CASE

STUDY 01
A CASE STUDY ON AMUL PIZZAS

B Y N E H A S AY I N I
Q. What makes AMUL concentrate on
pizza market?
The Indian company AMUL well known for it’s dairy products had introduced pizzas for
rs.20( one-third of the price charged by competitors) in the year 2001.
Due to liberization in the early 1990s there was a consecutive entry of new players in the market
which saw a change in food tastes and lifestyles of people. The new management team at Gujarat
Cooperative Milk Marketing Federation (GCMMF)-parent company of AMUL, took over the
federation hoping to get something out of this big change.
The new management team at GCMMF adopted the Total Quality Management and set out goals
for their growth in the market. AMUL had soon diversified their range of products like jams, ice
creams, ketchup, confectionaries and cheese. So why did AMUL find the need to launch pizzas in to
their list of products?
There was an increase in the milk production during the
time of liberization in the mid 1990s and due to this
GCMMF didn’t have an option but to make a productive
use off of the extra milk. There was pressure to
manufacture more milk product so AMUL came up with
an idea to incorporate it into the production of cheese
and butter( they wanted to introduce these 2 products as
a part of regular diet in households). AMUL’S aim was
to increase the offtake of their regular milk products by
selling their new products. So basically, the pizzas were
introduced to increase the sale of cheese.
 Q. How did AMUL target vegetarian pizza
? Explain?
Analysts believed that AMUL could reduce the prices of their products due the economies of scale it enjoyed.
“Instead of waiting for the pizza market to grow, we decided to create a new mass market ourselves, "Mr. Vyas
said. The selling strategy of their pizzas was indeed unique. AMUL wanted to be the very driver of change rather
than fearing it’s competitors. As Amul decided to sell their range of pizzas at low prices, there was an ideology that
the competitors would be forced to slash their prices and this would also increase consumption of their mozzarella
cheese(as mention earlier), this way it’s a win-win situation.

“GCMMF planned to open 3,000 pizza retail franchise outlets all over the country by 2005. The pizzas would be
made at the retail outlets. The technical training and the recipe for the pizza would be provided by GCMMF. It would
also negotiate with bulk suppliers of vegetables to get these at wholesale rates. These would be provided to the
retailers.” from these lines it is evident that GCMMF wanted to reach a vast number of consumers in the long run.
“Depending on the response in these cities, GCMMF would
decide to introduce its pizzas in other cities in India. The pizzas
were offered in four flavours: plain tomato-onion-capsicum, fruit
pizza (pineapple-topped), mushroom and 'Jain pizzas'(pizzas
without onion or garlic).” From the above lines abridged from
the case study(underlined) we can establish that that surveying
was done to understand customer preferences. The company
might have arrived on these flavors with the assumption that the
consumer might have a pallet for international flavors.
According to a research done in 2009 done in the city of
Mumbai, 77% of people said that they prefer eating branded
pizzas. When they were asked whether they knew that AMUL
was launching veg pizzas ,75% of the total respondents
questioned answered in negative. However when asked whether
they could accept AMUL as a pizza brand, 87% of the people
replied affirmative.
 Q. What Growth was AMUL Expecting in Pizza
selling to contribute its overall growth ?
 AMUL had big goals for their range of pizzas and
predicted that it would do well in the market but the
argument below proves otherwise.
It is true that AMUL had a brand identity and that a vast
number of people of different age groups often consumed
their products. Usually customers associate only certain
products when they think of a brand. Take the company
Amazon for example, when you think of amazon you
assume how we are able to buy different products ranging
from basic necessity goods like toothbrushes to lifestyle
goods like high end smartphones.
But if Amazon were to sell cars it would seem vague and
people wouldn't associate the brand with cars. The same
way, if AMUL launched items like clothes or shoes it
would be hard to accept AMUL as a clothes or shoes
brand and this argument supports AMUL PIZZAS as
well.
So, being able to understand whether customers would
accept AMUL as a pizza brand would have been really
important. As mentioned earlier, about 87% of the people
said that they would accept Amul as pizza brand. So we
can say that there is no problem in the branding of
AMULbut branding is not the only important factor
taken into consideration for a product to be successful.
According to a research done in 2009, when it comes to selection of pizzas
47% of the people said taste of pizza is given the most importance.
However as few reports suggest the taste of the Amul pizzas was not really
appreciable. The pizzas would be made at the retail outlets. The technical
training and the recipe for the pizza would be provided by GCMMF. But
there are possibilities that taste used to differ from time to time and
wouldn’t be appreciated whenever consumed.
 Chief general manager of GCMMF R.S. Sodhi explains, “there was
inconsistency in quality. The crusts were supplied from a centralized
location and consumers manning the outlets were trained to make
pizzas using Amul cheese. The product quality was not always up to the
mark, and, hence the system was discontinued after a year. These
pizzas were prepared in its factories and only need to be thawed and
micro waved before being consumed. Their shelf life was three months.
But, according to Sodhi, "Indians are notoriously biased towards fresh
rather than canned or preserved food. Also, interestingly, most of them
do not have the right kind of oven for thawing and heating food." From
the above lines we can state that the taste and the quality of the product was
not up to the mark and that the potential consumers who do not have the
right kind of ovens to make pizzas eventually would not buy AMUL pizzas.
AMUL used to sell their pizzas at rs.20-25 which proved to be an
advantage for the company. Pizza brands like Dominoes and pizza hut
were always praised for their taste and quality. What if these successful
brands were to reduce their prices lower than that of GCMMF. So
AMUL might have overlooked the threat from Pizza Professionals like
Pizza Hut and Domino’s.
AMUL did not segment market properly and did not have a
differentiated offering for different segments says a report from
2009.This is probably why their pizzas were no different from the ones
offered by other competitors and hence couldn’t find a distinctive place
in the market.
AMUL did have a good business plan, great selling and branding
strategy but their focus was inclined towards profiting off another milk
product and so the company failed to reach its goal and hence didn’t
grow in the long run.
CONCLUSION.
In my opinion AMUL shouldn’t have focused on creating pizza as a product of mass
consumption and to increase the sale of their cheese rather they should’ve focused on
generating a place for pizzas in the market and also what customers preferred the most-
taste, quality, freshness etc. AMUL could have considered adding more localized toppings
and could have catered to the needs of young working population. If this would be achieved
the consumption of cheese would eventually increase and the business would be able to
achieve its organizational goals.

By continuously catering to customer needs and handing out higher quality pizzas
GCMMF will achieve better advantages than their competitors.
BIBLIOGRAPHY.
owww.managementpedia.com

ohttps://amul.com/

ohttp://www.irjmst.com/

owww.business-standard.com

owww.Rediff.com

owww.bbamantra.com