The Brand Building Challenge

Amul

Prepared and Submitted by

Paresh Ashara (S11MMMMM00440)
Ranjeet Shriwastva (S11MMMMM00452)
Manoj Kaushik (S11MMMMM00453)
Sudip Kumar Das (S11MMMMM00765)
Vivek Wamorkar (S11MMMMM00416)
SMP07, NIIT Imperia Bangalore Center

Feb 28, 2011

The Brand Building Challenge Amul

Table of Contents

of Contents

1. Introduction ........................................................................................................ 3
2.

rsonality, and Symbolism ............................................ 4

3. Strategic decisions taken to build the brand ............................................. 6

4. Consumer Insights ............................................................................................ 8
5. Brand Positioning .............................................................................................. 9
6. Role of Advertisement ..................................................................................... 10
7. Brand Drivers...................................................................................................... 12
8. Future Steps for Brand Consolidation .......................................................... 13
9. References ........................................................................................................... 14

The Brand Building Challenge - Amul

Introduction
Company History
Amul was set up in 1946 and its full form is Anand Milk- producers Union Ltd. The
Brand Amul is a movement in dairy cooperative in India. The management of the
brand name is done by the Gujarat Cooperative Milk Marketing Federation Ltd
(GCMMF) which is a cooperative organization.
Gujarat Cooperative Milk Marketing Federation (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.
Amul is located in the town Anand which is in the state of Gujarat and it has set up
itself as a model for development in the rural areas. The Amul Brand has started the
White Revolution in India which has helped to make the country the biggest
manufacturer of milk and its by-products in the whole world. Amul has around 2.9
million producer members covering 15,322 village societies and the total capacity
for handling milk is around 13.07 million liters every day. The brand's capacity for
milk drying is around 647 Mts. each day and its capacity for cattle feed
manufacturing is about 3740 Mts. each day[1].

Achievements
Amul has always been the trend setter in bringing and adapting the most modern
technology to door steps to rural farmers.

GCMMF bags Agricultural and Processed Food Exports Development Authority

(APEDA) AWARD for 11th year in a row in 2006-07
Amul Pro-Biotic Ice-cream receives No. 1 Award At World Dairy Summit in 2007
GCMMF emerged as the top scorer in the service category of the prestigious
IMC Ramkrishna Bajaj National Quality Award - 2003
Amul - The Taste Of India (GCMMF) Receives International CIO 100 Award For
Resourcefulness in 2003
Rajiv Gandhi National Quality Award - 1999

Amul is the live example of how co-operation amongst the poor marginal farmers
can provide means for the socio-economic development of the under privileged
marginal farmers.
Amul Brand Umbrella caters several products under broad categories of butter, milk,
cheese, ghee, milk powder, curd, ice cream, flavored milk, health beverage,
condensed milk, sweets, chocolates and confectionary.
Amuls sales turnover for the past 16 years has been depicted in the chart below. It
has grown at a CAGR of 11% over the past 16 years achieving the turnover of
Rs.80,053 million in FY2009-10.

[1] Source: http://www.amul.com/organisation.html; Data as of FY2009-10

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

CAGR = 11%

Figure 1: Amul - Sales Turnover

AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit
"Amoolya," was suggested by a quality control expert in Anand.
Amul has fetched a greater mileage for itself by introducing The Taste
of India campaign after the liberalization of the Indian economy in
1991. Since 1967 Amul has successfully built the brand personality
with a cute little moppet girl wearing a polka-dotted frock as its
mascot (symbol) and made her a part of our lives.
Amul continues to show the same six-year-old girl in the Utterly
butterly delicious advertisement of Amul butter, which reflects that the brand never
gets old. She just comes in so casually each time with an all new dimension to
something already existing, either making fun of it or mocking at it, each time
minimizing the impact of the event & people mentioned but highlighting and
emphasizing only and only UTTERLY BUTTERLY DELICIOUS.. AMUL
The Amul brand is not built as a product but as a movement to make India the
largest producer of milk in the world. It is representation of the economic freedom of
dairy farmers. The core values of the company are:
- To provide remunerative returns to the farmers
- Give the best quality product to the consumer
- and the best possible price

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

Amul as an umbrella brand is presently used for sub branding for the different
products manufactured by Amul; like Amul Gold and Taaza in the milk category
amongst other products, which includes Amul butter, Amul ice-creams and the like.

Pride

Available

Variety

Food
Value

Quality

Taste
Indian

Figure 2: Brand Personality

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

Strategic decisions taken to build the brand

The strategic decisions that developed Amul as a brand can be classified in the
following broad categories:
1. Technology
2. Pricing
3. Quality
4. Product Portfolio
5. Distribution Network
1. Technology Strategy:
The technology, packaging and Amuls approach to marketing is based on
the changing taste buds of the consumers. The technology strategy is
characterized by four distinct components:
new products
process technology
complementary assets to enhance milk production
e-commerce

Few dairies of the world have the wide variety of products produced by the
Gujarat Cooperative Milk and Marketing Federation (GCMMF) network. Village
societies are encouraged through subsidies to install chilling units.
Automation in processing and packaging areas is common, as is Hazard
Analysis Critical Control Point (HACCP) certification.

Amul actively pursues developments in embryo transfer and cattle breeding

in order to improve cattle quality and increase in milk yields.

GCMMF was one of the first FMCG (fast-moving consumer goods) firms in
India to employ Internet technologies to implement business to consumer
(B2C) commerce. Today customers can order a variety of products through
the Internet and be assured of timely delivery with cash payment upon
receipt.

Another e-initiative underway is to provide farmers access to information

relating to markets, technology and best practices in the dairy industry
through net enabled kiosks in the villages.

GCMMF has also implemented a Geographical Information System (GIS) at

both ends of the supply chain, i.e. milk collection as well as the marketing
process. Farmers now has better access to information on the output as well
as support services while providing a better planning tool to marketing
personnel.

2. Pricing Strategy
At the time Amul was formed, consumers had limited purchasing power, and
modest consumption levels of milk and other dairy products. Thus Amul adopted
a low-cost price strategy to make its products affordable and attractive to
consumers by guaranteeing them value for money.

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

3. Quality
Amul has not changed its core values give the best quality product to the
customer.
A key source of competitive advantage has been the enterprise's ability to
continuously implement best practices across all elements of the network: the
federation, the unions, the village societies and the distribution channel (TQM
activities).

A regular Friday meeting is conducted that has its pre-set format in terms of
Purpose, Agenda and Limit (PAL) with a process check at the end to record
how the meeting was conducted. Similar processes are in place at the village
societies, the unions and even at the wholesaler and C&F agent levels as well.
Examples of benefits from recent initiatives include o reduction in transportation time from the depots to the wholesale
dealers,
o improvement in ROI of wholesale dealers,
o implementation of Zero Stock Out through improved availability of
products at depots and
o implementation of Just-in-Time in finance to reduce the float

Kaizen at the unions have helped improve the quality of milk in terms of
acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizen are
highly focused projects, reliant on a structured approach based on data
gathering and analysis.) For example, Sabar Union's records show a reduction
from 2.0% to 0.5% in the amount of sour milk/curd received at the union.

4. Enhance Product Portfolio

Amuls strategy of umbrella branding has also helped establish its brand firmly in
peoples minds. The network follows an umbrella branding strategy. Amul is the
common brand for most product categories produced by various unions: liquid
milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and
condensed milk.
5. Distribution Network
Amul products are available in over 500,000 retail outlets across India through
its network of over 3,500 distributors. There are 47 depots with dry and cold
warehouses to buffer inventory of the entire range of products.
GCMMF transacts on an advance demand draft basis from its wholesale dealers
instead of the cheque system adopted by other major FMCG companies. This
practice is consistent with GCMMF's philosophy of maintaining cash transactions
throughout the supply chain and it also minimizes dumping.
Wholesale dealers carry inventory that is just adequate to take care of the transit
time from the branch warehouse to their premises. This just-in-time inventory
strategy improves dealers' return on investment (ROI). All GCMMF branches
engage in route scheduling and have dedicated vehicle operations.

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

Consumer Insights
At the time Amul was formed, consumers had limited purchasing power, and modest
consumption levels of milk and other dairy products. Thus Amul adopted a low-cost
price strategy to make its products affordable and attractive to consumers by
guaranteeing them value for money. Amul milk enjoys 86% market share in India.
Amul have time to time used several marketing research data and consumer insights
for following customer aspects and have defined their market segmentation
accordingly.

Behavioral
User status , Usage rate
Demographic

Income , Age , Sex , Family

Psychographic
Activities and lifestyle
Geographic

International , Regional
Buying condition
Purchase location , Who buys , Type of buy

The Amul Model narrowed the gap between the producer and the consumer,
connecting the dairy farmer to the consumer through its organic network. The
success of this model ignited interest across India, where this model was replicated,
in essence leading to the White Revolution.
Despite competition in the high value dairy product segments Amul ensures that the
product mix and the sequence in which Amul introduces its products is consistent
with the core philosophy of providing butter at a basic, affordable price to appeal the
common masses. This helped AMUL BUTTER to create its brand image in the
household sector of the society.

MRP Rs.122

MRP Rs.25

However, the main thing that has helped Amul sail smoothly is that they have not
changed their core valuesgive the best quality product to the consumer, and the
best possible price. It holds true in any era. In fact, it is not just the core values at
Amul that have remained the same; the core team associated with the brand is still
the same. Even the advertising agency hasnt changed, and DaCunha and FCB Ulka, have played a pivotal role in the growth of Amul. This has helped maintain
consistency in market communication. Amul strategy of umbrella branding has also
helped establish their brand firmly in peoples minds. This, despite the fact that
Amul only spends than 1% of our turnover for marketing, compared with 7-8% (spent)

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

by most of the food and consumer product companies. From Utterly butterly
delicious Amul to The Taste of India, Amul continues to be the toast of the country.

Striking out on its own, with Amul Outlets or parlours to deliver consumers
total brand experience
Launched in 2002, there are now 5000 Amul parlours across the country,
which contributed 3% to the brands total turnover last year.
High profile locations: Amul parlours are today present on campuses of
Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail and railway stations in Gujarat.

Brand Positioning
Life begins at 60. Ask Amul synonymous for all things dairy. It focuses on India's
largest consumer segment, a.k.a. middle class society. This segment of consumers is
urban and knowledgeable. They need a great taste but they are equally health and
quality conscious.
Amul is the oldest and the most established dairy brand in the country, with its first
product, Amul butter, being marketed since 1946. Today, the company has its roots
deep in the dairy market and is increasingly focusing on the value added segment
that includes health drinks, cheese and dairy based desserts
Amul has carefully cultivated its family based homely image.
Brand positioning statement: The taste of India It has created a value for everyone
in the value chain, be it a customer or the supply chain.
Positioning Components:

Emotional Component: Through the campaigns like Gift for someone you
loved and Taste of India

Functional attributes: Unique functional attributes of Amul are:

Value for money The best quality diary product at the reasonable price

Product Availability Amul has huge supply chain and distribution

networks across India and has strong link back to the sourcing farmers.

Descriptive Factor Amul has become a family brand and it relates to its
Homely image.

Brand Consistency: Amul runs the Topical campaign for last 4 decades. It is one of
the longest running advertisements in the world
Target Market and segment: Amul has positioned variety of products for different
market segments e.g.

To target teenager Amul launched products like, Amul Kool, chocolate milk,
Neutramul Energy drink , Munch Time

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

In Nov 2007, Amul launched Fresh Paneer that claims to be Free from any
harmful chemicals
For Health conscious segment, Amul launched Pro-Biometic Wellness Ice cream &
sugar free Delights for the diabetics
For Women Amul Launched Amul Calci+

Point of Differences (POD):

Quality with affordability

Amul is a Mass market player with no premium offering
Sheer size and scale of operations
Value additions to the customer

Positioning Method:
Impulse purchase: Simple memorable slogan message A gift for someone you loved
Brand Re-positioning:
For young people below the age of 20, Amul is now moving away from its carefully
cultivated image of just a family brand popular with the homemaker. So while the
ponytailed Amul girl will continue to be the brand ambassador with her Utterly
Butterly spoofs, the brand has started changing its lingo to cater to Generation X, Y
and even Z. So the new television commercials, created by DCB Ulka, position the
products on the 'Utterly Healthy' platform where thin is in.

Role of Advertisement
64 years after it was first launched, Amul's sale figures have jumped from 1000 tons
a year in 1966 to over 9,30,200 tons a year in 2009-10. No other brand comes even
close to it. All because a thumb-sized girl climbed on to the hoardings and put a
spell on the masses.
It all began in 1966 when Sylvester daCunha, then the managing director of the
advertising agency, ASP, clinched the account for Amul butter. The butter, which had
been launched in 1945, had a staid, boring image, primarily because the earlier
advertising agency which was in charge of the account preferred to stick to routine,
corporate ads.
Sylvester daCunha designed an advertisement campaign as series of hoardings with
topical ads, relating to day-to-day issues. Thus was born the Amul Moppet, a little
girl who would warm her way into a housewifes heart. Amul since then have been
following different promotion and advertising campaigns with Amul moppet taking
central role in the advertisement

Uses a variety of media to communicate - Most famous is billboard campaign

using Amul moppet and topical ads

Call her the Friday to Friday star because Every Friday, since 1967, this little girl
appears at billboards, strategically placed all over India, focusing on the item of
the week tongue in cheek, of course

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

Amul food festival, which has been held for the last four year between October
and December in about 50,000 retail outlets

The Chef Of India promo invites hotel chefs to come up with recipes using as
many Amul products as possible, and is conducted at city, state and national
level

Figure 3: Advertisement

Amul Topical (Amul Hits)

There are no boundaries and nothing is off limits. From the political scene, to
entertainment, from local news to international, from sports to stars, she has a line
for everything. Often said to be playing the role of a social observer with evocative
humor, the billboards became, and still are, a topic of conversation amongst
millions. With their hing-lish (a combination of Hindi and English) punch-lines, they
have won the maximum number of awards in India for any ad campaign ever! This
little thumbelina seems to have the masses, right where she wants them wanting

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

more of her and of Amul. No other brand comes close to what Amul has been able to
accomplish.

Brand Drivers
The first lots of products with the Amul brand name were launched in 1955. Since
then, they have been in use in millions of homes in all parts of India, and beyond.
There is something more, though, that makes the Amul brand special and that
something is the reason for the commitment to quality and value for money. Amul is
the brand name of 2.9 million farmers, members of 15,322 village dairy cooperative
societies throughout Gujarat. This is the heart of Amul, it is what gives strength to
Amul, and it is what is so special about the Amul saga.
The Amul Pattern has established itself as a uniquely appropriate model for rural
development. Amul has made India one of the largest milk producers in the world.
Amul, therefore, is a brand with a difference. That difference manifests itself in a
larger than life purpose. The purpose freedom to farmers by giving total control
over procurement, production and marketing.
In an interesting piece published in 2001, Varghese Kurien, the Father of White
Revolution in India and the architect of the decentralized and highly integrated dairy
cooperative model said that the brand name of the movement, Amul, serves the role
of a contract. It is the assurance to the buyer that her specifications will be met. It is
the sellers assurance that the quality is being provided at a fair price. He further
said, If Amul has become a successful brand if, in the trade lingo, it enjoys brand
equity then it is because we have honored our contract with consumers for close to
fifty years. If we had failed to do so, then Amul would have been consigned to the
dustbin of history, along with thousands of other brands.
According to Kurien the major elements of Amuls contract with its customers are
quality, value for money, availability, and service. Our commitment to the producer
and our contract with the consumer is the reasons we are confident that cooperative
brands, like Amul, will have an even bigger role to play in the next fifty years. said
Kurien.
Amul is excellent example of brand which demonstrates how each failure, each
obstacle, and 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
and chance to turn a negative into a positive. Milk byproducts and supplementary
yield which suffered from the lack of marketing and distribution facilities became
encumbrances. Instead of being bogged down by their fate they were used as
stepping stones for expansion. Also Backward integration of the process led the
cooperatives to advances in animal husbandry and veterinary practice.

Organizing market to excellent supply chain is critical to the success of marketbased development
Infrastructure investment is crucial to rural development
From livelihood to wealth creation is equally important for rural development
Wealth creation requires transforming community
Closer to Nation and developing home grown entrepreneurs

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

The journey from Co-operative to Corporate is not that easy. Still Amul did not forget
its Social Responsibilities. Initiatives like: Green Amul Green India, One Member One
Tree, Amul Baby Growth Plan, Amul Relief Trust, Amul Shakti Vidyashree Award and
many more in the list are really impressing.

Future Steps for Brand Consolidation

Amul enjoys a good brand recognition and high recall. It has ventured in to broad
range of diary based products in the last decade. However, there is still lot to do for
Amul to continue garner the customer base and brand loyalty.
Amul stood at rank 21st in the top 21 list of global milk processing companies in
2009. With global market share of 0.4 percent as of year 2007 data, there is huge
potential to capture the unorganized sector (organized sector put together,
accounted for only 21 percent of the market share globally).

Recommendations:

Focus on retail expansion in Indian cities, towns and villages increase

branded Amul parlours to capture the consumer attention and keep the
competition at bay

Amul can venture into offering low-fat versions of its products as it would
help capture the hearts of second and third generation Indians in US & Global
Market

Amul can venture out on new products like dairy based sweets, baby food
products

Amul must try to understand the cause of certain products like Amul basundi,
gulab jamoon, and chocolates etc not being very popular. Amul need to take up
thorough market research and work on improving these products

Though Amuls hoardings are a huge success, it can penetrate even better in
the rural areas by advertising actively through the media viz cable channels and
newspapers. Sponsoring more shows on TV, sports events can be of great help.

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore

The Brand Building Challenge - Amul

References
http://www.amul.com
http://www.amul.com/story.html
http://en.wikipedia.org/wiki/Amul
http://www.indiainfoline.com/Markets/News/AMUL-Most-Trusted-among-Indias-Food-andBeverage-Brands/5068333116
http://www.india-seminar.com/2001/498/498%20verghese%20kurien.htm
http://www.scribd.com/doc/19978355/Amul-ppt-Presentation-Largest-Food-Brand-inIndia-Asia
http://www.indiadairy.com/ind_marketing_quality.html
http://www.ibef.org/artdisplay.aspx?cat_id=60&art_id=23218

Contact Information

Manoj Kaushik (kaushikmanoj@gmail.com)

Paresh Ashara (paresh_a@yahoo.com)
Ranjeet Srivastava (toranjeet@gmail.com)
Sudip Kumar Das (dasu1232001@yahoo.com)
Vivek Wamorkar (vivekvw@gmail.com)

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Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore