Advertising Research Helps Amul Challenge

Kwality Walls
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), a dairy products company established in
1946, is a market leader in various dairy product categories including baby food, dairy whiteners, cheese,
and butter. The company entered the 100 million liter per annum ice-cream business1 in 1997 with the
Amul brand of icecreams and has made steady gains to become a leading brand in the ice-cream segment
within a short span of time. HLL's Kwality Walls was the undisputed market leader in this segment till
Amul Ice-creams began to give it a tough fight after its launch. Kwality Walls emerged as a mother brand
after HLL acquired Kwality, Dollops and Milkfood and merged with its own brand - Walls. Amul has been
steadily increasing its market share over the years. In 1997, HLL registered sales worth Rs 1.52 bn at
volumes of 24.60 million liters while sales of Amul were worth Rs 270.40 mn with volumes of around 4
million liters. In 1999 and 2000, sales volumes of Kwality Walls were 24 million liters and 23 million liters
in 2001. In contrast Amul improved its market share from 7.9 million liters in 1999 and 14.6 million liters
in 2000 to 20 million liters in 2001.
The growth of the brand can be attributed to GCMMF's wider distribution network (available in over 1000
cities and towns across India) and price-value equation (products were sold at 50% less than Kwality
Walls). In the summer of 2002, Amul entered into newer markets like Kolkata and Delhi (the largest ice
cream markets in India). To ensure sustained growth, the company decided to make changes to its existing
marketing communication programs. As a part of this change, FCB-Ulka (which manages the Amul
advertising account) conducted an 'Ice-cream Mood' survey as part of its advertising research, among the
target customers. The survey provided many useful cues for Amul, which helped it develop an appropriate
marketing communication strategy. The survey findings stated that the take-away segments constituted only
20% of the total ice-cream sales, which was pretty low compared to 70 % in developed markets. The
difference was attributed to the Indian social context and the pricing levels of ice-creams. Another
interesting insight that the study gave was that ice-cream consumptions were low, even in top metros, as
icecreams were eaten only on some special occasions. Consumption was also restricted mainly to three
flavors — vanilla, chocolate, and butterscotch. In terms of brand perceptions, customers perceived Amul
ice-creams to be tastier and creamier than Kwality Walls. Amul also was perceived as a value-for-money
family brand. On the other hand, customers perceived Kwality Walls as a premium brand that offered a
variety and range of flavors. Due to its contemporary image, Kwality Walls also enjoyed a good market
share and mindshare among the youth.
Based on these findings, FCB-Ulka developed a marketing communication campaign that focused on the
take-away segment, to help increase ice-cream consumption of its brand. It launched the 'Flavor of the
Month' campaign that highlighted the new exotic flavors such as Black Current, Anjir, Cheese & Almonds,
Cappuccino, Dates & Honey, Fresh Litchi, Kulfi, etc. The rationale behind the campaign was to help
increase the number of 'perceived occasions' on which to eat ice creams. However, the existing tagline
'Real Milk Real Ice-cream' remained unchanged. Justifying the persistence of this tagline, Mr.
Karkare, said, "We will be continuing the same baseline for Amul this season. After all, Amul is still
perceived as a milk and dairy company. It is the wholesomeness of its products which gives it a
competitive advantage." In the summer of 2003, Amul launched the mega-bite almond cone (the
largest volume cone in the country), Santra Mantra an (orange ice-cream), Bouncer for the growing
children (an ice-cream with nuts and essential proteins, vitamins and minerals), etc.
Questions for Discussion:
1. Advertising research can help a company design an effective advertising campaign. Why did
GCMMF ask FCB-Ulka to undertake a survey? How far has advertising research helped in designing
the 'Flavor of the month' ad campaign?
2. There is a marked increase in the popularity of the 'eating out' concept and impulse buying among
Indian consumers. In light of this, to what extent is GCMMF right in focusing its communications on
the 'take-away' segment and launching variants like the mega-bite almond cone (the largest volume
cone in the country)?