Advanced Marketing Management

Guided by: Prof. Spurti Sushil

C3 Project on
Brand Building Strategy of Amul

Presented by
Murtaza Mannan (19BSP1631)
Table of Content

1. Executive Summary

2. About the Brand

3. Brand History and Development

4. Brand Strategy

5. Current Scenario

6. Recent Developments

7. Outlook for Amul

1. Executive Summary
The report describes success story of Amul which has touched the level of excellence as the top
player in the Indian diary market. The main purpose of the study is to show how branding has played a
role in Amul's phenomenal growth. In AMUL's case marketing and branding strategy have been the
mantras of success as AMUL Brand is one of the super brands of Indian market and it has established
its contract with customers showcasing its higher quality standards, justified and correct pricing
strategy & product availability in every part of India. The marketing strategy of Amul covers various
aspects of the business right from segmentation and targeting to the overall mission and vision of the
company and the various parameters which the company executes to become the top brand that it has
in the market.
The research is based on secondary data collected through different websites, magazines and
newspapers. Importance of a strong brand has been focused and Amul branding strategy has been
discussed with brief description of market share of different Amul products. At the end, it has been
concluded that Amul stands profitable at same time competitive due to its effective marketing mix
strategies.

The Gujarat Co-operative Milk Marketing Federation (GCMMF)
2. About the Brand
Amul (Anand Milk-producers Union Limited), formed on December 14, 1946,
is a dairy cooperative organization of India, based at Anand, Gujarat. It is a
cooperative brand managed by a cooperative body, the Gujarat Co-
operative Milk Marketing Federation Ltd. (GCMMF), which was established
in 1956. Currently, it is jointly owned by 3.6 million milk producers in Gujarat.
Amul was formed because of a revolt of dairy farmers. With a presence in
almost every product which can be made by milk, Amul has won over hearts
along with market share to become a highly valued brand with an Indian
origin.
The brand name “Amul”, from the Sanskrit ‘Amoolya’ means ‘priceless’, was
suggested by a quality control expert in Anand. Amul products have been in
use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul
Ghee, Amul spray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul
Ice cream, Nutramul, Amul Milk and Amoolya have made Amul a leading
food brand in India. At present, Amul has become a symbol of high-quality
products sold at reasonable prices, with a vast co-operative network. Over
the years, Amul has maintained its identity with its MASCOT and also with its
tagline “Amul the taste of INDIA”. Amul has promoted the White Revolution
of India, which has contributed in making India the largest producer of milk
and milk products in the world. The Amul Pattern has established itself as a
completely suitable model for rural expansion and growth.
There are two major competitive advantages of Amul over other brands.
1) Strong Supply Chain
Due to the large numbers of dairy suppliers, Amul has a tremendous
strength and reliability in its supply chain, enabling the brand to reach the
masses, while produce in high volumes. It supplies in huge amounts to its
C&F, who is required to have the right arrangements to store Amul products
in bulk. This C&F then transfers the products to distributors who in turn give
it to retailers. Furthermore, Amul has a direct sale team too which sells to
modern retail. Besides this, the company has exclusive Amul stores which
sell all products of Amul brand.
2) Wide Product Portfolio
Amul's product range consist of Amul milk, milk powders, roti softner, bread
spreads, cheese, Amul PRO, Ice cream, paneer, dahi, ghee, Mithai,
chocolates, fresh cream, Amul sour cream, butter milk, Amul cattle feed,
reciepies, and Happy treats.

Product Mix of Amul 2018

Liquid Milk
2% 6%
3%
Skimmed Milk
Powder
8%
Butter

11% Ghee
58% Cheese
12% Flavoured Milk

Others

3. Brand History and Development

The Mascot girl was created as a response to Amul's rival brand Polson's
butter-girl. The Amul moppet has been the mascot of Amul since 1967,
sporting a young girl in red polka dot frock with 'utterly butterly delicious’
jingle. The idea was conceived in 1967 once ASP (Advertising, Sales and
Promotion) clinched the brand portfolio from the previous agency FCB Ulka.
It was executed by Sylvester Da Cunha, the owner of the agency and his art
director Eustace Fernandez on hoardings, painted bus panels and posters in
Mumbai.

In 1966, Amul decided to give their account to the Advertising agency called
Advertising and Sales Promotion (ASP) to work on their ad campaign.
Sylvester da Cunha, then the managing director of the agency and Eustace
Fernandez, art director decided to create something that would grab the
attention of every housewife in the country.

Dr. Varghese Kurien, then chairman of the GCMMF, suggested a

mischievous little girl as a mascot with two requirements. It had to be easy to
draw and memorable as most of the advertising would be outdoor media
which required hand painting in those days and the hoardings had to be
changed frequently.

4. Brand Strategy

Amul as a brand has created a strong perception among its customers as

one of the most trusted brand of India in dairy products with its taste, quality
and value oriented services. It has maintained its position in the market with
a USP ‘’Quality with Affordability’’.

The segmentation of Amul is the mass population and in general, people of

all different age groups and demography enjoying the brand due to its wide
range of offerings including Milk, Butter, Cheese and other such products. As
it has a very deep product portfolio, it does not differentiate in its customers
but uses a mass marketing principle. The typical customers of Amul belong
to the Sec B and Sec C segment wherein they are either middle class or
lower class. In the case of Amul Ice cream, the target audience are the
regular middle class population, while for other products like Butter and
cheese, both high end and low end customers are the target market. In
terms of positioning, Amul has top of the mind positioning because it is the
first brand which comes in mind when talking of Ice cream, milk, cheese,
butter or any other milk based products.

Marketing Mix (4Ps) of Amul

Amul is such a strong brand is because of the marketing mix strategies

adopted by the company.

Product: Amul product portfolio is comprised mainly of Dairy products. Amul

butter, Amul cheese and Amul ice cream are cash cows for Amul as they
have the major market share in their product category. Amul ice cream is
amongst the top 10 ice cream brands of India. Amul milk, Amul Paneer and
Amul Dahi consumption is on the rise. In fact Amul milk has 26% of market
share in the packaged milk segment. The only disappointing performance is
seen in Amul Chocolates which are a burden for Amul and lot of push is
required for the sales of the same. This is because the chocolate market has
established players like Parle, Dairy milk and others.
Place: Amul has a massive distribution network because its ice creams,
milk, butter and cheese is found practically everywhere. There are two
different channels through which Distribution happens in Amul. One of them
is, procurement channel, wherein the milk is individually delivered from
farmers to the co operatives. The co operatives then collect all this milk and
send the bulk to the manufacturing facility. At the manufacturing facility, the
 milk is used to manufacture the finalised products. Secondly, in the
distribution channel, there are carrying and forwarding agents, distributors,
dealers and retailers involved. There are also Amul shoppe’s which sell all
products in the Amul product portfolio. The distribution channel of Amul
ensures that the products reach every nook and corner of India.
Promotions: Amul is responsible for one of the most unique and longest
running outdoor campaign as well as one of the most known outdoor
advertising characters – The Amul girl. The promotions of Amul are mainly
Revenues of Top Diary Companies
for butter but for all the other products there is hardly any promotions. During
the launch of products, Amul is known to go ATL and advertise milk, butter
etc. The Smita Patil ad wherein Smita patil is shown as a village milk
collector is one of the most famous ads for Amul. But overall, the main
advertisement is BTL through outdoor, trade promotions, discount schemes
and sales promotions. The major reason for Amul’s absence in hardcore
advertising is that Amul does not want to give away margins in advertising its
products. As per Amul, their maximum budget for advertising is 1% of the
turnover. Above and beyond that will directly affect the cost of the product.
Price: Amul has a strategy of low cost pricing. Since the begging of its
introduction stage itself, Amul had a vision to provide their products to end
customers at the best affordable rates.

5. Market Overview / Current Scenario

India has been the leading producer and consumer of dairy products
worldwide since 1998 with a sustained growth in the availability of milk
and milk products. Dairy activities form an essential part of the rural
Indian economy, serving as an important source of employment and
income. However, the milk production per animal is significantly low as
compared to the other major dairy producers. Moreover, nearly all of
the dairy produce in India is consumed domestically, with the majority
of it being sold as fluid milk. On account of this, the Indian dairy
industry holds tremendous potential for value-addition and overall
development.
According to the latest report by IMARC Group, the dairy market in India
Category Market Share reached a value of INR 9,168 billion in 2018.
Butter 85%
Milk Powder 40% Along with offering profitable business opportunities, the dairy industry
Cheese 50% in India serves as a tool of socio-economic development. Keeping this
Ice-cream 24.5% in view, the Government of India has introduced various schemes and
Sweets 50% initiatives aimed at the development of the dairy sector in the country.
Chocolate drinks 90% For instance, the “National Dairy Programme (Phase-I)” aims to
Chocolates 10% improve cattle productivity and increase the production of milk
*data as of 2013
expanding and strengthening and expanding the rural milk procurement
infrastructure and provide greater market access to the farmers. On the
other hand, the private participation in the Indian dairy sector has also
increased over the past few years. Both national and international
players are entering the dairy industry, attracted by the size and
potential of the Indian market. The focus is being given to value-added
products such as cheese, yogurt, probiotic drinks, etc.  The domestic
market is totally dominated by Amul, which is currently the market
leader in the industry.

Amul has some good competitors who have entered the market in the last
decade and growing strong steadily. Most of these ice creams entered
regionally but then held on to the regional market share. Thus, even though
 individually these brands might not be a worthy adversary, combined and
with their total net aggregate, all of them together are giving a very tough
competition to Amul.

Some of these competitors are Kwality walls, Vadilal, Havmore, Dinshaws,

Arun Ice cream, Baskin Robbins, London dairy and others. Many of these ice
cream products have their own niche or geographic targets. Arun ice cream
is strong in the south whereas havmor and Vadilal are strong in the west.
Besides these organized players, there are many unorganised local players
who also give competition to Amul by having their own outlets and their own
variants of ice cream. However, the competition in Butter and Cheese and
other dairy products is far lesser.

However, no competitor has such a vast dairy based product portfolio as

Amul. This is the major reason that Amul has a sustainable competitive
advantage over its competitors. These players are also improving their
milk procurement network which is further facilitating the development
of the dairy industry in India. They are also introducing innovative
products keeping in mind the specific requirements of the Indian
consumers. Looking forward, the market is expected to reach a value
of INR 21,971 Billion by 2024, exhibiting a CAGR of around 16% during
2019-2024.

6. Recent Developments / News and Media

Dates Headlines Sources

Dec 17, 2019 Maharashtra gets Amul like dairy cooperative with all women team https://www.financialexpress.com
Dec 14, 2019 Amul raises milk prices by Rs 2/litre https://www.outlookindia.com
Sep 15, 2019 Amul plans smaller dairy pack sizes for price-conscious rural market https://www.business-standard.com
Aug 25, 2019 From cookies to sweetmeat, Amul plans 40-60 new products in two years https://www.business-standard.com
Jul 08, 2019 How dairy brand Amul won the trust of India's consumers https://www.warc.com
May 29, 2019 Amul aims to achieve a business turnover of Rs 50,000 crore by 2021 https://www.businesstoday.in
May 10, 2019 TRU reason why AMUL is taking a taste of non-dairy items https://www.financialexpress.com
May 04, 2019 How Amul plans to go beyond dairy sector https://www.theweek.in
Oct 10, 2017 Amul named best FMCG co by IAA https://www.thehindubusinessline.com/

7. Outlook for Amul

Despite the competitive intensity, the outlook for a dominant firm such as
Amul is promising in the world’s largest milk consuming nation and the
world’s fastest growing branded milk market. In its recent financial earnings
report, the company recently stated that based on the estimated growth in
demand for Amul products and the future marketing efforts, the company
anticipate a 20% a compound annual growth rate in the business in the next
five years. Amul plans to enhance its milk processing capacity from the
current level of 320 lakh liters per day to 380–400 lakh liters per day in the
next two years. Increasing urbanization, changing consumer lifestyles and
half the population below 24 years in India is driving the expansion of the
industry.

Amul, which sources milk from what is the country’s largest network of
cooperatives, has been at the forefront of India’s white revolution that started
in the 1970s and turned the nation into the world’s largest producer and
consumer of milk. The company collects 25.5 million liters of milk a day—30
percent of the organized market. Revenue stood at Rs 27,000 crore in the
year ended March 2017.

GCMMF reported an 8% increase in turnover at Rs 29,220 crore for the

financial year ended March 31, 2018. Its branded consumer products
registered growth of 14% over the previous year, with products such as
cheese, butter, milk beverages, paneer, cream, buttermilk and dahi having
expanded 20-40%. The group turnover of Amul brand has crossed Rs
41,000 crores which is 10% higher than last year. The Amul federation has
been achieving a compound annual growth rate of more than 18% for the
past eight years because of higher milk procurement, continuous expansion
in markets, launching of new products and adding milk processing
capacities. Pouch milk, which is the highest turnover product, posted double-
digit growth in value. The company stated that there was a positive impact of
goods and services tax on the business and the federation was committed to
achieving sales turnover of Rs 50,000 crore by 2020-21. Amul is looking to
increase its dominance by growing its market share and revenue which is
attributable to institutional sales growing at a strong pace as the number of
food outlets is rising.