MICRO ANALYSIS OF AMUL & GUJARAT

COOPERATIVES OF MILK MARKETING FEDERATION

Submitted in partial fulfillment of the requirements for the award of the degree

of

Bachelor of Business Administration

(2006-2009)

Guided By: Submitted by:

Mr. Rakesh Kr. Arora Rashid Ali

Sr. Lecturer 1031591706

Rukmini Devi Institute of Advanced Studies

(Aff. To Guru Gobind Singh Indraprastha University)

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 CERTIFICATE

This is to certify that the project (BBA-159) entitled “Micro Analysis of Amul & Gujarat

Cooperative of Milk Marketing Federation” done by Mr. Rashid Ali, Roll No. 1031591706 is an

authentic work carried out by him/her at RDIAS under my guidance. The matter embodied in this

project work has not been submitted earlier for the award of any degree or diploma to the best of my

knowledge and belief.

Date:

Mr Rakesh Kr. Arora

(Sr. Lecturer)

RDIAS

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 ACKNOWLEDGEMENT

I express my deepest gratitude to MR. RAKESH Kr. ARORA whose invaluable guidance and

supervision in the project infused in me great inspiration and confidence in making this survey in

right earnest. This masterly guidance from time to time made the study interesting and meaningful.

He was always there for our help and doing away all the difficulties and confusions that arises

during the project period. He also helped me to understand what was actually required from the

project and what was needed to be done. At last I would like to thank our respondents for their kind

response and their precious time they provided me to carry our survey based on the data provided by

them I have given some suggestions that would be surely beneficial for the advertisement

companies.

(RASHID ALI)

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 ABSTRACT

Milk production is important to India, as milk is one of the main sources of proteins and calcium for

a largely vegetarian population. Dairying provides a livelihood for millions of Indian farmers and

additional income for a large number of rural families as well as a means for women to participate in

the economic activity in rural areas. In 1999 India became the largest producer of milk primarily due

to the efforts of the co-operative movement initiated by the National Dairy Development Board

(NDDB).

The movement, which started at AmulDairy in Gujarat, is now replicated in 70,000 villages in about

200 districts of India. Following the repeal of the 'Quantitative Restrictions’ on food products by the

Government of India under a WTO agreement, the Indian dairy sector faces a challenge from the

large organized dairies in the developed world. To meet this challenge, the cooperative dairy sector

has to further improve the production, collection, processing and marketing of milk and milk

products. The National Dairy Development Board has drawn up a program to double milk collection

in the next six years.

GCMMF is India’s largest food products marketing organization. It is a state level apex body of milk

cooperatives in Gujarat, which aims to provide remunerative returns to the farmers and also serve the

interest of consumers by providing quality products, which are good value for money. GCMMF

markets and manages the Amul brand. From mid-1990’s Amul has entered areas not related directly

to its core business. Its entry into ice cream was regarded as successful due to the large market share

it was able to capture within a short period of time- primarily due to the price differential and the

brand name. In September 2007, Amul emerged as the leading Asian brand according to a survey by

Synovate to find out Asia’s top 1000 Brands.

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Amul has done a very good job in marketing of their products. They have the best distribution

channel in India. They are introducing new techniques in production and marketing and human

resource function to continue their success story. Since 1967 Amul products’ mascot has been the

very recognizable “Amul baby” ( a chubby butter girl usually dressed if polka dotted dress ) showing

up on hoardings and products wrappers with the equally recognizable tagline Utterly Butterly

Delicious Amul. Amul has been able to withstand the onslaught of private and foreign players in the

dairy industry and has also been able to export products in limited quantities.

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 TABLE OF CONTENTS

1. Introduction

- Relevance of study 1

-Theoretical dimensions 2-8

2. Objectives of research 9

3. Reseaech methodology 10

4. Literature Review 11-16

5. Chapter 1

-Introduction 17-24

-GCMMF: An Overview 25-34

6. Chapter 2

Production Function 35-45

7. Chapter 3

Marketing function 46-54

8. Chapter 4

Human Resource Function 55-59

9. Swot Analysis 60-65

10. Analysis of the Project 66-71

11. Future Plans 72-73

12. Conclusion 74-75

13. Limitations of the study 76

14. Refernces 77-78

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 INTRODUCTION

RELEVANCE OF STUDY

This study is done on “Amul” and “Gujarat Cooperative of Milk Marketing Federation”. Amul is

India’s biggest Cooperative society of milk producers and marketers. It is providing quality products

to the country, also it is doing a good business in exports. In this report the micro analysis of Amul

and GCMMF is done. This analysis includes the discussion of production function of Amul and their

marketing function with the study of Human resource function. This report helps in understanding

the production process used by Amul in their plants. Report will help in studying the behavior of

marketing strategies and policies of Amul and GCMMF. It is discussing the human resource

function of Amul because every organization has a very important function “Human Resource

Function”. The best is tried to do a micro analysis of Amul.

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THERETICAL DIMENSIONS

Production Function

In microeconomics, a production function asserts that the maximum output of a technologically-

determined production process is a mathematical production of input factors of production.

Considering the set of all technically feasible combinations of output and inputs, only the

combinations encompassing a maximum output for a specified set of inputs would constitute the

production function. Alternatively, a production function can be defined as the specification of the

minimum input requirements needed to produce designated quantities of output, given available

technology. It is usually presumed that unique production functions can be constructed for every

production technology.

By assuming that the maximum output technology possible from a given set of inputs is achieved,

economists using a production function in analysis are abstracting away from the engineering and

managerial problems inherently associated with a particular production process. The engineering and

managerial problems of technical efficiency are assumed to be solved, so that analysis can focus on

the problems of allocative efficiency. The firm is assumed to be making allicative choices

concerning how much of each input factor to use, given the price of the factor and the technological

determinants reopresented by the production function. A decision frame, in whih one or more inputs

are held constant, may be used; for example, capital may be assumed to be fixed or constant in the

short run, and only labour variable, while in the ling run, both capital and labour factors are variable,

but the production function itself remains fixed, while in the very long run, the firm may face even a

chice of technologies, represented by various, possible production functions.

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The relationship of output to inputs is non-monetary, that is, a production function relates physical

inputs to physical outputs, and prices and costs are not considered. But, the production function is

not a full model of the production process: it deliberately avbstracts away from essential and

inherent aspects of physical production processes, including error, entropy or waste. Morever,

production functions do not ordinarily model the business processes, either, ignoring the role of

management, of sunk cost investments and the relation of fixed overhead to variable costs. The

primary purpose of the production function is to address allocative efficiency in the usre of factor

inputs in production in production and the resulting distribution of income to those factors. Under

certain assumptions, the production function can be used to derive a marginal product for each

factor, which implies an ideal division of the income generated from output into an income due to

each input factor of production.

During the first half of this century, the administrators and managers were purely production

oriented and the field of functions of marketing was completely neglected. As the saying goes

troubles and difficulties are no mans concern, they slowly began to understand identify and analyze

the importance of marketing functions during the fifties when they faced the problems of excess

production.

Hence those who have understood the concept of marketing function and practiced accordingly

survived and others were slowly edged out of the field of marketing. Developing countries

particularly countries like India have to concentrate a little more in this field so that they can avoid

simultaneously the problems of scarcity and excess productions

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The word marketing was a recent addition to the industrial vocabulary. At initial stages of its

development it just referred to buying and selling activities at market place. As the days pass on after

the world war two the very concept was adapted to include very many factors and functions come

under its meaning. During the forties and fifties of this century managers and administrators were

purely production oriented and the field and functions of marketing was in no mans thinking.

But when they faced the problems of excess production during the fifties they slowly began to

understand, identify and analyze the term marketing and its functions. So those who have understood

the concept very well and practiced accordingly survived and others were slowly being eased out of

the field. All the more the developing countries like India to concentrate a bit more in this field so

that they can avoid problems of scarcity and excess production simultaneously.

After the production the goods have to pass through multi-various activities, before it reaches the

ultimate consumer. Some of the activities are general and others are special.

More than the distribution of the goods, products and services, marketing in its ambit includes the

analysis of the feedback information’s form the consumers and users. This feedback information is

used to after the existing decisions and policies. So that the organizational goals can say that

marketing start and ends with the consumer. By condensing the above said information we can

define marketing function. As an act operation or service which the original product and the ultimate

consumer are linked together.

In brief marketing is involved in all activities of economic nature. From the economics point of view

it creates time ,place, and possession utilities. Even though most of the functions are performed by

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the so called and intermediaries, this does not reduce or lesson the importance of such functions in

any way. These varied functions are grouped under three types of process.

They are

(a)Concentration

(b)Equalization

(c) Dispersion

Concentration

Under this process, goods and products are collected together at a central point to facilitate further

action upon them. It is concerned with gathering, collecting and concern rating raw materials, partly

finished goods and finished products etc at central points. This concentration to a certain extent

embraces various other functions also such as assembling, storage, financing, grading,

standardization, risk taking etc..

Equalisation

According to Clark, equalization consists of the adjustment of the supply to the demand on the basis

of the time and quality. This sort of adjustment can be done through storage and transportation in

market centres

Dispersion

It refers to the allotment of the raw materials to the producer and the final products to the consumers

in lots of small and big sizes suitable for their consumption.

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Classification of Marketing Functions

There is consensus regarding the functional area of marketing. It varies from 5 to 36 and Rayan has

even identified 120 different kinds of marketing functions in the marketing journey of the products

and articles.

(A) If we accept the marketing concept as stated in previous lesson we must agree to the simple

proposition that supply in the functions of demand and therefore subservient to it, here demand is the

limiting and key factor. So a better understanding of the demand will make clear about the various

functions of marketing. Bates and Parkinson divide it into four aspects. They are

1. Analysis and forecasting i.e., marketing research

2. Product development and design

3. Influencing the demand design, advertising etc

4. Service distribution after sales, service etc.

The success in marketing of a firm depends upon the co-ordination of these ingredients in such a

way as to create a suitable mix to the particular situation in hand.

The Human Resources Management (HRM) function includes a variety of activities, and key among

them is deciding what staffing needs you have and whether to use independent contractors or hire

employees to fill these needs, recruiting and training the best employees, ensuring they are high

performers, dealing with performance issues, and ensuring your personnel and management

practices conform to various regulations. Activities also include managing your approach to

employee benefits and compensation, employee records and personnel policies. Usually small

businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't

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yet afford part- or full-time help. However, they should always ensure that employees have -- and

are aware of -- personnel policies which conform to current regulations. These policies are often in

the form of employee manuals, which all employees have.

Note that some people distinguish a difference between between HRM (a major management

activity) and HRD (Human Resource Development, a profession). Those people might include HRM

in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of

organizations, including, eg, career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large

organizations, eg, "should HR be in the Organization Development department or the other way

around?"

The HRM function and HRD profession have undergone tremendous change over the past 20-30

years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage

the paperwork around hiring and paying people. More recently, organizations consider the "HR

Department" as playing a major role in staffing, training and helping to manage people so that

people and the organization are performing at maximum capability in a highly fulfilling manner.

Human resource (or personnel) management, in the sense of getting things done through people. It's

an essential part of every manager's responsibilities, but many organizations find it advantageous to

establish a specialist division to provide an expert service dedicated to ensuring that the human

resource function is performed efficiently.

"People are our most valuable asset" is a cliché which no member of any senior management team

would disagree with. Yet, the reality for many organizations is that their people remain

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 • under valued

• under trained

• under utilized

• poorly motivated, and consequently

• perform well below their true capability

The rate of change facing organizations has never been greater and organizations must absorb and

manage change at a much faster rate than in the past. In order to implement a successful business

strategy to face this challenge, organizations, large or small, must ensure that they have the right

people capable of delivering the strategy.

The market place for talented, skilled people is competitive and expensive. Taking on new staff can

be disruptive to existing employees. Also, it takes time to develop 'cultural awareness', product/

process/ organization knowledge and experience for new staff members.

As organizations vary in size, aims, functions, complexity, construction, the physical nature of their

product, and appeal as employers, so do the contributions of human resource management. But, in

most the ultimate aim of the function is to: "ensure that at all times the business is correctly staffed

by the right number of people with the skills relevant to the business needs", that is, neither

overstaffed nor understaffed in total or in respect of any one discipline or work grade.

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 OBJECTIVES

The main emphasis of the study is microanalysis of Amul & Gujarat

cooperative society of milk marketing federation.

This study will conclude following objectives: -

• To study Amul’s & Gujarat Milk Marketing Federation’s evolution & why it is so successful.

• To study the Production Function & management of Amul with other organizational

functions, like, finance function, marketing function, human resource function.

To discuss the future plans and Amul’s strength as a business organization.

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 RESEARCH METHODLOGY

It refers to the method adopted to collect the relevant data and other information, which forms the

basis of the this writing. So far the effective writing of the report, the data must be quality

oriented. My research is divided into these stages:

STAGE I: Data Source

All the data collected by me is secondary in nature. Amul websites provides me their product details

which helps me in making product analysis of Amul. Evolution of Amul and GCMMF was collected

from google search and also from wikipedia.

The secondary data sources that is being utilized in this project are as follows-

• The economic times.

• The ads in The Times of India.

• Website material on Wikipedia, Amul website (www.amul.com), www.milkproduction.com

STAGE II: Analysis

In this stage all the data is analyzed and the report is being written. Material collected from various

sources is first arranged and then by consulting the project guide this data is used to prepare report.

The data which is secondary in this report study for the company profile

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 LITERATURE REVIEW

Amul is one of the most successful Indian business firm. It provides various milk

products in which its main brand product Amul Butter is also present. Amul begins

with just little group of milk producing villagers and now become largest milk

producing cooperative society in India. It had started with two village cooperatives

with 250 liters milk producing capacity and now it collects daily a 6.5 million

(average) of milk from a very large no of Indian villages. It has become a hope for

poor villagers who were exploiting by middlemen before the origin of Amul or Gujarat

milk marketing federation or Kaira union. By originated Amul got its first chairman

Shri Tribhuvandas Patel who through his integrity had favor of villagers and

understands the needs of cooperative society. Through their interpersonal faith and

cooperation Amul got this success history besides facing various difficulties.

Gujarat Milk Marketing Federation is a cooperative society. It done a very good job in

milk marketing, making way for poor villagers earnings. It not only provides effective

returns to the farmers but also take cares of customers interests. It serves for customer

on the basis of Indian ethics. They provide milk of better nutrients, better quality

products regularly and help in meeting the country’s need of daily milk requirements.

Some of the articles on Amul are as follows:-

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“India report part 5: AMUL, India’s number-one dairy brand”

Published: April 11, 2006 reference www.milk production.com

• On 14 December 1946 the predecessor of the Gujarat Milk Marketing Federation, better

known as the AMUL dairy cooperative, was founded in Kaira (Gujarat state).

• The daily milk collection was 247 litres.

• Anno 2005 the 2.4 million members/ dairy farmers supplied AMUL daily with 5.9 million

litres of milk.

According to Mr Khanna, an AMUL director ‘with special assignments’ – as his business card says

– the milk supply to his co-operative is increasing all the time. In the 2003/04 financial year, the

milk collection was up to 5.1 million litres per day, a rise of some 15.2%. By contrast, the co-

operative’s turnover rose by just 1.4% in the financial year 2004/05, bringing it to INR 29.22 billion

or EUR 584 million. This growth is lower than expected and due, believes Khanna, to the reduced

milk supply in the latter months of 2004 and the poor increase in the price of basic products in the

early months of 2005.

From what Khanna is saying, it is evident that AMUL is a co-operative operation without equal. The

2.4 million members/ dairy farmers in the state of Gujarat are grouped into 11,615 village co-

operatives equipped with both testing equipment and a milk cooling tank. Some of the unpasteurised

milk is sold to the villagers. The rest is transported by milk tankers twice a day to the 12 district

Milk Unions in the state. These Milk Unions process the milk by using the services of 24 processing

companies. The output of dairy products reflects the order submitted by the state’s marketing body,

the Gujarat Co-operative Milk Marketing Federation. These products are then sold throughout India

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under the AMUL and Sagar brand names.

Indian consumers are increasingly showing a preference for packaged dairy products, due to food

safety concerns. This explains in part why the revenues of AMUL’s consumer range of packaged

dairy products grew by 11.8% in the last financial year. The sales revenue of pasteurised drinking

milk in plastic pouches under the AMUL brand rose in 2004/05 by no less than 36%. This rise was

attributable chiefly to the successful introduction of AMUL milk more than a year ago in the Indian

city of Kolkata (formerly Calcutta), home to millions of people. Thanks to this success, the

pasteurised milk pouches are the biggest contributor to AMUL’s total turnover. In the 2004/05

financial year, this range brought in a turnover of INR 6.26 billion or EUR 125 million.

The turnover of UHT milk grew 23% in the last financial year compared to preceding year. The

turnover of ice cream rose by 10%, consolidating AMUL’s position as market leader. And despite

cut-throat competition, the sales of AMUL brand butter rose by 4.5%. The sales of cheese and

cheese spreads rose by 21%. Cheese includes cheese for pizzas. And, says Kurien, other packaged

products such as flavoured milk, fresh cream, paneer or cottage cheese also have the potential to

become major products bearing the AMUL brand within a couple of years.

As the country’s largest co-operative dairy, AMUL has developed a two-pronged strategy to address

this issue and develop national presence. Firstly, last year AMUL expanded its distribution network

to include some of India’s smaller cities. In so doing, the co-operative has responded quickly to

rapidly changing market conditions.

Situated all over India, these smaller cities are now promising markets with great purchasing power

as the incomes of India’s middle class are rapidly rising and the better-off rural families are

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migrating to these developing cities. In the last financial year AMUL has introduced some 900 food

wholesalers in these smaller cities to its product range. ‘This initiative has already started yielding

results. AMUL products are increasingly available in smaller cities throughout India. This initiative,

which we’ll be continuing for the time being, is generating additional turnover,’ says Kurien.

Director Khanna describes the second prong of AMUL’s expansion plan. ‘We expect that the milk

production in our procurement area, the state of Gujarat, will increase by 5% or more per year in the

coming period. That’s the first source of growth. As not only the dairy market but also the market for

farm milk has been liberalised, we are now collecting milk in six other places in India milk.

What is new that we would like to talk to other co-operative dairy companies. Most of them are also

organised by state following the Anand model. Our standpoint is clear. They know about milk

processing and we know about marketing. They can continue to produce dairy products that we will

sell under our strong AMUL and SAGAR brands. In this way, our partners will be able to piggy-

back on the success of AMUL’s ever expanding distribution network.’ He foresees a future in which

the players in India’s co-operative dairy world increasingly cooperate to offer the Indian consumer a

wide range of dairy products. It is completely obvious to him that AMUL will be a driving force in

shaping this new future. ‘AMUL is India’s oldest dairy brand.

But it is more than a brand. It is also a question of belief. Belief in the co-operative, in a dairy world

owned by the dairy farmers.That is important because they and the rest of the population in the

villages must be pulled up to a higher standard of living,’ says AMUL director Khanna, speaking

straight from the heart.

Mithaee is an example of Indian sweets made with sweetened condensed milk. As AMUL delivers

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this product in cans, it has a shelf life of nine months and can be stored outside the cooling chain.

Article from India Dossier, ZuivelZicht - 14 december 2005

“INDIA’S TOP BRANDS”
“AMUL’S ADVERTISING AND MARKETING SPEND HAS NEVER EXCEEDED 1% OF
ITS REVENUES”
By Rajeshwari Sharma Sat, Aug 25 2007. 3:30 AM IST

SUMMARY: ‘Media’, brand consultancy Asian Integrated Media Ltd

and market research company Synovate done this survey on the top

brand in Asia, among this Amul comes one of the most successful

Indian business firm. It is because Amul’s strategy of using

“umbrella branding” has paid off.

According to R.S. Sodhi, chief general manager, GCMMF. “Our

strength comes from consistency, trust and relevance of our

products.” Sodhi claimed that Amul’s advertising and marketing

spend has never exceeded 1% of its revenues. Most other food

companies spend 6-7% of revenues on advertising and marketing,

he added. “They (GCMMF) are not big spenders compared to

Britannia or Nestle. Despite a limited budget, Amul’s creatives—in

the form of billboards or the Taste of India campaign—have always

managed to evoke a larger-than-life brand feel, consistency and

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spirit of Indian culture in a contemporary way,” said Shashi Sinha,

executive director, FCB Ulka, GCMMF’s advertising agency.

‘We may end up touching a turnover of Rs20,000 cr by 2015’

Wed, Oct 3 2007. 12:21 AM IST by Sunil Raghu

Bharat M. Vyas has been the managing director of Gujarat

Cooperative Milk Marketing Federation Ltd (GCMMF), the owner of

brand Amul, for more than 12 years. In an interview with Mint, BM,

as Vyas is referred to by many, discusses the business strategy of

India’s biggest cooperative firm, which finds itself under increasing

pressure from nimbler private sector rivals.

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 INTRODUCTION
Evolution of AMUL

Before the cooperative movement began, middlemen who supplied milk to the consumers

were exploiting the dairy industry in the Kaira District. It began as a response to this

exploitation and put an end to it. It grew because it responded to the farmers financially

as well as with services. It has thrived because farmers who have a stake in its success, own

it. And because it has been managed by capable professionals and strengthened by dedicated

scientists, technologists and workers, it has forged ahead. Today in India, there are 75,000

dairy cooperative societies, spread all over the country with a membership of 10 million. The

farmer in the village is now assured of a better future thanks to these cooperatives. Recently

one of the European Embassies in Delhi requested Amul for information on the five biggest

"companies" in the dairy business. The first three are in the cooperative sector - The Gujarat

Cooperative Milk Marketing Federation (GCMMF), The Kaira District Cooperative Milk

Producers' Union Limited and The Mehsana District Cooperative Milk Producers' Union.

The Kaira District Cooperative is the second best in the country. It helped to create GCMMF,

the apex body of all cooperatives in Gujarat.

The Root Cause

In the forties one firm - Polsons, dominated the dairy industry. Established by a rather

enterprising gentleman who discovered that Kaira District, of what was then Bombay

23
Presidency, produced a good deal of milk. He established a creamery and for a while the

name Polsons was synonymous with butter - much as Amul is today.

One of Polson's businesses was to supply milk to Bombay. As Kaira district was an abundant

source of the commodity, Polson was chosen to procure it from there. He in turn, entered into

an arrangement with a number of contractors who actually went to the villages and collected

the milk. Everyone was happy. Bombay received reasonably good quality milk and Polson

made a handsome profit. The contractors too managed to earn large margins by over quoting

the farmers. It was only the poor farmers who were unhappy for it. They invested in the

animal feed and fodder and they put in their labor. Yet, it was they who received the smallest

share of the Bombay consumers' rupee. The arrangement benefited everyone but them.

The First step: formation of Kaira union

Realizing that something needed to be done about the unequal balance of wealth, they turned

to Sardar Vallabhbhai Patel for advice. Sardar Patel knew that their only chance of earning a

decent income was when they themselves gained control over the resources they created. He

also knew that the cooperatives offered them the best chance of gaining that control. So he

advised them to stop selling milk to Polson and form a cooperative of their own. In his

opinion they were to own their own dairy unit. He said, "Throw out Polson and his milk

contractors". They followed his advice and the Kaira District Cooperative Milk Producers'

Union (AMUL) was born, in 1946. By good fortune, they could get as Chairman - Shri

Tribhuvandas Patel, an equally remarkable man. He understood the concept of cooperation

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and he understood people. His integrity was absolute. Because the farmers of Kaira district

trusted and respected Tribhuvandas Patel, the cooperative was able to pass through some

very difficult times and eventually become a model of cooperative dairying throughout the

world.

The Kaira Union began with a clear goal, to ensure that its producer members received the

highest possible share of the consumers' rupee. This goal itself defined their direction. The

focus was on production by the masses, not mass production. By the early 'sixties, the modest

experiment in Kaira had not only become a success, people began to recognize it as such.

Farmers came from all parts of Gujarat to learn. They went back to their own districts and

started their own cooperatives. The result - Together, the district milk producers unions of

Gujarat own the Gujarat Cooperative Milk Marketing Federation, which markets the milk

and milk products manufactured by its owners. The Federation's turnover was over Rs. 1700

crore making it the largest in the food industry.

In 1964, the then Prime Minister Shri Lal Bahadur Shastri came to inaugurate cattle feed

factory owned by Amul near Anand. Impressed by the cooperative's success, he expressed

his wish to "transplant the spirit of Anand in many other places". He wanted the Anand

model of dairy development replicated in other parts of the country. With institutions owned

by rural producers, which were sensitive to their needs and responsive to their demands, it

was an ideal tool for progress. The National Dairy Development Board was created in 1965

in response to this call.

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INTRODUCTION

The mighty Ganges at its origin is but a tiny stream in the Gangotri ranges of the

Himalayas. Similar is the story of Amul, which inspired 'Operation Flood' and heralded the

'White Revolution' in India. It began with two village cooperatives and 250 liters of milk per

day, nothing but a trickle compared to the flood it has become today. Today Amul collects

processes and distributes over a million liters of milk and milk products per day, during the

peak, on behalf of more than a thousand village cooperatives owned by half a million-farmer

members. Further, as Ganga-ma carries the aspirations of generations for moksha, Amul too

has become a symbol of the aspirations of millions of farmers, creating a pattern of liberation

and self-reliance for every farmer to follow.

The start of a revolution

The revolution started as awareness among the farmers that grew and matured into a protest

movement and the determination to liberate them. Over four decades ago, the life of a farmer

in Kaira District was very much like that of his counterpart anywhere else in India. His

income was derived almost entirely from seasonal crops. The income from milch buffaloes

was undependable. Private traders and middlemen controlled the marketing and distribution

system for the milk. 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. Gradually, the realization dawned on the

farmers that the exploitation by the trader could be checked only if marketed their milk

themselves. In order to do that they needed to form some sort of an organization. This

realization is what led to the establishment of the Kaira District Cooperative Milk

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Producers' Union Limited (popularly known as Amul) that was formally registered on

December 14, 1946.

The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June 1948. 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 more village societies, and the quantity of milk

handled by one Union increased from 250 to 5,000 liters a day.

Obstacles: Springboards for success

Each failure, each obstacle, each stumbling block can be turned into a success story. In the

early years, Amul had to face a number of problems. With every problem came opportunity.

A chance to turn a negative into a positive. Milk by products and supplementary yield, which

suffered from the same lack of marketing and distribution facilities, became encumbrance.

Instead of being bogged down by their fate they were used as stepping-stones for expansion.

Backward integration of the process led the cooperatives to advances in animal husbandry

and veterinary practice.

Milk by products: An excuse to expand

The response to these provided stimulus for further growth. For example, as the movement

spread in the district, it was found that the Bombay Milk Scheme could not absorb the extra

milk collected by the Kaira Union in winter, when the production on an average was 2.5

times more than in summer. Thus, even by 1953, the farmer-members had no assured market

for the extra milk produced in winter. They were again forced to sell a large surplus at low

rates to the middlemen. The remedy was to set up a plant to process milk into products like

27
butter and milk powder. A Rs 5 million plant to manufacture milk powder and butter was

completed in 1955. In 1958, the factory was expanded to manufacture sweetened condensed

milk. Two years later, a new wing was added for the manufacture of 2500 tons of roller-dried

baby food and 600 tons of cheese per year, the former based on a formula developed with the

assistance of Central Food Technological Research Institute (CFTRI), Mysore. It was the

first time anywhere in the world that cheese or baby food was made from buffalo milk on a

large, commercial scale. Another milestone was the completion of a project to manufacture

balanced cattle feed. The plant was donated by OXFAM under the Freedom from Hunger

Campaign of the FAO.

To meet the requirement of milk powder for the Defense, the Kaira Union was asked by the

Government of India in 1963 to setup additional milk drying capacity. A new dairy capable

of producing 40 tons of milk powder and 20 tons of butter a day was speedily completed. It

was declared open in 1965. The Mogar Complex where high protein weaning food, chocolate

and malted food are being made was another initiative by Amul to ensure that while it

fulfilled the social responsibility to meet the demand for liquid milk, its members were not

deprived of the benefits to be had from the sale of high value-added products.

Cattle: From stumbling blocks to building blocks

Traditionally dairying was a subsidiary occupation of the farmers of Kaira. However, the

contribution to the farmer's income was not as prominent as his attachment to dairying as a

tradition handed down from one generation to the next. The milk yield from animals, which

were maintained mainly on the by products of the farm, was decidedly low. That together

with the lack of facilities to market even the little produced rendered the scientific practice of

28
animal husbandry irrational as well as unaffordable. The return on the investment as well as

the prospects of being able to market the product looked very bleak. It was a vicious cycle

reinforced by generations of beliefs.

The Kaira Union broke the cycle by not only taking upon themselves the responsibility of

collecting the marketable surplus of milk but also provided the members with every

provision needed to enhance production. Thus the Kaira Union has full-fledged machinery

geared to provide animal health care and breeding facilities. As early as late fifties, the Union

started making high quality buffalo semen. Through village society workers artificial

insemination service was made available to the rural animal population. The Union started its

mobile veterinary services to render animal health care at the farmers' doorstep. Probably for

the first time in the country, veterinary first aid services, by trained personnel, were made

available in the villages. Fully qualified staff mans the Union’s 16 mobile veterinary

dispensaries. All the villages are visited bi-monthly, on a predetermined day, to provide

animal health care. A 24-hour Emergency Service is also available at a fee (Rs. 35 for

members and Rs. 100 for non-members). All the mobile veterinary vans are equipped with

Radio Telephones.

The Union runs a semen production center where it maintains high pedigreed Surti buffalo

bulls; Holstein Friesian bulls, Jersey bulls and 50 per cent crossbred bulls. The semen

obtained from these bulls is used for artificial breeding of buffaloes and cows belonging to

the farmer members of the district. The artificial insemination service has become very

popular because it regulates the frequency of calving in cows and buffaloes thus reducing

29
their dry period. Not only that, a balanced feed concentrate is manufactured in the Union's

Cattle Feed Plant and sold to the members through the societies at cost price.

Impressive though its growth, the unique feature of the Amul sagas did not lie in the

extensive use of modern technology, nor the range of its products, not even the rapid inroads

it made into the market for dairy products. The essence of the Amul story lies in the

breakthrough it achieved in modernizing the subsistence economy of a sector by organizing

the rural producers in the areas.

30
 GCMMF: An Overview

Gujarat Cooperative Milk Marketing Federation (GCMMF) is the India’s largest food

product marketing organization. It is a state level apex body of milk cooperatives in Gujarat,

which aims to provide remunerative returns to the farmers and also serve the interest of

consumers by providing quality products that are good value for money.

Members 13 district cooperative milk producers' Union

No. of Producer Members 2.36 million
No. of Village Societies 12792
Total Milk handling capacity 10.16 million litres per day
Milk collection (Total – 2006-07) 2.38 billion litres
Milk collection (Daily Average 2006-07) 6.5 million litres
Milk Drying Capacity 594 metric Tons per day
Cattle feed manufacturing Capacity 2640 MTs per day

Sales Turnover Rs (million) US $ (in million)

1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493
List
2000-01 22588 500 of
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-2005 29225 672
2005-2006 37736 850
2006-2007 42778 1050
Products Marketed

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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

32
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

Pure Ghee

• Amul Pure Ghee

• Sagar Pure Ghee

• Amul Cow Ghee

Infant Milk Range

• Amul Infant Milk Formula 1 (0-6 months)

• Amul Infant Milk Formula 2 (6 months above)

• Amulspray Infant Milk Food

Milk Powders

• Amul Full Cream Milk Powder

• Amulya Dairy Whitener

• Sagar Skimmed Milk Powder

33
 • Sagar Tea and Coffee Whitener

Sweetened Condensed Milk

• Amul Mithaimate Sweetened Condensed Milk

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

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)

34
 • Utsav Range (Anjir, Roasted Almond)

• Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate)

• Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black

Currant)

• Sundae Range (Mango, Black Currant, Chocolate, Strawberry)

• Millennium 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

35
Milk Drink

• Amul Kool Flavoured Milk

Health Beverage

• Amul Shakti White Milk Food

Ready to Serve Soups

• Masti Tomato Soup

• Masti Hot & Sour Soup

Recently launched

Amul Ganthiya

Amul KOOL KOKO

Organisation Structure

Organization Structure is divided into two parts:

• External Organization Structure

• Internal Organization Structure

External Organization Structure

36
External Organization Structure is the organization structure that affects the organization

from the out side.

State Level Marketing Federation

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

Villagers

As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-operative

organization. The villagers of more than 10000 villages of Gujarat are the bases of this

structure. They all make village milk producers union, district level milk producers union and

then a state level marketing federation is established. The structure is line relationship, which

provides easy way to operation. It also provides better communication between two stages.

37
 Internal Organization Structure:

The following is internal organisation chart of Amul:

Organization Structure Chart

Chairman

Managing Director

General Manager

Ass. General Manager

Finance Production Marketing Sales & Purchase Personnel

Dept. Dept. Dept. Dept. Dept.

Senior Senior Senior Senior Senior

Manager Manager Manager Manager Manager

Finance Production Marketing Sales Personnel

Manager Manager Manager Manager Manager

Accountant Officer Marketing Officer P.R.F.

Executive

Officers Supervisor F.S.R. Salesmen Executive

38
A systematic & well-defined organizational structure plays a vital role & provides accurate

information to the top-level management. An organisation structure defines a clear-cut line of

authorities & responsibilities among the employees of GCMMF. The Organisation structure

of Amul is well-arranged structure. At a glance a person can completely come to know about

the organization structure.

Amul is leaded by the director under him five branches viz. Factory, Marketing, Accounts,

Purchase, Human Resources Department.

Factory department has a separate general manager under him there are six braches viz.

Production, Stores, Distribution, Cold Storage, Quality, and Deep-freezing. This department

takes care of the factory work.

Marketing department has regional senior marketing manager and under him there is a

regional manager. This department takes care of the marketing aspects of Amul.

Accounts department takes care regarding accounts i.e. day-to-day work. Under the

accountant there is one clerk.

Purchase department takes care regarding the purchase of raw materials and many other

things.

39
 Production Function

Introduction

Explosion of the production technology and changes in technical field is going to bring out

revolution in the industry sector which eventually gives stand to study and favors the come

backing subject i.e. production and management.

Production and operation management is planning, organizing, staffing, directing and

controlling of all the production system those portion of organization that convert inputs into

products and services. In general production system takes raw material, personnel, machines,

buildings and other resources and produce products and services.

The core of production system is its conversion subsystem where in workers; raw materials

are used to convert inputs into products and services. This production department is at heart

of the firm, as it is able to produce low cost products and superior quality in timely manners.

Thus, there arises enormous need of giving due importance to this department as a whole and

a strong concrete base being foundation pillars of a manufacturing organization, if the

intention is to succeed domestically and globally.

40
 Co operative Milk Producing Societies in Gujarat

Following are the cooperatives that function under GCMMF.

• Ahmedabad Dist Coop Milk Producers’ Union Ltd, Ahmedabad. Soc: 433, Mems: 52,428.

Av Milk Proc: 90,000 lpd.

• Banaskantha Dist Coop Milk Producers’ Union Ltd, Palanpur. Soc: 1,130, Mems: 97,251. Av

Milk Proc: 295,000 lpd.

• Baroda Dist Coop Milk Producers’ Union Ltd, Baroda. Soc: 783, Mems: 156,691. Av Milk

Proc: 225,000 lpd.

• Bharuch Dist Coop Milk Producers’ Union Ltd, Bharuch. Soc: 289, Mems: 37,900. Av Milk

Proc: 38,000 lpd.

• Bhavnagar Dist Coop Milk Producers’ Union Ltd, Bhavnagar. Soc: 190, Mems: 25,532. Av

Milk Proc: 23,000 lpd.

• Gandhinagar Dist Coop Milk Producers’ Union Ltd, Gandhinagar. Soc: 56, Mems: 13,000.

Av Milk Proc: 46,500 lpd.

• Junagadh Dist Coop Milk Producers’ Union Ltd, Junagadh. Soc: 400, Mems: 41,500. Av

Milk Proc: 73,000 lpd.

• Kaira Dist Coop Milk Producers’ Union Ltd, Amul Dairy, Anand. Soc: 943, Mems: 513,280.

Av Milk Proc: 740,000 lpd.

• Kutch Dist Coop Milk Producers’ Union Ltd, Kutch Dairy, Madhapar. Av Milk Proc: 25,000

lpd.

• Mehsana Dist Coop Milk Producers’ Union Ltd, Dudhsagar Dairy, Mehsana. Soc: 1,020,

Mems: 292,800. Av Milk Proc: 704,402 lpd.

41
 • Panchmahal Dist Coop Milk Producers’ Union Ltd, Godhra. Soc: 1,133, Mems: 126,510. Av

Milk Proc: 112,000 lpd.

• Rajkot Dist Coop Milk Producers’ Union Ltd, Rajkot. Soc: 193, Mems: 29,620. Av Milk

Proc: 50,000 lpd.

• Sabarkantha Dist Coop Milk Producers’ Union Ltd, Sabar Dairy, Himatnagar. Soc: 1,315,

Mems: 200,482. Av Milk Proc: 322,346 lpd.

• Surat Dist Coop Milk Producers’ Union Ltd, Sumul Dairy, Surat. Soc: 864, Mems: 160,000.

Av Milk Proc: 300,000 lpd.

• Surendranagar Dist Coop Milk Producers’ Union Ltd, Surendranagar. Soc: 486, Mems:

31,000. Av Milk Proc: 30,000 lpd.

• Valsad Dist Coop Milk Producers’ Union Ltd, Vasudhara Dairy, Valsad. Soc: 348, Mems:

35,900. Av Milk Proc: 74,400 lpd.

Plant Layout

Plant layout is the overall arrangement of the machine tools, handling equipments, storeroom

and other various accessories required for facilitating production in a factory. These

arrangements are pre-planned with the results that the building has been constructed to fit a

layout of a given process.

AMUL plant is indigenously worked out with facilitation of various production processes

and production of multi products under one plant. The total plot is nearly about 2.27 kms.

Separate buildings are provided with required arrangements of machine tools handling and

42
 computers connection through the control room to fit for varying product-manufacturing

departments.

The plant is engaged in producing milk, ice creams, milk powder and ghee. Entire

department is uniquely provided with facilities for the processing each product. There are 4

production departments and packaging departments pertaining to each product respectively.

Thus, plant layout encompasses all production and service facilities and provides for the most

effective utilization of the men, materials and machines constituting the process. It is the

master blue print of coordinating all operations.

A good layout results in elimination or minimization of accidents and hazards and cost while

increases the output. Thus a good layout specifically is observed to be beneficial on the

following grounds:

• Efforts minimization

• Fewer material handling will be provided manufacturing units cost will be lover

• Bottlenecking of production will be eliminated

• Total item in process will be less

• Specialization of operations is facilitated

• Less inspection will be required

• Production control will be easier to achieve

43
• Plant investment can be held to the necessary minimum

• Plant and equipment obsolescence may be less

• Wastage space will be eliminated

Thus, a true beneficiary is provided to the plant through good and sound planning for plant

layout.

Operating Analysis

Amul’s only source of raw material is Village Milk societies. Milk is brought from such

village milk societies every morning and evening. This milk is then sent to the dairy plant. In

the dairy plant the milk is processed i.e. it is made free from germs.

44
Milk Processing

The entire process of milk can be divided into following steps:

Steps:

Milk Processing Chart:

Collection of Raw-Milk
Electronic Milk Test

Methyline Blue Reduction Test

Purchasing And Standardizing Process

Separation Process

Quality Check

Packaging Process

Cold Storage

45
Steps in Production Process

1. Collection of Raw Milk

Raw milk is collected from different co-operative societies of Gujarat. About 122000 liters of

raw milk is collected per day. Before this milk is sent to the laboratory for testing the ‘FAT

& SNF’ proportion, the milk is separated from the raw milk. The milk is taken from the

chilling centers to Ahmedabad with the help of trucks.

After collecting the samples of milk, they are taken to the laboratory ,where two types of

tests are conducted.

• Electronic milk test

• Methyline blue reduction test

Electronic Milk Test

Before pasteurizing the milk the samples are taken to the laboratory. In the laboratory with

the help of machine called electronic milk tester, the proportion of SNF & FAT is checked

with phosphate solution. When the colour of the milk becomes yellow, it is sent for

pasteurisation.

Methyline blue reduction test

Another test, which is taken in the laboratory, is called Methyline blue reduction test. This

test is conducted for checking for how long the milk will remain fresh. To check this, 10 ml

of milk is taken and 1 ml of methyline blue solution is added to it. It is then kept under water

at 57-degree C. After one hour, if the solution losses its colour than it is called raw milk. If

46
the solution remains the same even after 5 hours than it is considered as fresh milk, which

remains constant for a long period of time.

The dairy fixes the proportion of FAT & SAF.

MILK SNF FAT

Buffalo 9% 6%
Cow 8.5% 4.5%

After laboratory gives green signal and confirming the raw milk at the reception dock is

brought in to the house connected with the pump is sent to the milk processing plant. This is

than chilled below 4 degree C. and then stored in milk silos. After that milk is processed

which has two steps i.e. pasteurising and standardizing.

2.Pasteurising & standardizing

After collecting and checking and conducting laboratory tests, the pasteurising process is

conducted. To pasteurized the milk means to kill all the germs in the milk by a particular

method which was invented by a scientist called James Pasteur and so the name

pasteurisation.

In pasteurizing, the milk is first heated at 72 C to 76 C for 15 seconds and then it is

immediately cooled below 4 C. By this method they destroy the pathogenic bacteria present

in the raw milk. But if the right degree of temperature is not provided there are chances that

the milk might still contain germs. After this process some milk goes to separator machine

and remaining is proportionately sent for standardization. Standardization process is known

such as it bifurcates the milk in 3 categories varying according to that FAT & SNF contents.

47
The equipment named OSTA. Auto standardization adjusts the fat directly. The computer is

just ordered whether gold or standard milk is to be rationed and the same will be received

with appropriate contents.

Ready Milk = Pasteurised + Standardized.

3. Separation process

Separator machine separates two kinds of products, skimmed milk & cream, through

channels. There are 100 disks fixed in separator machines, which revolve at 5000 rpm

(revolution per minute). It is taken to the tanks, which has the capacity of 20000 litres.

Whenever the milk is needed from the tank, it is tested in the laboratory and the deficit

proportion fat is added by mixing cream. This process continues for 24 hours.

4 Quality Check

Pasteurized milk is sent for a quality check in the Quality Assurance laboratory of the dairy

plant. Within 14 seconds FAT and SNF proportion is received regarding 30 lack litres of

milk. The total investment put into the lab by the Dairy plant is of Rs. 6 crores.

This laboratory only checks and analyses the powder, milk and ghee. There is a separate ice-

cream analyzing laboratory.

5 Packing Process

After this the milk is sent for packing to the milk packing station in the dairy plant. In the

milk packaging station there are huge pipelines and behind each of them there is polyfill

48
machine from which the material to pack milk comes out. There are 12 such polyfill

machines in the packaging station from which the materials to pack milk comes out. From

each of these 12 machines 100 pouches are packed in one single minute.

6. Storage

Then the milk is sent to the cold storage of the dairy where the milk is stored until it is

dispatched. Here the milk is stored at temperature ranging from 5 C to 10 C, it is maintained

with the help of exhaust fans having silicon chips. About 40000 litres of milk is dispatched

from the cold storage of the dairy plant everyday. The damaged pouches are kept a side and

the milk is once again put to the tank.

49
Milk Powder
For converting milk powder first of all water content is evaporated in condensing plant. By

this process they get condensed milk, it is used as a raw material. There after the milk is sent

to the drying plant. The spray drying plant is huge in size with a height of 70 feet. The plant

is divided into many floors to enable easy use of the plant. First of all the raw material i.e.

condensed milk is put into the first floor of the plant along with air at 200° C. By this process

the remaining water, which the condensed milk might have retained is also evaporated and

milk comes as powder but this is not the last stage.

This powder is again put in to a machine called milk calendaria, where it is turned in to real

milk powder. Its capacity is 1000 litres per 15 minutes. Then again this milk powder is put

into a Dense Waise Vessel. Here the lumps are removed and uniform milk powder is sent up.

After processing the powder is sent for quality checking at quality assurance laboratory.

After the quality confirms, this milk powder is differentiated, by adding different flavors to

them like elaichi, chocolate & sugar free milk powder. Thereafter they are packed in tins and

boxes. Afterwards it is stored at storage department.

50
 Marketing Function

Gujarat Co-operative Milk Marketing Federation (GCMMF)

GCMMF was the first co-operative to be set up under operation flood. GCMMF’S dairy

plant commissioned in 1994 is one of the most modern and largest plants. It can handle up to

1million litres of milk per day. The plant also has facilities for pasteurizing and packing. It

was funded by NDDB. GCMMF’s milk is sold under its flagship brand Amul.

GCMMF was formed in 1973. As an apex marketing federation of 12 district milk unions of

Gujarat to operate own marketing and distribution network in India and abroad.

GCMMF sales turnover grew by 21% Rs. 15.5 billion to Rs. 18.8 billion including

consignment sales of Rs. 3.7 billion sale of Amul milk in Gujarat and Maharastra increased

by 11% and 16% respectively. Dairy product turnover registered a 19% growth. Amul butter

registered 18% growth. The sale of Amul & Sagar Ghee increased by 47%. Amul Cheese

registered 60% value growth.

GCMMF’s sales to the defense services were Rs.233 million during the year, were mainly to

Burma, Uganda and West Africa. The company plans to expand its export markets in Saudi

Arabia and other Middle East countries.

51
During 1999, launching it in 8 states and 2 union territories extended the Amul ice-cream

brand franchise. Amul ice creams have become India’s 2nd largest brand. Recently it has

commissioned a dairy at Kolkata.

New products launched during the early 2000 were Amul Pizza, Cheese and Amul slice

cheese, Amul paneer and Amul Mithaee range. Safal mango drink has been launched by

Strategic alliance with Safal (A union of NDDB). The product range to be launched under

the Safal brand will include fruit drinks, squashes, pickles, jams, and ketchup and mango

pulp.

Amul ice-cream brand franchise was extended with launch in 8 states & 2 union territories.

Amul ice cream has become the 2nd largest brand in the country & has garnered major share

in its existing markets in a short time span of 3 years. Amul’s main ice-cream manufacturing

facility is located at Gandhinagar which is Asia’s largest and most modern integrated ice-

cream manufacturing plant and uses world renewed refrigeration units and an efficient cold

chain. GCMMF has become very popular because of its excellent marketing strategy.

GCMMF marketing strategy is to understand the consumer needs, develop products that

provide superior value at fewer prices. GCMMF has shown a tremendous commitment to the

floodwater situations. GCMMF has never stopped the supply of milk and other milk

products. And unlike other competitors, it has never taken wrong benefits in these kinds of

situations. It has developed an excellent distribution channel to provide its products to the

consumers. It has made its products available in each part of Gujarat & India.

Market Segmentation

52
Market segment is a very important function for the market department of the GCMMF,

because the market consists of buyers different in many ways. They are different in their

wants resources, locating buying practices. Because buyers have unique needs and wants,

each buyer is potentially separate market.

Geographic segmentation

Under these variables, GCMMF has divided market into different geographic units such as

region, states, cities etc. GCMMF sells its products by geographic segment action like in the

north where production of milk is very high the sale of Amul’s product is not much. But in

the western region it is high. GCMMF identifies this kind of variables and deals with it.

Demographic Segmentation

Under this variable GCMMF has divided market into several segments such as age, gender,

family, size, income, occupation etc. For each group GCMMF marketing strategy is

different. In milk Amul targets all the class where as in the other products like butter, ghee,

ice-cream etc. it targets to the middle and higher middle class.

Distribution Network

Most producers work with marketing intermediaries to bring their products to market. The

marketing intermediaries make up a marketing channel also called distribution cannel.

53
Distribution channels are sets of interdependent organizations involved in the process of

making a product or service available for use or consumption.

The Head Office of GCMMF is located at Anand. The entire market is divided in 5 zones.

The zonal offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai.

Moreover there are 49 Depots located across the country and GCMMF caters to 13 Export

markets.

A zero level of channel also called a direct marketing channel consists of a manufacturer

selling directly to the final customers. A one level channel; contains one selling intermediary

such as retailer to the final customers. A two level channel two intermediaries are typically

wholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber in

between.

GCMMF has an excellent distribution. It is its distribution channel, which has made it so

popular. GCMMF’s products like milk and milk products are perishable. It becomes that

much important for them to have a good distribution.

54
 Distribution Chart

Products

Agents

Wholesaler

Retailer

Consumer

We can see from above figure that GCMMF distribution channel is simple and clear. The

products change hands for three times before it reaches to the final consumer. First of all the

products are stored at the Agents end who are mere facilitators in the network. Then the

products are sold to wholesale dealers who then sell to retailers and then the product finally

reaches the consumers.

Amul Parlors

Amul has come out with a unique concept of Amul Parlours. They have classified them

under four types namely:

• Center for excellence

• On the Move

• Amul Parlours

• Amul Preferred Outlets

55
Center for Excellence: These Amul Parlours are specifically at a place, which has a class of

excellence of its own. We can find such parlors at the Infosys, IIMA, NID Ahmedabad etc.

On the Move: These parlors are at the railway stations and at different state bus depots

across different cities.

Amul Parlours: These parlors can be seen at different gardens across different cities. These

are fully owned by Amul.

Amul Preferred Outlets: These are the private shops that keep the entire of product range of

Amul. They also agree not to keep any competitor brands in the outlets. They can keep other

brands that are in the non-competitor category.

Amul has more than 200 such outlets right now. It wants to have 1,00,000 parlors by the end

of the year 2010.

Managing Competition

The Indian market is dominated by a large number of small local and regional players. There

are an estimated 150 manufacturers in the organized segment, which accounts for 30-35% of

sales and about 1000 units in the unorganized segments of the market. In the organized

segment the significant brands are Kwality Walls , Vadilal, Amul, Havmor, Mother dairy and

56
Baskins & Robbins. GCMMF is facing very tough competition from both in and outside

India.

Amul combats competition from its competitors by providing quality products at a price

which its customers value. Along with good quality products and reasonable price the

packaging is also very good. Most of its products are available in many flavors. Excellent

advertising backs its products and helps GCMMF (AMUL) to leave its competitors a tough

time. Also Amul has come out with Amul Parlours to cater to various segments of customers.

Amul has a very strong Brand Image in the Domestic market. Many products are exported by

GCMMF.

Exports

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

House" status. GCMMF has received the APEDA Award from Government of India for

Excellence in Dairy Product Exports for the last 9 years.

The major export products are:

Consumer Packs

• Amul Pure Ghee

• Amul Butter

• Amul Shrikhand

• Amul Mithaee Gulabjamun

• Nutramul Brown Beverage

57
 • Amulspray Infant Milk Food

• Amul Cheese

• Amul Malai Paneer

• Amul UHT Milk (Long Life)

• Amul Fresh Cream

Bulk Packs

• Amul Skimmed Milk Powder

• Amul Full Cream Milk Powder

The products are exported to 18 countries namely, USA, Kuwait, Qatar, UAE, Yemen,

Bahrain, Muscat, Saudi Arabia, Tanzania, Madagascar, Sri Lanka, Singapore, Nepal,

Bangladesh, Nepal Thailand and Australia.

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Advertising by Amul

Amul has two agencies that look after its entire range of products namely FCB Ulka and Da

Cunha.

FCB Ulka looks after a broad range of products namely, Amul Lite Breadspread, Amul

Shrikhand, Amul Chocolates, Amul Paneer, Amul SnowCap Softy Mix Ice cream,

Amul/Sagar Ghee, Amul Infant Milk Formula 1 & 2, Sagar Tea and Coffee whitener, Amul

Spray Infant Milk Food, Amul Mithaee, Amul Gulab Jamun, Amulya Dairy Whitener,

Mithaimate Sweetened Condensed Milk, Amul Ice cream, Sagar Skimmed Milk Powder and

Amul Whole milk Powder.

Da Cunha looks after the Amul butter. Da Cunha also prepares the very popular Amul butter

billboard campaigns, which we see at various locations. Over and above the Amul butter, Da

Cunha also looks after the Amul Cheese, Cheese spread, Gouda Cheese, Emmental Cheese,

Masti Dahi and Buttermilk, Amul Slim-n-Trim, Amul Taaza and Amul Gold (all different

brands of milk), Amul Fresh Cream, Amul Chocolate Milk, Amul Fresh Milk and Nutramul.

FCB Ulka also looks after the corporate campaign.

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 Human Resource Function

Introduction

The success to any industrial unit depends upon their effective personnel department.

Personnel department is basically commercial with human resource of an enterprise and it

also continues procurement, development, non-monetary comparison, integration and

maintenance of the personnel purpose of contribution towards the accomplishment of the

organization’s major goal and objectives. Personnel management in opinion of many authors

is true management. So sometimes it is told that management means to manage human

behaviour. Personnel management is that phase of management, which deals with the

effective control of use of manpower as distinguished from other source of power.

The management includes all aspects of works such as recruitment, selection, medical

checkups, various types of training, transfer, welfare activities, union activities, etc.

Recruitment

Recruitment forms the first stage in the process which continues with selection and cased

with the placement of the candidate recruitment makes it possible to acquire the number and

types of people necessary to ensure to continues operation of the organization requirement

has, been regarded as the most important function of personnel administration.

Amul’s recruitment and selection process is very systematic and comprehensive. All division

head in inform about their manpower requirements. According to the requirement of the

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personnel division they get require employees by resources like postal services employment

exchange education institution and advertisement.

Amul Dairy receives lots of applications in response to their advertisement. These forms

contain general information about the candidates. Then forms are to be checked by

authorized person and after scrutinizing eliminates the unqualified applications. Short listed

Applicants are called for personal interview. Interview committee conducts this interview.

When applicants are too many, then they conduct a written test. Those who pass this test are

called for interview and are selected on the basis of smart selection process.

Sources of Recruitment

• By giving advertisement in news papers

• Labour Union

• Voluntary Organisation

• Leasing Contract

• Private Employment Agency

• Government Employment Exchange

• School, Colleges, Universities and Professional Institutes

• Recommendation of present Employee

• Recruitment as Temporary Workers

Selection

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Selection process is concerned with screening relevant information about an applicant. The

objective of selection process is to determine whether an applicant meets the qualification for

a specific job and to choose the applicant who is most likely to perform well in that job.

Training & Development

Training and management development are the two separate things. Training is required for

persons working at operation level and it is required for increasing the knowledge and skills

of employees so that they can perform their tasks in the best manner while management

development refers to the activities that take place in order to improve the performance of

the managerial level personnel. Training and management development contribute a lot in

increasing the productivity. To facilitate newly selected person at operation level, he is

placed at the work under supervision of a senior worker who gives guidance and instructions

about the particular work. For the managerial level personnel, they select only those people

who are having an experience of at least three years in similar fields. Then a newly selected

person’s performance is observed for three months.

Promotion & Transfer Policy

Promotion

Two main policies followed by the organisation are:

• Automatic promotion

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• Merit cum seniority

During the period of 1972, promotion was given automatically to a person who had

completed his 6 yrs and 2nd promotion was given after 7 yrs. At that time they had a policy

of rewarding merit on the basis of seniority. But now it is solely based on merit. Managing

Director signs the promotion order after the recommendation by the personnel &

Administration department.

Transfer

Transfer is the pre-relative right of the management. Transfer is done if it is necessary for the

organization. Transfer is generally affected to build up a more satisfactory work team & to

achieve a specific purpose. In this organisation transfer takes place in flash season. Transfers

are also to adjust the work forces of one plant with another.

Wage & Salary Administration

Attendance is considered to be one of the major & important factors responsible for the

Wage & Salary Administration.

At present catalogue record is received from the time keeping office and is maintained in the

register, which is known as master roll. Timekeeper sends this master roll to the accounts

department. Attendance of each & every employee is analyzed & entered into the computer.

The record is scrutinized and a statutory and non-statutory deduction is made and then after

salary is calculated for each employee.

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The wages are paid in cash & also credited in corporate salary a/c. Employee wages are

deducted according to grades of workers. It consists of A, B, C, D, E, and F grade of

workers.

Job Description

Job Description is an important document, which is basically descriptive in nature and

contains a statement of job analysis. It defines the scope of job activities i.e. major

responsibilities & positioning of job in organization. It provides the worker and supervisor

with a clear idea of what kind of work they need to do to meet the demands of the job. Here

those who are at senior Level make job description regarding managerial position.

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 SWOT Analysis

Strengths

• Demand profile: Absolutely optimistic. Milk being a necessity product, the demand will

stay and the sales at GCMMF are bound to increase over a period of time.

• Margins: Quite reasonable, even on packed liquid milk. The margins are enough to limit the

entry of potential entrants.

• Flexibility of product mix: Tremendous. With balancing equipment, GCMMF has kept

adding a wide array of products to its product line.

• Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced

is flowing into the unorganized sector, which requires proper channelization. Amul &

GCMMF have leveraged this and has got itself a strong base of suppliers who provide them

milk throughout the year. Large number of dairy plants in public and cooperative sectors

besides several others coming up in the private sector would result in competition. Because

of this the end consumer would benefit and a good product mix would emerge.

• Technical manpower: Professionally trained, technical human resource pool, built over last

30 years is the strength that GCMMF has. The employees of GCCMF are highly recognized

in the industry and have earned name for themselves as well as the federation.

• Enhanced Milk Production: Increase in the milk production with consequently increased

availability of milk processing has led to increase in consumption and faster access to the

consumers through effective distribution. The technology is brought from Denmark and the

production of milk has benefited from that.

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• Transportation: The transportation facilities and the easy availability of the special trucks

have provided a boost. Cold refrigerated trucks are there in place and the warehouses also

have the cold storage facilities that facilitate the transportation.

• Vast resources: Country has vast natural resources which offer immense potential growth

and development for dairying. Moreover the financial resources available with the federation

are immense and the reputation is such that in case of any further requirements, it can

approach any institution and raise any form of capital.

• Increasing purchase power and changing tastes of the consumers: The purchasing power

of the residents is increasing. As a result a lot of products are being consumed. Moreover, the

consuming habits are changing. As a result, the demand for products such as butter and

cheese is increasing at a very rapid rate.

Weaknesses

Perishability: Pasteurization has overcome this weakness partially. UHT gives milk

long life. Still perishability is there at the milk vendors end. This does result in loss of

some production. But Amul Dairy is taking steps to store milk at the vendors end.

Surely, many new processes will follow to improve milk quality and extend its shelf

life.

Lack of control over yield: Theoretically, there is little control over milk yield. A lot

depends upon the monsoon in the country. This is because of the quality of cattle feed that

would be available will not have the required nutritional content. Steps are taken to provide

awareness regarding these and the penetration of quality feed is being increased. Moreover,

increased awareness of developments like embryo transplant, artificial insemination and

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properly managed animal husbandry practices, coupled with higher income to rural milk

producers should automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate transportation facility make

milk procurement problematic. All these factors lead to perishability of the procured milk.

But with the overall economic improvement in India, these problems would also get solved.

Erratic power supply: The erratic power supply would cause harm in the processing of

milk.

Underdeveloped systems: There still exist underdeveloped raw milk collection systems in

some parts of the country. However steps are being taken such as setting up of cold storage

points at key collection centers to combat the situation.

Lack of proper implementation: Dairy development programmes have not been fully

implemented as per the needs of the region in different agro-climatic zones.

Infrastructure: The infrastructure that is available is not up to the current world standards.

Also lack of infrastructure for offering dairy business management programmes to the trained

personnel is creating a hindrance.

Opportunities

"Failure is never final, and success never ending”. Dr Kurien bears out this statement

perfectly. He entered the industry when there were only threats. He met failure head-on, and

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 now he clearly is an example of ‘never ending success’! If dairy entrepreneurs are looking

for opportunities in India, the following areas must be tapped:

• Competition: With so many newcomers entering this industry, competition is becoming

tougher day by day. But then competition has to be faced as a ground reality. The market is

large enough for many to carve out their niche. Moreover due to competition, there is a

chance to better serve the market with innovative products.

• Value addition: There is a phenomenal scope for innovations in product development,

packaging and presentation. Given below are potential areas of value addition:

o Steps should be taken to introduce value-added products like shrikhand, ice creams,

paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and

flexibility in the market place along with opportunities in the field of brand building.

o Addition of cultured products like yoghurt and cheese lend further strength - both in

terms of utilization of resources and presence in the market place.

o Yet another aspect can be the addition of infant foods, geriatric foods and nutritional.

• Export potential: Efforts to exploit export potential are already on. Amul is exporting to

Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty,

opportunities will increase tremendously for the export of agri-products in general and dairy

products in particular. There is a strong basis of cost efficiency, which GCMMF can leverage

in the world market.

• Markets: The market for the traditional as wells as processed dairy products is expanding

both at the domestic and international front.

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• IT support: Software is now available for project formulation for dairy enterprise. It has also

computerized its production processes. Mother Dairy was the first fully computerized dairy

in India. In its Anand plant all products are processed computerized, which does not have any

hand touch during any stage of process.

Threats

• Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of

place in the industry. Organized dissemination of information about the harm that they are

doing to producers and consumers should see a steady decline in their importance.

• Infestation: There are increasing incidents of chemical contaminants as well as residual

antibiotics in milk.

• Quality: The quality of the milk is found to be poor as compared to the international

standards. One of the reasons for these according to the EU and America is the method of

milching the milk. In these nations the milk is hands by the farmers owning the cattle do

milched with the help of machines, while in India.

• Exploitation: The liberalization of the Dairy Industry is likely to be exploited by the

multinationals. They will be interested manufacturing the milk products, which yield high

profits. It will create milk shortage in the country adversely affecting the consumers.

• Subsidy by Western Nations: There have been incidences wherein the Western nations

subsidizing the dairy products by a few means like transportation. Because of such reasons

the final price of the product goes below the prices prevailing in the Indian Market. Hence it

proves a threat to GCMMF’s and other Indian dairy products.

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• Creation of Non Tariff Barriers by Developed Nations: The Developed Nations have

created Non Tariff Barriers related to Quality of the milk specifically. They want that the

milk be processed with potable Air and Water. They also want that the milching of cattle be

done with the help of machines. However this type if system is yet to evolve in India.

Because of these reasons they are reducing the market potential of Indian made products,

where GCMMF holds a lions share.

The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh

‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and

threats are transitory. Any investment idea can do well only when you have three essential

ingredients: entrepreneurship (the ability to take risks), innovative approach (in product

lines and marketing) and values (of quality/ethics).

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 ANALYSIS OF THE PROJECT

 According to Porter (1980) a firm must be analyzed in relation to its industry. Factors outside

the industry tend to influence all the industry’s firms in the same way and are thus not as

important to study.

 To a large extent, industry structure governs the strategies open to the firms. The profitability

and attractiveness of an industry is dependent of the level of competition. Competition in an

industry originates from industry structure and goes well beyond the behavior of individual

competitors.

 According to Porter, each industry has a potential profitability and the profitability for the

firms is dependent on the competitive forces in the industry. Porter identifies five competitive

forces that derive from the ambition to obtain as large share of the profitability as possible.

The five forces are the foundation of the five-force model.

 The major competitors of the Amul dairy include:

Milk Gayatri

Royal

Sardar

Uttam
Shreshtha

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 Ice Crean Vadilal

Havmor

Kwality Walls Max

Local & Regional players

Ghee Gayatri

Nestle

Milk Powder Nestle

Chocolate Nestle

Cadbury

The success of the national and local competitor’s brands includes effective distribution

system, advertising, good pricing policy etc. The factors ascribed by porter are:

• Threats of new entrants

• Bargaining power of suppliers

• Bargaining power of buyers

• Rivalry among competitors

• Threats from substitutes

These factors can be explained in context to GCMMF as below:

Threats of New Entrants

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 Economies of Scale: GCMMF enjoys economies of scale, which is difficult to

match by any other competitor. It is because of this reason that no regional competitor

has grown to a national level.

 Cost and Resource advantages: Amul dairy is co-operative society. That means

“cooperation among competitive” is the fundamental principle. Amul dairy is

managed under the norms of GCMMF and market the products under the brand name

‘Amul’, which has a very good reputation at domestic and international level. Here,

the raw material procurement is very difficult for the new entrants. Consequently

Capital requirement is also high. Still new entrants are emerging such as domestic and

international players. So the threats of new entrants are moderate.

 Brand Preferences and Consumer Loyalty: There is an immense level of Brand

Preference of Amul in the minds of the people. The level of preference specifically in

the liquid milk sector is that they would go to other retailer if the retailer does not

have milk.

 Access to Distribution Channels: The distribution channel of GCMMF is a very

planned and perfect one. For any new entrant to enter it would be a very difficult task.

For GCMMF the result is years of hard work and its investment in its employees as

well as at different levels in the distribution network.

 Inability to match the technology and specialized know-how of firms already

in the industry: The technology used by Amul is imported from Denmark. It is a

state of art technology. To get this technology in India, a firm would require a huge

amount of resources.

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  Capital Requirements: The total investment required in the industry is huge and

is a decision worth considering even for MNC’s. The investment decisions cover the

processing costs as well as the marketing costs. To compete with the brand Amul in

India is difficult as Amul is synonymous to Quality.

Bargaining power of supplier

 The objective of Amul dairy is not profiting. As it is a part of co-operative

society, it runs for the benefit of farmers those are the suppliers of milk and users of

milk products. According the concept of the cooperative society supplier has

bargaining power to have a good return on his or her supply. However, supplier has

limited rights to bargain with the cooperative society because it is made and run for

the sake of mass and not for individual benefit. But it is made sure that the supplier

gets his fair share of return.

 There is appropriate bargaining power of the supplier. In olden days there were

not any kind of cooperative societies as the farmer was exploited. But, nowadays the

farmer’s rights are protected under the cooperative rules and regulations, which

ultimately results in moderate power of bargaining from the supplier.

Bargaining power of buyers

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  Cost of switching to competitor brands: The switching of brands is seen very

much in products such as ice cream, curd, milk powders, milk additives etc. but it can

be seen comparatively less in liquid milk category. Even if the buyers shift to the

other brands of milk, the value that they get is less than they would get from

consuming Amul.

 Large no. of buyers: Milk is a necessity product and hence is a mass product. It

has a considerable share of the rupee spent by any Indian. Moreover the buyers are

spread evenly over the country and do not have any bargaining power.

Rivalry among competitors

 Demand for the product: The demand of the products of GCMMF is increasing

at a very healthy rate. To stand against the rivalry GCMMF is coming with a wide

range of products.

 Nature of Competitors: In different business category GCMMF faces

competition from different players. In the Milk powder category it faces competition

from Cadbury & Nestle, in the chocolate category also I faces competition from

Cadbury & Nestle. While in the ice cream market it faces competition from Kwality

Walls Max and Havmor. In butter and chesses it faces competition from Britannia.

Moreover in almost all categories there is presence of local retailers and processors

and milk vendors. Rivalry intensifies as each of the competitors has different lines

and this would in turn depend on the importance the line holds for the competitor.

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  Mergers and Acquisitions: As such in the industry there are no mergers or

acquisitions. However if any MNC wishes to enter through this route then the

competition might be severe.

Threats Of Substitute

 Availability of attractive priced substitutes: Different substitutes are available

for different category of products. There is ample availability of low priced

substitutes from local vendors and retailers. This is a front where GCMMF is still

finding hard to combat.

 Satisfaction level of substitutes: Customers do consider these products as equal

on quality if not better then the products of GCMMF. Hence the rate of customers

switching to the substitutes is very high. Moreover the buyers also can switch to the

customers easily without any hurdles.

 Not immediate substitutes: Distant substitutes are present in many of the

categories of business of GCMMF. For example in the Masti Buttermilk category it

faces competition from cold drinks and ice cream.

These 5 forces interact among themselves at different degrees over a period of time. Moreover

it will get intense or loosen up depending upon the moves of its competitors, buyers, suppliers,

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etc. However GCMMF has been able to outperform on almost all fronts excluding a few lines

of business.

Future Plans

• To achieve and maintain competitive advantage, innovation in product design and delivery
are increasingly essential.
• To innovate at each stage in value chain – production, procurement, processing, marketing
and branding.
• To devise more effective ways of attracting and retaining skilled human resources.
• To provide them an adequately self-motivating work environment that draws the best out
of them on a sustained basis.
• The ‘Dairy Demonstration Project’ is a collective effort of the Union and Bank. The
project envisages encouraging the farmers to use high yielding animals and modern aids to
increase production. The union will provide necessary guidance to the milk producers on
various techniques and required financial support will be forthcoming with the co-
participation of Bank. To illustrate and bring about better understanding of the project, a
“model farm” is being set up at Mogar and Khatraj to impart training to the participants.
• “Suvarna Jayanti Gram Swarojgar Yojana” helps its beneficiaries to avail loan from the
bank with the Government approval. Under this scheme a marginal producer intending to
avail the benefits, is allocated an amount adequate for purchase of 2 milch animals along
with required other implements on a soft loan basis. This scheme not only help enhance the
productivity and living standards of subscribing producers, the union in turn will also be
benefited by the way of enlarged membership and increased milk procurement.

Future Challenges

The organization may face the following challenges in the future:

• Global demands and changes.

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• Foreign affiliations.
• Competition.
• Liberalisation.
• Changing values.
• Urban shifting.
• Changing interests.
• Adoption of latest technology.
• Production according to international standards with foremost quality.
• Increase need for R&D.
• To keep the prices steady and reduce production and maintenance expenses.
• To enhance milk production by adopting better animal husbandry practices and improving
calf rearing practices in order to assure a stand in international market in the foreseeable
future.
• Expansion and upgrading of plant and equipment to meet increasing demanded for quality
and quantity with the help of better-qualified personnel.
• Rapid increase in productivity while respecting the basic man and animal dynamic i.e., to
control dairy and agriculture development in India.
• Development of new markets and expansion of old ones replacing additional system with
quality packaged milk products and vegetable.
• Creating a national information network to ensure that accurate timely information is
available to all who need it.
These are some of the challenges, which the organisation foresees and requires coping up
with.

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 Conclusion

Amul means different things to different people.

To a milk producer – A life enriching experience

To a consumer – Assurance of having wholesome milk

To a mother – A reliable source of nourishment for her child

To the country – Rural development and self reliance

Amul has given a new dimension to marketing. It showed that a democratically owned and

managed farmer organisation can successfully develop national market, but by doing this

Amul provided virtually guaranteed marketing service to the milk producer at his door step.

Amul has displayed dynamic initiative at a time when its multinational competitors were

merely content to use depreciated machinery.

Following factors have given us the insight to conclude, why Amul is thriving with success

today:

• Emphasis on Quality: All the products of Amul are of highest grade. Consumers were very

quick to perceive this and the sales success that followed reflected the public’s stamp of

approval.

• Modern marketing: A good product alone cannot succeed unless backed by innovative

marketing, including packaging, price and promotion. Amul’s advertising campaigns created

a splash in the market that eventually led to a tidal wave that rocked the competition.

• Management: The judicious handling of people, recognition of performance and

encouragement for a good try has gone a long way to build a sound foundation of people. All

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 the basic components of management that is production, marketing, finance and organisation

behavior are nicely arrayed at Amul.

• The co-operative concept: The fundamental thesis underlying the Anand model is that the

rural producer must own and enjoy the assets they have helped to create. The model has

inspired the creation of hundreds of other Anand.

• The system has succeeded mainly because of involvement of people on such a large scale,

providing assured market at remunerated prices for milk producers, enables the consumers

access to high quality milk and milk products, ploughing back the profit to the members, part

of the profit is used by the society for common good and community development.

Amul is doing everything in the best possible manner. Just look at its product quality,

packaging, advertising and nation wide marketing network. This has given Amul an edge

over its competitors.

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 LIMITATIONS

 All the data under study is secondary in nature.

 The company is not responded when they are contacted via e-mail, due to which I am not

able to present the primary data.

 Lack of current financial results on the websites deficts this report of financial analysis.

 In the report analysis Michael E. Porter’ theoretical work is been uses as base of analysing

this study on Amul and its mother company GCMMF (Gujarat Co-operative Milk Marketing

Federation) and Porter has been criticised by some academics for inconsistent logical

argument in his assertions. Critics have also labelled Porter's conclusions as lacking in

empirical support and as justified with selective case studies.

 The study is done under a very short period so it may lack deep analysis.

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 REFERENCES

• Thompson Arthur A. Jr., Strickland J. A. III; “Strategic Management-Concepts and Cases”,

Thirteenth Edition, Tata McGraw-Hill Publishing Co. Ltd. 2003, pp 117, 123 –127.
• Patel, Rameshbhai P., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
Anand, 50 Years of Milk & Health.”
• Dr. Kurien., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand, 50
Years of Milk & Health.”
• Carter, Thomas R., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
Anand, 50 Years of Milk & Health.”
• Patel, T. K., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand, 50
Years of Milk & Health.”
• Gowda, Shri Deve, “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
Anand, 50 Years of Milk & Health.”
• Halse, Michael, “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand,
50 Years of Milk & Health.”
• Baxi, J. J. “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand, 50
Years of Milk & Health.”
• Singh, Katar, Mittal, S. P., Singh Virendra, “Amul, The Kaira District Cooperative Milk
Producers’ Union Ltd. Anand, 50 Years of Milk & Health.”
• Dr. Oza, D. R., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand,
50 Years of Milk & Health.”
• Thodarson, Bruce, “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
Anand, 50 Years of Milk & Health.”
• Singh, Katar, “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd. Anand, 50
Years of Milk & Health.”
• GCMMF, 30th Annual Report 2003 –2004.
• The Kaira District Cooperative Milk Producers’ Union Ltd. Anand, 58th Annual Report 2003
–2004.

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 Website Visited
• www.amul.coop
• www.indiadairy.com
• www.indianmilkproducts.com

Addional information
Michael Eugene porter is an American academic focused on
management and economics. He has made important contributions to
strategy theory. Porter’s main academic objectives focus on how a
firm or a region can build a competitive advantage and develop
competitive strategy.

• Porter, M. (1980) Competitive Strategy, Free Press, New York, 1980.

• Porter, M. (1985) Competitive Advantage, Free Press, New York, 1985.
• Porter, M. (1987) "From Competitive Advantage to Corporate Strategy", Harvard Business
Review, May/June 1987, pp 43-59.
• Porter, M. (1996) "What is Strategy", Harvard Business Review, Nov/Dec 1996.
• Porter, M. (1998) On Competition, Boston: Harvard Business School, 1998.
• Porter, M. (2001) "Strategy and the Internet", Harvard Business Review, March 2001, pp. 62-
78.
• Porter, Micheal E. and Kramer, Mark R. (2006) "Strategy and Society: The Link Between
Competitive Advantage and Corporate Social Responsibility", Harvard Business Review,
December 2006, pp. 78-92.

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