Professional Documents
Culture Documents
Project Report
On
The Magnetic Marketing of
“Amul”
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CONTENTS
• DECLARATION…………………………………………………………………1
• INTRODUCTION………………………………………………………………….2
• PRODUCTS AT A GLANCE…………………………………………………….8
• PLACE……………………………………………………………………………..
• DISTRIBUTION NETWORK……………………………………………………
OF CHANNEL MEMBERS……………………………………………………..
• CONCLUSION…………………………………………………………………….
• BIBLIOGRAPHY…………………………………………………………………
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INTRODUCTION
India is the largest milk producing country in the world after US. In 1997, total
milk production in the country was 72 million tonnes, accounting for 13% of the
world’s total milk production.
During the last three decades, the progress made by the country in increasing milk
production is remarkable. Annual milk production in India has made a quantum
jump from 22 million tonnes in 1970 to 74 million tonnes in 1998–99.
The Operation Flood launched in 1970 under Dr Verghese Kurien was successful
in modernizing the dairy sector in India and creating a strong network for
procuring, processing and distribution of milk through the co-operative sector.
Operation Flood also organized dairy co-operatives in milk shed areas of villages
and links them to metros - the major market for milk .First dairy co-operative -
National Diary Development Board (NDDB), at Anand, Gujarat.
Amul's success led to the creation of similar structures of milk producers in other
districts of Gujarat. They drew on Amul's experience in project planning and
execution. Thus the 'Anand Pattern' was followed not just in Kaira district but in
Mehsana, Sabarkantha, Banaskantha, Baroda and Surat districts also.
Major milk procuring centres in India are: Anand (Gujarat), Mumbai
(Maharashtra) , Chennai, Erode, Salem (Tamilnadu), Bangalore (Karnataka), New
Delhi, Hyderabad (Andhra Pradesh).
The milk market at a glance
• Today in India the liquid milk production is 74 million MT / year and the
milk production growing at around 5 % CAGR.
• In India around 9 MT is pasteurized & packed while the rest is sold loose.
• The demand from metros for packaged milk - around 6 million MT which is
a potential market.
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• Per capita milk consumption in India has grown from 132 gms / day to 233
gms per day in 1997-98.
COMPANY PROFILE
The story of Amul inspired the '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.
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Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a
few South African countries. Its bid to enter Japanese market in 1994 had not
succeeded, but now it has fresh plans of flooding the Japanese markets .Other
potential markets being considered include Sri Lanka.
Dr Verghese Kurien, former chairman of the GCMMF, is recognized as the man
behind the success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the
Banaskantha Union, was elected chairman of GCMMF.
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TYPE Cooperative
ESTABLISHED 1946
NAME Anand, India
Chairman, Gujarat Co-operative Milk
HEADED BY
Marketing Federation Ltd. (GCMMF)
PRODUCTS Dairy
WEBSITE www.amul.com
GCMMF TODAY
GCMMF is India's largest food products marketing organisation. 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. It also entered the Pizza business, where the base and the recipes
were made available to restaurant owners who could price it as low as 30
rupees per pizza when the other players were charging upwards of 100
rupees.
In September 2007, Amul emerged as the leading Indian brand according to a
survey by Synovate to find out Asia's top 1000 Brands
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Despite of the economic slowdown Amul has managed to maintain its profit
figures. The sales turn over Amul for the year 2008-09 is Rs. 67113 million.
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AMUL’S TARGET MARKET
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KEY FEATURES OF AMUL
• A mass market player
• No premium offerings
• Product level- moved from core benefit to expected benefit.
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• Product type - consumable and perishable products
PRODUCT CLASIFFICATION
(Amul) (Amul)
• The length of a product mix refers to the total no. of items in the mix. Here
in the table it is 48.
• The Depth of a product mix refers to how many variants are offered of each
product in the line. Like here Amul Pure Ghee comes in two variants with
three diff. pack. Sizes, then it has depth of six.
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• The Consistency of the product mix refers to how closely related the various
product lines are in end use, product lines, or some other way. Here Amul’s
product lines are consistent insofar as they are consumer goods going
through same distribution channel.
PRODUCT-MIX WIDTH
Bread Milk Powder Fresh Cheese Desserts Pasteurized Health For
Spreads Drinks Milk Milk Drink Cooking
Milk
Amul Amul Kool Amulya Amul Amul Amul Ice Toned Nutramul Amul /
Butter Millk Dairy Fresh Pasteurise Creams Sagar Pure
Shaake Whitener Milk d Ghee
Processed
Cheese
Amul Lite Amul Kool Sagar Tea Amul Amul Amul Double toned Amul Amul Malai
Coffee Gold Emmental Mithaee Shakti Paneer
Whitener Milk Cheese Gulab Health
Jamuns Food
Drink
Delicious Amul Kool Sagar Amul Amul Pizza Pure Khoya Full cream Mithai
Table Cafe Skimmed Taaza Mozzarella Gulab Mate
Margarine Milk Double Cheese Jamums
Powder Toned
Milk
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Nutramul Amul Amul Amul Amul Flavored milk Masti Dahi
Energy Spray Fresh Cheese Lassee
Drink Infant Milk Cream Spreads
Amul Kool Food
Chocolate
Milk
PRODUCT PORTFOLIO
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PLACE
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Amul has effectively managed flow of its products. It has always focused on easy
consumer accessibility. The products are available in small shops as well as in
large retail outlets also.
Amul has recently entered into direct retailing through "Amul Utterly Delicious"
parlours created in major cities Ahmedabad, Bangalore, Baroda, Delhi, Mumbai,
Hyderabad and Surat. Amul has plans to create a large chain of such outlets to be
managed by franchisees throughout the country. Amul Parlours were created at
some prominent locations in the country, which are run by the company or its
wholesale dealers.
1. Delhi Metro Rail Corporation
2. The Somnath Temple
3. National Institute of Design
4. Infosys Technologies in Bangalore, Mysore & Pune
5. Wipro campus in Bangalore
6. L.J. College, Ahmedabad
7. Ahmedabad Airport
8. Surat Municipal Corporation
9. Delhi Police
10.Gujarat State Raod Transport Corporation
11. Jubilee Mission Medical College, Trichur, Kerala
12. Sanjay Gandhi Hospital Parlour, Amethi
13. Indian Institute of Management, Kolkata
14. Cafe Amul, MDG, Gandhinagar
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DISTRIBUTION NETWORK
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GCMMF
Head office
GCMMF Manufacturing
Head office
Depot.. Depot..
.1 .n
Second leg
WD…1 WD…n
Third leg
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Retail…1 Retail..
.n
Procurement Channel
Distribution
GCMMF
Head Office
MU…1 MU...n
VCS…1 VCS…n
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Village… Village…
1 n
Upstream flow
SCM AND MARKET LOGISTICS
Milk is procured from the villages and collected at Village Cooperative Societies
(VCS), from there the milk is taken to manufacturing units where the milk is
processed into various products.
The products are then transporters to the company Depots located in various parts
of the country. The products are then sent to Wholesale Distributors (WD) and
from there to the retailers.
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• The C&F agents are not fixed and are decided by the local company
offices
• There are approximately 4,50,000 retailers spread all over India
• Total house hold consumers covered are 100,000
• The milk procured per day is 5 million liters
• Where the total capacity of operation is 7 million liters per day
• The peak processing till date has been 6 million liters per day
• These co operative societies are bound to supply there produce only to
GCMMF
CHANNELS
Upstream Channel: In which milk is procured from the farmers to the
manufacturing units.
1. In the first step, the milk is taken to the VCS by the farmers on foot or
bicycles in small quantities
2. The second step involves the transportation of milk from the co-
operatives to the manufacturing units this is done in special trucks
which are equipped with tankers to carry milk.
Downstream Channel: It is the distribution part of the supply chain from the
manufacturing units to the retailers.
1. First leg
First leg of transport is from the manufacturing unit to the company
depots. This is done using 9 and 18 MT trucks any lesser quantity
will be uneconomical to the company there fore is some time the
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quantity ordered is lesser then club loading is done which means that
the product ordered is supplied with some other products.
2. Second leg
It is from the depot to the WD’s, this transport is carried out in
insulated 3 and 5 MT TATA 407’s here a permanent dispatch plan
(PDP) is prepared where the distributor plans out the quantity of
various products to be ordered on a particular date.
3. Third leg
This is the flow of good from WD’s to retailers, a beat plan is
prepared and transportation is done on auto-rickshaws, rickshaws and
bicycles.
Selection:
The company takes into consideration a host of factors while selecting the channel
members. This is because GCMMF believes that selection of channel members is a
long run decision & the rest of the decision regarding the supply chain depends
upon the efficiency & coverage by the channel members. The following are the
host of factors considered by the company in selecting the channel members:
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• Authentication is required by the regarding the identity of the channel
members, which includes the name & address, photograph of the location.
• Proof of solvency which requires name & address of the channel member’s
bankers
• Safety of the inventory, which means that the distributor/ dealer should get the
stock of the company insured.
• Details of the product kept of other companies have to be provided. The annual
sales of these products too have to be mentioned. Also details of
complementary products & product lines need to be mentioned.
• Dealers of the company must carry a good reputation. This is due to the fact
that the company believes reputation of the dealer affects the clientele.
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• Market coverage by the distributors needs to be defined which includes details
of Geographic coverage & Outlets per market area.
• The company also requires the dealers to furnish any Advertising & Sales
initiative undertaken by them on behalf of the company.
Distributors
• One of the main factors, which keep the distributors motivated, is the margin.
Usually the margins offered by the company are 8% & it is raised to 8.5%.
Volume wise this comes out to be a big figure since Amul’s product has a good
demand in the market. However compared to the other companies the margins
are still lower since the new players in the market offer a much higher margin.
But the very fact that Amul’s products have good demand in the market
motivates the distributors to stock it.
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• Amul being a cooperative cannot afford to give heavy monetary incentives.
Amul’s products are considered to be value for money since the company does
not believe in charging high margins. In fact all monetary incentives are just the
short run means to promote the company’s product. In order to keep the
Channel members motivated in the long run, Amul builds on the concept of
“Trade Marketing” which makes the dealers & the distributors believe that the
company’s products are worthy of being pushed in the market.
• Vision and mission statement: the company cascades down the vision to the
various channel members, this is done through various events organized by the
company at different locations where the values of the company are made clear
and enforced to the channel members.
• Amul yatras: this includes taking the channel members on a guided tour of the
manufacturing and procuring facilities in Gujarat. So that the channel members
can have an experience of the working of the company and can pick up some
quality measures that can help them to synchronize and improve their own
functioning at various levels. This in turn help the company to co ordinate the
entire value chain, as the channel members understand the various constraints
and liberties the company goes through. The company has already got the
Rajiv Gandhi award for quality.
Retailers
• Trade schemes: these are undertaken by the company only for the hard selling
items e.g. Ice creams, flavored milk etc. for these the company raises the
margins by 2%, also schemes like good packaging incase of butter and cheese
is undertaken by the company. However this is only a short-term initiative to
push the products of the company.
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• Glow boards: the company puts up glow boards at the retailer and pays the
major portion of the cost.
• Schedule of the salesmen: they provide the retails with this schedule so the
retailers can pre estimate the quantities of the various products needed.
• Target versus achievement: the performance and the targets are compared
and therefore the gaps are identified which help in evaluating the WD and
planning for the next year as well. This is done for each of the product
category.
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The company at has implemented an ERP program as low as Rs. 3 corers in
collaboration with TCS ltd. The company uses it, the data right from the
procurement from the farmers till the delivery of goods to the retailers is fed into
the system. The software enabling the channel members to use for the
synchronized working and best possible utilization of the available resources
maintains details regarding the inventory management. Market logistics deals
with the implementation of the SCM of the company.
The scale of operations of Amul is very large and complex because of the huge
supplier base the Gujarat Village cooperative society members. Amul makes about
10 millions payment daily amounting to transactions worth Rs.170 million in
cash. More than 500 trucks move the milk from villages to 200 dairy processing
plants twice a day. The IT initiatives of Amul started in 1994 IT became the major
thrust area of GCMMF as it can facilitate improvements in operational efficiency.
Since then GCMMF is marching in a big way starting from AMCUS to today’s
DISK.
• There are certain products like amul basundi, gulaab jamun, chocolates etc
which are not as popular as ice creams. Amul must try to understand the
cause of this through thorough market research and work on improving
these products.
• Though amul’s hoardings are a huge success, it can penetrate even better in
the rural areas by advertising through the media via cable channels and
newspapers. Sponsoring shows in TV, sports events can be of great help.
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CONCLUSION
Amul may justifiably take pride in having built the largest food product business in
the country; they do not pause to rest upon our laurels. In this environment, Amul
has survived and grown on the basis of its greatest strength: co-operative culture,
co-operative networking, market acumen and respect for both producer and
the consumeThus the magnificent marketing mix of Amul has strengthened its
hold in the market beyond comparision.It is indeed magnetic as it has attracted &
retained customers, suppliers, emlopyees, stake holders for years long.
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EXIHIBIT
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BIBILIOGRAPHY
Books:
Web sources:
www.amul.tv
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www.amul.com
business.outlookindia.com
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Thank You
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