Amul Journal

7/31/2019 Amul Journal

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College of Business Administration Lingaraj College

The Indian milk man The Amul saga About Indian diary industry The birth of and development of indias diary cooperativemovement Operation flood About GCMMF Product mix Customers Competitors brand building Distribution network Amul Parlours Cooperative development programme Action@ amul Mission 2020 CSR the amul way The milkmans exist


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Dr. VERGHESE KURIEN was born on 26 November 1921 in Calicut. He went to the Loyola college of Madras when he was 14yrs. Of age and completed is degree

in physic when he was 18yr of age in 1940.

He represented the college in four games namely tennis, cricket, badminton and boxing .Hewas the outstanding cadet of Madras Battalion.

He did Mechanical Engineering from Madras University. After completing his degree, he joined the Tata Steel Technical Institute, Jamshedpur from

where he graduated in 1946. He then went to USA on a government scholarship to earn his

Master of Science in Mechanical Engineering (with distinction) from Michigan State

University.

Kurien has since then built this organization into one of the largest and most successfulinstitutions in India

The pattern of cooperatives had been so successful; he created the National DairyDevelopment Board (NDDB) to replicate the program on a nationwide.

Kurien also set up GCMMF in 1973 to sell the products produced by the dairies. TodayGCMMF sells brand products not only in India but also overseas.

He quit the post of GCMMF Chairman in 2006 following disagreements with GCMMFmanagement.

Kurien's life story is chronicled in his memoirs 'I too had a dream'.

Kurien and his team were pioneers in inventing the process of making milk powder andcondensed milk from buffalo's milk instead of cow's milk. This was the reason became so

successful and competed well against Nestle who only used cow milk to make powder and

condensed milk. In India buffalo milk was the main raw material unlike Europe where cow

milk is abundant.

India's first Prime Minister Jawaharlal Lal Nehru visited Anand to inaugurate "factory" andhe embraced Kurien for his groundbreaking work.


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THE success of the brand name has, no doubt, resulted in my being asked to comment on itshistory and the reasons for its success. I have, therefore, reflected on the long history of thebrand to see if I could distil reasons why is a name widely recognized and respected, not just

in our cities and towns, but in our villages as well.

Probably the easy, but nonetheless wrong, answer is that has been advertised well. Certainlyit has helped that those responsible for keeping the name in the public eye have usedconsiderable imagination and, if I do say so, The taste ofIndia is nothing short of brilliant.However, there is much more to it.

A successful consumer product is the object of thousands, even tens of thousands oftransactions every day. In these transactions, the brand name serves in lieu of a contract. It isthe assurance to the buyer that her specifications will be met. It is the sellers assurance that

quality is being provided at a fair price.

If has become a successful brandif, in the trade lingo, it enjoys brand equitythen it isbecause we have honored our contract with consumers for close to fifty years. If we hadfailed to do so, then would have been consigned to the dustbin of history, along withthousands of other brands.

The tough part of the use of a brand as a contract is that every day is a renewal; if, just once,the brand fails to meet the customers expectations or, more exactly, if it fails to delight the

customer, then the contract loses its value. If s sales continue to rise, it is because that

contract has been honored, again and again. I would like to think that the granddaughters of

some of our first customers are now contracting with us to buy their butter, cheese, babyfood, chocolates and other fine products. It is also a fact that when we first thought ofexporting to West Asia and even to the United States, it was because of the loyalty ofcustomers who, even when far from home, still craved our taste of India.

What goes into the contract that is a brand name? First is quality. No brand survives long if

its quality does not equal or exceed what the buyer expects. There simply can be nocompromise. Thats the essence of the contract. In the case of a food product, this means that

the brand must always represent the highest hygienic, bacteriological and organolepticstandards. It must taste good, and it must be good.

Second, the contract requires value for money. If our customer buys an product, she gets whatshe pays for, and more. We have always taken pride in the fact that while we earn a goodincome for our ownersthe dairy farmers of Gujaratwe dont do it at the cost of exploitingthe consumer. Even when adverse conditions have reduced supplies of products like butter,we have resisted the common practice of raising prices, charging what the market would bear.Rather, we have kept prices fair and done our best to ensure that retailers do not gain at theconsumers expense.


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The third element of the contract is availability. A brand should be available when andwhere the customer wants it. There is no benefit achieved in creating a positive brand image,and then being unable to supply the customer who wants to buy it. In our case, over the yearswe have built what is probably the nations finest distribution network. We reach hundreds of

cities and towns through a cold chain that not only ensures that our products are available, butthey reach the customer at the farthest end of the country with the same quality as you wouldfind in Ahmadabad or Vadodara.

The fourth part of the contract is service. We have a commitment to total quality. But,occasionally, we may make a mistakeor, our customer may think weve made a mistake,and the customer, as they say, is always right. That is why, for , every customer complaintmust be heardnot just listened to. And, every customer complaint must be rectified to theextent humanly possible.

For close to fifty years now, has honored its contract with the consumer. The contract that is

symbolized by the brand means quality. It means value for money. It means availability. Andit means service.

How did the brand become what it is? To answer that, we must journey back in time, to thehistory books, to the time of Indias independence because s birth is indelibly linked to thefreedom movement in India. It was Sardar Vallabhbhai Patel who said that if the farmers ofIndia are to get economic freedom then they must get out of the clutches of the middlemen.

The first cooperative was the result of a farmers meeting in Samarkha (Kaira district,Gujarat) on 4 January 1946, called by Morarji Desai under the advice from SardarVallabhbhai Patel, to fight rapacious milk contractors. It was Sardars vision to organise

farmers, to have them gain control over production, procurement and marketing by entrustingthe task of managing these to qualified professionals, thereby eliminating the middle men, the

bane in farmers prosperity.

The decision was taken that day in January 1946: Milk producers cooperatives in villages,federated into a district union, should alone handle the sale of milk from Kaira to the

government-run Bombay Milk Scheme. This was the origin of the Anand pattern ofcooperatives. The colonial government refused to deal with the cooperative. The farmerscalled a milk strike. After fifteen days the government capitulated. This was the beginning ofKaira District Cooperative Milk Producers Union Ltd., Anand, registered on 14 December

1946.

Originally the Anand pattern included dairy cooperative societies at the village level, and aprocessing unit called a union at the district level. Inspired by the Kaira Union, similar milk

unions came up in other districts too. In 1973, in order to market their products moreeffectively and economically, they formed the Gujarat Cooperative Milk MarketingFederation Limited (GCMMF Ltd.).GCMMF became the sole marketer of the original range

of products including milk powder and butter. That range has since grown to include ice


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cream, ghee, cheese, chocolates, shrikhand, paneer, and so on. These products have made aleading food brand in India.

The brand name, from the SanskritAmoolya, meaning priceless, was suggested by a qualitycontrol expert in Anand. The first products with the brand name were launched in 1955.Since then, they have been in use in millions of homes in all parts of India, and beyond.Today is a symbol of many things: Of high quality products sold at reasonable prices, ofavailability, of service.

There is something more, though, that makes the brand special and that something is thereason for our commitment to quality and value for money. is the brand name of 2 million

farmers, members of 10,000 village dairy cooperative societies throughout Gujarat. This isthe heart of, it is what gives strength to, and it is what is so special about the saga.

In the early days of Kaira Union there was no dearth of cynics. Could natives handle

sophisticated dairy equipment? Could western-style milk products be processed from buffalomilk? Could a humble farmers cooperative market butter and cheese to sophisticated urbanconsumers? The teamfarmers and professionalsconfounded the cynics by processing avariety of high-grade dairy products, several of them for the first time from buffalo milk, andmarketing them nationally against tough competition.

What began way back in 1946 was really an effort to carve out a truly Indian company thatwould have the involvement of millions of Indians and place direct control in the hands of thefarmers. It was a mandate for producing, owning and marketing and above all, building yourown truly Indian Brand. And successfully at that.

You will appreciate that when the lives of lakhs of farmers depend on a brand, and when yourhistory is grounded in the Independence movement, when not only competitors but even your

own government questions you, then your resolve to be the best is like the finest steel.

, therefore, is a brand with a difference. That difference manifests itself in a larger than lifepurpose. The purposefreedom to farmers by giving total control over procurement,production and marketing. and all other milk products produced by cooperatives were bornin struggle. It was the producers struggle for command over the resources that they create, a

struggle to obtain equitable returns and a struggle for liberation from dependence onmiddlemen. It was a struggle against exploitation. A refusal to be cowed down in the face ofwhat others believed to be the impossible.

s birth was thus a harbinger of the economic independence of our farmer brethren. s mission

was the development of farmers, nutrition to the nation, and heart in heart, the realdevelopment of India.


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Given Indias vast geographical spread, the country had very few dairy plants at the time of

independence. As the then Prime Minister Lal Bahadur Shastri had said, One is not

sufficient. Many s are the need of the hour. This led to replication of the Anand pattern

through the Operation Flood programme which has, amongst others, three majorachievements to its credit, namely: making dairying Indias largest self-sustainable rural

employment programme, bringing India close to self-sufficiency in milk production, andtrebling the nations milk production within a span of two and a half decades to make Indiathe worlds largest milk producer.

Today, 173 milkproducers cooperative unions and 22 federations play a major role inmeeting the demand for packed milk and milk products. Quality packed milk is now available

in more than 1,000 cities throughout the length and breadth of India. And this is milk with adifferencepasteurized, packaged, branded, owned by farmerscarrying the milk drop logo,like, a symbol of quality.

Over the course of Operation Flood, milk has been transformed from a commodity into abrand, from insufficient production to self sufficient production, from rationing to plentifulavailability, from loose, unhygienic milk to milk that is pure and sure, from subjugation to asymbol of farmers economic independence, to being the consumers greatest insurance

policy for good health.

What of the future? Indias population has risen from 350 million in 1950 to 1,000 million

today. As cities draw people to new employment opportunities, the current urban-rural ratioof 26:74 is likely to become 33:67 by the year 2010. As per available projections, thepopulation by the year 2010 would touch 1,190 million people. This means that by the year2010, rural India will be required to support some 800 million people, an increase of 11%over 1999s 720 million rural people.

Based on the current population demographics and projections, we estimate that there will be260 million women in the age-group of 15-59 years in India by the year 2010 and this wouldfurther increase to 302 million by the year 2020, of which only 100 million would be literate.This means that rural women will comprise 21% of Indias total population. In our country,

most rural women contribute to agricultural and dairying activities apart from thehousehold workand their activities are not included in Indias GDP despite their significantcontribution. Dairying is, therefore, very important to our rural women. For many, it is theirmain source of employment and income, incomes that they often manage themselves.

Population gives us one picture. The other is provided by the demand for householdcommodities. By 2010, the national requirement for food grains will touch 266 million metric

ton, rising to 343 mmt by 2020. For milk, estimated consumption will be 153 mmt by 2010


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and 271 mmt by 2020. For edible oils, demand will soar to 9 mmt by 2010 and 13 mmt by2020.

It should be clear that agriculture will remain the most important engine of our economy. andits cooperative sister brands are aware of this challenge. The future, they say, is at best a

mystery. But, it should be clear that the needs of a nation on the move must be met. Thecountry is young. There are more working women. The needs of an ever-growing populationhave to be met with sustainable economic development. And the demand for milk and milkproducts, therefore, is only going to grow further. Couple this with the nutritional needs ofthe new and the old generations and it is equally clear that there will be a need for more valueadded milk products. This calls for production to be enhanced at even faster rate than it is atpresent.

There is also something very special about milk, something which requires that any brand formilk and milk products to act not simply as a seller, but as a trustee. Milk is not a white goodor a brown good. It is not something people save their entire lives in order to buylike a car,

or a house. Milk is not a status symbol; rather it is the symbol of nutrition. Milk is a nearlycomplete food, providing protein, vitamins, minerals and other nutrients so essential tomaintaining good health.

We realize the value of milk on the day the milkman does not bring it to our doorstep, whenour children have to go to school without it, when we go without our daily cup of coffee ortea. And what would our lives be like without ghee, butter, cheese, curd, lassi, chaas and thelike. Milk is not only an ingredient in our favorite recipes; it is an essential ingredient of lifeitself. And, by its very indispensable nature, it has one of the biggest marketsa whopping82 mmt at a very conservative consumption of just 214 grams per day per person in Indiaalone.

Our commitments to the producer and our contract with the consumer are the reasons we areconfident that cooperative brands, like, will have an even bigger role to play in the next fiftyyears. Resources need to be deployed with a purpose and a commitment to deliver betterresults. There is no limit for a marketing exercise then. It must build India and its culture asecond time round. An India that is the land of our dreams.


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India with 134mn cows and 125mn buffaloes has the largest population of cattle in theworld.

More than fifty percent of the buffaloes and twenty percent of the cattle in the worldare found in India and most of these are milch cows and milch buffaloes.

Indian dairy sector contributes the large share in agricultural gross domestic products.

Presently there are around 70,000 village dairy cooperatives across the country.

The co-operative societies are federated into 170 district milk producers unions,which is turn has 22-state cooperative dairy federation.

India is the leading producer of milk in the world followed by USA.

Number one producer of milk. Despite being the worlds largestmilk producer, Indias share in the world dairy trade

is almost negligible.

80% of the Indian dairy industry is unorganized

In India about 55% of the total milk is produced by buffalo.


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Food service institutional market:It is growing at double the rate of consumermarket

Defense market:An important growing market for quality products at reasonableprices

Ingredients market:A boom is forecast in the market of dairy products used as rawmaterial in pharmaceutical and allied industries

Parlour market:The increasing away-from-home consumption trend opens newvistas for ready-to-serve dairy products which would ride piggyback on the fast foodrevolution sweeping the urban India


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Type : Cooperative Founded: 1946 Headquarters: Anand, India Industry: Dairy Revenue:

$868 million USD (06-07) Employees: 2.41 million milk producers. HISTORY Gujarat

Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing

organisation. 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 Amul (Anand Milk-producers

Union Limited), formed in 1946, is a dairy cooperative movement in India. The brand name

Amul, sourced from the Sanskrit word Amoolya, means priceless. It was suggested by a

quality control expert in Anand. It is a brand name managed by an apex cooperative

organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today

is jointly owned by some 2.41 million milk producers in Gujarat, India[1]. It is based in

Anand town of Gujarat and has been a sterling example of a co-operative organization's

success in the long term. The Amul Pattern has established itself as a uniquely appropriate

model for rural development. Amul has spurred the White Revolution of India, which has

made India the largest producer of milk and milk products in the world. It is also the world's

biggest vegetarian cheese brand [2]. Amul's product range includes milk powders, milk,


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butter, ghee, cheese, curd, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns,

basundi, Nutramul brand and others. Situation of farmers Over five decades ago, the life of an

average farmer in Kheda District was very much like that of his/her counterpart anywhere

else in India. His/her income was derived almost entirely from seasonal crops. The income

from milk buffaloes was undependable. Milk producers had to travel long distances to deliver

milk to the only dairy, the Polson Dairy in Anand often milk went sour, especially in the

summer season, as producers had to physically carry milk in individual containers. Private

traders and middlemen controlled the marketing and distribution system for the milk. These

middlemen decided the prices and the off-take from the farmers by the season. As milk is

perishable, farmers were compelled to sell it for whatever they were offered. Often, they had

to sell cream and ghee at throw-away prices. In this situation, the private trader made a

killing. Moreover, the government at that time had given monopoly rights to Polson Dairy

(around that time Polson was the most well known butter brand in the country) to collect milk

from Anand and supply to Bombay city in turn (about 400 kilometers away). India ranked

nowhere amongst milk producing countries in the world in 1946. Gradually, the realization

dawned on the farmers with inspiration from then nationalist leaders Sardar Vallabhbhai Patel

(who later became the first Home Minister of free India) and Morarji Desai (who later


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become the Prime Minister of India) and local farmer, freedom fighter and social worker

Tribhovandas Patel, that the exploitation by the trader could be checked only if they marketed

their milk themselves. Amul was the result of the realization that they could pool up their

milk and work as a cooperative. PRODUCT AMUL BUTTER : UTTERLY BUTTERLY

DELICIOUS AMUL BUTTER was the first product which was officially launched by

AMUL in 1945. It has been a market leader during the last 4 decades. AMUL BUTTER is

made from Butter, Common Salt, permitted natural colour- Annatto Composition: Milk Fat

80% Moisture 16% Salt 2.5% Curd 0.8% Calorific Value: 720 kcal./100g Special Features:

Made from fresh cream by modern continuous butter making machines. Marketed in India

since 4 decades. Product Specification: Meets AGMARK standard and BIS specifications

No.IS:13690:1992 PRICE: Amul Pricing Strategies 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. 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 the sequence in which Amul introduces

its products is consistent with the core philosophy of providing butter at a basic, affordable


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price to appeal the common masses. This helped AMUL BUTTER to create its brand image

in the household sector of the society. Rs.87 Rs.18 PLACE: A Global Distributor GCMMF is

India's largest exporter of Dairy Products. It has been accorded a "Trading House" status.

GCMMF has received the APEDA Award from Government of India for Excellence in Dairy

Product Exports for the last 9 years. Currently Amul has 2.41 million producer members with

milk collection average of 5.08 million litres/day. Besides India, Amul has entered overseas

markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong

and a few South African countries. Its bid to enter Japanese market in 1994 had not

succeeded, but now it has fresh plans of flooding the Japanese markets [6]. Other potential

markets being considered include Sri Lanka. PROMOTION: Initial Promotional Strategy The

butter, which had been launched in 1945, had a staid, boring image, primarily because the

earlier advertising agency which was in charge of the account preferred to stick to routine,

corporate ads. They didnt help in creating a brand image of AMUL butter which was their

then motive. The image they presented was, well, boring. A brand - Amul A Taste of India

However, in 1966, a man named Sylvester daCunha, from the ad agency of ASP, took over

the Amul account. And in 1967 it began, innocently enough. In India, food was something

one couldn't afford to fool around with. It had been taken too seriously, for too long.


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Sylvester daCunha decided it was time for a change of image. Scott Bradbury, the marketing

genius behind Nike and Starbucks, once said A great brand is a story that is never

completely told. A brand is a metaphorical story thats evolving all the time. Stories create

the emotional context people need to locate themselves in the larger experience He could

easily have been talking about the Amul moppet. The moppet who put Amul on India's

breakfast table The year Sylvester daCunha took over the account, the country saw the birth

of a campaign whose charm has endured fickle public opinion, gimmickry and all else. The

Amul moppet, the little girl who created a home in the hearts and minds of millions and

millions of Indians. No easy task. And to be there for almost 34 years! Call her the Friday to

Friday star because Every Friday, since 1967, this little girl appears at billboards, strategically

placed all over India, focusing on the item of the weektongue in cheek, of course. Round

eyed, chubby cheeked, winking at you, from strategically placed hoardings at many traffic

lights. She is the Amul moppet everyone loves to love (including prickly votaries of the Shiv

Sena and BJP). How often have we stopped, looked, chuckled at the Amul hoarding and

product wrappers with the equally recognisable tagline Utterly Butterly Delicious Amul that

casts her sometime as the coy, shy Madhuri, a bold sensuous Urmila or simply as herself,

dressed in her little polka dotted dress and a red and white bow, holding out her favourite


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packet of butter. There are no boundaries and nothing is off limits. From the political scene,

to entertainment, from local news to international, from sports to stars, she has a line for

everything. Often said to be playing the role of a social observer with evocative humor, the

billboards became, and still are, a topic of conversation amongst millions. With their hing-

lish (a combination of Hindi and English) punch-lines, they have won the maximum number

of awards in India for any ad campaign ever! This little thumbalina, seems to have the

masses, right where she wants them wanting more of her and of Amul. No other brand

comes close to what Amul has been able to accomplish. ADVERTISING Its advertising has

also started using tongue-in-cheek sketches starring the Amul baby commenting jovially on

the latest news or current events. This formed a large chunk of the collective memory of us

Indians. We grew with them as the ads grew with us. They are quirky, poke fun at no one in

particular and are pure eye-candy! We almost admire the speed with which the ad-people

come up with copy and illustration for the ads, that change every few days!! From the Sixties

to the Nineties, the Amul ads have come a long way. While most people agree that the Amul

ads were at their peak in the Eighties they still maintain that the Amul ads continue to tease a

laughter out of them The Amul ads are one of the longest running ads based on a theme, now

vying for the Guinness records for being the longest running ad campaign ever. Where does


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Amul's magic actually lie? Many believe that the charm lies in the catchy lines. That we

laugh because the humour is what anybody would enjoy. They don't pander to your

nationality or certain sentiments. It is pure and simple, everyday fun. BRANDING The first

products with the Amul brand name were launched in 1955. Since then, they have been in use

in millions of homes in all parts of India, and beyond. There is something more, though, that

makes the Amul brand special and that something is the reason for the commitment to quality

and value for money. Amul is the brand name of 2 million farmers, members of 10,000

village dairy cooperative societies throughout Gujarat. This is the heart of Amul, it is what

gives strength to Amul, and it is what is so special about the Amul saga. The Amul Pattern

has established itself as a uniquely appropriate model for rural development. Amul has made

India one of the largest milk producers in the world. Amul, therefore, is a brand with a

difference. That difference manifests itself in a larger than life purpose. The purpose

freedom to farmers by giving total control over procurement, production and marketing. Our

commitment to the producer and our contract with the consumer is the reasons we are

confident that cooperative brands, like Amul, will have an even bigger role to play in the next

fifty years. MARKETING STRATEGIES 4 MAIN STRATEGIES What goes into the

contract that is a brand name? First is quality. No brand survives long if its quality does not


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equal or exceed what the buyer expects. There simply can be no compromise. Thats the

essence of the contract. In the case of a food product, this means that the brand must always

represent the highest hygienic, bacteriological and organoleptic standards. It must taste good,

and it must be good. Second, the contract requires value for money. If our customer buys an

Amul product, she gets what she pays for, and more. We have always taken pride in the fact

that while we earn a good income for our ownersthe dairy farmers of Gujaratwe dont do

it at the cost of exploiting the consumer. Even when adverse conditions have reduced

supplies of products like butter, we have resisted the common practice of raising prices,

charging what the market would bear. Rather, we have kept prices fair and done our best to

ensure that retailers do not gain at the consumers expense. The third element of the contract

is availability. A brand should be available when and where the customer wants it. There is

no benefit achieved in creating a positive brand image, and then being unable to supply the

customer who wants to buy it. In our case, over the years we have built what is probably the

nations finest distribution network. We reach hundreds of cities and towns through a cold

chain that not only ensures that our products are available, but they reach the customer at the

farthest end of the country with the same quality as you would find in Ahmedabad or

Vadodara. The fourth part of the contract is service. We have a commitment to total quality.


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But, occasionally, we may make a mistake or, our customer may think weve made a

mistake, and the customer, as they say, is always right. That is why, for Amul, every

customer complaint must be heardnot just listened to. And, every customer complaint must

be rectified to the extent humanly possible. For close to fifty years now, Amul has honoured

its contract with the consumer. The contract that is symbolised by the Amul brand means

quality. It means value for money. It means availability. And it means service.


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The birth of and development ofIndIas diary cooperative

movement

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 (Rs60 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 atAmul 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 oneparticular photograph. It shows a long line of Gujarati women waiting patiently for a uniontruck 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 primarycustomer. If you don't, success is certain. The proof? A unique, Rs 2,200 crore (Rs 22 billion)enterprise.

Organisation structure

It all started in December 1946 with a group of farmers keen to free themselves fromintermediaries, 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 asAmul) 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 centres andfourteen district level plants (unions) under the overall supervision of GCMMF.

There are similar federations in other states. Right from the beginning, there was recognitionthat this initiative would directly benefit and transform small farmers and contribute to thedevelopment of society.

Markets, then and even today, are primitive and poor in infrastructure. Amul and GCMMFacknowledged that development and growth could not be left to market forces and thatproactive intervention was required. Two key requirements were identified.

The first, that sustained growth for the long term would depend on matching supply anddemand. It would need heavy investment in the simultaneous development of suppliers andconsumers.

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

To implement their vision while retaining their focus on farmers, a hierarchical network ofcooperatives was developed, this today forms the robust supply chain behind GCMMFsendeavors. The vast and complex supply chain stretches from small suppliers to large

fragmented markets.


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Management of this network is made more complex by the fact that GCMMF is directlyresponsible 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.

Developing demand

At the time Amul was formed, consumers had limited purchasing power, and modestconsumption levels of milk and other dairy products. Thus Amul adopted a low-cost pricestrategy to make its products affordable and attractive to consumers by guaranteeing themvalue for money.

Introducing higher value products

Beginning with liquid milk, GCMMF enhanced the product mix through the progressiveaddition 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 HindustanLever ,Nestle and Britannia , GCMMF ensures that the product mix and the sequence inwhich Amul introduces its products is consistent with the core philosophy of providing milkat a basic, affordable price.

The distribution network

Amul products are available in over 500,000 retail outlets across India through its network ofover 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventoryof the entire range of products.

GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of thecheque system adopted by other major FMCG companies. This practice is consistent withGCMMF's philosophy of maintaining cash transactions throughout the supply chain and italso minimizes dumping.

Wholesale dealers carry inventory that is just adequate to take care of the transit time fromthe 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 havededicated vehicle operations.

Umbrella brand

The network follows an umbrella branding strategy. Amul is the common brand for mostproduct 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 Amulspray, Amulspree, 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.


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By insisting on an umbrella brand, GCMMF not only skillfully avoided inter-union conflictsbut 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 thatprofessional managers and technocrats would be required to manage the network effectivelyand make it commercially viable.

Coordination

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

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

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

These include monitoring milk collection contractors, the supply of animal feed and othersupplies, 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 processingand the production of dairy products. Accordingly, marketing efforts (including branddevelopment) were assumed by GCMMF. All other activities were entrusted to third parties.These include logistics of milk collection, distribution of dairy products, sale of productsthrough 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, andmany 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 commoditywhere there are already weaknesses in the basic infrastructure.

Establishing best practices

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

In developing these practices, the federation and the unions have adapted successful modelsfrom 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 goodaccounting practices at the village society level.


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More important, the network has been able to regularly roll out improvement programs acrossto 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 ofGCMMF meet at the closest office, be it a department or a branch or a depot to discuss their

various quality concerns.

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

Examples of benefits from recent initiatives include reduction in transportation time from thedepots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation ofZero Stock Out through improved availability of products at depots and also theimplementation 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 sourmilk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed projects, relianton a structured approach based on data gathering and analysis.) For example, Sabar Union'srecords show a reduction from 2.0% to 0.5% in the amount of sour milk/curd received at theunion.

The most impressive aspect of this large-scale roll out is that improvement processes areturning 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 GCMMFnetwork. Village societies are encouraged through subsidies to install chilling units.Automation in processing and packaging areas is common, as is HACCP certification. Amulactively pursues developments in embryo transfer and cattle breeding in order to improvecattle quality and increases in milk yields.

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

Today customers can order a variety of products through the Internet and be assured of timelydelivery with cash payment upon receipt.

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 thesupply chain, i.e. milk collection as well as the marketing process.


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Farmers now have better access to information on the output as well as support services whileproviding a better planning tool to marketing personnel.


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In 1970 through NDDB Varghese kurien initiated operation flood a ruraldevelopment intivative.

Its main objective was to create a nation wide milk grid by increasing milkproduction.

The other objective was to provide fair wages to consumers.

During this phase 18 premier milk sheds in the country were linked to the fourmetropolitan cities namely Delhi, Calcutta, Chennai and Mumbai.

Number of milk sheds Increased from 18 to 136. Self sustaining system -43,000 village co-ops with 4.25million milk

producers.

Increases in participation of women and women co-ops Expand and strengthen the infrastructure for procurement and production. Large number of new co-ops added.Emphasis on Research & Development in animal health & nutrition and to

enhance productivity of milch animal.


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Gujarat Cooperative milk Marketing Federation Ltd

It was established in 1973.Its members are the 17 district cooperative milk producers unions, 15members and four nominal members.

GCMMF is India's largest food products marketing organisation. It is a state level apex body ofmilk cooperatives in Gujarat, which aims to provide remunerative returns to the farmers and also

serve the interest of consumers by providing affordable quality products.

GCMMF markets and manages the brand. Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an economic

network that links more than 2.8 million village milk producers with millions of consumers

in India.

These cooperatives collect on an average 7.5 million litres of milk per day from their producermembers, 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 castes.

It is an institution created by the milk producers themselves to primarily safeguard their interesteconomically, socially as well as democratically. Business houses create profit in order to distribute

it to the shareholders. In the case of GCMMF the surplus is ploughed back to farmers through the

District Unions as well as the village societies.

Gujarat Cooperative Milk Marketing Federation Ltd.(GCMMF), is India's largest food productmarketing organisation with annual turnover (2010-11)US$ 2.2 billion. Its daily milk procurement

is approx 12 million lit (peak period) per day from 15,712 village milk cooperative societies, 17

member unions covering 24 districts, and 3 million milk producer members.


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GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House"status. Many of our products are available in USA, Gulf Countries, Singapore, The Philippines,

Japan, China and Australia.

GCMMF has received the APEDA Award from Government of India for Excellence in DairyProduct Exports for the last 13 years. For the year 2009-10, GCMMF has been awarded "Golden

Trophy' for its outstanding export performance and contribution in dairy products sector by

APEDA.

For its consistent adherence to quality, customer focus and dependability, GCMMF has receivednumerous awards and accolades over the years. It received the Rajiv Gandhi National Quality

Award in1999 in Best of All Category. In 2002 GCMMF bagged India's Most Respected Company

Award instituted by Business World. In 2003, it was awarded the The IMC Ramkrishna Bajaj

National Quality Award - 2003 for adopting noteworthy quality management practices for logistics

and procurement. GCMMF is the first and only Indian organisation to win topmost International

Dairy Federation Marketing Award for probiotic ice cream launch in 2007.


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Member unions

1. Kaira District Cooperative Milk Producers' Union Ltd., Anand

2. Mehsana District Cooperative Milk Producers' Union Ltd, Mehsana

3. Sabarkantha District Cooperative Milk Producers' Union Ltd., Himatnagar

4. Banaskantha District Cooperative Milk Producers' Union Ltd., Palanpur

5. Surat District Cooperative Milk Producers' Union Ltd., Surat

6. Baroda District Cooperative Milk Producers' Union Ltd., Vadodara

7. Panchmahal District Cooperative Milk Producers' Union Ltd., Godhra

8. Valsad District Cooperative Milk Producers' Union Ltd., Valsad

9. Bharuch District Cooperative Milk Producers' Union Ltd., Bharuch

10. Ahmedabad District Cooperative Milk Producers' Union Ltd., Ahmedabad

11. Rajkot District Cooperative Milk Producers' Union Ltd., Rajkot

12. Gandhinagar District Cooperative Milk Producers' Union Ltd., Gandhinagar

13. Surendranagar District Cooperative Milk Producers' Union Ltd., Surendranagar

14. Amreli District Cooperative Milk Producers Union Ltd., Amreli

15. Bhavnagar District Cooperative Milk Producers Union Ltd., Bhavnagarvvb


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The 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 further federated into a Milk Federation at the State level. The above three-tier

structure was set up in order to delegate the various functions; milk collection is done at the

Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk

& Milk Products Marketing at the State Milk Federation. This helps in eliminating not only

internal competition but also ensuring that an economy of scale is achieved.

The main functions of the VDCS are as follows:

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

Providing support services to the members like Veterinary First Aid, Artificial Inseminationservices, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting

training on Animal Husbandry & Dairying, etc.

Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the

District Milk Union.


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The main functions of the Milk Union are as follows:

Procurement of milk from the Village Dairy 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 & fodder seed sales, etc.

Conducting training on Cooperative Development, Animal Husbandry & Dairying formilk producers and conducting specialised skill development & Leadership

Development training for VDCS staff & Management Committee members.

Providing management support to the VDCS along with regular supervision of itsactivities.

Establish Chilling Centres & Dairy Plants for processing the milk received from thevillages.

Selling liquid milk & milk products within the District Process milk into various milk & 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 ofsupport services provided to members.


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Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. Arranging transportation of milk & milk products from the Milk Unions to the

market.

Creating & maintaining a brand for marketing of milk & milk products (brandbuilding).

Providing support services to the Milk Unions & members like Technical Inputs,management support & 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 ofmilk products.

Decide on the prices of milk & milk products.


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Product categories


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Amul milk

Bread spreads

Cheese
http://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.phphttp://www.amul.com/products/amul-goudacheese-info.phphttp://www.amul.com/products/amul-emmentalcheese-info.phphttp://www.amul.com/products/amul-processedcheese-info.phphttp://www.amul.com/products/amul-delicioustablemargarine-info.phphttp://www.amul.com/products/amul-lite-info.phphttp://www.amul.com/products/amul-tablebutter-info.phphttp://www.amul.com/products/amul-taaza-info.phphttp://www.amul.com/products/amul-gold-info.php


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UHT Milk

Beverage Range
http://www.amul.com/products/amul-uhtgold-info.phphttp://www.amul.com/products/amul-uhttaaza-info.phphttp://www.amul.com/products/amul-uhtcalci-info.phphttp://www.amul.com/products/amul-koolkoko-info.phphttp://www.amul.com/products/amul-koolcafe-info.phphttp://www.amul.com/products/Amul-Kool-Flavoured-Milk.php


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Ice cream

Paneer

Dahi
http://www.amul.com/products/amul-malaipaneer-info.phphttp://www.amul.com/products/amul-icecream-info.php


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Ghee

Milk powder

Nutramul
http://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.phphttp://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.phphttp://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.phphttp://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.phphttp://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.phphttp://www.amul.com/products/amul-sagarsmp-info.phphttp://www.amul.com/products/amul-amulya-info.phphttp://www.amul.com/products/amul-amulspray-info.phphttp://www.amul.com/products/amul-flaavyo-info.phphttp://www.amul.com/products/amul-probioticdahi-info.phphttp://www.amul.com/products/amul-mastidahi-info.phphttp://www.amul.com/products/amul-yellowghee-info.phphttp://www.amul.com/products/amul-sagarghee-info.phphttp://www.amul.com/products/amul-ghee-info.php


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Mithai range

Mithai mate

Choclate
http://www.amul.com/products/amul-mithaimate-info.phphttp://www.amul.com/products/amul-basundi-info.phphttp://www.amul.com/products/amul-gulabjamun-info.phphttp://www.amul.com/products/amul-shrikhand-info.phphttp://www.amul.com/products/amul-Nutramul-info.phphttp://www.amul.com/products/amul-mithaimate-info.phphttp://www.amul.com/products/amul-basundi-info.phphttp://www.amul.com/products/amul-gulabjamun-info.phphttp://www.amul.com/products/amul-shrikhand-info.phphttp://www.amul.com/products/amul-Nutramul-info.phphttp://www.amul.com/products/amul-mithaimate-info.phphttp://www.amul.com/products/amul-basundi-info.phphttp://www.amul.com/products/amul-gulabjamun-info.phphttp://www.amul.com/products/amul-shrikhand-info.phphttp://www.amul.com/products/amul-Nutramul-info.phphttp://www.amul.com/products/amul-mithaimate-info.phphttp://www.amul.com/products/amul-basundi-info.phphttp://www.amul.com/products/amul-gulabjamun-info.phphttp://www.amul.com/products/amul-shrikhand-info.phphttp://www.amul.com/products/amul-Nutramul-info.phphttp://www.amul.com/products/amul-mithaimate-info.phphttp://www.amul.com/products/amul-basundi-info.phphttp://www.amul.com/products/amul-gulabjamun-info.phphttp://www.amul.com/products/amul-shrikhand-info.phphttp://www.amul.com/products/amul-Nutramul-info.php


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Fresh cream pouch butter milk
http://www.amul.com/products/amul-freshcream-info.phphttp://www.amul.com/products/amul-chocolatesyrub-info.phphttp://www.amul.com/products/amul-chocozoo-info.phphttp://www.amul.com/products/amul-chocolate-info.phphttp://www.amul.com/products/amul-pouchbuttermilk-info.phphttp://www.amul.com/products/amul-freshcream-info.phphttp://www.amul.com/products/amul-chocolatesyrub-info.phphttp://www.amul.com/products/amul-chocozoo-info.phphttp://www.amul.com/products/amul-chocolate-info.phphttp://www.amul.com/products/amul-pouchbuttermilk-info.phphttp://www.amul.com/products/amul-freshcream-info.phphttp://www.amul.com/products/amul-chocolatesyrub-info.phphttp://www.amul.com/products/amul-chocozoo-info.phphttp://www.amul.com/products/amul-chocolate-info.phphttp://www.amul.com/products/amul-pouchbuttermilk-info.phphttp://www.amul.com/products/amul-freshcream-info.phphttp://www.amul.com/products/amul-chocolatesyrub-info.phphttp://www.amul.com/products/amul-chocozoo-info.phphttp://www.amul.com/products/amul-chocolate-info.phphttp://www.amul.com/products/amul-pouchbuttermilk-info.php


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Brand building

Amul Butter Girl

The moppet who put Amul on India's breakfast table

50 years after it was first launched, Amul's sale figures have jumped from 1000 tonnes a year

in 1966 to over 25,000 tonnes a year in 1997. No other brand comes even close to it. All

because a thumb-sized girl climbed on to the hoardings and put a spell on the masses.

Bombay: Summer of 1967. A Charni Road flat. Mrs. Sheela Mane, a 28-year-old housewifeis out in the balcony drying clothes. From her second floor flat she can see her neighbours onthe road. There are other people too. The crowd seems to be growing larger by the minute.Unable to curb her curiosity Sheela Mane hurries down to see what all the commotion is

about. She expects the worst but can see no signs of an accident. It is her four-year-old whodraws her attention to the hoarding that has come up overnight. "It was the first Amulhoarding that was put up in Mumbai," recalls Sheela Mane. "People loved it. I remember itwas our favourite topic of discussion for the next one week! Everywhere we went somehowor the other the campaign always seemed to crop up in our conversation."

Call her the Friday to Friday star. Round eyed, chubby cheeked, winking at you, fromstrategically placed hoardings at many traffic lights. She is the Amul moppet everyone lovesto love (including prickly votaries of the Shiv Sena and BJP). How often have we stopped,looked, chuckled at the Amul hoarding that casts her sometime as the coy, shy Madhuri, a

bold sensuous Urmila or simply as herself, dressed in her little polka dotted dress and a redand white bow, holding out her favourite packet of butter.

For 30 odd years the Utterly Butterly girl has managed to keep her fan following intact. Somuch so that the ads are now ready to enter the Guinness Book of World Records for beingthe longest running campaign ever. The ultimate compliment to the butter came when aBritish company launched a butter and called it Utterly Butterly, last year.

It all began in 1966 when Sylvester daCunha, then the managing director of the advertisingagency, ASP, clinched the account for Amul butter. The butter, which had been launched in1945, had a staid, boring image, primarily because the earlier advertising agency which was

in charge of the account preferred to stick to routine, corporate ads.

One of the first Amul hoardings

In India, food was something one couldn't afford to fool around with. It had been taken tooseriously, for too long. Sylvester daCunha decided it was time for a change of image.


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The year Sylvester daCunha took over the account, the country saw the birth of a campaignwhose charm has endured fickle public opinion, gimmickry and all else.

The Amul girl who lends herself so completely to Amul butter, created as a rival to thePolson butter girl. This one was sexy, village belle, clothed in a tantalising choli all but

covering her upper regions. "Eustace Fernandez (the art director) and I decided that weneeded a girl who would worm her way into a housewife's heart. And who better than a littlegirl?" says Sylvester daCunha. And so it came about that the famous Amul Moppet was born.

That October, lamp kiosks and the bus sites of the city were splashed with the moppet on ahorse. The baseline simply said, Thoroughbread, Utterly Butterly Delicious Amul,. It was amatter of just a few hours before the daCunha office was ringing with calls. Not just adults,even children were calling up to say how much they had liked the ads. "The response wasphenomenal," recalls Sylvester daCunha. "We knew our campaign was going to besuccessful."

For the first one year the ads made statements of some kind or the other but they had not yetacquired the topical tone. In 1967, Sylvester decided that giving the ads a solid conceptwould give them extra mileage, more dum, so to say. It was a decision that would stand thedaCunhas in good stead in the years to come.

In 1969, when the city first saw the beginning of the Hare Rama Hare Krishna movement,Sylvester daCunha, Mohammad Khan and Usha Bandarkar, then the creative team workingon the Amul account came up with a clincher -- 'Hurry Amul, Hurry Hurry'. Bombay reactedto the ad with a fervour that was almost as devout as the Iskon fever.

That was the first of the many topical ads that were in the offing. From then on Amul beganplaying the role of a social observer. Over the years the campaign acquired that all importantAmul touch.

India looked forward to Amul's evocative humour. If the Naxalite movement was thehappening thing in Calcutta, Amul would be up there on the hoardings saying, "Breadwithout Amul Butter, cholbe na cholbe na (won't do, won't do). If there was an IndianAirlines strike Amul would be there again saying, Indian Airlines Won't Fly Without Amul.

There are stories about the butter that people like to relate over cups of tea. "For over 10years I have been collecting Amul ads. I especially like the ads on the backs of the butter

packets, "says Mrs. Sumona Varma. What does she do with these ads? "I have made analbum of them to amuse my grandchildren," she laughs. "They are almost part of our culture,aren't they? My grandchildren are already beginning to realise that these ads are not just asource of amusement. They make them aware of what is happening around them."

Despite some of the negative reactions that the ads have got, DaCunhas have made it a policynot to play it safe. There are numerous ads that are risque in tone.

"We had the option of being sweet and playing it safe, or making an impact. A fine balancehad to be struck. We have a campaign that is strong enough to make a statement. I didn't wantthe hoardings to be pleasant or tame. They have to say something," says Rahul daCunha.


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"We ran a couple of ads that created quite a furore," says Sylvester daCunha. "The IndianAirlines one really angered the authorities. They said if they didn't take down the ads theywould stop supplying Amul butter on the plane. So ultimately we discontinued the ad," hesays laughing. Then there was the time when the Amul girl was shown wearing the Gandhicap. The high command came down heavy on that one. The Gandhi cap was a symbol of

independence, they couldn't have anyone not taking that seriously. So despite their reluctancethe hoardings were wiped clean. "Then there was an ad during the Ganpati festival whichsaid, Ganpati Bappa More Ghya (Ganpati Bappa take more). The Shiv Sena people said thatif we didn't do something about removing the ad they would come and destroy our office. Itis surprising how vigilant the political forces are in this country. Even when the Enron ads(Enr On Or Off) were running, Rebecca Mark wrote to us saying how much she liked them."

Amul's point of view on the MR coffee controversy

There were other instances too. Heroine Addiction, Amul's little joke on Hussain had theartist ringing the daCunhas up to request them for a blow up of the ad. "He said that he had

seen the hoarding while passing through a small district in UP. He said he had asked hisassistant to take a photograph of himself with the ad because he had found it so funny," saysRahul daCunha in amused tones. Indians do have a sense of humour, afterall.

From the Sixties to the Nineties, the Amul ads have come a long way. While most peopleagree that the Amul ads were at their peak in the Eighties they still maintain that the Amulads continue to tease a laughter out of them.

Where does Amul's magic actually lie? Many believe that the charm lies in the catchy lines.That we laugh because the humour is what anybody would enjoy. They don't pander to yournationality or certain sentiments. It is pure and simple, everyday fun.


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Compitators

Brittania Nestle HLL Cadboury Mother Diary


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Distribution network

THE COMPANYAMUL means "priceless" in Sanskrit. A quality control expert in Anand

suggested the brand name Amul, from the Sanskrit Amoolya, Variants, all meaning"priceless", are found in several Indian languages. Amul products have been in use inmillions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray,Amul Cheese,Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milkand Amulya have made Amul a leading food brand in India. (Turnover: Rs. 25 billion in2002). TodayAmul is a symbol of many things. Of high-quality products sold at reasonableprices, ofthe genesis of a vast co-operative network, of the triumph of indigenous technology,ofthe marketing savvy of a farmers' organization and have a proven model for dairydevelopment. List of Products Marketed: Breadspreads: Amul Butter Amul Lite Low Fat

Breadspread Cheese Range: Amul Pasteurized Processed Cheddar Cheese Amul Processed

Cheese Spread Amul Mozarella Cheese Amul Emmental Cheese Amul Gouda Cheese

Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza Mithaee Range (Ethnicsweets): Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul

Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee

Kulfi Mix 2

UHT Milk Range: Amul Taaza 3% fat Milk Amul Gold 4.5% fat Milk Amul

Slim-n-Trim 0% fat milk Amul Chocolate Milk Amul Fresh Cream Amul SnowcapSofty Mix Pure Ghee: Amul Pure Ghee Sagar Pure 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 Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener Sweetened

Condensed Milk: Amul Mithaimate Sweetened Condensed Milk Fresh Milk: Amul TaazaToned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk

3% fat Amul Smart Double Toned Milk 1.5% fat Curd Products: Amul Masti Dahi (fresh

curd) Amul Butter MilkAmul Icecreams: 3

Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)

Nut-o-mania range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival, BadshahiBadam Kulfi, Shista Pista Kulfi) Utsav Range (Anjir, Roasted Almond) Simply Delicious

Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate) Nature's Treat (Alphanso Mango,

Fresh Litchi, Anjir, Fresh Strawberry, Black Currant) Sundae Range (Mango, Black

Currant, Chocolate, Strawberry) Millennium Icecream (Cheese with Almonds, Dates withHoney) Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi, ShahiPista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi) Cool Candies (Orange, Mango)

Cassatta Tricone Cones (Butterscotch,Chocolate) Megabite Almond Cone Frostik- 3layer chocolate Bar Fundoo Range - exclusively for kids SlimScoop Fat Free FrozenDessert (Vanilla, Banana, Mango, Pineapple) Chocolate & Confectionery: Amul Milk

Chocolate Amul Fruit & Nut Chocolate Amul Eclairs Brown Beverage: NutramulMalted Milk Food

THE CHANNEL NETWORK Distribution channel GCMMF Manufacturing Headoffice First leg (from manufacturing units) Depot...1 Depot...n Second leg WD1 WDn

Third leg Retail1 Retail...n 5


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Downstream flow Procurement Channel Distribution GCMMF Head office MU1

MU...n VCS1 VCSn Village1 Villagen Upstream flow 6

SCM AND MARKET LOGISTICS The networkMilk is procured from thevillages and collected at Village Cooperative Societies (VCS), from there the milk is taken to

manufacturing units where the milk is processed into various products. The products are thentransporters to the company Depots located in various parts of the country. The products arethen sent to Wholesale Distributors (WD) and from there to the retailers. The fact sheet

Milk is procured twice a day from 2 million from Gujarat alone The payment is made under

twelve hours of procurement There are 10000 village cooperative societies There are 3600

wholesale distributors in the country 45 depots The C&F agents are not fixed and are

decided by the local company offices There are aproxx. 4,50,000 retailers spread all over

India Total house hold consumers covered are 100,000 The milk procured per day is 5

million liters Where the total capacity of operation is 7 million liters per day The peak

processing till date has been 6 million liters per day These co operative societies are bound

to supply there produce only to GCMMF

SCM and Market Logistics Enterprise resource planning: the company at hasimplemented an ERP program as low as Rs. 3 corers in collaboration with TCS ltd. Thecompany uses it, the data right from the procurement from the farmers till the delivery ofgoods to the retailers is fed into the system. The software enabling the channel members touse for the synchronized working and best possible utilization of the available resourcesmaintains details regarding the inventory management. Market logistics deals with theimplementation of the SCM of the company. Upstream Channel in which milk is procuredfrom the farmers to the manufacturing units. 1. In the first step, the milk is taken to the VCSby the farmers on foot or bicycles in small quantities 2. The second step involves thetransportation of milk from the co-operatives to the manufacturing units this is done inspecial trucks which are equipped with tankers to carry milk. Downstream Channel, it is thedistribution part of the supply chain. From the manufacturing units to the retailers. 1. First legof transport is from the manufacturing unit to the company depots. This is done using 9 and18 MT trucks any lesser quantity will be uneconomical to the company there fore is sometime the quantity ordered is lesser then club loading is done which means that the productordered is supplied with some other products. a. Frozen food the temperature of these trucksis kept below -18C b. Dairy wet the temperature of these trucks is kept between 0-4C 2.Second leg is from the depot to the WDs, this transport is carried out in insulated 3 and 5

MT TATA 407s here a permanent dispatch plan (PDP) is prepared where the distributor

plans out the quantity of various products to be ordered on a particular date. 8

Third leg this is the flow of good from WDs to retailers, a beat plan is

prepared and transportation is done on auto-rickshaws, rickshaws and bicycles. SELECTION,MOTIVATION & EVALUATION OF CHANNEL MEMBERS Selection: The companytakes into consideration a host of factors while selecting the channel members. This isbecause GCMMF believes that selection of channel members is a long run decision & the restof the decision regarding the supply chain depends upon the efficiency & coverage by thechannel members. The following are the host of factors considered by the company inselecting the channel members: Authentication is required by the regarding the identity of

the channel members, which includes the name & address, photograph of the location. Proofof solvency which requires name & address of the channel members bankers Safety of the

inventory, which means that the distributor/ dealer should get the stock of the companyinsured. Inventory or the perishable goods kept by the distributor/ dealer should be in good


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condition which means a detail of storage space & Refrigeration facility is to be provided.Refrigeration system should have deep freezers, cold room & walk in coolers. Details of the

delivery vehicle, which includes Light Commercial Vehicles, Matador, 3 Wheeler Van,Tricycle Van & Hand/Push cart. The number & model of each of the vehicle needs to befurnished to the company. GCMMF acknowledges the fact that it needs to be sensitive to the

market demands. For this it requires that a number of salesmen needs to be present on thefield. The salesmen too are divided into various categories like the Field salesmen & Countersalesmen. Also the details of Clerical Staff & Mazdoors are to be provided. The technicalcompetence of the salesmen needs to be mentioned Details of the product kept of other

companies have to be provided. The annual sales of these products too have to be mentioned.Also details of complementary products & product lines need to be mentioned.

Dealers of the company must carry a good reputation. This is due to thefact that the company believes reputation of the dealer affects the clientele. Market coverage

by the distributors needs to be defined which includes details of Geographic coverage &Outlets per market area. The company also requires the dealers to furnish any Advertising &

Sales initiative undertaken by them on behalf of the company. Motivation of ChannelMembers GCMMF strongly believes in maintaining a good relationship with the channelmembers so that they are genuinely motivated to work for the company. Also if the channelmembers are motivated, they can also initiate advertising & sales promotion schemes onbehalf of the company. However to keep the channel members motivated to work, thecompany has to incur certain costs but the benefits of it are felt in the long run. The followingare the motivation programs run by the company: Distributors One of the main factors,

which keep the distributors motivated, is the margin. Usually the margins offered by thecompany are 8% & it is raised to 8.5%. Volume wise this comes out to be a big figure sinceAmuls product has a good demand in the market. However compared to the other companies

the margins are still lower since the new players in the market offer a much higher margin.But the very fact that Amuls products have good demand in the market motivates the

distributors to stock it. Amul being a cooperative cannot afford to give heavy monetaryincentives. Amuls products are considered to be value for money since the company does

not believe in charging high margins. In fact all monetary incentives are just the short runmeans to promote the companys product. In order to keep the Channel members motivatedin the long run, Amul builds on the concept of Trade Marketing which makes the dealers &

the distributors believe that the companys products are worthy of being pushed in the

market. The company is organizing various Total Quality Management initiatives &workshops. Here various counseling measures are undertaken by the company to improve theoverall working of the distribution network. Vision and mission statement: the company

cascades down the vision to the various channel members, this is done through various eventsorganized by the company at different locations where the values of the company are madeclear and enforced to the channel members. Also the fact that Amul being a cooperativesociety cannot

Afford to spend exorbitantly on such events therefore it has a verytraditional way of organizing these get together which leaves an impact on the members.

Amul yatras: this includes taking the channel members on a guided tour of the manufacturingand procuring facilities in Gujarat. So that the channel members can have an experience ofthe working of the company and can pick up some quality measures that can help them tosynchronize and improve their own functioning at various levels. This in turn help the

company to co ordinate the entire value chain, as the channel members understand thevarious constraints and liberties the company goes through. The company has already got the


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Rajiv Gandhi award for quality. The Retailers Trade schemes: these are undertaken by thecompany only for the hard selling items e.g. Ice creams, flavored milk etc. for these thecompany raises the margins by 2%, also schemes like good packaging incase of butter andcheese is undertaken by the company. However this is only a short-term initiative to push the

products of the company. Glow boards: the company puts up glow boards at the retailer and

pays the major portion of the cost. Schedule of the salesmen: they provide the retails withthis schedule so the retailers can pre estimate the quantities of the various products needed.Infrastructure facilitation: the company facilitates the retailers to buy freezers and fridges byformulating an easy payment program and a commitment to buy back the equipment at areasonable price when the value of the equipment has depreciated. Evaluation of channelmembers Beat plan: this plan is generated for the various product categories i.e. diary dry,

diary wet, Dhara and ice cream. A weekly schedule is prepared for various markets and theretailers the turnover for each of the product is calculated for the wholesale dealers. Cumulative performance: the performance of the dealers is averaged out over a period ofthree years where a comparison is made of the present performance vis- -vis the previousones.

Target versus achievement: the performance and the targets are compared andtherefore the gaps are identified which help in evaluating the WD and planning for the nextyear as well. This is done for each of the product category. Other criterion o Details of thebank guaranty o Photographs of the offices o Details of the WD salesmen and the productlines he deals in o The computerization facility available o The storage space o Refrigerationfacility with photograph o Details of the delivery vehicle with photograph o Summary of themonthly potential sales of markets o Summary of the product wise monthly sales potential ofinstitutions Note: the evaluation form in original attached. 12

CONFLICTS AND CO-OPERATION AMONG CHANNEL MEMBERSConflicts Ownership of assets: Previously the company used to give the cooling equipment

on lease to the retailers, when the company wanted the stuff back; the retailer disagreed tocomply and created issues of ownership. Stocking issues: The company doesnt want theretailers to stock the competing brand in the company leased fridges, which at times s hard tomanage as retailers tend to do it often. Replacement of products: The deterioration in the

product calls for fail in replacement by the company this major issue of vertical conflict. Credit policy: Compared to the market, the companys credit period is less that specially

incase of institutional sales is very important. Packaging: The channel members foreasystoring demand a better quality of packaging. Replenishment: The replenishment of the

stocks is not prompt in case of amul cheese and all hard selling items. Margins: The

Company provides least margins to all the channel members. For e.g. The retailers margin incase of butter is 8% as compared to Britannias 12% 13

Co-operation among channel members Amul quality circles: The membersof the local channel meet together every month to share issues and the achievements of thechannel members. This is an ongoing activity facilitated by the company offices in differentlocations; this enables the channel members to learn together and reduces the horizontalconflicts among the WDs. Pilot salesmen scheme: To reduce the financi al burden of thedistributors this scheme is run whereby half the cost of the salesmen is born by the companyand the rest half by the distributor Scheduling of sales: The WDs provides Schedule of the

distributors sales men to the retailers so that the retailers can plan out and place the orders in

advance. Agreement defining rights: The company makes the distributors sign an agreement


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where the areas of operation for each of the distributors are defined, therefore avoiding anyconflict amongst the distributors regarding their areas of operation.

Amul parlours


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Cooperative development programme

Action @amul

Amul ranked No. 1 "Indian" Brand for third consecutive year in Asia

The "Campaign" magazine published from Hong Kong and Singapore hasranked Amul as theNo. 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, aheadof leading food and dairy brands of the

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