Project Report On Amul Company

Submitted in Partial Fulfillment of the Requirements ofBachelor of Business Administration

ofGuru Gobind Singh Indraprastha University

Submitted to : Mr. P.K Pandey Submitted by : Rajeshwar Singh Anand 04121401709 Semester - 3

Jagannath International Management SchoolVasant Kunj, New Delhi – 110070

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Subject

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1. Certificate 4

2. Preface 5

3. Acknowledgement 6

4. Synopsis 7

5. Introduction 9

6. Theoretical perspectivea. Historyb. Condition Of Dairy Farmersc. Role Of Sardar Vallabbhai Pateld. Formation of District Co-operative

Kairae. Formation Of GCMMFf. The First Advertising Strategyg. Digital Advertisingh. Business Modeli. Developing Demandj. Distribution Networkk. Umbrella Brandl. Third Party Service Providersm. Co-ordinationn. Best Practices

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7. Methodologya. Amul Revolution- impact studyb. The Turnaroundc. Socio-Economic Impactd. Institution Building

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8. Analysisa. Marketing And Advertising Strategyb. Product Scope Strategyc. Different Products Of Amul And its

variantd. Product Eliminatione. Current Market Share

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9. Findingsa. Product Positioningb. Product Repositioningc. Product Overlap

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d. Defense Strategye. Amul Defending Its Turff. Segmentationg. Targetingh. Promotioni. Amul Competitors

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10. S.W.O.T Analysisa. Strengthb. Weaknessc. Opportunitiesd. Threat

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11. Conclusions 43

12. Bibliography 44

Certificate

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This project titled “Amul Company” is based on an original study conducted by Rajeshwar Singh Anand of BBA III Semester programme and is based on the results carried out by him under my guidance and supervision.

Mr. P.K Pandey (Project Guide)

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Preface

The report is on Amul Company. I have tried to cover each and every topic

which I found is relevant for the general understanding. I haven’t included

any technical term so as to make it easy to understand by the user.

The report gives an overview of what is all about the Amul company, their

overall products and branches that they have already launched and their

future launching of the products. It gives you a brief idea about their

production and collection techniques

Also at the end, recommendations and policies that are as well as can be

implemented are mentioned. The steps they have taken to improve the

quality and quantity of their product in accordance with customer

satisfaction. Necessary charts and graphs are also included.

Acknowledgement

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ANY ATTEMPT AT ANY LEVEL CANNOT BE SATISFACTORILY COMPLETED WITHOUT THE SUPPORT AND GUIDANCE OF LEARNED PEOPLE.I WOULD LIKE TO EXPRESS OUR IMMENSE GRATITUDE TO Mr. P.K Pandey FOR HER CONSTANT SUPPORT AND MOTIVATION THAT HAS ENCOURAGED ME TO COME UP WITH THIS PROJECT.

Rajeshwar Singh Anand

Synopsis

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With the liberalization of the Indian economy in the early 1990s, and the subsequent entry of new players, there was a change in lifestyles and the food tastes of people. The new team that took over the management of the GCMMF in the mid-1990s hoped to take advantage of the change.

According to some analysts, this diversification was probably not entirely demand-driven. Being a cooperative, GCMMF was compelled to buy all the milk that was produced in Gujarat. And with milk production having increased since the mid 1990s, GCMMF had to make use of additional milk, and hence the pressure to make and market more and more processed-milk products.

Amul had to expand the consumption base of milk-based products in India. It planned to make its products (butter and cheese) a part of the regular diet in most households. Amul launched its new products with the intention of increasing the offtake of its basic milk products, including cheese.

This flurry of launches helped Amul broaden its appeal across all segments. Price was an advantage that Amul enjoyed over its competitors. Amul's products were priced 20-40 % less than those of its competitors. Analysts felt that Amul could price its products low because of the economies of scale it enjoyed.

Amul's obsession with keeping down manpower cost and dealer commissions added to the strength . In ice-creams for example, Amul's retail commission in Ahmedabad city was 17.5% which was 10% lower than what competitors offered.

However, all said and done, Amul seemed to be all set to make steady progress in the coming years with its products having become quite popular in both rural and urban households. Said Vyas, "We've handled liberalization and globalization far better than our transnational rivals. It has made us fitter than ever."

Period of diversification

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In 1996, B M Vyas, Managing Director, GCMMF, commissioned the Indian Market Research Bure (IMRB) to conduct a consumer survey to identify the products consumers wanted from Amul .Based on the findings, Amul entered into the following areas: ice cream, curd, paneer, cheese, and condensed milk.

In 1997, Amul launched ice creams after Hindustan Lever acquired Kwality, Milkfood and Dollops. Positioned as the 'Real Ice-cream,' Amul Ice cream was one of the few milk-based ice creams in the market.

In 1999, Amul launched branded yoghurt in India for the first time, when it test marketed "Masti Dahi" in Ahmedabad first and then introduced it all over the country

In January 2000, Amul re-entered the carton milk market with the launch of "Amul Taaza" in Mumbai. Amul Taaza was non-sweetened, plain, low fat milk. The product was positioned as a lifestyle as well as functional product.

In November 2000, Amul decided to promote mozzarella cheese, which was used in pizza. The growing demand for mozzarella cheese from pizza making companies like Pizza Hut and Domino's Pizza was expected to give Amul's cheese sale an additional push.

In August 2001, Amul decided to enter the ready-to-eat stuffed paratha, cheeseburger, cheese and paneer pakoda, and cheese sandwich segments. The products were marketed under the SnowCap brand. The SnowCap brand also included tomato sauce and ketchup.

Introduction

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The largest food brand in India and world's Largest Pouched Milk Brand ‘Amul’ is a brand name managed by Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF).

This name has its origin in the Sanskrit word "Amoolya," (meaning Priceless) and was actually suggested by an employee of Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)

The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India and is the apex organization of the Dairy Cooperatives of Gujarat.

With a turnover of INR 67.11 billion GCMMF has created an economic network that links :

millions of consumers in India and abroad,

2.8 million village milk producers,

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a cooperative system that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level,

Theoritical perspective

History

• Condition of dairy farmers

• Plea of dairy farmers and role of Sardar Vallabh Bhai Patel

• Formation of first District Co-operative ‘Kaira’

Formation of ‘GCMMF’

Condition of Dairy farmers

There was exploitation of marginal milk producers by traders or agents of existing dairies in the small town

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named Anand (in Kaira District of Gujarat) and Polson Dairy .

Other problems faced by dairy farmers in Gujrat.

Role of Sardar Vallabhai patel

• Unfair trade practices and minimal returns angered dairy farmers.

• So under the leadership of Tribhuvandas Patel dairy farmers approached Sardar Vallabh Bhai Patel for a solution.

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Formation Of District Co-operative Kaira

• Thus the first District Cooperative was established to collect and process milk in the District of Kaira in 1946.

• Milk collection was also decentralized and village level cooperatives were established to organize the marginal milk producers in each of these villages.

• The brand Amul was formally registered on December 14th, 1946

Formation Of ‘GCMMF’

• Later on with the help of Dr. Verghese Kurien and Shri H M Dalaya this revolution spread to most of the districts in Gujrat.

• Thus GCMMF came into being in the year 1973.

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• Initially, the brand name Amul was with Kaira district dairy cooperative, but later they decided to give it to GCMMF

The First Advertising Strategy

1966 sees the creation of the Amul girl by Sylvester daCunha of the ASP Advertising agency as a rival to the Polson .

In 1967 the first hoarding was put up in Mumbai with the Amul girl.The tag line of “Utterly Butterly Delicious” came out in October of 1967.

The first Topical ad came out in 1969 at the beginning of the Hare Rama Hare Krishna movement.One of the most conservative FMCG entities — GCMMF — spends a mere 1% of its turnover on promotions. Amul butter girl is one of the longest run ad campaigns in the country for 43 years.Entered in the Guinness Book Of World Records for being the longest running campaign ever.

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Digital Advertising

Amul Cyber StoreAmul in Social NetworkingAmul Indulges in Second Life marketing – Advergaming Business Model

The father of the White Revolution, Dr. Verghese Kurien and the World Food Prize & the Magsaysay Award winner, is responsible for the grand success of brand ‘Amul’.

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In a recent survey,

GCMMF ranked amongst the top ten FMCG firms in the country

AMUL rated the second most recognized brand in India amongst all Indian and MNC offerings

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Objective :

Deliver profitable and equitable returns to a large number of farmers for a long period of time

Additional objective

Develop the supplier over the long term through social change.

Amul’s Supply chain is one of the most complicated in the world

Success depends on

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Developing Demand

Consumers- Limited Purchasing power

Modest consumption levels of milk

Low –cost price strategy

Products affordable & attractive

Distribution Network

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Dry and cold warehouses to buffer inventory

Transactions on an advance demand draft basic

Just-in-time inventory strategy improves dealers' return on investment (ROI)

All branches -dedicated vehicle operations.

Umbrella brand

Common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk

Avoided inter-union conflicts

Opportunity for the union members to cooperate in developing products. Third Party Service Providers

Unions' core activity -milk processing and the production of dairy products.

Marketing efforts , brand development - By GCMMF

Logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinary services –By Third Parties

Co-ordination

Large number of organisations and entities in the supply chain

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GCMMF and the unions play a major role in achieving control

Interlocking control - The board is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies

The federation handles the distribution of end products and coordination with retailers and the dealers.

The unions coordinate the supply side activities.

Best practices

Small group activities or quality circles at the federation

TQM program at the unions

Improvement programs across to a large number of members and the implementation rate is consistently high

For example, every Friday, Meeting without fail, between 10.00 a.m. and 11.00 a.m – to discuss quality concerns

Village societies becoming individual improvement centres

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Methodology

Amul Revolution – Impact Study

Pre-Amul Era

Over five decades ago, the life of a farmer inKaira District was very much like that of his counterpart

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anywhereelse in India.

His income was derived almost entirely from seasonalcrops.

Milk distribution was by private traders. . As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often, they had to sell cream and ghee at throwaway prices. In this situation, the one who gained was the private trader.

Only one company , a British company(Polson) existed and it exploited the farmers

The Turnaround

• Farmer’s realization that they had to market milk themselves to earn better is what led to the establishment of the Kaira District Cooperative Milk Producers' Union Limited (popularly known as Amul)

• An assured market proved a great incentive to the milk producers of the district. By the end of 1948, more than 400 farmers joined in morevillage societies, and the quantity of milk handled by one Unionincreased from 250 to 5,000 liters a day.

Socio-Economic Impact

• The yearly elections of the management committee and its chairman, by the members, are making the participants aware of their rights and educating them about the democratic process.

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• Voluntary mix of the various ethnic and social groups for common causes and mutual betterment has resulted in eroding many social inequilibria. The rich and the poor, the elite and the ordinary come together to cooperate for a common cause.

• Live exposure to various modern technologies and their application in day-to-day life has not only made them aware of these developments but also made it easier for them to adopt these very processes for their own betterment.

• More than 900 village cooperatives have created jobs for nearly 5000 people in their own villages -- without disturbing the socio-agro-system -- and thereby the exodus from the rural areas has beenarrested to a great extent.

• Besides, women, who are the major participants, now have a say in the home economy. Initiated “Mahila Pashupalan Talim Karyakram” for women resource persons of the member unions.

• 48 per cent of the income of the rural household in Kaira District is being derived from dairying. Since dairying is a subsidairy occupation for the majority of the rural population, this income is helping these people not only to liberate themselves from the stronghold of poverty but also to elevate their social status.

• CSR sensitive organizational structure – the 3 tier model from village societies to state cooperatives ensures accumulation of human capital which in itself leads to development of society and the economy.

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• Amul Relief Trust – formed in 2001 by GCMMF under the Chairmanship of Dr. V. Kurien.

• The Trust reconstructed 6 schools damaged by the 2001 earthquake at a cost of Rs. 41.1 millions in Kutch area.

• Ripple Effects

• Anand Pattern extended to other districts in Gujarat - Mehsana, Sabarkantha, Banaskantha, Baroda and Surat where farmers easily adopted Amul’s gameplan.

• The Himalayan Cooperative Milk Producers’ Union Limited (HIMUL) was formed at the foot of the Himalayas in West Bengal in 1973 on the same lines as Amul.It includes both dairy and non-dairy.

• At a later stage oilseeds, fruit and vegetables, salt, and tree sectors also benefited from it's success.

Institution Building

• The National Dairy Development Board (NDDB) was created in 1965, fulfilling the desire of the late Lal Bahadur Shastri - to extend the success of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India.

• Founded by Dr. Verghese Kurien and Dr. Amrita Patel is the current Chairman of the National Dairy Development Board, Anand.

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• 96000 cooperatives have been integrated by this to date.

• To promote the development of cooperatives NDDB has set up separate units and works in close association with a number of national level institutions Sabarmati Ashram Gaushala (SAG), Bidaj, Animal Breeding Centre (ABC), Salon, Institute of Rural Management, Anand (IRMA), National Cooperative Dairy Federation of India (NCDFI), Anand and Foundation for Ecological Security (FES), Anand, Mother Diary, Delhi.  

• Institute Of Rural Management formed in 1979 with Swiss Agency for Development Coordination and Govt of Gujarat to develop people through management education.

Analysis

Marketing and Advertising Strategies

1)Quality

• No brand can survive long if it’s quality is not equal or exceed customer expectations.

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• Incase of food product hygienic, taste, bacteriological & organoleptic standard –main essence.

2)Value for money

• Customers get more than what they pay.

• Keep price fair & do best to ensure that retailers don’t gain at the expense of customer.

3)Availability

Brand available when and where customers want.

Amul has nation’s finest distribution network.

4)Service

Committed to total quality.

Product Scope Strategy

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“Perspective of the product mix of a company”

Different products of Amul and its variants

Bread spreads

Amul Butter Amul Lite Low Fat Bread spread Amul Cooking Butter Delicious Margarine Pure Ghee

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Sweets

Amul Shrikhand & Amrakhand Amul Mithaee Khoya Gulabjamaun Amul Basundi

Milk Powders

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

Sweetened Condensed Milk Amul Mithaimate

Fresh Milk

Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 4.5% fat Amul Slim & Trim Double Toned Milk

1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk

Curd Products

Yogi Sweetened Flavoured Dahi (Dessert)

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Amul Masti Dahi (fresh curd) Amul Lite Dahi Amul Prolife probiotic Dahi Amul Masti Spiced Butter Milk Amul Lassee

Chocolate & Confectionery

Amul Fruit & Nut Chocolate Amul Bindazz Amul Rejoice Amul kesar

Brown Beverage

Nutramul Malted Milk Food

Amul Ice creams

Vanilla Royale

Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi)

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

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

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

Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta)

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

Milk Drink

Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate, Butterscotch)

Amul Kool Cafe Amul Kool Koko

Health Beverage

Amul Shakti White Milk Food

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Product Elimination

Product reaches the stage where continued support is no longer justified where performance is falling short of expectations, it is desirable to pull the product out of the market place.

“ It eliminated “JALDHARA” a decade ago as Bottled water product do not have potential customers”.

Current Market Share

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Findings

Product Positioning

Placing a product in that part of the market where it will receive a favorable reception compared to competing products.

A mass market player, no premium offerings

USP – Quality with affordability

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Up against niche players – value addition to customers

Sheer size and scale of operation

New offerings for health conscious and vibrant India –

India’s First Pro-Biotic Wellness Ice cream & Sugar Free Delights For Diabetics.

Low Priced Amul Ice Creams made Kwality Walls life hell.

Flank Attack.. Age Wise..Aug 25 2007

Amul launches Chocolate milk under brand name of ‘Amul Kool Koko’.

This is targeted at teenagers and youths.

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Nov 11, 2007

Amul in Multinational Arena With Snack Launch: “Munch Time”.

Flavors: Masala , Mint and Tomato

New Product Activity.Nov 26, 2007

Amul Launches “Fresh Paneer” (Free From Any Harmful Chemicals)Flank Attack—Expanding its Cheese Segment.

Current market share 65%.

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Product Repositioning

New Competition

Change in consumer preference

Wrong original positioningAmul marketed bottled water product

named “JALDHARA” but due to less potential in the market it turned out to be blunder.

Now Amul is all set to launch bottled water “NARMADA NEER”.

Product Overlap

Situation where company decides to compete against its own brands.

Powdered Milk

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Health and price Conscious

Cheese Spreads Specific Vs General

“Amul Processed Cheese Vs Cheese Spread”USP:Cheese spread is highly accepted spread for regular use.

Milk Drinks“Nutramul Energy Drink Vs Amul Kool”

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Defense Strategy

Moving consumers from loose milk to packaged milk and gradually move them up the value chain (tetra pack to beverages, all available under the Amul brand)

A sound strategy likely to work.

Being exposed to a brand, it is natural for a customer to try more products

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Improving socio-economic condition of the customer anchors the desire to enhance lifestyle

Amul defending its turf

Largest milk brand in Asia marketing more than 30 different brands of dairy products like cheese, ice-cream, condensed milk, ready-to-eat pizza, beverages etc.

Amul is the market leader in ghee and butter

Amul Kool and Kool Café doing well

Defending against names like Mahananda, Vijay, Milma and other co-operative milk brands

Aggressive moves against FMCG and F&B brands like Britannia, Nestle and Mother Dairy among others.

Segmentation

Wide range of product categories caters to consumers across all market segments. For example, Amul Kool is

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targeted at children, while teenagers prefer Kool Café, as it has a cool imagery associated with it.

Segmentation is not as easy in curd and low fat products, due to mixed audiences, various culinary applications , eg. ghee, butter and cheese.

“In India, the most used spread is ghee, then butter, cheese, low fat butter, margarine, cheese spread and mozzarella cheese.

Targeting

Changing retail environment Striking out on its own, with Amul

Outlets or parlors to deliver consumers total brand experience

Launched in 2002, there are now 400 Amul parlors across the country, which contributed 3% to the brand’s total turnover last year.

High profile locations: Amul parlors are today present on campuses of Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail and railway stations in Gujarat.

Promotion

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Given this wide product portfolio, Amul’s approach is to promote its brands in a rotational cycle of two to three years.

After ice-creams were launched in 1996, the category was re-visited in 1999, in order to improve availability of the product and make it affordable.

The focus shifted to cheese in 2001, Amul Masti Chaas in 2004-05 (sales of Masti dahi grew by 25%), Nutramul and Kool Kafe in 2006 and Amul Koko — cold chocolate drink in 2007

Uses a variety of media to communicate

Most famous is billboard campaign

The endearing polka dressed girl and pun at various issues increased brand’s fan following.

Below-the-line activity has grown too — such as the Amul food festival, which has been held for the last four year between October and December in about 50,000 retail outlets.

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The Chef Of India promo invites hotel chefs to come up with recipes using as many Amul products as possible, and is conducted at city, state and national level.

Amul Competitors

Butter

Britannia Nestle

Cheese

Britannia

Baby Food

Nestle Heinz

Dairy Whitener Segment

Nestle Britannia

Ice creams

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HLL

Chocolates & Confectionaries

Cadbury Nestle

Pizza

Pizza Hut Dominos Nirulas Frozen pizza

Curd

Nestle Mother Dairy

Ultra High Treated Milk

Nestle Britannia

Sweet Condensed milk

Nestle

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Cottage Cheese(Paneer)

Britannia

Milk Additives

Cadbury Smithkline Beecham

Flavored Milk

Britannia

SWOT Analysis

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In this part we are going to analyses the strength, weakness, threats and opportunity of the PepsiCo

Strength

• Demand profile• Flexibility of product mix • Technical manpower • Trust enjoyed by its products• Strong cooperative organization• Introduced TQM

Weakness

• Logistics of procurement• Competition• Short self life of its products• Completely dependent on villages for

its raw material• Salaries offered is less compared to

competitors

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Opportunities

• Value addition• Export potential• Used internet to sell its products• Introduced hybrid products in the

market• Exploring foreign markets

Threat

• Milk vendors, the un-organized sector• Strong competition from MNCs• Competition from private dairies and

local milk suppliers• The yield of Indian cattle still much

lower than other dairy countries

Conclusion

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Amul envisages that the dairy cooperatives of Gujarat will have a group turnover of Rs. 27000 crores by the year 2020. This will be a three-fold increase over its current group turnover of approx. Rs. 9600 crores. Milk production in milk shed area will increase to 231 lakh kg per day (23.1 million kg per day), at an annual growth rate of 4%.

Amul will create fresh avenues for growth by tapping the rising demand for new value-added products. Special emphasis will be given to strengthening their presence in the large market for liquid milk, in metropolitan cities.

Plan to double to processing capacity of dairy plants to 20.7 million kg per day, by 2020. This would include multi-fold capacity expansion for major product categories including milk powders, Ice-cream, paneer, cheese, ethnic sweets, curd, ghee and other dairy products.

BiblioGraphy

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List of published sources consulted during the course of the project :-

1.) www.google.com2.) www.youtube.com3.) www.msn.com4.) www.yahoo.com 5.) The Economic Times

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