Mankhurd, Tilaknagar,
Ghatkopar and Vikhroli city. By analyzing geographical representation and sales data with
spatial distribution Amul outlets, competitors outlets and the density of others in an area, we
identify unexplored area and plan location outlets to increase its market penetration. Using such
research we can ascertain the quality and depth of retail penetration in specific area.

Background of the organization:

Amul was formally registered on December 14, 1946. The brand name Amul, sourced from the
Sanskrit word Amoolya, means priceless. It was suggested by a quality control expert in Anand.
Some cite the origin as an acronym to (Anand Milk Union Limited).
The Amul revolution was started as awareness among the farmers. It grew and matured into a
protest movement that was channeled towards economic prosperity. Some of the milk products
are Amul milk, Amul butter, Amul milk powder, Amul ghee, Amul spray, Amul cheese, Amul
chocolates, Amul shrikhand, Amul ice cream, Natramul, Amulya. Gujrat cooperative Milk
Marketing Federation Ltd (GCMMFL) is the largest Organisation in FMCG industry engaged in
marketing milk & milk products under the brand names of AMUL and SAGAR with an annual
turnover exceeding Rs 6000 crores.
At the initial stage only 250 liters of milk was collected every day. But with the growing
awareness of the benefits of the cooperativeness, the collection of milk increased. Today Amul
collect 11 lakhs liters of milk every day. Since milk was a perishable commodity it becomes
difficult to preserve milk for a longer period. Besides when the milk was to be collected from the
far places, there was a fear of spoiling of milk. To overcome this problem the union thought out
to develop the chilling unit at various junctions, which would collect the milk and could chill it,
so as to preserve it for a longer period. Thus, today Amul has more than 150 chilling centers in
various villages. Milk is collected from almost 1073 societies.

GCMMF: An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products
marketing organization. It is a state level apex body of milk cooperatives in Gujarat which aims
to provide remunerative returns to the farmers and also serve the interest of consumers by
providing quality products which are good value for money.
CRISIL, Indias leading Rating, Research, Risk and Policy Advisory company, has assigned its
highest ratings of AAA/Stable/P1+ to the various bank facilities of GCMMF.

10

Its supply chain is easily one of the most complicated in the world. Amul, the flagship for a host
of dairy products marketed by the Gujarat Co-operative Milk Marketing Federation (GCMMF),
has become Asias largest milk brand. Something that is substantiated by facts: It is clearly a
market leader in the milk category in Gujarat and Kolkata.
It has 38% of the ice cream market, 88% of butter, 65% of milk powder, 70% of
condensed milk and around 50% of Shrikhand.

Amul Success Mantra

Amul (Anand milk union ltd.) is based on four hands, which are coordinated with each other.
The actual meaning of this symbol is co-ordination of four hands of different people by whom
this union is at the top position in Asia.
First hand is of farmers, without whom the organization would not have existed. Second hand is
of processors, who process the raw material (milk) into finished goods. Third hand is of
marketer, without whom the product would have not reached the customers. And finally, Fourth
hand is of customers, without whom the products would have not carried on.

11

Sales Turnover:
The following table shows the Annual Sales turnover of Amul
Sales Turnover
1994-95
1995-96
1996-97
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

Rs (million)
11140
13790
15540
18840
22192
22588
23365
27457
28941
29225
37736
42778
52544
67113
80053
97742
116680
137500

Annual Sales of Year 2013-14 are yet to announce in June. The federation expects to hit Rs
17,000-crore turnover in 2013-14.
Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand of
milk and milk products, has been growing at a compounded growth rate of 20% for the past five
years.

12

Annual Sales of Amul

160000
140000

*Sales in Millions

120000
100000
80000

Annual Sales of Amul

60000
40000
20000
0
2008-09 2009-10 2010-11 2011-12 2012-13

As we can observe the above table it indicates that Amul has always seen a progressive trend (a
diagram indicating the same is given in list of illustrations). It is because it always strives to offer
innovative products to market. It always checks on the quality it delivers and most important
Amul knows how to maintain Trust of their customers.

Areas of Operation:
Besides India, AMUL has entered overseas markets such as Mauritius, Singapore, UAE, China,
USA, Hong Kong, Bangladesh, Sri Lanka, Australia and South Africa.

Production Analysis
Amuls only source of raw material is Village Milk societies. Milk is brought from such village
milk societies every morning and evening. This milk is then sent to the dairy plant. In the dairy
plant the milk is processed i.e. it is made free from germs.

13

Launching Of Amul Ice Creams

Amul Ice Cream launch in 1996, Amul Ice Creams have consistently combated competition like
Kwality walls, Mother Dairy, Vadilal, Havemore, Cream Bells and many other brands. Amul Ice
Creams entered Mumbai followed by Chennai in 1998. Nationally it was rolled out in 1999. The
customers have shown huge faith in the quality of Amul Ice Creams. Amul has been able to write
such a success story because of the quality of products it offers, economic pricing and the belief
consumers have in the brand.
Amul ice cream always brought newness in its products. Currently it offers selection of 200
variants. In January 2007, Amul introduced sugar free & Pro life Probiotic ice cream, which was
first of its kind in India for health conscious.

14

Awards & Certifications:

- All Amul Ice cream plants are ISO 9000-HACCP certified.
- Ranked No. 1 ice cream in quality by Insight, a consumer magazine published by Consumer
Research and Education Society (CERS).
- Voluntary Organization in Interest of Consumer Education (VOICE), in an article referred
Amul ice cream as Best Value for Money Brand
Amul Ice cream always tries to innovate and offer best products to its consumers but main
challenge of any company is to reach its customers. And here marketing and distribution comes
into role. A proper strategy has to be made so that people are aware about product. It simply
means that a product to be positioned in market so that it creates demand. And at the same time
when demand is created product has to be made available to consumers. Therefore, availability
of product requires proper distribution channel.
Amul Ice cream is live example of where I could see that marketing and distribution goes hand
in hand.

15

Managing Competition:
The Indian market is dominated by a large number of small local and regional players. There are
an estimated 150 manufacturers in the organized segment, which accounts for 30-35% of sales
and about 1000 units in the unorganized segments of the market. In the organized segment the
significant brands are Kwality Walls, Vadilal, Amul, Havmor, Mother dairy and Baskins
&Robbins. GCMMF is facing very tough competition from both in and outside India.
Amul combats competition from its competitors by providing quality products at a price which
its customers value. Along with good quality products and reasonable price the packaging is also
very good. Most of its products are available in many flavors. Excellent advertising backs its
products and helps GCMMF (AMUL) to leave its competitors a tough time. Also Amul has
come out with Amul Parlous to cater to various segments of customers. Amul has a very strong
Brand Image in the Domestic market. Many products are exported by GCMMF.

Need of Study
Managers are always curious about the position of their companys products in the market which
largely depend upon the companys goodwill, and the position of their brand. In order to
maximize the sale and profit, company must deliver outstanding satisfaction to the retailers,
wholesaler & customers. So market survey of retailers, wholesalers & customers, chart out the
position of the company as compared to the competitors. It helps the organization to find out the
brand being sold most by the retailers along with their stocking and also consumer buying
preferences.

16

Learning during Internship

Internship was great experience where I got to learn how distribution network flows. Learned
how each and every aspect is managed and hierarchy wise. A product has to change many hands
before reaching to final consumer and proper care has to be taken. Mishandling of goods may
lead to damage and loss of product. And especially in case of ice cream which is perishable as
well as it should not lose its form.

Observations
Initially during my internship my Company guide explained us how Amul ice cream has changed
in terms of their branding and Packaging. They also told us we will observe more when we work
for the brand
I observed how Amul have changed itself with time. Every brand has to change with changing
time so that it is accepted by new and emerging market. Now let us see what all changes are done
by Amul so that it is accepted in market.

Change in Branding of Amul Ice creams

Before

After

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Amul ice cream changed its whole look and was ready with makeover. They even left their ice
cream mascot. They came with fresh and classy look.

Change in terms of Packaging

Family Packs which were more like square and of box look were given rectangular look so that it
looks better and gets proper piece while cutting. This was an appreciated effort in terms of
Packaging.
Ice Cream vertical Tubs were also introduced as that was in trend. Consumers prefer eating ice
creams in Plastic Tub rather than Paper cups.

18

As Amul learnt consumers are very conscious about PACKAGING of goods they
also introduced ice-cream tubs

My Experience
In Amul ice cream my job was to understand the working of organization. I had to observe the
current outlets and what are their problems, how does their ice cream business work, Was there
ample brand visibility provided, schemes were conveyed to them or not, Salesmen visited to
them regularly, Stock was replenished on time, Was stock delivered in proper condition and
proper packaging. Accordingly I had to make report and discuss the same with in charge.
I also got to learn competitors analysis. I also visited to Naturals, Swirls and Baskins Robins to
understand how it works and difference between their service and Amul service. Also I saw
packaging of different competitors and how each brand tries to distinguish them in different way.
I also got to visit Cold storages where Ice Creams were stored. Cold Storage plays a very
important role as ice-cream is a product which cannot be sold in normal temperature conditions;
and require special cold storage to keep the products fit for sale.
Cold Storages are well maintained and all the products are bifurcated in a manner so that when
demand arises, supply is easily met with.

19

Methodology & Findings

Initially I had to visit the markets with salesman and understand how he communicates with
owners of the outlets. I have had visits to Ghatkopar, Chembur, Tilaknagar, Govandi, Mankhurd
and Vikhroli. Every area differed from the other in terms of requirements and thinking of
customer.
Mankhurd, Govandi and Tilaknagar area was seen as Bottom of Pyramid for brand. In these
suburbs, people were aware of the brand Amul was, however, the local brands in ice cream also
gave a stiff competition due to low pricing. The local ice cream brands like Windys, Chetna,
Solanki, etc. were the tough substitutes for Amul in the above mentioned regions.

20

The local brands had their manufacturing units close to the market, which reduced the overall
transportation cost and reduced any inclusive overheads, thus making it possible for the local
brands to sell their product at the lowest possible cost for their consumers.
As a part of my experience, I came across certain outlets that did not sell Amul brand of ice
creams at all. This gave me a chance to introduce the brand to these outlets, convincing them to
consider selling the brand as a part of their sales. Thereby, I attempted to try and increase the
number of retailers for Amul brand.
In the process, I was required to explain the retailers and outlets about the schemes. Get
feedbacks and attend to their grievances, take a note of it and bring them in notice of the higher
authorities. We were provided with a Price list and a brochure which gave brief insights on the
variety of ice creams that Amul offers.
Further, I was expected to observe and find out on regions that lacked Brand Visibility. As a part
of this, I was required to make suggestions on how the issue be resolved by offering necessary
inputs that helped in decision making as relevant, for e.g., what is more effective for a particular
shop? Replacement of the Board or new standee or just a mere sticker on the fridge will suffice
the requirement?
I was also given a task of promoting certain products which had relatively very less demand and
suffered lack in product awareness, viz., Sugar free ice cream and frozen yoghurt. Both of these
products are new in the market and hence, require a good market positioning strategy to bring
them at par with other products of Amul. Other than that, as a part of my job profile, I have made
visits to various dairies, shops, parlors, marts and malls and recorded their behavior of ordering
flavors and observed the way the retail owners make perceptions about the information of any
scheme as imparted to them.

21

Amul Ice Cream/ Scooping Parlor

How different it is from retail outlets and what is different in serving

Different combinations

With shakes and toppings

With cream and garnishing

Amul Ice cream Parlor offers a great variety in desserts. It was a concept initiated on the basis of
the consumer needs and demands. Amul observed that the consumers in ToP & MoP (in
pyramid) were the ones that required a particular ice cream place where they can enjoy their

22

favorite dessert in the company of their friends and family. The consumers looked out for a value
for money service and at the same time quality to count on.

Finding of Sales by Outlets during different Seasons:

During my Internship, I have carried out a Survey as a part of my work
experience. In case of Amul Ice cream, a firm called Adinath Enterprises
is responsible for managing the brands distribution network. The
following diagram is a representation of Average sales recorded from
outlets. (Primary Data).
25,000

As per Average Sales Recorded in

Vikhroli during SIP.
20,000

15,000
Summer
Monsoon
10,000

Winter

5,000

0
Parlors

Marts

Groccery
Stores

23

Dairies

Hotels

Advantages and Drawbacks:

DrawbacksThe basic problem faced by the retailers was replacement of damaged goods.
Others required more Brand Visibility. There were instances when the stock was
unavailable as and when required or was unable to be delivered at the outlet at the
given or committed period of time. Many of the feedbacks from the outlets had the
complaint from the Distributors point of service. Some outlets were disappointed
by the distribution service on the grounds of availability of the product, they
complained of uneven and unfair distribution. According to certain retailers, they
complained that a particular amount of stock was made available to a nearby mall,
yet was unavailable to them at that point of time. This made a lot of inconvenience
in the sales for these retailers. On the other hand, the outlets in the malls did admit
in receiving excess supply in their stock, more than what actual requirement.
Some of them wanted more brand visibility,
Many a times stock was not available as per demanded.
Outlets were dissatisfied due to distributors service,
Outlets also felt neglected as many a times they ordered goods which were not
supplied but was made available to nearby mall.
Malls too felt like goods were dumped in their stores.

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AdvantagesIn spite of the various listed drawbacks, the retailers nevertheless are satisfied with
the sales of Amul as it is one of the most sought after and trusted brand. Amul icecream enjoys ensured Brand Loyalty, which comes from the fact that the retailers
have recorded continuous and repetitive sales of this brand. With the help of right
price differentiation strategy, trusted quality and the brand itself, Amul has proven
to be successful in capturing a considerable market share amidst the tough
competition in the market.
They were happy with brand Amul in their store as people have deep trust in that
product,
Consumers tendency of Repeat purchases of Amul ice-cream, ensured brand
loyalty.
Amuls entry into ice creams is regarded as successful due to the large market
share which it was able to capture within a short period of time, due to price
differential, quality of products and the brand name.

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Distribution Channel

Having an opportunity to work with Amul Ice cream I got the chance to get vis-vis with the organizational hierarchy followed by Amul for Distribution of Ice
Cream. The Headquarter of the company is situated in Anand, Kaira district. This
is the central office where all of the major decisions are taken, mostly the
managerial and administrative ones. Amul has setup plants or hired dairies on
contracts, at 12 places in Maharashtra, where the manufacturing of Ice creams take
place. Valsad, Virar, Tarapur to name a few where the manufacturing of the ice
cream takes place and is further processed for packaging.
After the packaging is done at these plants, the batches of the produce is loaded
and distributed to various C&F agents situated in cities. These C&F agents act as
wholesalers in the supply chain. The C&F agents possess huge cold storage where
they store the produce, and further distribute the goods from this point to the
Retailers situated within the city. The distribution of the goods is done by the
Distributors appointed by the company. These distributors may or may not contain
cold storages in their possession. In such a case where the cold storage is not
available with the distributors, the latter may co-ordinate with the C&F agents,
with respect to the demand of the quantity required at the time, to avoid any event
of damaged goods form arising. From this point, the distributors distribute the
products to the various retailers and finally the product is made available to the
consumers.
To ensure a smooth process in the Supply chain system, company appoints an
Amul Officer, under his surveillance the links and channels of the complete

26

process takes place. He is responsible for the smooth process of the system and
ensures quality performance of the supply chain management therein.

Amul Representatives

Manufactring
Plant

CnF Agents

Distributors

27

Outlets

FINAL
CONSUMER

Recommendations
1. Profit Margins offered by different brands. During my internship I found
that profit margin by other brand were higher than Amul. Although this is
the USP of Amul that they offer goods at best value price but it comes as a
disadvantage for the company, as retailers would easily prefer other brands,
since they get higher margin in selling other brands.

Profit Margin Of Different Ice

Creams Brands

16.5%

22%

Amul
Kwality
18%

Havmor
Mother dairy

18%

Cream bell
21%

2. It is essential to carry out enough promotional campaigns both Above-theline and Below-the-line pre-launch, in order to make aware the consumers
about the flavors and product.
3. Company should also focus more on tub packaging as there is obvious
preference towards it by consumers.

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4. Deep freezers should be provided with proper racks for tri cones and
candies.
5. Company should improvise on Packaging methods to avoid damaging of
goods.
6. There has to be a centralized communication channel for communicating
schemes to outlet, as many times schemes are not conveyed to retailers.
7. Amul has a relatively good distribution network, but still many a times
company is not able to fulfill the demand of outlets. Here company should
consider on the supply of product in the peak season

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Conclusion
This report has covered various aspects from the learning point of view with
respect to the Summer Internship Programme. The basic idea was to provide an
overview of the total learning experience while working as an intern in one of the
leading FMCG brands- Amul. The complete working experience was absolute
enriching, having a tandem made in the theoretical knowledge with the practical
application in the real world. In the report, the topics covered are relevant to the
personal observations while working for the company. The report has been made
keeping in mind the analysis of the market structure, the impact of the marketing
decisions by the administration, the supply chain system, also giving an overview
of the company as a whole. In the process, certain suggestions and ideas as
represented in the report have been proposed with an intention to interpret the
learning outcomes and observations as made during the internship. This was a
mere attempt to improvise any underlying drawback in the system and helping the
firm to deliver best possible quality service, following the observations made
during the internship experience.

30

Bibliography
http://www.financialexpress.com/news/amul-posts-18-jump-in-turnover-at-rs-13775-cr/1133794
http://www.amulicecream.in/
www.amul.com
www.scribd.com
www.4 shared.com
www.Wikipedia.com

Mr. Nitin Rahate (Amul Representative)

Mr. Nitin Moghe (Company Guide)

Kotler, P Marketing Management, 13th Edition

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