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AMUL Butter 4P's

AMUL Butter 4P's

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Published by: Krishnakant Jonnalgadda on Jul 23, 2011
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02/08/2015

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AMUL BUTTER’S Competitive Advantage By Constant Innovation of the 4P’s

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Promotion Krishnakant JonnalgaddaNeelotpal ShuklaCharu BhatiaAnimesh GuptaSohrab Singh ChauhanPreeti Mathews60 52 6 54 57 28 1

TABLE OF CONTENTS- 1) Introduction and Company Profile 03 2) Implementation of the 4P’s 03 3) Analysis of Consumer Behavior 08 4) SWOT Analysis 13 5) Conclusion 13 6) Appendix 14 7) References and Bibliography 15 2 .

but also the constant innovation that they undergo in their packaging.they follow world standard methods like Total Quality Management in their operations. Gujarat Cooperative Milk Marketing Foundation Ltd. AMUL butter is available in the following sizes- 500 grams 100 grams 50 grams 20 grams 8 grams This diverse package basket clearly reflects how AMUL has been successful in segmentation of its target group. Amul Distributor of Andheri Region. Anil Mehta 1.Amul Butter. Right from the supply side where they adopt practices like Kaizen to ensure the quality of the milk in terms of acidity and its sourness.Product.these two captions speak volumes about the power of AMUL and its flagship product. They did what was considered unthinkable back then. The processing meets the AGMARK standard and BIS Specifications No. They’ve formulized a very strong base in all these four parameters which has given it a Competitive Advantage over all its competitors. “The Taste Of India”. The flagbearers of our White Revolution. Right now under their product basket. is the cooperative that runs the operations and takes care of the entire marketing. They’ve been distributing AMUL products in this region 3 . Founded in 1946. They are the market leaders in the butter segment with more than 80% market share. AMUL Butter’s product advantage is not only restricted to the superior quality that it has. IS: 13690:1992 which gives a testimony to their quality measures. this Cooperative is a live case study of efficient management and powerful marketing. says-“ Amul’s target group ranges from 1 Mr Amit Mehta owns Amritlal & Bros. Mr. Place and Promotion. AMUL butter’s implementation of the 4P’s- AMUL butter enjoys a market share of more than 80% which is a result of its constant strategizing of the 4P’s.AMUL butter’s core competency lies in the product that they offer. All these proactive initiatives gives them a firm foundation to build over in order to pursue their marketing policies. Product.to bring thousands of farmers together under a Cooperative and run a business venture. This can be attributed to their solid implementation of the marketing principle of the 4P’s. Price. AMUL has always set milestones for others to learn and emulate. They are the distributors of AMUL products in the Andheri west region. Consumer Division.Introduction and Company Profile- “Utterly Butterly Delicious”.

distribution and the entire management of AMUL brand name. AMUL has kept the provision of purchasing Institutional Packs for High Consumption Groups like restaurants and caterers who usually place their order in cases(one case has 30 packs of 500 grams). Britannia charges Rs. Under their umbrella. As discussed earlier. This gives them a wider reach to the new found segment of health aware target group. Place.8 million farmers supplying them milk and the GCMMF has a network of more than 3500 distributors and more than 5 lakh retail outlets. for the past 45 years. They look after the marketing. The range of product packages Amul offers(8 grams being the minimum) makes it easier for lower income groups to afford it. AMUL has constantly taken the right steps to ensure a high quality product that gets prodigious customer satisfaction.The biggest strength of Amul is its very strong marketing channel spread across the length and breadth of the country. Price . This cuts down the cost for the High Consumption group as they are priced much less than the retail packs.27 for a 100 gram packet. So on one hand its closest competitor. Amul charges Rs.slums to Sun-N-Sand”( both order the 8 grams butter packs.slum dwellers due to affordability and big hotels as a butter supplement to specific dishes). The Cooperative network of the Milk Union eradicates the scope of the middle man on the supply side ensuring fair pricing and the strong marketing channel of GCMMF 2 carries forth the trend. AMUL’s Institutional Packs have an attractive pricing of Rs 110 compared to retail packs priced at Rs. over a period of time they’ve expanded on their target group with effective packaging and pricing. 2 GCMMF is the Cooperative under whom more than 2.The next important aspect that provides a Competitive Advantage to AMUL butter over its competitors is its price. 4 .25. Since health consciousness is gaining momentum in our country as well . Thus. Thus. Add to this.Amul reacted to it with the introduction of new products in its line. This makes availability a very strong factor contributing to AMUL butter’s success. AMUL butter spends less than 1% of its revenues into advertising which is much less than the industry average of 8-9%. This Institutional Packs are not meant for retail selling and are without the outer packaging that one finds on the retail stores.8 million farmers of 12 districts are operational.Amul Lite which offers a low fat butter and Delicious which is a no cholesterol table margarine( a substitute for butter). which gives them a strong pricing advantage. they’ve a highly efficient distribution channel which facilitates effective pricing. they’ve more than 2.122 for a 500 gram pack.

This shows their intent to frame a parallel strong distribution channel which would give their products unparalleled availability compared to the competitors. From GCMMF to consumer.The flow in the above figure gives a broad picture of how the distribution channel functions. They’ve implemented technology on the supply side through initiatives like ACMUS and their supply chain management from farmers to GCMMF is Just in Time also satisfying conditions of six sigma. they subsequently decentralize the operations to 47 depots which then deal with more than 3500 distributors and eventually AMUL butter is available in more than 5 lakh retail outlets. forms the backbone of the organization which is responsible for managing the entire cooperative under the umbrella brand of AMUL. The Gujarat Cooperative Milk Marketing Foundation Ltd. where they’ve been able to create a direct B2C model. customers searched for it and took AMUL butter even though other alternatives were clearly available at convenience) 5 . Amit Mehta. The other way is the inception of AMUL Parlour. One is shown above where from Centralized GCMMF. there are two ways in which the distribution channels function.This was a field research that our group undertook the retail visibility of AMUL butter (Even though stacked behind due to consumption of stock. Retail Visibility. “Amul has a vision to have a parlour across the country at a distance range of every 3-4 kilometers” informs Mr.

although Nutralite does much better in the health segment compared to AMUL Lite and Delicious.the social observer created by Da Cunha Communications. Versova (W). The cute AMUL moppet girl wearing a polka dress has gained high recognition ubiquitously and is in the race for Guinness Book 6 . The department manager confirmed that sales volumes of AMUL butter are much higher. Infiniti Mall. Mumbai) The overall impression we got was although AMUL didn’t have an entry point advantage at the store.GCMMF spends less than 1% of its revenue on advertising.(Photos taken at Food Bazaar. The major form of advertising is the AMUL topical. but its stacking in the 500 gram segment provides extensive visibility compared to other competitors. Promotion. The group found out that customers instantly searched for AMUL butter on entry and made a quick exit from the segment and didn’t try to look at other alternatives.

They are also present on the virtual world. 7 . twitter. Amit Mehta.of World Records for the highest running campaign in the world.com) Apart from this. (Source: The pictures have been taken from Official Amul Website. “There is only one time that I can recollect AMUL butter giving a discount of Rs.Second Life. Amul Chef of the Year. But our research shows that not many consumers are aware of their presence which is a matter of concern for them. Orkut and their own blogs apart from the website. Our research showed that AMUL doesn’t even indulge too much into sales promotion activities like discounts to surge the sales. They try different ways for that like sponsorships( Amul Star Voice of India. This has given the brand a high recall value as well at a relatively smaller expenditure.amul. 5. Amul Maharani Contest and so on). there isn’t much sales promotion activity on their side as word of mouth and the already established brand works effectively for them” elaborates Mr.www. Amul Cricket Ratings. The major promotional aspects of AMUL are for the umbrella brand and not butter. They are trying to make headway into social media effectively as well through Facebook. AMUL butter advertises sporadically on television but they are far and few in between.

Consumer Behavior. Favorite brand of butter is 8 . The following are the trends that we came across- Butter forms a regular purchase item on our grocery list Family's usual monthly consumption is Analysis.The following market survey was conducted to understand the butter consuming patterns in India and the perception of AMUL butter.The above two graphs clearly portray rising consumption of butter in Indian families.

The aspect that sets apart my favorite butter from its competitors is With the word butter.The above three graphs portray AMUL butter clearly emerging out as a favorite because of its better taste and enjoys top of the mind recall as well. the brand which comes to my mind first is Analysis. we look at the available alternatives I experiment with a new brand if something is seen on the shelves 9 . Before purchasing.

more offers and discounts. it'd be *Attributes areCutting Down on calories. packets of more sizes. Pricing. My consumption of butter has come down over time due to its high calories 10 .Analysis.The above two graphs show that consumers are still not very open to experimentation and are loyal to the existing brands. Analysis. Addition of new flavors.People want AMUL to introduce new flavors and cutting down on price further (doesn’t seem rational) if any change has to be made. If I could change anything in Amul Butter.

Analysis.This shows a 50-50% division which does indicate that health awareness is burgeoning. I think AMUL butter should be advertised across other mediums as well I'm aware of the AMUL cyber store which can be used to order my stock I'm aware of AMUL butter's presence on Social Networking Sites 11 .

people aren’t much aware or responsive to it.The four graphs tell that although AMUL is prevalent across social media. Thus. On a scale of 1-10. I'd rate AMUL butter on the whole as SWOT Analysis of AMUL Butter12 .Analysis. AMUL should come up with better strategies to cater to this problem.

but the market dynamics are changing and in times when consumer memory is influenced by bombardment of novel items.There is no doubt that AMUL is a market leader ahead by miles.especially for the new entrants AMUL Lite and Delicious. Amit Mehta. there is a challenge in front of AMUL to ensure that in the butter segment it uses Above the Line advertising more effectively. Our research shows 95% people don’t know Delicious is from the house of AMUL.Conclusion. Thus the market leader certainly has to take some corrective measures to maintain the hegemony. Distributor AMUL products. Andheri Region. APPENDIXExcerpts of interview of Mr. 13 .

” • • • • • • • • • Bibliography and References1) Mr. The transportation cost till the distributors is taken care by GCMMF. but is clearly reflected in ‘AMUL Lite’ and ‘Delicious’ brands of butter. Amrit & Brothers Consumer Division. Advertising and Promotion’s paucity is the biggest weakness of Amul. The usual delivery pattern is thrice a week to him and the depot in the Kalaghoda region of Mumbai decides the minimum stock of each product that has to be ordered mandatorily. AMUL less proactive in this regard compared to Britannia. a famous restaurant in Vile Parle(W) cancelled its order of Institutional Packs and prefers to purchase Retail Pack even though it means Rs.• According to Mr.12 more per pack. Papylon. which has not effected their product butter yet. Owner. Amit Mehta. The usual trend is that distributors sell to only those who order more than five packets of 500 grams per day. The hawkers who do roaring business are also his clients. His final words for the company “AMUL provides the one of the best quality products in the industry. they can see better avenues for higher sales and accessibility to the customers.AMUL Products Distributor in Andheri region. There have been rare occasions of Under Stocking due to sudden rise in demand. he has to incur the cost. But they are a very traditional enterprise. Retail Visibility is a collaborative decision of the company and the retail store. Amit Mehta. 14 . They work on really low margins of around 2.75%. Nutralite is gaining momentum because of higher awareness in people about it compared to AMUL Lite or Delicious. from his place to the retailers. So selling AMUL products becomes a viable proposition only when high volume sales take place. There have been sporadic complaints about Institutional Pack’s quality compared to the retail pack. If they create better communication strategies. Inventory Management is a very important aspect that they take good care of.

A South Asian Perspective 13th Edition by Philip Kotler.www. 15 . 5) Marheting Management by Dr. Abraham Koshi.com 4) Marketing management.Google books Page 227-228.wikipedia. Rajan Saxena 6) www.amul.Floor Manager of Foods Segment at Food Bazaar. Versova (W).com 7) The Amul India Story By Ruth Heredia. Mithileshwar Jha.2) Reshma. Infiniti Mall. Kevin Lane Keller. Mumbai 3) Amul’s official website.

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