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“MARKETING STRATEGY ”
OF AMUL
SUBMITTED TO:
SUBMITTED BY:.
ANJALI SINHA (3510910063)
ANUPAM ROY(3510910073)
ARJUN VIKRAM(3510910083)
Of
B.HARIPRIYA
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ACKNOWLEDGEMENT
We would like to express our deepest gratitude and thanks to Dr.
practically impossible.
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S.NO CONTENT PAGE
NO.
i Introduction 5
ii Amul business model 7
iii Product development 7
iv Distribution 9
v Advertising and sales promotion 10
vi Looking ahead 11
vii Amul The Taste of India 14
viii Three tier amul model 18
xi Impact of amul model 22
x Achievements of amul model 24
xi Amul brand building 25
xii Product list of Amul 29
xiii Market research 36
xiv Strategic positioning and planning 37
xv Conclusion 39
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Introduction
Gujarat Cooperative Milk Marketing Federation (GCMMF), the largest
food company in India, recorded a turnover of Rs 2882 crore ($ 0.65 bn) in
2003-04. Its flagship brand 'Amul' was the market leader in butter, whole milk,
cheese, ice cream and dairy whitener. GCMMF was the largest cooperative
movement in India with 2.2 million milk producers of Gujarat organized in
10,552 cooperative societies. GCMMF collected 5 million litres of milk per day
from its shareholders who owned 3.2 million buffaloes, one million cows and
0.3 million crossbred cows. The Federation's extensive marketing network
comprised 3000 distributors and 500,000 retailers spread across the country.
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He had obtained a master's degree in Mechanical Engineering from Michigan
State University in 1948 and subsequently completed an assignment at the
Government's Research Creamery in Anand when Patel met him. Patel named
Kurien, KCMPUL's General Manager in 1950. In 1954, when the Bombay Milk
Scheme refused to take all the milk that KCMPUL had produced, the
cooperative found itself saddled with surplus milk.
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Amul's Business Model
Amul bought all the milk offered by the milk producer, made timely
payment, and shared with the producers the profit generated from marketing the
milk and milk products under the Amul brand name...
Organizational Structure
The cooperative model pioneered by Amul - a union of primary village
dairy cooperatives- came to be known as the "Anand pattern" cooperative
system. It was a three-tier structure that comprised village societies, district
level dairy unions and a state level federation.
Product Development
Amul's product development was driven both by the spirit of the
cooperative system and profitability. Being a cattle farmers' cooperative, Amul
was committed to buying all the milk offered by the farmer. The perishable
nature of milk made it imperative for Amul to process the surplus milk and
enter new product categories as production increased...
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Butter
Launched in 1955, butter was one of the first milk products offered by
Amul. It was also the first time Amul successfully challenged the hegemony of
an established brand. Amul's earliest competitor, Polson had been the monopoly
milk supplier to the Bombay Milk Scheme. Amul displaced Polson to emerge as
the undisputed leader in the butter market...
Cheese
GCMMF launched processed cheese in 1959 followed by cheese
powder in the early 1970s. In the 1980s the popularity of cheese increased...
Pricing
Amul's philosophy had all along been to deliver value for money to its
customers. Despite being priced economically, Amul maintained its product
quality...
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Distribution
During the year, the major development on the distribution front was
the development and alignment of four distribution highways-those of Fresh
Products, Chilled Products, Frozen Products and Ambient Products. This is a
significant achievement because it allows us to develop synergies among all our
product lines and to leverage these highways to introduce and distribute new
products as per market demand. I take pleasure in declaring that no other
organization in India has been able to develop this kind of channel synergy so
far.
Another major initiative undertaken during the year was the Time-
based Military Technique (TMT) of distribution. This has been deployed to
effect a nationally synchronized mass distribution of our products with the
objective of achieving total channel penetration on a single day. I am pleased to
declare that this initiative has proved to be very successful. Most of our
products launched or re-launched through this technique have seen significant
gains in distribution and availability.
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vehicles. An objective evaluation was done in the form of distributor renewal
and Performance appraisal.
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increased by 13 percent. Products like Flavoured Milk, Amul Fresh Cream,
Paneer, Mithaimate, Softy Mix, and fresh curd demonstrated their potential to
become dominant brands in the coming few years.
Looking Ahead
In the past, illustrious leaders like the late Shri Tribhuvandas Patel,
Bhurabhai Patel, Jaswantlal Shah - to name only a few - understood the
importance of professionalism in the management of cooperatives. They always
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encouraged attitudes and activities geared towards a results orientation. Today's
leaders have a duty and an obligation to carry forward that tradition of
identifying and nurturing professionalism.
From the year 1994, Amul’s unions have been engaged in the
practice of third party validation of its practices. Since then, this have been
awarded the ISO 9002:2000, the HACCP, the ISO 14001 and similar marks of
excellence in milk procurement and processing. It have also been given a
certificate of merit from IMC Ramkrishna Bajaj National Quality Award during
last year.
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constantly create and update our competencies in these products so as lead, set
and exceed market expectations.
Based on the work done in the last decade, the changes that we
have built in the Organisation at all levels, and with the new portfolio of
products we have developed, I feel confident of maintaining our market share
growth. I also feel confident that your Federation will be able to increase its
sales further by close to another Rs.500 crores in the current year.
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AMUL, THE TEST OF INDIA
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Amul is the largest food brand in India and world's Largest
Pouched Milk Brand with an annual turnover of US $1050 million (2006-07).
Currently Unions making up GCMMF have 2.8 million producer members with
milk collection average of 10.16 million litres per 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 did not succeeded, but now it has fresh plans
entering the Japanese markets [6]. Other potential markets being considered
include Sri Lanka.
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The Birth of Amul and development of India’s Dairy
Cooperative Movement
The birth of Amul at Anand provided the impetus to the
cooperative dairy movement in the country. The Kaira District Cooperative
Milk Producers’ Union Limited was registered on December 14, 1946 as a
response to exploitation of marginal milk producers by traders or agents of
existing dairies in the small town named Anand (in Kaira District of Gujarat).
Milk Producers had to travel long distances to deliver milk to the only dairy, the
Polson Dairy in Anand. Often milk went sour as producers had to physically
carry the milk in individual containers, especially in the summer season. These
agents arbitrarily decided the prices depending on the production and the
season. Milk is a commodity that has to be collected twice a day from each
cow/buffalo. In winter, the producer was either left with surplus / unsold milk or
had to sell it at very low prices. 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
it to Bombay city in turn. India ranked nowhere amongst milk producing
countries in the world in 1946.
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after its brand name). Indigenous R&D and technology development at the
Cooperative had led to the successful production of skimmed milk powder from
buffalo milk – the first time on a commercial scale anywhere in the world. The
foundations of a modern dairy industry in India were thus laid since India had
one of the largest buffalo populations in the world.
Dr. Verghese Kurien, the World Food Prize and the Magsaysay
Award winner, is the architect of India’s White Revolution, which helped India
emerge as the largest milk producer in the world.
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to-day functions. It also employs various people for assisting the Secretary in
accomplishing his / her daily duties. 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
Arranging transportation of raw milk from the VDCS to the Milk Union.
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Providing input services to the producers like Veterinary Care, Artificial
Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder
seed sales, etc.
Establish Chilling Centres & Dairy Plants for processing the milk
received from the villages.
Process milk into various milk & milk products as per the requirement of State
Marketing Federation.
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Establish distribution network for marketing of milk & milk
products.
Arranging Finance for the Milk Unions and providing them technical
know-how.
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Impact of the "Amul Model"
The fact that rural development involves more than agricultural production
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The beneficial effects of higher incomes in relieving the worst aspects of
poverty
The dairy cooperative movement has spread across the length and
breadth of the country, covering more than 125,000 villages of 180 Districts in
22 States.
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The dairy cooperatives have also been instrumental in bridging the
social divide of caste, creed, race, religion & language at the villages, by
offering open and voluntary membership.
Achievements of GCMMF
13 District Unions
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The Govt. of India has honoured Amul with the “Best of all categories Rajiv
Gandhi National Quality Award”.
Products
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brands are Amul Kool, a low calorie thirst quenching drink; Masti Butter Milk;
Kool Cafe, ready to drink coffee and India's first sports drink Stamina.
Mascot
Since 1967 Amul products' mascot has been the very recognisable
"Amul baby" (a chubby butter girl usually dressed in polka dotted dress)
showing up on hoardings and product wrappers with the equally recognisable
tagline Utterly Butterly Delicious Amul.The mascot was first used for Amul
butter. But in recent years in a second wave of ad campaign for Amul products,
she has also been used for other product like ghee and milk.
Advertising
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events. The pun in her words has been popular. Amul outdoor advertising uses
billboards, with a humorous take on current events and is updated frequently.
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 with
Smokey Bear. Sylvester da Cunha was the managing director of the advertising
agency, ASP, that created, in 1967, the campaign.
Rivals
In popular culture
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The White Revolution ushered an era of plenty from a measly
amount of milk production and distribution. Aside from the great measurable
success that this project was, it also demonstrated the power of "collective
might". A small set of poor farmers of Kheda district in Gujarat had the vision
and foresight to act in a way that was good for the society and not for the self
alone.
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24 x 10 x 40 Gm.
AMUL F & N CHOC.
(1.40 Oz.)
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illiterate), converts the milk into branded, packaged products, and
delivers goods thus achieving record annual sales turnover of $ 1504
million in 2008-09 making Amul as the largest food products marketing
organization in India with more than 60 products.
Based in the village of Anand, the Kaira District Milk Cooperative Union
(better known as Amul) expanded exponentially. It joined hands with other milk
cooperatives, and the Gujarat network now covers 2.79 million farmers, 13,328 village
societies and thirteen district level plants (unions) under the overall supervision of
GCMMF.
There are similar federations in other states. Right from the beginning,
there was recognition that this initiative would directly benefit and transform
small farmers and contribute to the development of society.
Markets, then and even today are primitive and poor in infrastructure.
Amul and GCMMF acknowledged that development and growth could not be
left to market forces and that proactive intervention was required.
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The first, that sustained growth for the long term would depend on
matching supply and demand. It would need heavy investment in the
simultaneous development of suppliers and consumers.
Second, that effective management of the network and commercial viability
would require professional managers and technocrats.
Developing demand
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providing milk at a basic, affordable price.
Wholesale dealers carry inventory that is just adequate to take care of the transit
time from the branch warehouse to their premises. This just-in-time inventory
strategy improves dealers' return on investment (ROI). All GCMMF branches
engage in route scheduling and have dedicated vehicle operations.
Umbrella brand
The network follows an umbrella branding strategy. Amul is the
common brand for most product categories produced by various unions: liquid
milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and
condensed milk.
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Managing the supply chain
Even though the cooperative was formed to bring together
farmers, it was recognized that professional managers and technocrats would be
required to manage the network effectively and make it commercially viable.
Coordination
Given the large number of organizations and entities in the
supply chain and decentralized responsibility for various activities, effective
coordination is critical for efficiency and cost control. GCMMF and the unions
play a major role in this process and jointly achieve the desired degree of
control.
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It is worth noting that a number of these third parties are not in
the organized sector, and many are not professionally managed with little regard
for quality and service.
More important, the network has been able to regularly roll out
improvement programs across to a large number of members and the
implementation rate is consistently high.
For example, every Friday, without fail, between 10.00 a.m. and
11.00 a.m., all employees of GCMMF meet at the closest office, be it a
department or a branch or a depot to discuss their various quality concerns.
Each meeting has its pre-set format in terms of Purpose, Agenda and Limit
(PAL) with a process check at the end to record how the meeting was
conducted. Similar processes are in place at the village societies, the unions and
even at the wholesaler and C&F agent levels as well.
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wholesale dealers, implementation of Zero Stock Out through improved
availability of products at depots and also the implementation of Just-in-Time in
finance to reduce the float.
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net enabled kiosks in the villages.
Market research
Listen to the Voice of your Customer, find out what your
competitors are doing, analyze the competitive landscape, discover and quantify
new market opportunities. Geo Strategy Partners’ market research practice can
help you identify and capture strategic market growth opportunities.
Geo Strategy Partners strives for insightful results high in validity, reliability,
and objectivity. Amul focus on your strategic objectives, not just our
deliverables.
Strategic planing
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Amul makes an important distinction in their practice between
traditional strategic planning and strategic positioning. Strategic planning is a
linear process, typically with a lot of known variables or assumptions in place.
Marketing Strategy
Business Planning
Market Entry
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Conclusion
Amul is the largest co-operative movement in India with 2.2 million milk
producers organised in 10,552 co-operative societies in 2003-2004.
The country's largest food company, Amul, is the market leader in butter, whole
milk, cheese, ice cream, dairy whitener, condensed milk, saturated fats and long
life milk.
Amul follows a unique business model, which aims at providing 'value for
money' products to its consumers, while protecting the interests of the milk-
producing farmers who are its suppliers as well as its owners. Despite being a
farmers' co-operative, Amul has given multinationals a run for their money.
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In butter, cheese and saturated fats, Amul has remained the undisputed market
leader since its inception in 1955, by offering quality products at competitive
prices. In other categories, Amul has nullified its late mover disadvantage
through aggressive pricing, better quality, innovative promotion, and superior
distribution.
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