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Project Report On Amul
Project Report On Amul
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CONSUMERS
29
GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
MAR*-. R-S-AR+A
Market research is a method of ,ettin, facts to 4e used 4& the e7ecuti%es in
formulatin, 2olicies and 2lans! 5t ena4les a manufacturer or 2roducer to know
what the customers want; at what time and what <uantit&! 5t is an or,ani6ed
attem2t to reduce market risk! Ae 2rinci2le task of marketin, research is to
widen the 4asis of facts u2on which 4usiness 2lans can 4e laid! Marketin,
research shows chan,es from time to time ; if an&!
AM$1 conducts 4asicall& two t&2es of market research! 0ne is for products and
another for the advertising conducted 4& the com2an&! .hese research results ser%e as
an in2ut in future decision makin,! .he com2an& 4asicall& collects feed4ack from the
customers; a4out the effecti%eness of its ad%ertisin, cam2ai,n and likin, of the
2roduct es2eciall& in case of new 2roducts launched! 5t tries to find out 4& conductin,
a sur%e& in a tar,et market whether or not the 2roduct is liked 4& the consumers and
ask for their su,,estions for im2ro%ement! Aowe%er AM$1 is not much into
conductin, research 4efore the launch of the 2roduct! Most of its research is done
onl& once when the 2roduct is alread& launched in the market! 5t doesn:t ha%e an&
se2arate de2artment for this 2ur2ose 4ut its sales a,ents themsel%es do the work of
research for the com2an&! >et the results are almost com2ara4le to those conducted
4& 2rofessionals!
NEW PRODUCT DEVELOPMENT
ew 2roduct de%elo2ment means de%elo2ment of ori,inal 2roduct or 2roduct
im2ro%ement or modification or new 4rands throu,h Research J De%elo2ment
efforts !ew 2roduct de%elo2ment has 4ecome more difficult with the 2assa,e
of time; due to shorta,e of new ideas; keen com2etition; ,o%ernment and
en%ironmental constraints !5t is an e72ensi%e affair which in%ol%es lot of crucial
decision makin,!
A num4er of decisions are taken 4& AM$1 with re,ards to launch 2lans and
strate,ies for the new 2roduct ; which are as under?
Decidin, the tar,et customers
Desi,nin, the 2romotional cam2ai,n
Decidin, the 2rice
Market anal&sis
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
Decidin, the sales force to 4e em2lo&ed
Decidin, the marketin, mi7
Decidin, whether to launch the 2roduct across the countr& or in the
selected area
A22ointin, distri4utors
+onductin, market research
PRODUCT LIFE CYCLE STAGES
A 2roduct 2asses throu,h distinct sta,es durin, its life in market; each 2osin,
different challen,es; o22ortunities and 2ro4lems !(rofits rise and fall at different
sta,es of the 2roduct life c&cle! .here are four different sta,es of 2roduct life c&cle;
namel&
"! 5.R0D$+.50 S.A3-
2! 3R0B.A S.A3-
=! MA.$R5.> S.A3-
C! D-+15- S.A3-
Different 2roducts of AM$1 are in different sta,es in the 2roduct life c&cle!
(roducts like milk; 4utter; chocolate and cheese are in the maturit& sta,e; while
ice-creams ; chocolates and shrikhand are still in the ,rowth sta,e! 0n the other
hand; 2roducts like milk 2owders; infant food; fro6en food items and mi7 are in
introduction sta,e!
.he com2an& ado2ts a,,ressi%e sellin, techni<ues for those 2roducts which
are in the introductor& sta,e; while %er& less 2romotional 2ro,rammes are carried
out for those 2roducts which are in the ,rowth or maturit& sta,e!
PRODUCT RANGE
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
A %ast %arieties of 2roducts are offered 4& AM$1 which are as follows?
BREADSPREADS
Amul Butter
Amul 1ite 1ow 8at Breads2read
Amul +ookin, Butter
CHEESE RANGE
Amul (asteuri6ed (rocessed +heddar +heese
Amul (rocessed +heese S2read
Amul (i66a (Mo6arella) +heese
Amul Shredded (i66a +heese
Amul -mmental +heese
Amul 3ouda +heese
Amul Malai (aneer (cotta,e cheese) 8ro6en and .inned
$tterl& Delicious (i66a
MITHAEE RANGE (ETHNIC SWEETS)
Amul Shrikhand (Man,o; Saffron; Almond (istachio; +ardamom)
Amul Amrakhand
Amul Mithaee 3ula4'amuns
Amul Mithaee 3ula4'amun Mi7
Amul Mithaee *ulfi Mi7
UHT MILK RANGE
Amul .aa6a =G fat Milk
Amul 3old C!DG fat Milk
Amul Slim-n-.rim 0G fat milk
Amul +hocolate Milk
Amul 8resh +ream
Amul Snowca2 Soft& Mi7
Amul .aa6a Dou4le .oned Milk
PURE GHEE
Amul (ure 3hee
Sa,ar (ure 3hee
Amul +ow 3hee
INFANT MILK RANGE
Amul 5nfant Milk 8ormula " (0-I months)
Amul 5nfant Milk 8ormula 2 ( I months a4o%e)
Amuls2ra& 5nfant Milk 8ood
MILK POWDERS
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
Amul 8ull +ream Milk (owder
Amul&a Dair& Bhitener
Sa,ar Skimmed Milk (owder
Sa,ar .ea and +offee Bhitener
SWEETENED CONDENSED MILK
Amul Mithaimate Sweetened +ondensed Milk
FRESH MILK
Amul .aa6a .oned Milk =G fat
Amul 3old 8ull +ream Milk IG fat
Amul Shakti Standardised Milk =G fat
Amul Smart Dou4le .oned Milk "!DG fat
CURD PRODUCTS
Amul Masti Dahi (fresh curd)
Amul Butter Milk
Amul 1assi
AMUL ICECREAMS
Royal Treat Range (Ra'4ho,; +a22uchino; +hocochi2s; Butterscotch; .utti
8rutti)
Nut-o-Mania Range (*a'u Drakshi; *esar (ista; Roasted Almond; *esar
+arni%al; Badshahi Badam *ulfi; Shista (ista *ulfi)
Utsav Range (An'ir; Roasted Almond)
Simply Delicious Range ()anilla; Straw4err&; (inea22le; Rose; +hocolate)
Nature's Treat (Al2hanso Man,o; 8resh 1itchi; An'ir; 8resh Straw4err&;
Black +urrant)
Sundae Range (Man,o; Black +urrant; +hocolate; Straw4err&)
Millennium Icecream (+heese with Almonds; Dates with Aone&)
Milk Bars (+hoco4ar; Man,o Doll&; Ras24err& Doll&; Shahi Badam *ulfi;
Shahi (ista *ulfi; Mawa Malai *ulfi; 3reen (ista *ulfi)
Cool Candies (0ran,e; Man,o)
Cassatta
Tricone Cones (Butterscotch; +hocolate)
Megabite Almond Cone
Frostik - = la&er chocolate Bar
Fundoo Range - e7clusi%el& for kids
SlimScoop Fat Free Frozen Dessert ()anilla; Banana; Man,o; (inea22le)
CHOCOLATE & CONFECTIONERY
Amul Milk +hocolate
Amul 8ruit J ut +hocolate
Amul -clairs
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
BROWN BEVERAGE
utramul Malted Milk 8ood
MILK DRINK
Amul Shakti 8la%oured Milk
PRODUCT LINE
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
AM$1 has 4asicall& C 2roduct lines which are milk and milk 2roducts; ice-cream;
chocolate; wet 2roduct line and dr& 2roduct line! .he com2an& is increasin, the
len,th of its 2roduct line 4& filling its line i!e! 4& addin, more 2roducts within the
e7istin, lines!
MILK ICE CREAM &
CHOCOLATE
WET PRODUCTS DRY PRODUCTS
AM$1 .AAHA AM$1 M51*
+A0+01A.-
AM$1 B$..-R AM$1 8$11 +R-AM
M51* (0BD-R
AM$1 301D AM$1 8R$5. AD
$. +A0+01A.-
AM$1 15.- 10B
8A. BR-AD S(R-AD
AM$1>A DA5R>
BA5.--R
AM$1 S15M AD
.R5M M51*
AM$1 -+1A5RS AM$1 +00*53
B$..-R
SA3AR S*5MM-D
M51* (0BD-R
AM$1 +A0+01A.-
M51*
AM$1 8$D00
+A0+01A.-
AM$1 (R0+-SS-D
+A--S- S(R-AD
SA3AR .-A J
+088-- BA5.--R
AM$1 8R-SA
+R-AM
AM$1 B5DAS
+A0+01A.-
AM$1 (5HHA
+A--S-
AM$1 M5.AA--
3$1AB/AM$ M5@
AM$1 S0B+A(
S08.> M5@
A1M0D BAR AM$1 SAR-D-D
(5HHA +A--S-
AM$1 M5.AA--
*$185 M5@
AM$1 .AAHA
D0$B1- .0-D
M51*
AM$1 +00*53
+A0+01A.-
AM$1 -MM-.A1
+A--S-
AM$1 58A. M51*
80RM$1A-5
AM$1 M5.AA5MA.-
SB--.--D
+0D-S-D M51*
R0>A1 .R-A.
RA3-
AM$1 3A$DA
+A--S-
AM$1 58A. M51*
80RM$1A-55
AM$1 .AAHA
.0-D M51*
$.-0-MA5A
RA3-
AM$1 MA1A5
(A--R
AM$1S(RA> 58A.
M51* 800D
AM$1 301D 8$11
+R-AM M51*
$.SA) RA3- $..-R1>
D-15+50$S (5HHA
$.RAM$1-MA1.-D
M51* 800D
AM$1 SAA*.5
S.ADARD5S-D
M51*
S5M(1> D-15+50$S
RA3-
AM$1 SAR5*AAD
AM$1 SMAR.
D0$B1- .0-D
M51*
A.$R-:S .R-A. AM$1 M5.AA--
3$1AB/AM$S
AM$1 +001 M51* S$DA- RA3- AM$1 ($R- 3A--
AM$1 SAA*.5
81A)0$R-D M51*
M511-5$M
5+-+R-AM
SA3AR ($R- 3A--
M51*BARS AM$1 +0B 3A--
+001 +AD5-S AM$1 MAS.5 DAA5
.R5+0- +0-S AM$1 B$..-RM51*
8$D00 RA3- AM$1 1ASS--
S15MS+00( 8A.
8R-- 8R0H-
D-S-R.
MAS.5 .0MA.0
S0$(
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
PRODUCT MIX
A 2roduct mi7 consists of all the 2roduct lines and items that a 2articular seller
offers for sale! A com2an&:s 2roduct mi7 has four im2ortant dimensions ? width;
len,th ;de2th and consistenc&!
(roduct mi7 width refers to how man& different 2roduct lines the com2an& carries!
AM$1 has C different 2roduct lines namel& milk and milk 2roducts; chocolate and
ice-cream; wet 2roducts and dr& 2roducts!
(roduct mi7 length refers to the total num4er of items in the mi7 ! 5n the milk
and milk 2roducts line there are "C different 2roducts; while in ice-cream and
chocolate ran,e there are 2" 2roducts and in wet and dr& 2roducts line there are 20
and "0 different 2roducts res2ecti%el&!
(roduct line depth refers to how man& %ariants are offered of each 2roduct in
the line !
(roduct line consistency refers to how closel& related the %arious 2roduct lines
are in the end use; 2roduction re<uirements; distri4ution channels or some other
wa&s ! Althou,h the 2roducts %ar& in man& wa&s there is still 2roduct line
consistenc& in AM$1! All the 2roducts of AM$1 are marketed throu,h same
channels of distri4ution!
MARKET SEGMENTATION
Market Se,mentation is the act of su4 di%idin, a market into distinct sets of customers
who merit attention! .ar,etin, these customers for marketin, 4& e%aluatin,; selectin,;
and concentratin, 4ecomes a corollar& to se,mentation! Market se,mentation assumes
im2ortance in the conte7t of intense com2etition market is 4om4arded with! A market
consists of 4u&ers; and 4u&ers differ in one or more wa&s! .he& ma& differ in their
wants; resources; locations; 2roducts re<uirements! .hese %aria4les ha%e to 4e
considered in the 2rocess of se,mentation!
.here are different le%els of market se,mentation! .he& are mass marketin,; se,ment
marketin,; niche marketin, and micro marketin,! Markets can 4e se,mented on the
,eo,ra2hical 4asis; demo,ra2hical 4asis; 2s&cholo,ical 4asis; 4eha%ioral 4asis and
lo&alt& status!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
AM$1 se,ments its market on the followin, 4asis?
1. GEOGRAPHICAL BASIS:
.his se,mentation is done on the 4asis of the lifest&le of 2eo2le in different re,ions
and their tastes and consum2tion 2atterns which are distinct accordin, to their
,eo,ra2hical situation! AM$1 has se,mented 5ndia ,eo,ra2hicall& into D 6ones!
2. DEMOGRAPHICAL BASIS:
.he& ha%e se,mented its market on the 4asis of the socio-economic status of the
customers! i!e! on the 4asis of their 2urchasin, 2ower and income le%el as follows?
GROUPA:
+onsumers fallin, in this ,rou2 are from hi,her social and economic class!
GROUPB:
+onsumers fallin, in this ,rou2 are from middle socio-economic class!
GROUPC:
+onsumers fallin, in this ,rou2 are from the lower middle class!
MARKET TARGETING
After se,mentin, the market; com2an& e%aluate the %arious se,ments and decides
how man& and which ones to tar,et!
3enerall& the market is tar,eted in three wa&s?-
UNDIFFERENTITED MR!ETING
DIFFERENTITED MR!ETING
C"NCENTRTED MR!ETING
AM$1 uses undifferentiated marketin, strate,& for tar,etin, its customers as far as
its milk and milk 2roduct line is concerned! Bhile the com2an& im2lements
differentiated marketin, strate,& for tar,etin, its customers for the other 2roduct lines
that are ice creams and chocolates; wet 2roducts and dr& 2roducts! Differentiated
marketin, means market co%era,e strate,& in which a firm decides to tar,et se%eral
market se,ments and desi,ns se2arate offers for each! AM$1 tar,ets its customers
accordin, to the se,ments like ,eo,ra2hic and demo,ra2hic!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
PACKAGING
(ackin, includes the acti%ities of desi,nin, and 2roducin, the container for the
2roduct! (acka,in, has 4ecome the 2otent marketin, tool! Bell desi,ned 2acka,es
can create con%enience and 2romotional %alue! )arious factors contri4ute to
2acka,in, ,rowin, use as a marketin, tool?
S-18 S-R)5+-
+0S$M-R A881$-+-
+0M(A> AD BRAD 5MA3-
50)A.50 0((0R.$5.>
(acka,in, of the 2roducts of AM$1 %aries accordin, to the nature of the
2roduct! As most of the 2roducts are 2erisha4le in nature s2ecial care is taken
in 2ackin, them! MI#! ND MI#! $R"DUCT% are 2acked in 2lastic 4a,s or
containers; while ICE&CREM% ND C'"C#TE% are 2acked in card4oard
2ackin,! .he com2an& maintains the standards 2rescri4ed 4& B5S; with re,ards
to 2ackin,! .hese 2roducts are then 2acked in cartoons; for ,reater safet&
measures and for trans2ortin, them to the market!
LABELING
1a4elin, 2rinted information that a22ears on or with the 2acka,e; is also a 2art of
2acka,in,! 1a4els ma& ran,e from sim2les ta,s attached to 2roducts to com2le7
,ra2hics that are 2art of the 2acka,e! 1a4el identifies descri4es and 2romotes the
2roduct throu,h attracti%e ,ra2hics! .he la4el mi,ht carr& onl& the 4rand name or
,reat deal of information or 2ictures! -%en if the seller 2refers a sim2le la4el the law
ma& re<uire additional information!
.he la4els of the 2roducts of AM$1 are attracti%el& desi,ned! 5t contains all the
information as 2er statutor& re<uirements! 5nformation like name of 2roduct; 4rand
name; lo,o; date of 2ackin, J manufacturin,; e72ir& date; 2rice; code num4er;
in,redients; stora,e and usa,e instructions; wei,ht; manufacturer:s and marketer:s
name; lo,o showin, L ($R- )-3 M etc a22ears on the la4el of the 2roducts!
BRANDING
A 4rand is a name; term; si,n; s&m4ol or desi,n or a com4ination of these
used to identif& a 2roduct or com2an&! A trademark is a le,all& reco,ni6ed 4rand!
Brandin, has 4ecome so stron, that toda& hardl& an&thin, ,oes un4randed! .oda&
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
customers %iew a 4rand as an im2ortant 2art of the 2roduct and 4randin, adds value to
a 2roduct!
Brand names hel2 customers identif& 2roducts that mi,ht 4enefit them and also tells
the 4u&er somethin, a4out the 2roduct <ualit&! .o the sellers 4rand name and
trademark 2ro%ides le,al 2rotection for uni<ue 2roduct features that otherwise mi,ht
4e co2ied 4& the com2etitors and it also hel2s them to se,ment markets! A 4rand
name is selected kee2in, in %iew the 2roduct and its 4enefits; the tar,et market and
2ro2osed marketin, strate,ies!
Decisions a4out 4randin, are taken at the Aead 0ffice at Anand! AM$1 means
(priceless) in Sanskrit! .he 4rand name (MU#) from the Sanskrit (*oolya) was
su,,ested 4& a <ualit& control e72ert in Anand! )ariants; all meanin, (priceless)+ are
found in se%eral lan,ua,es of 5ndia! AM$1 manufactures and markets its 2roducts
under two 4rand names MU# and %GR Infor*ation .echnolo,& (5.) has
2la&ed a si,nificant role in de%elo2in, the Amul 4rand! .he installation of =000
Automatic Milk +ollection S&stem $nits (AM+$S) at )illa,e Societies to ca2ture
mem4er information; milk fat content; the %olume collected and amount 2a&a4le to
each mem4er has 2ro%ed in%alua4le in ensurin, fairness and trans2arenc& throu,hout
the whole Amul or,ani6ation!
UMBRELLA BRAND
.he network follows an um4rella 4randin, strate,&! Amul is the common 4rand for
most 2roduct cate,ories 2roduced 4& %arious unions? li<uid milk; milk 2owders;
4utter; ,hee; cheese; cocoa 2roducts; sweets; ice-cream and condensed milk!
AmulEs su4-4rands include %ariants such as Amuls2ra&; Amuls2ree; Amul&a and
utramul! .he edi4le oil 2roducts are ,rou2ed around Dhara and 1okdhara; mineral
water is sold under the /al Dhara 4rand while fruit drinks 4ear the Safal name!
B& insistin, on an um4rella 4rand; 3+MM8 not onl& skillfull& a%oided inter-union
conflicts 4ut also created an o22ortunit& for the union mem4ers to coo2erate in
de%elo2in, 2roducts!
BRAND EQUITY
Brand e<uit& refers to the %alue of a 4rand; 4ased on the e7tent to which it has 4rand
lo&alt&; 4rand name awareness; 2ercei%ed <ualit&; stron, 4rand associations; and the
other assets such as 2atents; trademarks and channel relationshi2!
5t is e%aluated on the 4asis of 4rand assets which are?
1. BRAND AWARENESS: Awareness ultimatel& enhances 4rand e<uit&!
AM$1 en'o&s %er& hi,h 4rand awareness amon, its customers! Accordin, to the
sur%e& done 4& the com2an&; 4rand awareness is as hi,h as almost 90G!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
2. BRAND LOYALTY? Brand lo&alt& means the a4ilit& to retain the e7istin,
customers! AM$1 is 4lessed with hi,h 4rand lo&alt& amon, its customers! As it is
one of the 4i,,est market 2la&ers it has 2ro2ortionatel& lar,er ,rou2 of lo&al
customer; who are in turn a medium of marketin,K ad%ertisin,!
3. BRAND ASSOCIATIONS: +onsumers associate the 4rand with certain
tan,i4le and intan,i4le attri4utes! Most of these associations are deri%ed from 4rand
identit& and 4rand ima,e! +ustomers associate AM$1:s 4rand with hi,h <ualit&
standards and reasona4le 2rice!
4. BRAND IMAGE: Brand ima,e is the meanin, consumers ,i%e to a 2roduct
4ased on the 2ercei%ed %alues it deli%ers! AM$1 has created 4rand ima,e 4& offerin,
e7cellent <ualit& 2roducts at reasona4le 2rice! (erfect distri4ution channelF continuous
J effecti%e ad%ertisin,F use of different 2romotional toolsF wide lo&al market share;
has contri4uted to create an e7cellent ima,e in its trade o2erations!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
INFORMATION
TECHNOLOGY
INTEGRATION
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
Amul is 4olsterin, its 4rand identit& as a farmersE co-o2erati%e throu,h the 5nternet
4ased Oamul!coo2O $R1 and e-mail addresses! .his will continuall& remind the
worldEs consumers that the& are a coo2erati%e; and 2roud of it! .his identit& ,i%es
Amul a %ital 4usiness ad%anta,e and facilitates Amul 4rand 2enetration across the
world! 5t also stren,thens their co-o2erati%es 4& 4rin,in, their mem4ers to,ether and
closer to consumers!
Technology and e-initiatives
3+MM8Es technolo,& strate,& is characteri6ed 4& four distinct com2onents? new
2roducts; 2rocess technolo,&; and com2lementar& assets to enhance milk 2roduction
and e-commerce!
8ew dairies of the world ha%e the wide %ariet& of 2roducts 2roduced 4& the 3+MM8
network! )illa,e societies are encoura,ed throu,h su4sidies to install chillin, units!
Automation in 2rocessin, and 2acka,in, areas is common; as is AA++( certification!
Amul acti%el& 2ursues de%elo2ments in em4r&o transfer and cattle 4reedin, in order
to im2ro%e cattle <ualit& and increases in milk &ields!
3+MM8 was one of the first 8M+3 (fast-mo%in, consumer ,oods) firms in 5ndia to
em2lo& 5nternet technolo,ies to im2lement B2+ commerce!
.oda& customers can order a %ariet& of 2roducts throu,h the 5nternet and 4e assured
of timel& deli%er& with cash 2a&ment u2on recei2t!
Another e-initiati%e underwa& is to 2ro%ide farmers access to information relatin, to
markets; technolo,& and 4est 2ractices in the dair& industr& throu,h net ena4led
kiosks in the %illa,es!
3+MM8 has also im2lemented a 3eo,ra2hical 5nformation S&stem (35S) at 4oth
ends of the su22l& chain; i!e! milk collection as well as the marketin, 2rocess!
8armers now ha%e 4etter access to information on the out2ut as well as su22ort
ser%ices while 2ro%idin, a 4etter 2lannin, tool to marketin, 2ersonnel!
MANAGING THE SUPPLY CHAIN
-%en thou,h the coo2erati%e was formed to 4rin, to,ether farmers; it was reco,ni6ed
that 2rofessional mana,ers and technocrats would 4e re<uired to mana,e the network
effecti%el& and make it commerciall& %ia4le!
Coordination
3i%en the lar,e num4er of or,ani6ations and entities in the su22l& chain and
decentrali6ed res2onsi4ilit& for %arious acti%ities; effecti%e coordination is critical for
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
efficienc& and cost control! 3+MM8 and the unions 2la& a ma'or role in this 2rocess
and 'ointl& achie%e the desired de,ree of control!
Bu&-in from the unions is assured as the 2lans are a22ro%ed 4& 3+MM8Es 4oard! .he
4oard is drawn from the heads of all the unions; and the 4oards of the unions com2rise
of farmers elected throu,h %illa,e societies; there4& creatin, a situation of
interlockin, control!
.he federation handles the distri4ution of end 2roducts and coordination with retailers
and the dealers! .he unions coordinate the su22l& side acti%ities!
.hese include monitorin, milk collection contractors; the su22l& of animal feed and
other su22lies; 2ro%ision of %eterinar& ser%ices; and educational acti%ities!
Managing third party service providers
8rom the 4e,innin,; it was reco,ni6ed that the unionsE core acti%it& la& in milk
2rocessin, and the 2roduction of dair& 2roducts! Accordin,l&; marketin, efforts
(includin, 4rand de%elo2ment) were assumed 4& 3+MM8! All other acti%ities were
entrusted to third 2arties! .hese include lo,istics of milk collection; distri4ution of
dair& 2roducts; sale of 2roducts throu,h dealers and retail stores; 2ro%ision of animal
feed; and %eterinar& ser%ices!
5t is worth notin, that a num4er of these third 2arties are not in the or,ani6ed sector;
and man& are not 2rofessionall& mana,ed with little re,ard for <ualit& and ser%ice!
.his is a 2articularl& critical issue in the lo,istics and trans2ort of a 2erisha4le
commodit& where there are alread& weaknesses in the 4asic infrastructure!
Establishing best practices
A ke& source of com2etiti%e ad%anta,e has 4een the enter2riseEs a4ilit& to
continuousl& im2lement 4est 2ractices across all elements of the network? the
federation; the unions; the %illa,e societies and the distri4ution channel!
5n de%elo2in, these 2ractices; the federation and the unions ha%e ada2ted successful
models from around the world! 5t could 4e the im2lementation of small ,rou2
acti%ities or <ualit& circles at the federation! 0r a .NM 2ro,ram at the unions! 0r
housekee2in, and ,ood accountin, 2ractices at the %illa,e societ& le%el!
More im2ortant; the network has 4een a4le to re,ularl& roll out im2ro%ement
2ro,rams across to a lar,e num4er of mem4ers and the im2lementation rate is
consistentl& hi,h!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
8or e7am2le; e%er& 8rida&; without fail; 4etween "0!00 a!m! and ""!00 a!m!; all
em2lo&ees of 3+MM8 meet at the closest office; 4e it a de2artment or a 4ranch or a
de2ot to discuss their %arious <ualit& concerns!
-ach meetin, has its 2re-set format in terms of (ur2ose; A,enda and 1imit ((A1)
with a 2rocess check at the end to record how the meetin, was conducted! Similar
2rocesses are in 2lace at the %illa,e societies; the unions and e%en at the wholesaler
and +J8 a,ent le%els as well!
-7am2les of 4enefits from recent initiati%es include reduction in trans2ortation time
from the de2ots to the wholesale dealers; im2ro%ement in R05 of wholesale dealers;
im2lementation of Hero Stock 0ut throu,h im2ro%ed a%aila4ilit& of 2roducts at de2ots
and also the im2lementation of /ust-in-.ime in finance to reduce the float!
*ai6ens at the unions ha%e hel2ed im2ro%e the <ualit& of milk in terms of acidit& and
sour milk! ,Underta-en .y *ulti&disciplined tea*s+ !ai/ens are highly focused
pro0ects+ reliant on a structured approach .ased on data gathering and analysis12 8or
e7am2le; Sa4ar $nionEs records show a reduction from 2!0G to 0!DG in the amount of
sour milkKcurd recei%ed at the union!
.he most im2ressi%e as2ect of this lar,e-scale roll out is that im2ro%ement 2rocesses
are turnin, the %illa,e societies into indi%idual im2ro%ement centers!
PRICING
.he amount of mone& char,ed for a 2roduct or ser%ice or the sum of the %alues that
consumers e7chan,e for the 4enefit of ha%in, or usin, the 2roduct or ser%ice is called
its 2rice! A com2an&:s 2ricin, decisions are affected 4& 4oth internal factors like
com2an&:s o4'ecti%es; marketin, mi7 strate,&; cost and or,ani6ational considerations
and e7ternal factors like nature of the market and demand; com2etition and other
en%ironmental elements!
Bhile decidin, the 2rice of its 2roducts AM$1 takes into consideration all the 4elow
mentioned factors; this is true for all the 2roducts!
+ost of raw materials
+ost of la4our
(rofit mar,in of distri4utors
)arious administrati%e and manufacturin, o%erheads
(rices of the com2etitors
Demand and su22l& 2osition in market
8air return to the farmers
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
AM$1 4elie%es that the com2an& with lar,est market share will en'o& lowest cost
and hi,hest lon, run 2rofit to 4ecome the market leader! .he& set 2rices as low as
2ossi4le!
PRICING APPROACH
AM$1 em2lo&s different 2ricin, 2olicies for different 2roducts de2endin, u2on the
life c&cle sta,e of the 2roduct; market condition and the nature of 2roduct!
5n case if the 2roduct is newl& launched in the market the com2an& doesn:t em2hasi6e
on the 2rofit mar,in and kee2s its 2rices as low as 2ossi4le so as to 2enetrate in the
new market!
Aowe%er in case of the alread& esta4lished 2roducts the com2an& uses a mi7 of !ost
p"us p#i!in$ %pp#o%!& and !ompetito# '%se( p#i!in$ %pp#o%!& i!e! it sets its 2rices
kee2in, in %iew the cost of 2roduction; desired 2rofit mar,in and 2rices of
com2etitor:s 2roducts
DISTRIBUTION CHANNEL
A distri4ution channel is a set of interde2endent or,ani6ations in%ol%ed in the 2rocess
of makin, a 2roduct or ser%ice a%aila4le for the use of consum2tion 4& the consumer
or 4usiness user! 5n other words; the channel decision is one which takes the 2roduct
to the customer! .he channel selected affects e%er& other marketin, decision and has a
4earin, on the future! Marketin, channel decision is amon, the most decision that
mana,ement faces!
Before selectin, a 2articular channel; e%er& firm takes some factors into consideration
and then onl& decides a 2articular channel! Decisions taken 4& AM$1 are as under?
"! AA1>S53 +0S$M-R:S --DS
2! S-1-+.53 +AA-1 0B/-+.5)-S
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C! $MB-R 08 5.-RM-D5AR5-S
D! -)A1$A.53 A1.-RA.5)-S
Distri4ution channel can 4e descri4ed 4& the num4er of channels le%els in%ol%ed!
+hannel le%el is the le%el of intermediaries that 2erforms some work in 4rin,in, the
2roduct and its ownershi2 closer to the final 4u&er! .he followin, are the different
t&2es of distri4ution channel that a firm ma& use?
(i) H-R0-1-)-1 +AA-1?
Manufacturer---------------+onsumer
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
(ii) 0--1-)-1 +AA-1?
Manufacturer---Retailer---+onsumer
(iii) .B0-1-)-1 +AA-1?
Manufacturer--Bholesaler--Retailer--+onsumer
(i%) .AR---1-)-1 +AA-1?
Manufacturer-Bholesaler-A,ents-Retailer-+onsumer
AM$1 has three-le%el distri4ution channel; i!e! it em2lo&s carr& forward a,ents;
wholesaler and retailers to carr& its 2roducts to the final consumers!
.ill toda&; the ma'or de%elo2ment on the distri4ution front is the de%elo2ment and
ali,nment of four distri4ution hi,hwa&s - those of 8resh (roducts; +hilled (roducts;
8ro6en (roducts and Am4ient (roducts! .his is a si,nificant achie%ement 4ecause it
allows AM$1 to de%elo2 s&ner,ies amon, all their 2roduct lines and to le%era,e
these hi,hwa&s to introduce and distri4ute new 2roducts as 2er market demand! o
other or,ani6ation in 5ndia has 4een a4le to de%elo2 this kind of channel s&ner,& so
far!
Another ma'or initiati%e undertaken is the Ti*e&.ased Military Techni3ue (.M.) of
distri4ution! .his has 4een de2lo&ed to effect a nationall& s&nchroni6ed mass
distri4ution of their 2roducts with the o4'ecti%e of achie%in, total channel 2enetration
on a sin,le da&!
After Distri4utor Salesmen in the 2re%ious &ear and Distri4utors in the &ear 4efore
last; it was the turn of the to2 Retailers across the countr& to 2artici2ate in the *ul
4atra $rogra**e which is a uni<ue e72eriment conducted 4& Amul to 4rin, their
channel 2artners face to face with their coo2erati%e institutions; acti%ities; culture and
achie%ements throu,h a ,uided tour in and around Anand! A total of ""C Distri4utor
Salesmen and C#2 to2 retailers from across the countr& 2artici2ated in the Amul >atra
this &ear! Bith the o2enin, of se%eral new milk markets and = se2arate Milk Sales
0ffices at Mum4ai; ew Delhi and Boisar; the num4er of Milk Area Deli%er& A,ents
has increased!
DECISION ABOUT THE CHANNEL
MEMBER
Decisions a4out selectin, a channel mem4er is taken 4& the head office!
Bholesalers are a22ointed 4& conductin, the market sur%e& ; findin, out the
num4er of distri4utors a%aila4le ;man2ower and financial ca2a4ilities of each of
them; market likelihood; infrastructural facilities etc! all this information is filled
in a form which is sent to the head office where it mo%es from Marketin,
Mana,er to the 3eneral Mana,er who finall& selects the one that suits the 4est
to the com2an&!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
Distri4utors ha%e to ,i%e a 4ank ,uarantee or demand draft in a,ainst of the
%alue of ,oods the& want to 2urchase and ha%e to make a 2a&ment for the
same within four da&s of the dis2atch of the order! .he seller then forwards
the ,oods to the retailers for which 2rices and norms of deli%er& are fi7ed 4&
the head office! Both the retailers and wholesalers are re<uired to maintain
certain 4asic infrastructural facilities!
.he head office and all the de2ot offices ha%e their own authori6ed trans2orters
who carr& the order from the 2roduction 2lace to 2lace of order!
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GU1ARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD
SALES FORCE MANAGEMENT
.he or,ani6ation of sales de2artment is as under?
H0A1 5+AAR3-
D-(0. 5+AAR3-
-@-+$.5)-S