Presented By:

Gunjan Dugar
Manish Madhukar
Mohit Almal
Vineet Sekhani
 Background
• AMUL – formally registered on December 14,
1946
• During 1940’s the milk procurement was done by
a private company, Polson’s Dairy in Anand
• In 1946, under the leadership of Sardar
Vallabhbhai Patel, Mr. Tribhuvandas Patel, a local
farmer organized farmers into a Cooperative
• In 1949, Dr. Verghese Kurien joined dairy Institute
Research at Anand
 Background
• Membership -
– Committing to supply a certain quantity of milk for a
certain number of days in a year
– Would continue to be a member only if he kept up this
commitment

• Cooperative, not only collected milk but also provided

support services
– veterinary care for their cattle
– Supply of cattle feed of good quality
– Education on better feeding of cattle
– Facilities for artificial insemination of their cattle
 ANAND PATTERN

THE VILLAGE SOCIETY THE DISTRICT UNION THE STATE FEDERATION

 ANAND PATTERN
• Village Society
– Called as Village Dairy Cooperative Society (DCS)
– Formed by Milk Producers
– Has milk collection centres where milk is collected
daily
– Each member's milk is tested for quality with
payments based on the percentage of fat and SNF
– At the end of each year -
• A portion of the DCS profits is used to pay each member a
patronage bonus based on the quantity of milk poured.
 ANAND PATTERN
• The District Union
– Called as District Cooperative Societies
– Buys all the societies' milk, then processes and markets
fluid milk and products.
– Also provides a range of inputs and services to DCSs
and their members
• veterinary care for their cattle
• Supply of cattle feed of good quality
• Education on better feeding of cattle
• Facilities for artificial insemination of their cattle
– Trains and provides consulting services to support DCS
leaders and staff
 ANAND PATTERN
• The State Federation
– Responsible for marketing the fluid milk and
products of member unions.
– Some federations also manufacture feed and
support other union activities
 Organisational Structure
Managing Director

General Manager General Manager General Manager

(Marketing) (HRD) (Quality assurance)

Assistant general
Manager
(Marketing – Dairy
Products)

Manager Manager Manager Manager

(commercial) (Exports) (Liquid Milk) (Ice Cream)
 Organisational Structure
• Sales offices
• Headed by a Sales manager
48 • Assisted by Sales Officers and Field
Salespersons

3600 • Dealer Network

400000 • Retailers
 Product Portfolio
Category Market Share Market Position
Liquid Milk NA 1
Full fat milk
Semi Toned Milk
Fully Toned Milk
Butter
Amul Butter 85 1
Amul Lite 80 1
Amul Ghee 8 2
Sagar Ghee 10 1
Milk Powder
Amul Spray 65 1
Amul Milk Powder 80 1
Sagar, Skimmed Milk 40 1
Powder
Amulya, dairy whitener 60 1
 Product Portfolio
Category Market Share Market Position
Cheese
Amul pasteurized Cheddar Cheese 50 1

Amul Cheese Spreads 90 1

Amul mozzarella cheese 100 1

Amul Emmental Cheese

Amul Paneer
Amul Cheese Powder
Ice Creams
Amul Ice Creams 30 2
Sweets
Amul Shrikhand 50 1
Amul Mithai Gulab Jamun 1

Amul Mithai Mate

 Product Portfolio
Category Market Share Market Position
Chocolates
Amul Chocolates 10 3
Chocolate Drinks
Nutramul 15 4
Edible Oils 12
Dhara Edible Oil
Dhara Health
Fruit & Vegetable N.A.
based Products
Safal Fruit Drinks
Safal Tomato Ketchup
Safal Mixed Fruit Jam
Success Robust
supply
Story chain

Technology
Low cost
and e-
strategy
initiatives
Success

Strong Diverse
distribution product
network mix

Amul – Quality, Value for money, Availability, Service

 AMUL – Business Model

Raw Milk

Pasteurization

Condensed
Packaged Milk Dried
Butter
Ice cream Skimmed Milk
Ghee Powder
Beverages
cream
 GCMMF’s Business Strategy
Developing demand
Limited purchasing power
A low cost price strategy product

The Distribution Network

Dry and cold warehouses
Cash transactions throughout the supply chain
JIT improves dealers’ ROI

Umbrella Brand
Common brand for most product categories
Amul’s sub-brands like Dhara, Safal etc.
Third party service providers
Core is milk processing
Logistics of milk collection, distribution of products
and sale through retail outlets and dealers
Porter’s 5 Forces: An Industry Analysis
Threat of new
entrant is high
as entry barriers
are low

Bargaining power Competitive

of suppliers is low rivalry high Bargaining power
because they are due to other of customers is
rural milk high because of
brands and
producers high competition
local players

Threat of
substitute is
high because of
other products
 3 C’s Model
Defending against Customers extremely
Mahananda, Vijaya and satisfied
other co-operative Moved from loose to
socieities packaged milk
Aggressive moves by Ready to try more products
Britannia, Nestle, Kwality Competition Customer
Improved socio economic
conditions

Company

Largest milk brand in Asia

Market leader in ghee and butter
Very strong supply chain
Good reputation
Value for money
 SWOT Analysis
Strength
High Quality, low price
Introduced TQM
Highly diversified product mix
Robust distribution network
Brand strength
Opportunities
Penetrate international markets
Diversify product portfolio by
adding products like processed food,
chocolates
Use of internet to sell products
Increasing customer contact points
Weakness
Strong dependence on weak
infrastructure and dependence on
villages for raw material
Short shelf life of product
Alliance with third parties
Threats
International competitors
Growing price of milk
Yield of indian cattle low as
comapred to other countries
Saturation of markets
Advertisement
 Data
Sales Data Marketing Expenses
50000 600
22192.31
40000 500 492.47
18835.97 439.82
400
30000 15333.83 360.56
13792.89 Total Turnover
300 301.03
20000 11140.42 Sales of Dhara 265.41 244.77
9888.92
200
Sales
10000 100
0 0
93-94 94-95 95-96 96-97 97-98 98-99 93-94 94-95 95-96 96-97 97-98 98-99

Net profit carried down

140
130.12
120
100
80 81.79 84.8
77.85
60
40
20
13.44
7.89
0
93-94 94-95 95-96 96-97 97-98 98-99
 Profitability Ratios
Net profit margin ROA
70.00% 12.00%
11.29% 10.93%
60.00% 10.00% 9.89% 9.67%
50.00% 8.55%
8.00%
40.00%
6.00%
30.00%
4.00%
20.00%
10.00% 2.00%

0.00% 0.00%
93-94 94-95 95-96 96-97 97-98 98-99 94-95 95-96 96-97 97-98 98-99

ROE
20.00%
18.00% 18.63% 18.76%
16.00%
14.00% 13.73% 13.72%
12.00%
10.00%
8.00%
6.00%
4.00%
3.20%
2.00% 2.25%
0.00%
1994 1995 1996 1997 1998 1999
 Ratio’s
Marketing Expense/Total Dhara Sales/ Total Turnover
Turnover 25.00%

3.00% 22.81%

2.68% 20.00% 19.63%

19.40%
2.50% 18.48% 18.29% 18.38%
2.35% 2.34%
2.20% 2.18% 2.22%
2.00% 15.00%

1.50%
10.00%

1.00%

5.00%
0.50%

0.00% 0.00%
93-94 94-95 95-96 96-97 97-98 98-99 93-94 94-95 95-96 96-97 97-98 98-99
Amul Competition
 Product Strategy of Amul
• Product Positioning Strategy
• Product Design Strategy
• Diversification Strategy
• Value Marketing Strategy
 Product Positioning
• To place the product in that part of the market
where it will get favourable reception
• Positioning of Amul is “Taste of India” as it has
created value in the whole chain from
customers to farmers
• USP – Quality with affordability
 Product Design Strategy
“Whether to offer standardised or customized
products”
Uses of Utterly – Butterly Girl:
Using since 1967
One of the longest serving ad campaigns
 Product Diversification
• Seeking unfamiliar markets or products in the
pursuit of growth
• Amul’s Philosphy:
- Progressive addition of higher value
products while maintaining the desired
growth in existing products
Core philosphy:
- Providing milk at basic and affordable
price
 Value Marketing Strategy
• Providing a product that works as claimed, is
accompanied by decent service and delivered
on time
• Commitment to quality
• Value for money
• Creating awareness
• Fostering loyalty
 Dairy Cooperative Network-Current Scenario
The Dairy Cooperative Network
• Includes 177 milk unions
• Operates in over 346
districts
• Covers around 1,28,799
village level societies
• Is owned by around 13.4
million farmer members of
which 3.7 million are
women
Milk Production
• India's milk production
increased from 21.2 million
MT in 1968-69 to 100.9 million
MT in 2006-07 and to 102
million MT in 2007-08
• Per capita availability of milk
was 246 grams per day in
2006-07 increased from
241grams per day in 2005-
06, up from 112 grams per day
in 1968-69
 Dairy Cooperative Network-Current Scenario
Marketing
• In 2007-08, average daily
cooperative milk marketing
stood at 189.21 lakh litres;
annual growth has averaged
about 6.6 per cent
compounded over the last five
years
• During 1991-2007 the daily
milk supply by Cooperatives to
each 1000 urban consumers
has increased from 37.3 to
66.3 litre
Innovation
• Bulk-vending - saving money
and the environment.
• Milk travels as far as 2,200 kms
to deficit areas, carried by
innovative rail and road milk
tankers.
• Automatic Milk Collection Unit
(AMCU) and Bulk Milk Cooler
(BMC) at grass root level –
preserve quality and reduce
post-procurement losses
 Mission 2020
• “Mission 2020,” as the GCMMF calls it, focuses on
cattle feed manufacturing capacity

• The GCMMF, at current price, will require an

investment of Rs 2,600 crore to ready the
infrastructure required for such a facility

• “We want to expand the manufacturing capacity of

the cattle feed more than four times to 12,000 MTs
per day by 2020,” said Parthi
Bhatol, chairman, GCMMF
Sales Growth-By Value
 Amul-Retailing
• The network of more than 4000 parlors in almost all
major towns of the country bears testimony to the
fact that the model is hugely scalable and inherently
sustainable

• The retailing business alone fetched sales turnover

of more than Rs.200 Crores during the current year

• Channel Partner- Indian Railways, 300 New Outlets

Problem Statement
 SWOT ANALYSIS
• Strengths:
– Existing Distribution Channel
– Current Positioning – PURITY!!
– Better knowledge about Indian Tastes &
Preferences than the MNCs
– Strong Morals
– Excellence in forming Cooperatives
– Sound Financials
 SWOT ANALYSIS
• Weaknesses:
– Unable to recruit professionals
– Do not enjoy a level playing field as compared to
Companies
– Need to do away with the Lean organisation
format, hence affecting the profitability
 SWOT ANALYSIS
• Opportunities
– Premium Food consumption to increase by more
than 150%
– Prevailing conditions comprises loopholes like
• Wasteful production
• Poor prices paid to farmers
– Growing Health Concern
 SWOT ANALYSIS
• Threats
– Competition from MNC’s like HLL and Nestle
– Mark up at each stage is high
– Cattle productivity is low
– Lags behind in expertise when compared to
MNC’s
– Production of Fruits and Vegetables highly
dispersed
– Subsistence farming