PROJECT REPORT

DEVELOPMENT OF AMUL MILK

BACHELORS OF MANAGEMENT STUDIES

SEMESTER-V

SUBMITTED

IN PARTIAL FULFILLMENT OF THE

DEGREE OF BACHELOR OF MANAGEMENT
STUDIES

BY

MAKARAND WAINGANKAR

ROLL NO:- 124

RAMNIRANJAN JHUNJUNWALA
COMMERCE ARTS AND SCIENCE.

1
 DECLARATION

I, MAKARAND WAINGANKAR THE STUDENT OF TYBMS

SEMESTER-V (2017-18). HERE BY declare that I have
completed the project on Development of Amul Milk the
information submitted is true and original to best of knowledge.

MAKARAND WAINGANKAR

ROLL NO:124
RAMNIRANJAN JHUNJUNWALA COLLEGE OF ARTS,
SCIENCE, COMMERCE, GHATKOPAR (W)

2
 CERTIFICATE
This is to certify that MR.MAKARAND WAINGANKAR,

ROLL NO:-124 the student of third year BMS Semester-V (2017-

18) has successfully completed the project on DEVELOPMENT
OF AMUL MILK under the guidance of Prof. KALAI SELVI
MAM.

PRINCIPAL

COURSE CO-ORDINATOR:-

PROJECT GUIDE:-

EXTERNAL EXAMINER:-

3
 ACKNOWLEGDMENT
To list who all have helped me in difficult because they are so enormous.

I would like to acknowledge the following as being idealistic channels and

fresh dimension in the completion of this project.

I take the opportunity to thank the University of Mumbai for giving me the
chance to do this project.

I take this opportunity to thank my principal Prof. Dr. Usha Mukundan for
providing the necessary facilities required for completion of this project.

I take opportunity to thank our co-ordinator Prof. KalaiSelvi Nadar for her
moral support and guidance.

I would also like to show my gratitude to my project guide Prof.

KalaiSelvi Nadar whose guidance and care made the project successful.

Lastly I would like to thank each and every person who directly or
indirectly helped me in the completion of project especially my parents

And who supported me throughout my project.

4
SR.NO TITLE PAGE.NO

1. INTRODUCTION AND HISTORY 7

2. OBJECTIVE OF STUDY 35

3. RESEARCH METHODOLOGY 36

4. LITERATURE REVIEW 37

5. DATA ANALYSIS 39

6. CONCLUSION 49
7. REFERENCES/BIBLOGRAPHY 52

5
 Executive Summary

This final project was undertaken with the objective of “CONSUMER BUYING
PATTERN TOWARS AMUL MILK”
In the year 1946 the first milk union was established. This union was started with 250
litre of milk per day. In the year 1955 AMUL was established. In the year 1946 the
union was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’
UNION. This union selected the brand name AMUL in 1955.

The brand name Amul means “AMULYA”. This word derived of the
Sanskrit word “AMULYA” which means “PRICELESS”. A quality control expert in
Anand had suggested the brand name “AMUL”. Amul products have been in use in
millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India.
(The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many things like
of the high-quality products sold at reasonable prices, of the genesis of a vast co-
operative network, of the triumph of indigenous technology, of the marketing savvy
of a farmers' organization. And have a proven model for dairy development
(Generally known as “ANAND PATTERN”).

6
 INTRODUCTION AND HISTORY

In the year 1946 the first milk union was established. This union was started with 250
litre of milk per day. In the year 1955 AMUL was established. In the year 1946 the
union was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’
UNION. This union selected the brand name AMUL in 1955.

The brand name Amul means “AMULYA”. This word derived of the
Sanskrit word “AMULYA” which means “PRICELESS”. A quality control expert in
Anand had suggested the brand name “AMUL”. Amul products have been in use in
millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India.
(The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many things like
of the high-quality products sold at reasonable prices, of the genesis of a vast co-
operative network, of the triumph of indigenous technology, of the marketing savvy
of a farmers' organization. And have a proven model for dairy development
(Generally known as “ANAND PATTERN”).

In the early 40’s, the main sources of earning for the farmers of Kaira district
was farming and selling of milk. That time there was high demand for milk in
Bombay. The main supplier of the milk was Polson dairy limited, which was a
privately owned company and held monopoly over the supply of milk at Bombay
from the Kaira district. This system leads to exploitation of poor and illiterates’
farmers by the private traders. The traders used to beside the prices of milk and the
farmers were forced to accept it without uttering a single word.

However, when the exploitation became intolerable, the farmers were

frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a leading
7
activist in the freedom movement. Sardar Patel advised the farmers to sell the milk on
their own by establishing a co-operative union, Instead of supplying milk to private
traders. Sardar Patel sent the farmers to Shri Morarji Desai in order to gain his co-
operation and help. Shri Desai held a meeting at Samarkha village near Anand, on 4 th
January 1946. He advised the farmers to form a society for collection of the milk.
These village societies would collect the milk themselves and would decide the prices
at which they can sell the milk. The district union was also form to collect the milk
from such village co-operative societies and to sell them. It was also resolved that the
Government should be asked to buy milk from the union.

However, the govt. did not seem to help farmers by any means. It gave the
negative response by turning down the demand for the milk. To respond to this action
of govt., the farmers of Kaira district went on a milk strike. For 15 whole days not a
single drop of milk was sold to the traders. As a result the Bombay milk scheme was
severely affected. The milk commissioner of Bombay then visited Anand to assess
the situation. Having seemed the condition, he decided to fulfil the farmers demand.

Thus their cooperative unions were forced at the village and district level to
collect and sell milk on a cooperative basis, without the intervention of Government.
Mr. Verghese Kurien showed main interest in establishing union who was supported
by Shri Tribhuvandas Patel who lead the farmers in forming the Co-operative unions
at the village level. The Kaira district milk producers union was thus established in
ANAND and was registered formally on 14th December 1946. Since farmers sold all
the milk in Anand through a co-operative union, it was commonly resolved to sell the
milk under the brand name AMUL.

At the initial stage only 250 litres of milk was collected every-day. But
with the growing awareness of the benefits of the cooperativeness, the collection of
milk increased. Today Amul collect 11 lakhs litres of milk every-day. Since milk was
a perishable commodity it becomes difficult to preserve milk flora longer period.
8
Besides when the milk was to be collected from the far places, there was a fear of
spoiling of milk. To overcome this problem the union thought out to develop the
chilling unit at various junctions, which would collect the milk and could chill it, so
as to preserve it for a longer period. Thus, today Amul has more than 150 chilling
centres in various villages. Milk is collected from almost 1073 societies.

With the financial help from UNICEF, assistance from the govt. of New
Zealand under the Colombo plan, of Rs. 50 -millions for factory to manufacture milk
powder and butter was planned. Dr.Rajendra Prasad, the president of India laid the
foundation on November 15, 1954. Shri Pandit Jawaharlal Nehru, the prime minister
of India declared it open at Amul dairy on November 20, 1955.

9
The AMUL Story

The Kaira District Cooperative Milk Producers’ Union Limited was established on
December 14, 1946 as a response to exploitation of marginal milk producers in the
city of Anand (in Kaira district of the western state of Gujarat in India) by traders or
agents of existing dairies. 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.
These agents decided the prices and the off-take from the farmers by 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 to Bombay city in turn (about 400 kilometers
away). India ranked nowhere amongst milk producing countries in the world in 1946.
The producers of Kaira district took advice of the nationalist leaders, Sardar
Vallabhbhai Patel (who later became the first Home Minister of free India) and
Morarji Desai (who later become the Prime Minister of India). They advised the
farmers to form a cooperative and supply directly to the Bombay Milk Scheme
instead of selling it to Polson (who did the same but gave low prices to the
producers). Thus the Kaira District Cooperative was established to collect and
process milk in the district of Kaira. Milk collection was also decentralized, as most
producers were marginal farmers who would deliver 1-2 litres of milk per day.
Village level cooperatives were established to organize the marginal milk producers
in each of these villages.

10
 The first modern dairy of the Kaira Union was established at Anand (which
popularly came to be known as AMUL dairy after its brand name). The new plant
had the capacity to pasteurise 300,000 pounds of milk per day, manufacture 10,000
pounds of butter per day, 12,500 pounds of milk powder per day and 1,200 pounds of
casein per day. 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 had just been laid as India had one of the largest buffalo
populations in the world.

We move to year 2000. The dairy industry in India and particularly in the State of
Gujarat looks very different. India has emerged as the largest milk producing country
in the world (see Table 1). Gujarat emerges as the most successful State in terms of
milk and milk product production through its cooperative dairy movement. The Kaira
District Cooperative Mi Producers’ Union Limited, Anand becomes the focal point of
dairy development in the entire region and AMUL emerges as one of the most
recognized brands in India, ahead of many international brands1.
Starting with a single shared plant at Anand and two village cooperative
societies for milk procurement, the dairy cooperative movement in the State of
Gujarat had evolved into a network of 2.12 million milk producers (called farmers)
who are organized in 10,411 milk collection independent cooperatives (called Village
Societies). These Village Societies (VS) supply milk to thirteen independent dairy
cooperatives.

11
 AMUL is one such Union. Milk and milk products from these Unions are
marketed by a common marketing organization (called Federation). Figure 1 gives
the hierarchical structure of this extensive network of cooperatives. Gujarat
Cooperative Milk Marketing Federation or GCMMF is the marketing entity for
products of all Unions in the State of Gujarat2. GCMMF has 42 regional distribution
centers in India, serves over 500,000 retail outlets and exports to more than 15
countries. All these organizations are independent legal entities yet loosely tied
together with a common destiny! (In a recent survey GCMMF was ranked amongst
the top ten FMCG firms in the country while AMUL was rated the second most
recognized brand in India amongst all Indian and MNC offerings). Interestingly, the
Gujarat movement spread all over India and a similar structure was replicated (all are
at different levels of achievement but their trajectory appears to be quite similar).
Two national organizations, the National Dairy Development Board (NDDB) and the
National Co-operative Dairy Federation of India (NCDFI) were established to
coordinate the dairy activities through cooperatives in all the States of the country.
The former provides financing for development while the latter manages a national
milk grid and coordinates the deficit and surplus milk and milk powder across the
states of India. In the early nineties, AMUL was asked by the Government of Sri
Lanka to establish a dairy on similar lines in Sri Lanka. Interestingly, while Polson
folded up sometimes in 1960s, the cooperatives are faced with new competition in
liberalizing India – from multi-national corporations (MNCs) that brought in new and
improved product portfolio, international network and immense financial support.
The Cooperatives face new challenges that test the robustness of their approach and
their commitment to the movement and a new style of management thinking.

Today AMUL is a symbol of many things. Of a promise to member farmers

who are assured a guaranteed purchase of all the milk that they produce at pre-

12
determined prices. Of high-quality products sold at reasonable prices to consumers.
of developing and coordinating a vast co-operative network. of making a strong
business proposition out of serving a large number of small and marginal suppliers.
of the triumph of indigenous technology. of the marketing savy of a farmers'
organisation.
In the remaining part of the paper, we first review the role that cooperatives have
played in the development of dairy industry globally and how is this sector adjusting
to new global challenges. Next, we look at AMUL within this context and highlight
their journey towards excellence. Specifically, we study how AMUL achieved this
exalted status, what were the ingredients of its success, how did the belief in
cooperation transform the business environment and the lives of people, and what
lessons does it hold for other businesses.

13
Cooperatives and the Global Dairy Industry

Three broad questions have intrigued researchers and practitioners on

cooperatives3: what are the objectives of cooperatives, what determines the success
and failure of cooperatives and how do cooperatives act as organizations of social
and economic change. While most of the observations are based on normative
judgments of what the cooperatives are supposed to do, some studies reflect the
true behavior of agents within a cooperative framework thereby making the debate
on cooperatives more complex but also interesting. To these themes we add
another question that reflects in some ways our own enquiry through this paper: are
mechanisms of cooperation that cooperatives employ any different from those used
by other industrial organizations?
Traditionally, cooperatives have been established to serve the needs of its
members in order to maximize their returns. Governments have usually seen these
organizations as effective mechanisms for delivering their own program (e.g.,
sector development or poverty reduction, etc.). Researchers have looked at
cooperatives as channels for re-distributing wealth, improving the opportunities for
the weaker sections of the society, alternative institutions for property ownership,
efforts in democratic and participative governance of organizations 4 etc. (this
discussion draws from Shah, 1995). In that, the cooperatives have often sought
protection of sorts from uncertainties in the market place. Globally, modern day
cooperatives are agglomeration of many such small groupings that serve some of
the above objectives but have now moved from being protected entities to
becoming market driven. This makes such cooperatives an interesting
organizational alternative to traditional business enterprises (i.e., investor owned
firms) in terms of concern for shareholders, distributional effectiveness and ability
to provide product/service variety5.
14
 In emerging economies, cooperatives have been used as institutions to
organize marginal producers thereby providing scale effects to a network of such
producers. Sometimes, it is the government that organizes these marginal
producers and may also manage the collective (as in various cooperatives in former
Soviet Union and Africa). On other occasions, producers themselves come together
to produce and distribute their own products (as in the case of AMUL, majority of
cooperatives in North America etc6.). While control and subsidies from the
government distort the performance of former, producer-driven cooperatives have
to develop systems and processes that respond to market requirements and be
competitive. In that, the determinants of success for this kind of cooperatives are
no different from those of other commercial organizations. Moreover, they
recognize that in order to optimize the objective function of the marginal
producers, they have to serve the market very effectively7. Cooperatives are,
however, different from other commercial organizations in one respect – they are
bound to serve the suppliers (i.e., the producers of goods & services who happen to
be the members of the cooperatives) in good and bad times. In that, they present an
interesting model to other commercial organizations on strategic management of
resources and their conservation.
Globally, cooperatives have played the role of preventing market failures for small
producers especially in the dairy industry8. Traditionally, a large number of these
cooperatives have had small membership and produced predominantly raw
products (i.e., fluid milk) or products with some value addition (i.e., dry powder,
butter etc.). This situation has been changing dramatically in the last decade and
especially in the last three years. There has been a spate of mergers all around the
world to create fewer but larger dairy cooperatives. In many cases, these
cooperatives look very different from the merged entities.
15
Cooperative dairies that operate with small membership have retained a certain
focus (i.e., geographical or product related) in their offerings9. There have been
several factors driving the restructuring of the dairy business (which has chiefly
been organized around cooperative principles). These include efficiencies in
managing fewer large plants versus a number of under-utilized small plants, need
for more milk supply (and declining membership), need to offer wide variety,
improvements in trucking & milk handling thereby facilitating long hauls, opening
of new international markets (also markets for new products), seeking marketing
clout and need to bring investment from outside the cooperatives. In USA, for
instance, there were 592 cooperatives (with a membership of 281,065 producers)
that marketed milk to plants and handlers in 1973. This number reduced to 226
(with 87,938 members) in 1997. However, the share of milk delivered by the
cooperatives increased by 9 percent during this period though the share of dairy
sales of small cooperatives reduced from 43.8 percent in 1975 to about 30 per cent
in 1998 ( Blayney and Manchester, 2000)10. The two largest dairy cooperatives in
the US, Dairy Farmers of America and Land O’Lakes had annual sales of US$ 7.9
and 5.1 billion respectively11.
Dairy Farmers of America was formed by the merger of four large cooperatives in
the US in 1998. It consists of 25,499 members across 45 states of USA12.
Consolidation in cooperatives during the last five years was also in anticipation of
(and reaction to) the consolidated Federal Milk Marketing Order of 2000 which
removed geographical anomalies in minimum support prices for dairy products
hence reduced the need to locate spatially distributed processing centers to take
advantage of varying prices. It helped dairy cooperatives to forge alliances with
firms in various regions.

16
 European (and especially Scandinavian) dairy cooperatives have also seen
tremendous consolidation. Danish cooperatives, mostly producers’ cooperatives,
have often faced difficulties in raising capital internally for investment (though
government support has been quite strong on this count) and have been re-
structuring since mid-70s (Hansen et al. 1980). Dairy coops in Denmark have
reduced to 45 units in 2002 from 1500 in 1930s with one large dairy processing 90
per cent of the available milk. The Danish Dairy Board, however, invests in R&D,
allots quota for milk supply to individual farms, regulates prices and quality, and
supports the efforts of the cooperatives in international markets. It believes that its
competition is from dairies outside Denmark13. Similar has been the experience of
dairy farmers in other parts of Europe with a higher involvement of government in
reshaping the structure of the industry. Many Irish cooperatives have, however,
converted to non-cooperative forms (Hamm, 2001). Outside Europe and USA, the
experience of dairy cooperatives in New Zealand is instructive. The New Zealand
Dairy Board (NZDB) zealously guards the structure of the industry, which had an
annual worldwide sale of NZ$3.5 billion in 1996.

Dairy cooperatives collect milk from individual farmers and sell processed
products in the domestic markets and to NZDB for exports14. Akoorie and Scott-
Kennel (1999) argue that this structure looks more like strategic partnership
between producers and the board (the global marketing arm) with the later
providing capital for growth and innovation. Interestingly, the form that a
producing organization should take and the relationship that it should have with its
marketing has been the center of debate in managing dairy cooperatives. AMUL in
India has learnt from many of these experiences and has been influenced by
practices in dairies around the world especially in its formative years. It has,
however, formed it own organizational structure (i.e., AMUL is a cooperative of
17
village cooperatives) to bring about a change in the lives of marginal farmers of
India.
in the region of the cooperative, the sociology of cooperation, interface of the dairy
cooperative and the rural power structure, relation of the State and the Cooperative
and the role of government in its growth (interestingly, AMUL has successfully
managed to exercise its independence from the government unlike other
cooperatives in India), elements & replicable of the cooperative movement at
Anand, cost effectiveness of subsidies to AMUL (in its initial years) etc.15

A few studies have evaluated the operational effectiveness of the operations at

AMUL16. Studies have reported usage of mobile veterinary dispensaries, wireless
sets to link mobile units to service centers as early 1951, developing a programme
of cross breeding of cows in early 1970s etc. that have led to a phenomenal rise in
productivity of milk (Patel, 1988).We have, however, not come across any research
paper or study that looks at the entire supply chain to understand the role of
managerial practices in achieving its objectives successfully. There have been no
studies that look at managerial practices, efficiency and performance of
cooperatives either. We now present, how AMUL developed a robust organization
based on sound values and commercial interests.

18
ACHIEVEMENTS:

Amul: Asia’s largest dairy co-operative was created way back in1946 to
make the milk producer self-reliant and conduct milk- business with pride. Amul
has always been the trend setter in bringing and adapting the most modern
technology to door steps to rural farmers.
Amul created history in following areas:
a) First self -motivated and autonomous farmers‟ organization comprising of
more than 5000000 marginal milk producers of Kaira District.
b) Created Dairy co-operatives at village level functioning with milk
collection centres owned by them.
c) Computerized milk collection system with electronic scale and
computerized accounting system.
d) The first and only organization in world to get ISO 9000 standard for its
farmer’s co-operatives.
e) First to produce milk from powder from surplus milk.
Amul is the live example of how co-operation amongst the poor marginal
farmers can provide means for the socio-economic development of the under
privileged marginal farmers

19
AWARDS:

Amul a co-operative society and its co-operation has led many

different awards in its favor.

Magsaysay award for community leadership presented in manila,

Philippines to Shri Tribhuvandas Patel, Shri D N Khurody and Shri V.
Kurien

1964: “Padmabhusan” award given to Shri T.K. Patel

1965: “Padmshri awarded was given to V. Kurien, general manager,

by the president of India

1987: “Best Productivity” awarded by national productivity council

for the year 1985-86 awarded to Amul dairy.

1988: “Best Productivity” awarded for the second successive year 1986-
87 by the president of India, Mr. R. Venkatrao to kaira union.

1993: “ICA” Memenoto towards genuine and self -sustain co-

operative worldwide ICA regional office for Asia and pacific, New Delhi,
1996.

1999: G.B. Birla award.

Moreover the Amul union has achieved the prestigious ISO 9001-2000 and
HACCP Certificate and effects are got to obtain ISO 14000.

20
Amul in abroad:

Amul is going places. Literally after having established its presence in China,
Mauritius and Hong Kong, Gujarat Cooperative Milk Marketing Federation
(GCMMF), India largest milk cooperative, is waiting to flood the Japanese market.
Then, GCMMF is also looking at Sri Lanka as one of its next export destinations.
Amul products are already available on shelves across several countries, including
the US, China, Australia, West Asian countries and Africa.
GCMMF recorded a turnover of Rs 2,922 crore last fiscal. Its products include
pouch milk, ultra heat treated (UHT) milk, ice-cream, butter, cheese and
buttermilk.

21
SWOT ANALYSIS

Strengths

The company is having Indian origin thus creating feeling of oneness in the mind
of the customers.

It manufactures only milk and milk products, which is purely vegetarian thus
providing quality confidence in the minds of the customers

It is aiming at rural segment, which covers a large area of loyal customers, which
other companies had failed to do.

People are quite confident for the quality products provided by Amul.

Amul has its base in India with its butter and so can easily promote chocolates
without fearing of loses.

Weaknesses

There are various big players in the chocolate market, which acts as major
competitors restricting their growth.

Lack of capital invested as compared to other companies.

Improper distribution channel in India.

22
Opportunities

There is a lot of potential for growth and development as huge population stay in
rural market where other companies are not targeting.

The chocolate market is at growth stage with very less competition so by

introducing new brand and intensive advertising there can be a very good scope in
future.

Threats

The major threat is from other companies who hold the majority share of
consumers in Indian market i.e. Cadburys and Nestle.

There exists no brand loyalty in the chocolate market and consumers frequently
shift their brands.

New companies’ entering in Indian market like Fantasy fine poses lot problems for
Amul.

23
List of Products
Marketed:-

Bread spreads

• Amul Butter
• Amul Lite Low Fat Breadspread
• Amul Cooking Butter

Cheese Range

• Amul Pasteurized Processed Cheddar Cheese

• Amul Processed Cheese Spread
• Amul Pizza (Mozarella) Cheese
• Amul Shredded Pizza Cheese
• Amul Emmental Cheese
• Amul Gouda Cheese
• Amul Malai Paneer (cottage cheese), Frozen, Refrigerated and
Tinned
• Utterly Delicious Pizza

Mithaee Range (Ethnic sweets)

• Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

• Amul Amrakhand
• Amul Mithaee Gulabjamuns
• Amul Mithaee Gulabjamun Mix
• Amul Mithaee Kulfi Mix
• Avsar Ladoos

24
Pure Ghee

• Amul Pure Ghee

• Sagar Pure Ghee
• Amul Cow Ghee

UHT Milk Range

• Amul Shakti 3% fat Milk

• Amul Taaza 1.5% fat Milk
• Amul Gold 4.5% fat Milk
• Amul Lite Slim-n-Trim Milk 0% fat milk
• Amul Shakti Toned Milk
• Amul Fresh Cream
• Amul Snowcap Softy Mix

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

25
 Fresh milk
• Amul Taaza Toned Milk 3% fat
• Amul Gold Full Cream Milk 6% fat
• Amul Shakti Standardized Milk 4.5% fat
• Amul Slim & Trim Double Toned Milk 1.5% fat
• Amul Saathi Skimmed Milk 0% fat
• Amul Cow Milk

Sweetened Condensed Milk

Amul Mithaimate Sweetened Condensed Milk

Curd Products

• Yogi Sweetened Flavored Dahi (Dessert)

• Amul Masti Dahi (fresh curd)
• Amul Butter Milk
• Amul Lassee

Amul Ice creams

• Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch,

Tutti Frutti)
• Nut-o-Mania Range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar
Carnival, Badshahi Badam 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, BlackCurrant)
• Sundae Range (Mango, Black Currant, Chocolate, Strawberry)

26
 • Millennium Ice cream (Cheese with Almonds, Dates with Honey)
• Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam
Kulfi, Shahi
Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)

• Cool Candies (Orange, Mango)

• Cassatta
• Tricone Cones (Butterscotch, Chocolate)
• Megabite Almond Cone
• Frostik - 3 layer chocolate Bar
• Fundoo Range - exclusively for kids
• SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango,
Pineapple)
• Health Isabcool

Chocolate & Confectionery

• Amul Milk Chocolate

• Amul Fruit & Nut Chocolate

Brown Beverage

• Nutramul Malted Milk Food

Milk Drink

• Amul Kool Flavoured Milk

Health Beverage
• Amul Shakti White Milk Food

27
AMUL'S SECRET OF SUCCESS

The system succeeded mainly because it provides an assured market at

remunerative prices for producers' milk besides acting as a channel to market the
production enhancement package. What's more, it does not disturb the agro-system
of the farmers. It also enables the consumer an access to high quality milk and milk
products. Contrary to the traditional system, when the profit of the business was
cornered by the middlemen, the system ensured that the profit goes to the
participants for their socio-economic up lifting and common good.

Looking back on the path traversed by Amul, the following features make it a
pattern and model for emulation elsewhere.

Amul has been able to:

 Produce an appropriate blend of the policy makers farmers board of

management and the professionals: each group appreciating its rules
and limitations,
 Bring at the command of the rural milk producers the best of the
technology and harness its fruit for betterment.
 Provide a support system to the milk producers without disturbing
their agro-economic systems,
 Plough back the profits, by prudent use of men, material and
machines, in the rural sector for the common good and betterment of
the member producers and

28
The Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the
village societies. Basically the union and cooperation of people brought Amul into
fame i.e. AMUL (ANAND MILK UNION LIMITED), a name which suggest THE
TASTE OF INDIA.

Plants:
First plant is at ANAND, which engaged in the manufacturing of milk,
butter, ghee, milk powder, flavoured milk and buttermilk.

Second plant is at MOGAR, which engaged in manufacturing chocolate, nutramul,

Amul Ganthia and Amul litre.

Third plant is at Kanjari, which produces cattle feed

Fourth plant is at Khatraj, which engaged in producing cheese.

Today, twelve dairies are producing different products under the brand name
Amul. Today Amul dairy is no. 1 dairy in Asia and no. 2 in the world, which is
matter of proud for Gujarat and whole India.

29
Industry Profile:-

The World Dairy Situation:

According to a report published by International Dairy Federation (IDF)
on the World Dairy Situation 2007 the worldwide milk production is
expected to grow at a slower pace in 2007-08 and is estimated at 655
million tonnes, only 9 million tonnes more than the production of 2006
– 2007. The strongest growth would be in Asia, notably in China and
India. Milk production is projected at36 million tonnes in China and
94.60 million tonnes in India. India would continue to be the largest
milk producer, followed by the US, with projected production of 82.60
million tonnes.

Major changes are not expected in dairy products basket. World butter
production increased for two years, in 2004 and 2005 and then
declined in 2006-07. It is expected to decline again in
2007-08. Industrial cheese production is continuing to grow. The major
cheese producing regions are Europe and North America and both areas
are expected to have a faster growth rate.

The production of condensed and evaporated milks is subject to a

declining trend for many years in the developed market. It has been
replaced by many other dairy products, especially liquid milks of UHT
type, coffee cream and coffee whitener including some of the non-dairy
origin.

30
World trade in dairy products after a period of relative stagnation,
started recovery in the second half of 2006-07 and it continued in
the first half of 2007-08. The recovery is due to prosperity resulting
from economic demand. However, the bullish price situation is not
likely to continue long and would level down.

Export of butter and butter-oil recovered in 2006-07 and this recovery

continued in early2007-08.

The total volume of the world trade in cheese has accelerated and this
trend is likely to continue in the year 2008.

The outlook for the trade in dairy commodities for 2007-08 appears bright.
However, since the new market equilibrium, in respect of prices has to be
found, the question is whether international trade in dairy products will
continue its growth in 2007-08 at the same momentum as in previous years.
Because of the price situation in 2007-08, one may ask whether demand can
follow the expected trends, but it would be premature to expect stagnation in
the trade. In established markets, the potential for demand to reduce slightly can
release the additional supplies, which are needed to maintain the growth of trade.

31
Growth and Challenges

From its inception with the formation of its first milk cooperative, AMUL network
has sustained an impressive growth rate for more than 50 years culminating in the
emergence of Indian dairy industry as the world’s leading milk producer. However,
it is unclear whether AMUL’s strategy and practices that have worked well for
long can maintain this growth trajectory in a changing environment with
globalization and increased competition. In this section we describe some of
AMUL’s initiatives and discuss briefly opportunities for growth and challenges
that need to be overcome.

AMUL’s growth during the past five decades has been fuelled primarily by growth
in milk supply with corresponding pricing strategy to generate demand. This
growth has been sustained by a two-pronged strategy – (a) growth in the number of
member farmers by widening its coverage with more village societies and
increasing the membership in each society, and (b) growth in per capita milk
supply from its members. This growth is achieved by increasing milk yields and by
helping members raise their investments in cattle. It is worth noting that AMUL
has funded these support activities from its earnings (instead of repatriating them
to the members either as dividends or with a higher procurement price). It is
expected that AMUL’s growth in the immediate future will continue to rely on this
strategy.

32
However, in the new emerging environment, several challenges have become
apparent and AMUL network needs to evolve proactive mechanisms to counter
these threats. First, competitors are cutting into milk supply by offering marginally
higher procurement prices thereby challenging the practice of provision of services
for long-term growth in lieu of higher prices in the short-term.
Second, for a section of its membership, dairy activity is a stepping-stone for
upward mobility in the society. Typical ,such member on to other occupations after
raising their economic position through milk production. As a result, AMUL is
unable to realize the full benefits of its long-term strategy, and finds new members
(mostly marginal farmers) to replace those who have higher potential and capacity.

By progressively increasing the share of higher value products AMUL has

been able to grow at a faster rate than the growth in milk supply. AMUL has been
rather cautious in implementing this strategy and has always ensured retention of
its customer base for liquid milk and low value products. With slowdown in the
growth of milk supply this strategy is likely to come under pressure and AMUL
will be forced to make some hard choices. More important, it is fairly clear that its
low price, cost efficient strategy may not be appropriate for the high value
segment.

Thus, AMUL may have to adopt a dual strategy specific to its target markets,
which in turn may lead to dilution in focus. A part of AMUL’s growth has come
from diversification into other Agri-products such as vegetable oils, instant foods
etc. In some of these initiatives AMUL adapted its successful cooperative
organization structure, but the experience to date has been somewhat mixed. More

33
recently, the network is exploring conventional joint venture arrangements with
suitable partners for diversification into areas such as fast food and special
chocolates. While it is too early to assess the success of these ventures, challenges
involved are becoming quite visible. For example, diversification has resulted in
expansion of the network with disparate elements, each motivated by their own
objectives. This in turn has led to a lack of focus within the network and dilution in
the commonality of purpose. These developments are likely to have serious
implications for coordination and control in the network. More important, shared
vision and common goal was one of the main planks of AMUL’s growth during
the past 50 years, and its dilution is likely to adversely impact the network
performance.

34
 OBJECTIVE OF THE STUDY

 To know awareness of people towards Amul products

 To know the preference of Amul products with comparison to
other competitive brands.
 To know the factors which affects consumer’s buying behave while
purchase milk.
 Swot analysis of Amul
 To study various factors such as quality, price, easy available etc. Is
influencing lot and influences positively
 Ideas about to increase the sale of the “Amul
 To know the relationship of sales with the advertisement.
 To know awareness of people towards Amul Milk.
 To know which advertisement tool is mostly preferred by people.
 To know the preference of Amul Milk with comparison to
Other competitive brands.
 To know the factors which affects consumer’s buying behave to purchase
milk.

35
 RESEARCH METHODOLOGY

RESEARCH PROBLEM
 Seek the general perception of consumer towards Amul Milk.
 To know the consumer psyche and their behave towards Amul Milk.

• Research objectives:- To understand the present scenario of Amul company

in the market. How much percentages of people are willing to buy Amul
products in the markets. To make analysis of consumption survey. To
understand consumer behave towards Amul.

• Research approach:- The research was made to know the competitive

position of Amul in market. Thus conducted a research in other companies
such as Mother dairy and Gowardhan.

• Research Instrument:- The research instrument was structured question

formulated for the respond. The question was done to different retailers and
dealers and from the consumers.

• Research data:-

• Primary data has been collected from dealers and retailers etc. by asking
question.

• Secondary data was collected from internet website and company record.

36
 LITERATURE REVIEW

AMUL in India that has developed successful model for doing business in large
emerging economy. It has been primarily responsible, through its innovative
practices for India to become worlds- largest producer of milk.
This paper draws various lessons from experiences of Amul that would be useful
to co-operative globally as well as firms that are doing business in large
emerging markets like India and China
Many of the economies have underdeveloped markets and fragmented
supply bases. On the other hand the size of both markets and suppliers is large.
As a result firms who identify appropriate business strategies that take into
account. These are amul key successful firms in environment need to develop
markets and suppliers to demand and supply planning. Develop or become a part
of network of productions. In emerging economies different industrial sectors
may be at different stages of development. However strategies followed AMUL
would be still useful.

In this paper we describe a case study of a dairy cooperative, AMUL, in western

India that has developed a successful model for doing business in large emerging
economy. It has been primarily responsible, through its innovative practices, for
India to become world’s largest producer of milk. This paper draws various lessons
from the experiences of AMUL that would be useful to cooperatives globally as
well as firms that are interested in doing business in large emerging markets like
India and China.

37
 Many of these economies have underdeveloped markets and fragmented
supply bases. Market failures for many of these small producers are high. On the
other hand, the size of both, markets and the suppliers is large. As a result, firms
that identify appropriate business strategies that take into account these
characteristics are more likely to succeed in these markets. The following are some
key message from AMUL’s success: firms in these environments need to
simultaneously develop markets and suppliers to synchronize demand and supply
planning, develop or become a part of network of producers (i.e., cooperatives in
this case) to obtain scale economies, focus on operational effectiveness to achieve
cost leadership to enable low price strategy. In addition, a central focus to bring the
diverse element together and a long-term approach are required.
In emerging economies different industrial sectors may be at different stages
of development. In some of the sectors all of the above environmental
characteristics faced may not hold. However, a subset of strategies followed by
AMUL would still be very useful. Thus, firms that are contemplating addressing
large undeveloped markets or have an intention of taking advantage of extensive.

38
 DATA ANALYSIS
The collected data were not easily understandable, so I like to analyse the collected
data in a systematic manner and interpreted with simple method.

The analysis and interpretation of the data involves the analysing of the
collected data and interpretation it with pictorial representation such as bar charts,
pie charts and others.

1)Which milk do you consume?

a. Pouch milk
b. Loose milk
c. Both

Options No of Responded % of Responded

Pouch mik 20 40
Loose milk 20 40
Both `10 20

Sales

pouch milk

loose milk

others

The above figure states that 40% of respondent uses pouch milk and other 40%
uses loose milk and remaining 20% uses both types of milk.

39
2)Are you satisfied with the milk you are consuming?
a) Yes
b) No

NO. %
RESPONSE OF RESPONDED OF responded
YES 32 64
NO 18 36

percentage

yes
no

Above diagram shows that 32 no of respondent are satisfied by consuming the milk
they uses that is 64% of total respondent and18 no of respondent are not satisfied
with the milk they use that is 36% .

40
3)What do you like?
a) Quality b) Taste
c) Price d) Availability

Factors No. of Respondents Percentage %

quality 20 40
taste 15 30
price 10 20
availability 5 10

45

40

35

30

25 Column1
20 percentage
15 colum1
10

0
qulaity taste price avalibility

The above graph shows that people prefer quality the most which is 40%. Secondly
people prefer taste of the milk that is 30%.Then people prefer price of the milk are
20%. And lastly 10% of people look after availability of milk.

41
4)Do you get milk pouch at…………..
a)Doorstep
b) From retailer

RESPONDED NO.OF responded % OF responded

Door step 30 60
retailer 20 40

percentage

yes

no

The above figure shows that 60% of respondent prefer milk on doorsteps where as
40% of people buy milk from the retailers.

42
5)What is total consumption of milk in a day?
a) Pouch milk in litre……
b) Loose milk in litre……

RESPONDED NO.OF responded % OF responded

Pouch milk in 30 60
litre……

b)Loose milk in 20 40
litre……

Column1

pouch milk in lit

loose milk in lit

The above figure show that 60% of respondent consume pouch milk in litre
everyday and 40% of respondent consume loose milk everyday.

43
6)What is your monthly expenditure in milk (in Rs.)?

a)) 500-1000
b) 1000-1500
c) 1500 and above

RESPONSE NO. %
OF RESPONDED OF CONSUMERS
500-1000 25 50
1000-1500 15 30
1500 and above 10 20

% of consumers
60

50

40

30
% of consumers
20

10

0
500-1000 1000-1500 1500 and above

The above graph shows expenditure of respondents in months.50% of respondent

expenses are around 500-1000. Where as 30% of respondent expenses are from
1000-1500 and lastly 20% of people are part expenses are from 1500-2000.(in rs).

44
7)In pouch milk which brand do you prefer?
a)AMUL
b) MOTHER DAIRY
c) GOKUL
d) MAHANANDA
e) WARANA
f) OTHERS

RESPONSE NO. %
OF RESPONDED OF CONSUMERS
amul 15 30
Mother dairy 10 20
mahananda 10 20
Gokul 5 10
Warana 5 10
others 5 10

35

30

25

20

15 Column3

10

0
amul mother dairy mahananda gokul warana others

Above graph shows the brand respondent prefer in milk.30% of respondent uses
Amul.20% of respondent uses Mother dairy where as 10% each for other brand
such as Gokul, Warana, and others.

45
8)Do you think the price of the product is high/low compared to competitors
product?

a) Strongly agree
b) Strongly disagree
c) Agree
d) Neither

RESPONSE NO. %
OF RESPONDED OF CONSUMERS
15 30
Strongly agree

Strongly disagree 10 20

agree 15 30
Neither 10 20

% of consumer

strongly agree

strongly disagree

agree

neither

Above diagram shows that 30% of respondent strongly agree that price of milk is
high/low as compare to quality.20% strongly disagree on that where as 30% of
respondent agree on it. Then 20% of respondent neither believe on any of it.

46
9)If you buy AMUL milk pouch which pack you purchase?

a) AMUL Gold
b) AMUL Taaza
c) AMUL Slim & Trim

RESPONSE NO. %
OF RESPONDED OF CONSUMERS

AMUL Gold 25 50
AMUL Taaza 15 30
AMUL Slim & Trim 10 20

amul gold
amul taaza
amul slim and trim

The above diagram shows that if respondent buy Amul then 50% of respondent
prefer Amul Gold. Where as 30% prefer Amul Taaza and rest 20% prefer Amul
slim ad trim.

47
10)CONSUMER’S OPINION TOWARDS PRODUCT

rating No of respondent % of consumer

poor 15 30
average 25 50
good 7 14
excellent 3 6

30

25

20

Column2
15 Column1
percentage
10

0
excellent good average poor

The above graph gives statistics of consumer opinion towards the product and the
respondent says that 30% of consumer has rated poor while 50% have rated good
and 14% have rated them as good and remaining 6% are poor.

48
 CONCLUSION

Majority of the customers are satisfied with the Amul milk and Milk products
because of its good quality, reputation, easy availabilities.

From the survey conducted it is observed that Amul milk has a good market share.

From the study conducted the following conclusions can be drawn. In order the
dreams comes into reality and for turning liabilities into assets one must have to
meet the needs of the customers.

The factors considered by the customer before purchasing milk are freshness,
taste, thickness and availability.

Finally I conclude that, majority of the customers are satisfied with the Amul milk
and Milk products because of its good quality, reputation, easy availabilities.
Some customers are not satisfied with the Amul Milk because of high price, lack
of dealer services, spoilage and low shelf life etc. therefore, if slight modification
in the marketing programme such as dealers and outlets, promotion programmers,
product lines etc., definitely company can be as a monopoly and strong market
leader.

Amul has also to take care of its competitors into consideration and more
importantly its customers before making any move.

The largest segment of the market in emerging economies desires value for money
from its purchases. Development of such markets requires careful nurturing and a
long-term approach. Initial success in these markets is typically based on a low

49
price strategy (providing value for money) supported by cost leadership. This
strategy helps to grow the market exponentially by focusing on the largest
segment of the population, the middle and the lower middle class.

In this context, it is important for global players to note that the value
proposition perceived by consumers is influenced to a large extent by the state of
markets and the economy and cultural factors. Development of an appropriate
value proposition suitable for large mass markets in India requires a thorough
understanding of the environment and a focus on costs.

This in turn, requires designing the organization structure and practices in a

manner that it delivers continued market share through cost leadership. AMUL is
a good example of this strategy. Firms that are able to develop control processes
through better use of operational practices and supply chain coordination are the
ones that are able to serve large volumes and enjoy top line growth in revenues.

Development of suppliers likewise requires nurturing with a long-term

perspective. It is interesting to note that this was achieved by AMUL through a
process of education and social development activities - activities that are not
usually considered to be standard business practices. This type of ‘out of the box’
vision is essential for developing innovative mechanism in new, unfamiliar
environments where building of relationship with consumers goes much beyond
marketing messages and useful product offerings.

Environments with underdeveloped markets and suppliers (as in the case of

AMUL) add one more dimension of complexity relating to the relative pace of
growth of these two areas. Through its pricing strategy, AMUL has been able
balance the growth in markets and suppliers and has achieved some degree of

50
synchronization. Otherwise, gaps between demand and supply would require
complementary strategies.

The AMUL example is also instructive for multinational companies and others
contemplating operations in emerging markets by taking advantage of the local
small and medium enterprises. In such cases large businesses are built by forging
linkages with these enterprises thereby changing the boundaries of the entering
firm. Such a partnership reduces the operational risk while providing a credible
source of understanding the behavior of the consumer through the experience of
partners. It also provides operational flexibility and makes the network responsive
to changes within and outside.

To be effective it is important that decision-making be decentralized to the extent

possible, with appropriate coordination mechanisms to ensure consistency in the
system. The leadership of such organization have always been larger than life and
have been seen to play an important role in the building of the society even today

Firm that are able to overcome the hesitation of deploying IT for achieving
operational excellence in emerging economies gain considerably from its network
effect.

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 BIBLIOGRAPHY

Marketing Management Philip Kotler, The Millennium Edition,

Prentice Hall Of India Private Limited, New Delhi.

Periodical: Business World

Research Methodology: C. R. Kothari , 2nd edition.

S.N Murthy and U. Bhojanna

Websites:

i. www.google.co.in

ii. www.wikipedia.com

iii. www.amul.com.

iv. www.marketresearch.com
v. www.dairy.com

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