Professional Documents
Culture Documents
IN
A Training Report
submitted in partial fulfillment of the requirements for
the award of the Degree of
By
This is to certify that the work presented in the training report entitled
“CONSUMER BEHAVIIOUR TOWARDS AMUL PRODUCT” in partial
fulfilment of the requirement for the award of Degree of Bachelor of
Business Administration of Usha Martin University, Jharkhand is an
authentic work carried out under my supervision and guidance.
3.2 Summary of
Departmental
Activities
Chapter 5 Conclusion
Chapter 1 : Introduction
1.1 Company history
Amul has a storied history, having been created in 1946 in response to the exploitation
of marginal milk producers by traders from Polson dairy, which was then the region’s
only dairy.
Polson Dairy, a locally-owned dairy in Anand, Gujarat, was procuring milk from farmers
at very low rates to sell to the Bombay (now Mumbai) government.
In 1946, Gujarat was in the middle of the nationalist movement. During that time, Polson dairy,
which had complete rights to supply milk to Bombay under the Bombay Milk Scheme, was
exploiting the Indian dairy farmers by procuring milk from them at very low rates and selling it
to the Bombay Government at excessively high rates. While Polson prospered and the
middlemen happily made money, it was the poor dairy farmers who suffered.
This continued until Tribhuvandas Kishibhai Patel started a revolution to help poor dairy
farmers and landless labourers. He approached Sardar Vallabhbahi Patel and Murarji Desai,
who was then Bombay’s home and revenue minister, to seek their permission to form a
cooperative with their own pasteurisation plant. After getting support from the duo, the
Any farmer was free to join the Kaira Union irrespective of his or her caste, religion or
financial status.
The whole of Gujarat was in a rebellious mood and was not contributing milk to the
Polson Dairy, by which the Polson Dairy was on the verge of breaking down. The British
government initially tried to dread the protesting farmers. They farmers refused to
buckle under pressure.
They decided to go on a ‘milk strike’ and suspended milk supply to Bombay. The city
went without even a drop of milk from Anand for 15 days.
Later, reluctantly the British allowed the farmers to set up their own cooperative,
thinking that the cooperative would not last for even a couple of days because most of
the farmers were illiterate. And this is how Kaira District Co-operative Milk Producers
Union, popularly known as Amul Dairy today, was born. Tribhuvandas Kishibhai Patel
went on to become the chairman of the Kaira union.
In 1949, Patel sought the help of Dr Verghese Kurien, who was then working at the
Government Creamery at Anand, Gujarat, to put the dairy equipment together and run
the units. He was also entrusted with the responsibility of marketing and external
affairs of the Union.
Patel and Kurien were joined by HM Dalaya. Dalaya looked after the technical and
internal aspects of running the dairy. These three went on to become the pillars of the
cooperative movement.
New machinery was bought and milk procurement increased from 200 litres in 1948 to
20,000 litres in 1952. However, during this period, the surplus milk found no takers, so
farmers had to face the problem of fluctuating milk production. This gave birth to the
idea of converting extra milk to milk powder. Kurien’s batchmate from America HM
Dalaya invented the process of skimmed milk powder and condensed milk from buffalo
milk instead of cow milk and a dairy was set up in 1955 to process excess milk into milk
powder and butter.
With the commercial success of the modern dairy at Anand, the brand name Amul (from
the Sanskrit Amulya or priceless, and also an acronym for Anand Milk Union Ltd) was
registered in 1957.
Its strategy, which evolved over time, comprises of elements described below.
Simultaneous Development of Suppliers and Customers: From the very early stages
of the formation of AMUL, the cooperative realized that sustained growth for the
long-term was contingent on matching supply and demand. Further, given the
primitive state of the market and the suppliers of milk, their development in a
synchronous manner was critical for the continued growth of the industry. The
organization also recognized that in view of the poor infrastructure in India, such
development could not be left to market forces and proactive interventions were
required. Accordingly, AMUL and GCMMF adopted a number of strategies to assure
such growth. For example, at the time AMUL was formed, the vast majority of
consumers had limited purchasing power and was value conscious with very low
levels of consumption of milk and other dairy products. Thus, AMUL adopted a low
price strategy to make their products affordable and guarantee value to the
consumer. The success of this strategy is well recognized and remains the main
plank of AMUL's strategy even today. The choice of product mix and the sequence
in which AMUL introduced its products is consistent with this philosophy. Beginning
with liquid milk, the product mix was enhanced slowly by progressive addition of
higher value products while maintaining desired growth in existing products. Even
today, while competing in the market for high value dairy
products, GCMMF ensures that adequate supplies of low value products are
maintained. On the supply side, as mentioned earlier, the member- suppliers were
typically small and marginal- farmers had severe liquidity problems, were illiterate
and had no prior training in dairy farming. AMUL and other cooperative Unions
adopted a number of strategies to develop the supply of milk and assure steady
growth. First, for the short term, the procurement prices were set so as to provide
fair and reasonable return. Second, aware of the liquidity problems, cash payments
for milk supply was made with minimum of delay. For the long-term, the Unions
followed a multipronged strategy of education and support. For example, only part
of the surplus generated by the Unions is paid to the members in the form of
dividends. A substantial part of this surplus is used for activities that promote
growth of milk supply and improve yields. These include provision of 12
veterinary services, support for cold storage facilities at the village societies etc.
In parallel, the Unions have put in place a number of initiatives to help educate
the members. To summarize, the dual strategy of simultaneous development of
the market and member farmers has resulted in parallel growth of demand and
supply at a steady pace and in turn assured the growth of the industry over an
extended period of time. Cost Leadership: AMUL’s objective of providing a value
proposition to a large customer base led naturally to a choice of cost leadership
position. Given the low purchasing power of the Indian consumer and the marginal
discretionary spending power, the only viable option for AMUL was to price its
products as low as possible. This in turn led to a focus on costs and had significant
implications for managing its operations and supply chain practices (described
later). Focus on Core Activities: In view of its small beginnings and limited
resources, it became clear fairly early that AMUL would not be in a position to be
an integrated player from milk production to delivery to the consumer23.
Accordingly, it chose a strategy to focus on core dairy activities and rely on third
parties for other complementary needs. This philosophy is reflected in almost all
phases of AMUL network spanning R&D, production, collection, processing,
marketing, distribution, retailing etc. For example, AMUL focused on processing of
liquid milk and conversion to variety of dairy products and associated research and
development. On the other hand, logistics of milk collection and distribution of
products to customers was managed through third parties. However, it played a
proactive role in making support services available to its members wherever it
found that markets for such services were not developed. For example, in the initial
stages, its small and marginal member farmers did not have access to finance,
veterinary service, knowledge of basic animal husbandry etc. Thus to assure
continued growth in milk production and supply, AMUL actively sought and worked
with partners to provide these required services. In cases where such
partnerships could not be established, AMUL developed the necessary capabilities
and provided the services. These aspects are elaborated later in this section.
Managing Third Party Service Providers: Well before the ideas of core competence
and the role
of third parties in managing the supply chain were recognized and became
fashionable, these concepts were practiced by GCMMF and AMUL. From the
beginning, it was recognized that the core activity for the Unions lay in processing
of milk and production of dairy products. Accordingly, the Unions focused efforts
on these activities and related technology development. Marketing efforts
(including brand development) were assumed by GCMMF. All other activities were
entrusted to 13 third party service providers. These include logistics of milk
collection, distribution of dairy products, sale of products through dealers and retail
stores, some veterinary services etc. It is worth noting that a number of these third
parties are not in the organized sector, and many are not professionally managed.
Hence, while third parties perform the activities, the Unions and GCMMF have
developed a number of mechanisms to retain control and assure quality and timely
deliveries (see the sub-section on Coordination for Competitiveness later in the
paper for more details). This is particularly critical for a perishable product such as
liquid milk. Financial Strategy: AMUL’s finance strategy is driven primarily by its
desire to be self-reliant and thus depend on internally generated resources for
funding its growth and development. This choice was motivated by the relatively
underdeveloped financial markets with limited access to funds, and the reluctance
to depend on Government support and thus be obliged to cede control to
bureaucracy. AMUL’s financial strategy may thus be characterized by two
elements: (a) retention of surplus to fund growth and development, and (b)
limited/ no credit, i.e., all transactions are essentially cash only. For example,
payment for milk procured by village societies is in cash and within 12 hours of
procurement (most, however, pay at the same time as the receipt of milk).
Similarly, no dispatches of finished products are made without advance payment
from distributors etc. This was particularly important, given the limited liquidity
position of farmer/suppliers and the absence of banking facilities in rural India. This
strategy strongly helped AMUL implement its own vision of growth and
development. It is important to mention that many of the above approaches were
at variance with industry practices of both domestic and MNC competitors of
AMUL.
1.3 Organizational structure
It has established itself as a uniquely appropriate model for rural development. Amul
has spurred the WhiteRevolution of India, which has made India the largest producer
of milk and milk products in the world. It isalso the world's biggest vegetarian cheese
brand.
Amul PRO
Amul Chocolates
Amul Icecreams
1.6 Competitor
There are several brands in the market which are competing for the same set of customers.
Below are the top 6 competitors of Amul:
1. Britannia
2. Nestle
3. Mother Dairy
4. Cadbury
5. Baskin Robbins
6. Kwality Walls
Political Factors:
The political factors in the Amul PESTLE Analysis can be explained as follows:
Due to favorable political factors, the Amul company achieved a growth of 11.35% across
their operations units in Kolkata, Pune and Mumbai. The company focuses on developing
long lasting relationships with their milk producers by ensuring that they pay them higher
prices. The company has set its milk procurement operation in West Bengal under “Amul
Pattern”. This has resulted in significant progress to the socio-economic conditions of the
members of the producer’s community. In Maharashtra, Punjab and Gujarat the company
has established and maintained new milk societies. The union has established milk societies
outside Gujarat under “Anand Pattern”. They provide high quality feed and veterinary
services to the cattle owned by the milk producers of such societies. For the international
dairy industry, the latest years have been quite difficult due to import and export hurdles
faced in Russia. Lower demand for dairy products in Chinese market, other upheavals in
European countries and product regulations leading to lower level of demand in Germany
has proved to be a barrier in company’s growth. If the Amul company receives adequate
support from the State as well as the Union level then by adopting latest technologies, they
would be able to achieve one of the highest rate of procurement and progress the company
name to a successful level.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Amul:
In many countries Amul has received significant benefits in terms of lower milk procurement
rates by almost 30 to 60 %.
This further benefits the company in terms of reduction in the price of its products such as milk powder and
butter by 30%. The price of the milk powder in India improved substantially from Rs.130 to Rs.150 which
affected the milk procurement prices by Rs.4 to Rs.5 per litre. The national as well as the international markets
are facing recessionary conditions. Increase in transportation costs can significantly affect the ability of the
company to deliver its products to the end consumer. In the year 2019 an increase of 11.24%, in milk
procurement costs and an increase of 14% in Diesel costs lead to an increase in milk transportation costs for
Amul. During the same year there was an increase in Interest and Bank Commission by approximately 10%.
Social Factors:
Following are the social factors impacting Amul PESTLE Analysis:
The individual buying decision is mainly the output of social factors like culture and society.
Friends, peer groups, families, reference groups can have a major influence on the
consumption pattern and buying behavior of the consumer. Amul has taken advantage of
these factors and has successfully targeted women and children. It has created a strong and
vital presence in the dairy segment. Vegan lifestyle is being increasingly adopted by a large
number of consumers. Increase in the number of vegans would negatively influence the dairy
industry as the lifestyle itself doesn’t permit consumption of dairy products obtained from
animals. The overall picture for the company looks in a beneficial position as the Indian
households are more accustomed to morning tea and the people are in general more
accustomed to milk and milk products. The culture of fast food also promotes a certain type
of lifestyle that increases the consumption of ice creams.
Technological Factors:
The technological factors in the PESTLE Analysis of Amul are mentioned below:
Amul as global brand, understands the need to invest in different technologies and updating
the current technology as well in order to capture as well as retain the current customers.
The brand has invested 600-800 crore, in the current fiscal year for setting up new milk
processing plants. The company has also invested in order to expand the capacity of the
existing units as well. The entire industry in general in adapting to a variety of latest
technology that helps in supervising the productivity of milking animals and dairy farmers.
The idea is to identify any faulty practices and take corrective steps in order to meet the
market demand.
The latest technologies are equipped with smart chips of unique identities that are tagged,
which help such companies in registering the productivity and health records of individual
animals.
Legal Factors:
Following are the legal factors in the Amul PESTLE Analysis:
The company has faced a lot of problems with regard to infringement malpractices adopted
by the local players in the market. In 1998, Amul noticed that Naroda based Shri Shakti
Dairy, was involved in manufacturing milk pouches under similar names to Amul brands.
This was a distressing situation for the company as the names were quite similar with its
own brand names “Amul Shakti” and “Amul Taaza”. The brands were being advertised by a
firm. The private dairy was making use of similar packaging as well as brand name of Amul
and selling them to the rural markets thus creating a confusion in the minds of the
customers. The company fought a 20-year, long battle against the defaulters, finally winning
the case from the private dairy. Such factors can disrupt the market of the products of the
company by capturing the untapped potential and selling fraudulent products to such
customers.
Environmental Factors:
In the Amul PESTLE Analysis, the environmental elements affecting its business are as
below:
Due to the effects of global warming that have been experienced by everyone, the company
understands that it is their moral responsibility to protect the environment. The adoption of
automization and the increasing use of modern technologies in its everyday processing
activities like water, fuel, gas and electricity has resulted in substantial reduction in
conservation of national resources. This has further led to savings in electricity and fuel. On
14th December, 2018 the company, by the government of India was awarded National
Energy Saving Award for coveting the first position in Food Processing Sector for energy
conservation.
2.2 Internal environment analysis
MOTTO:
The main motto of AMUL is to help farmers. Farmers were the foundation stone of
AMUL. The system works only for farmers and for consumers, not for profit. The main
aim of AMUL is to provide quality products to the consumers at minimum cost. The
goal of AMUL is to provide maximum profit in terms of money to the farmers. The main
Motto of Amul is to help farmer. Amul system works under objective of highest
possible price to the milk producers and lowest possible price to consumer. Farmers
are paid money in cash payment for the milk. Milk gives them money for daily
necessities. Amul is the one who started using their profit for the milk producer
common good.
VISION:
Vision of AMUL is to provide and vanish the problems of farmers (milk producers). The
AMUL apparition was to run the organization with the co-operation of four main
parties, the farmers, the representatives, the marketers, and the consumers.
QUALITY POLICY:
We the motivated and devoted work force of AMUL are committed to produce whole
some and safe foods of excellent quality to remain market leader through deployment
of quality management system, state-of-art technology innovation and eco- friendly
operation delightment of customer and betterment of milk producers.
2.3 SWOT Analysis
STRENGTH:
CO-OPERATIVE CULTURE: All the co-operatives are work together to accomplish a
particular task.
BRAND STRENGTH: The strong brand equity of AMUL, which made it possible to
become a market leader in milk and milk products.
PRODUCT INNOVATION: Under its umbrella brand AMUL has added a wide range
of milk products like- cheese, butter, Srikhand, flavored milk, Ice-Cream,
Chocolate, Sugar-free Chocolate, Probiotic Ice-Cream etc. Recently AMUL launched
Pizza and milkshakes.
WEAKNESSES:
Co-operative culture if not dealt properly can affect the organization.
Animals are now taken as side business. This can affect the industry as the main
raw material is milk which is provided by animals.
OPPORTUNITIES:
Day by day increase in the collection of the milk, AMUL has wide
opportunity to produce variety of products like Choco Flakes.
THREATS:
I started my summer internship on 1 st July 2022. And during summer training I had to report
at the organization at sharp 10:00 am and was asked to work till 6:00 pm. First 15 days I
spent on various marketing activities like I had visited near about 350 retail shops to know
there view & consumer behaviour towards Amul Milk.
And also collects detail about the competitors there offers & profit margin.
After that next few days I went with distributors early in the morning 5:00 am to know how
distribution channel works.
And then at last I worked with questionnaire a sample size of 100 respondents was taken for
the study whose response were studied and interpreted. The sampling design was used
convenience sampling. The process of analysis was done through excel work sheet,
frequency table, percentage analysis etc.
There is one thing that I have found that the people working at AMUL are very much helpful
in all areas. Everytime they come to me and told me that they are available at any time for
me for anything, which really boost me and motivates me towards my goal and objectives.
The culture of Amul is very much friendly.
I completed my Internship on 31 st August’ 22, and during this period, I have achieved my all
objectives of my Internship.
RESEARCH PROBLEM ➢ Seek the general perception of consumer towards Amul Milk. ➢ To
know the consumer psyche and their behaviour towards Amul Milk .
OBJECTIVE OF THE RESEARCH ➢ To know the relationship of sales with the advertisement.
➢ To know awareness of people towards Amul Milk. ➢ To know which advertisement tool
is mostly preferred by people. ➢ To know the preference of Amul Milk with comparison to
Other competitive brands .
➢ To know the factors which affects consumer’s buying behaviour to purchase milk.
3.2 Summary of departmental activites
Information required
• First, I had to know about all the competitors present in the Milk segment (Reputed and
well established brands as well as Local brands).
• Before going for the survey I had to know the comparative packs and prices of all the
competitors existing in the market.
• Since Milk is a product that used daily hence I had to trace the market and segment it,
which mainly deals with people of various age groups. • The main information needed is the
various types of brands available in the market, their calorific value and various other facts.
• As Amul milk advertisements are mainly done through hoardings but on television the
advertisement is being telecasted timely and on the proper time or not.
RESEARCH DESIGN
A Research design specifies the methods and procedures for conducting a particular study. It
is a map (or) blue print to which the research is to be conducted. Descriptive research
design has been considered as a suitable methodology for present study and for data
analysis.
SAMPLING DESIGN
The sampling design used was Convenience sampling, which is a non-probability sampling
method. The convenience factors were the availability and approachability of the
respondents.
POPULATION
All types of outlets that stock and sell Amul milk in the markets. The outlets have been
classified into as follows
Primary sources
The primary data was collected through questionnaires. They were filled using the
scheduled method of data collection by the researcher.
Secondary sources
The secondary sources were used only for collecting information regarding the sample; they
were however not used for analysis
ANALYSIS TECHNIQUES
Quantitative analysis is performed using the data collected at each outlet to estimate the
presence of Amul milk.
Tools Utilized
➢ Percentage Analysis
➢ Graph Chart
SAMPLING
2. Sample Unit : People who buy milk available in retail outlets, superstores, etc
• In order to get correct information I had to approach consumers ranging from 18 yrs to 65
yrs.
• I visited as many respondents as I can and asked them their real likings about any milk and
also got an idea.
• People were not willing to answer, when they were contacted between 1.00 pm to 5.00
pm, the time when most of the people take rest during the scorching heat.
3.4Trainee contribution:
Respondents Consumption Quality:
Consumption quality is varying with various respondents. Some of customer they buy less
quantity and some them huge quantity depends upon requirement and number of people in
their houses. The data is collected to know the various consumption patterns.
From the above table we can conclude that majority of the respondents were consuming
one litre per day.
INCOME:
Income decided the purchasing power of the customer. If the income is high then, they go
for high quality irrespective of price of the product. Hence in this research I like to collect
the data how income is influence to purchase Amul Milk .
INTERPRETATION:
25% of the respondents rated that AMUL Milk & Milk products are Excellent. 48% of the
respondents rated as good, 22% of the respondents rated as Average Quality. 05% of the
respondents rated that AMUL Milk & Milk products are Poor.
From the above table we can conclude that majority of the respondents rated AMUL Milk &
Milk products are of Good Quality.
INTERPRETATION:
96% of the respondents feel that they get the value for money they paid. Only 04% of the
respondents feel that they are not getting the value for money what they paid.
From the above table we can conclude that majority of the respondents are agreed that
they are getting the value for money they paid.
1. Incomes less than 5000 to 10000 are more attracted to Amul Milk. As per
the data, 79% of the respondents’ income is under this group.
2. The main purchasing factors for the Amul Milk are Quality and Brand
image. The data reveals that 42% influences on Quality and 32% influenced
CONCLUSION
From the survey conducted it is observed that Amul milk has a
good market share.