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INTRODUCTION OF THE INDUSTRY

The collaboration & effort of each member by giving their to another hands as such all
returns distributed amongst themes per share & constitution of society.
India is a big country in which most of people resides below poverty line. Father of nation
“MAHATMA GANDHI JI” is the first man of our country who thought, orates and wrote about
the co-operative system to save the country workers from the economics exploitation.
After independence and his first visit to Russia our first prime minister “PANDIT JAWAHAR
LAL NEHRU” started movement for the upliftment of people by constituting co-operative
societies is based on formal president of U.S.A “MR.ABRAHAM LINCOLN” i.e. by the
people, for the people and of the people.
As the co-operative societies are being constituted by the people after nomination of
members and members of society elects officer bearer themselves under the rules and
regulations of such body by their own thinking, which were based their own requirement &
then all co-operative efforts done by all the people.
The co-operation federation by movement can also known as social revolution .This is the
solid way by which producers of villagers (members) go to directly in managed &
associated way and due to better prices of their produces reimburse to them by which their
uplift & communal harmony rises day by day.
None can raise their finger to that matter dealt by the society worker under the guidance of
rules &regulations constituted by the member & an of them have an opportunity to replace
any office bearer of his society at the time of annual election which is under the act passed
by govt, of India in 1961.
During the last 47 years, a co-operative society of our country has struggled hard to win its
freedom from economic exploitation using the cooperative daring as its weapon .It has
created a formidable business entity .one of that has overcome the toughest challenges
emerging as a recognized player in the international dairy industry .This society is known as
Gujarat cooperative milk marketing federation Ltd.

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INDIAN ICE-CREAM AN OVERVIEW
Ice-cream is a frozen dessert usually made from dairy products, such as milk and cream,
and often combined with fruits or other ingredients and flavors. Most varieties contain
sugar, although some are made with other sweeteners. In some cases, artificial flavorings
and colorings are used in addition to the natural ingredients.
The meaning of ice-cream varies from one country to another. Terms like frozen custard,
frozen yogurt, sorbet, and gelato and so on.

• ICE CREAM INDUSTRY IN INDIA


The ice cream industry in India is in many ways, reflective of overall population distribution.
The country’s population is primarily rural with approximately 65% of the population living in
villages. It is estimated that only 30% of entire market is “organized”.
The Ice-cream industry in India is worth Rs. 2000 crores.
The industry can be divided into branded and unbranded market. The branded market at
present is 100 million liters per annum valued at Rs.800 crores.
In 2008-09, in the branded ice cream market, Amul held the no. one spot with the market
share of 38%, followed by Kwality Walls 14%, Vadilal 12% and Mother Dairy at 8%.
The per capita consumption of ice cream in India is approximately 300m1, as against the
world average of 2.3 liter per annum.
Vanilla, strawberry and chocolate together constitute approximately 60% of the market.

BRIEF HISTORY OF ORGANISATION


Who is unknown with that moppet, which put the branded milk product on India’s breakfast
table? Yes! the amul butter girl which simply said by her baseline “utterly butter delicious
AMUL “the butter of amul which has launched in 1945 by GCMMF became very famous in
1967 amongst the majority of people of India by the help of its advertisement .For 30 odd
years the utterly butterly girl has managed to keep her following intact .so much so that
adds are ready to enter in the gunnies book of world record being the largest campaign
ever.
Today people are very frank with brand name of “AMUL” OF GCM.MF Ltd. Now amul has
completely set up its goodwill in Indian market. The national dairy development board, with
its operation flood programmed, has played a shining role in its growth & development.

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The institute of rural management “ANAND” (Gujarat) as always has contributed to the
prospective building & professionalization of management of co-operative sector.
The advertising agency like ASP bankers like (bank of Baroda, standard bank of India, kaira
district central co-operative bank Itd. insurances, management, Consultants, suppliers
&transport has also given a great help in management.
The great strength of GCMMF Ltd. (AMUL) is member union of cooperatives, the spirit of
co-operative movement & adherence to fundamental principle of the co-operative.
The management of federation elected leaders & office bearers for their valuable guidance,
support& co-operative.
With the support of govt, of India &govt. of Gujarat, today GCMMF Ltd. (AMUL) continued
toward its progress.
Gujarat co-operative milk marketing federation ltd. ANAND India is registered under Gujarat
co-operative Societies act 1961.

INDIAN DAIRY INDUSTRY-FACTS & FIGURE


Beginning in organized milk handling was made in India with the establishment of Military
Dairy Farms. Handling of milk in Co-operative Milk Unions established all over the country
on a small scale in the early stages. Long distance refrigerated rail-transport of milk from
Anand to Bombay since 1945 Pasteurization and bottling of milk on a large scale for
organized distribution was started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi
(1959), World (1961), Madras (1963) etc
Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over
India. These were taken up with the dual object of increasing the national level of milk
consumption and ensuring better returns to the primary milk producer. Their main aim was
to produce more, better and cheaper milk.

• MILK PRODUCTION
India’s milk production increased from 21.2 million MT in 1968 to 88.1 Million MT in 2003-
04. . India is the largest producer of Milk in the World (replacing USA). Per capita
availability of milk presently is 231 grams per day, up from 112 grams per day in 1968-69. .
India’s
3.8 percent annual growth of milk production surpasses the 2 percent growth in population;
the net increase in availability is around 2 per cent per year.

• MARKETING

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In 2004-05, average daily cooperative milk marketing stood at 155 lakh liters; registering a
growth of 4.2 percent over 148.75 lakh liters in 2003-04.. Dairy Cooperatives now market
milk in about 200 class cities including metros and some 550 smaller towns. . During the
last decade, the daily milk supply to each 1,000 urban consumers has increased from 17.5

to 52.0 liters.

• INNOVATION
> Bulk-vending - saving money and the environment. Milk travels as far as 2,200 kilometers
to deficit areas, carried by innovative rail and road milk tankers.NinetyS-five percent of dairy
equipment is produced in India, saving valuable foreign exchange.

• MACRO IMPACT
> The annual value of India’s milk production amounts to about Rs. 880 billion.
> Dairy cooperatives generate employment opportunities for some 12 million farm families.
> Dairy Farming is the single largest contributor to the economy (5% of GDP &13% of
employment)
> Dairy industry represents a huge opportunity being the largest single FMCG Market:
Urban Mkt size Rs 33000 Cores and organized sector Rs 11000 Cores representing a huge
opportunity for conversion and growth

KEY CHALLENGES BEFORE INDIAN DAIRY INDUSTRY ARE AS


FOLLOWS
> Ensuring Quality
> Procurement and efficiencies in supply chain
> Product differentiation and value addition
India’s dairy sector is expected to triple its production in the next 10 years in view of
expanding potential for export to Europe and the West. Moreover with WTO regulations
expected to come into force in coming years all the developed countries which are among
big exporters today have to withdraw the support and subsidy to their domestic milk
products sector. Also India today is the lowest cost producer of per liter of milk in the world,
at 27 cents, compared with the U.S1 63 cent. Also to take advantage of this lowest cost of
milk production and increasing production in the country multinational companies are
planning to expand their activities here. Some of these milk producers have already

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obtained quality standard certificates from the authorities. This will help them in marketing
their products in foreign countries in processed form. The urban market for milk products is
expected to grow at an accelerated pace of around 33% per annum to around Rs.83, 500
crores by year 2010. This growth is going to come from the greater emphasis on the
processed foods sector and also by increase in the conversion of milk into milk products. By
2010, the value of Indian dairy produce is expected to be Rs 10,00,000 million. Presently
the market is valued at around Rs7, 00,000 mn.

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INTRODUCTION

TO

THE ORGANISATION

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Amul: The Origin

GCMMF, known through its popular “desi brand”, Amul.


The mighty Ganges at its origin is but a tiny stream in the Gangotri ranges of the
Himalayas. Similar is the story of Amul which inspired '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. Today Amul collects
processes and distributes over a million liters of milk and milk products per day, during the
peak, on behalf of more than a thousand village cooperatives owned by half a million farmer
members. Further, as Ganga-ma carries the aspirations of generations for moksha, Amul
too has become a symbol of the aspirations of millions of farmers. Creating a pattern of
liberation and self-reliance for every farmer to follow.
The brand name AMUL, from the Sanskrit Amoolya, meaning priceless, was suggested by
a quality control expert in Anand. The first products with the Amul brand name were
launched in 1955. Since then, they have been in use in millions of homes in all parts of
India, and beyond. Today Amul is a symbol of many things: Of high quality products sold at
reasonable prices, of availability, of service.
There is something more, though, that makes the Amul brand special and that something is
the reason for our commitment to quality and value for money. Amul is the brand name of 2
million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat.
This is the heart of Amul, it is what gives strength to Amul, and it is what is so special about
the Amul saga.In the early days of Kaira Union there was no dearth of cynics. Could
‘natives’ handle sophisticated dairy equipment? Could western-style milk products be
processed from buffalo milk? Could a humble farmers’ cooperative market butter and
cheese to sophisticated urban consumers? The Amul team – farmers and professionals –
confounded the cynics by processing a variety of high-grade dairy products, several of them
for the first time from buffalo milk, and marketing them nationally against tough competition.

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Introduction to the Organizations

Gujarat Cooperative Milk Marketing federation Ltd. (GCMMF)

GCMMF, better known through its Amul brand, is India’s largest food product marketing
organization. Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative
movement in India. It is a brand name managed by an apex cooperative organization,
Gujarat Cooperative Milk Marketing Federation Ltd.
(GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat,
India?
AMUL is based in Anand, Gujarat and has been a sterling example of a co- operative
organization’s success in the long term. It is one of the best examples of co-operative
achievement in the developing world. “Anyone who has seen the dairy cooperatives in the
state of Gujarat, especially the highly successful one known as AMUL, will naturally wonder
what combination of influences and incentives is needed to multiply such a model a
thousand times over in developing regions everywhere.” The Amul Pattern has established
itself as a uniquely appropriate model for rural development. Amul has spurred the White
Revolution of India, which has made India the largest producer of milk and milk products in
the world. It is also the world’s biggest vegetarian cheese brand. Amul is the largest food
brand in India and world’s Largest Pouched Milk Brand with an annual turnover of US
$1050 million (2006-07).
Currently Amul has 2.6 million producer members with milk collection average of 3 10.16
million liters per day. Besides India, Amul has entered overseas markets w such as
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 a potential markets being considered include
Sri Lanka. Dr Varghese Kurien, former chairman of the GCMMF, is recognized as the man
behind the success of Amul. On 10 Aug 2006 Parthia Bhatol, chairman of the Banaskantha
Union, was elected 3 chairman of GCMMF.

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INTRODUCTION AND HISTORY

In the year 1946 the first milk union was established, This union was started with £% 250
liters of milk per day. In the year 1955 AMUL was established. !ri the year 1946 the union
was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION. This union
selected the brand name AMUL in 1955. cj The brand name Amul means “AMULYA”. This
word derived form the Sanskrit A word “AMULYA” which means “PRICELESS”. A quality
control expert in Anand had suggested the brand name “AMUL”. Amul products have been
in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul,
Amul Milk i and Amulya have made Amul a leading food brand in India. (The total sale is
Rs. 6 A billion in 2005). Today Amul is a symbol of many things like of the high-quality A
products sold at reasonable prices, of the genesis of a vast cooperative network, i of the
triumph of indigenous technology, of the marketing savvy of a farmers’ A organization. And
have a proven model for dairy development (Generally known A as “ANAND PATTERN”).
In the early 40’s, the main sources of earning for the farmers of Kaira district were farming
and selling of milk. That time there was high demand for milk in Bombay. The main supplier
of the milk was Poison dairy limited, which was a privately owned company and held
monopoly over the supply of milk at Bombay from the Kaira district. This system leads to
exploitation of poor and illiterates’ farmers by the private traders. The traders used to
beside the prices of milk and the farmers were forced to accept it without uttering a single
word. However, when the exploitation became intolerable, the farmers were frustrated.
They collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the
freedom movement. Sardar Patel advised the farmers to sell the milk on their own by
establishing a co-operative union, Instead of supplying milk to private traders. Sardar Patel
sent the farmers to Shri Morarji Desai in order to gain his co-operation and help. Shri Desai
held a meeting at Samarkha village near Anand, on 4th January 1946. He advised the
farmers to form a society for collection of the milk.
These village societies would collect the milk themselves and would decide the prices at
which they can sell the milk. The district union was also form to collect the milk from such
village cooperative societies and to sell them. It was also resolved that the Government
should be asked to buy milk from the union. However, the govt did not seem to help farmers
by any means. It gave the negative response by turning down the demand for the milk. To

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respond to this action of govt., the farmers of Kaira district went on a milk strike. For 15
whole days not a single drop of milk was sold to the traders. As a result the Bombay milk
scheme was severely affected. The milk commissioner of Bombay then visited Anand to
assess the situation. Having seemed the condition, he decided to fulfill the farmers demand.
Thus their cooperative unions were forced at the village and district level to collect and sell
milk on a cooperative basis, without the intervention of Government. Mr. Varghese Kurten
showed main interest in establishing union who was supported by Shri Tribhuvandas Patel
who lead the farmers in forming the Cooperative unions at the village level. The Kaira
district milk producers union was thus established in ANAND and was registered formally
on 14th December 1946. Since farmers sold all the milk in Anand through a co-operative
union, it was commonly resolved to sell the milk under the brand name AMUL.
Initial stage only 250 liters of milk was collected every day. But with the growing awareness
of the benefits of the cooperativeness, the collection of milk increased. Today Amul collect
11 Iakhs liters of milk every day. Since milk was a perishable commodity it becomes difficult
to preserve milk flora longer period. Besides when the milk was to be collected from the far
places, there was a fear of spoiling of milk. To overcome this problem the union thought out
to develop the chilling unit at various junctions, which would collect the milk and could chill
it,
So, as to preserve it for a longer period. Thus, today Amul has more than 150 chilling
centre in various villages. Milk is collected from almost 1073 societies. With the financial
help from UNICEF, assistance from the govt, of New Zealand under the Colombo plan, of
Rs. 50 millions for factory to manufacture milk powder and butter was planned.Dr. Rajendra
Prasad, the president of India laid the foundation on November 15, 1954. Shri Pandit
Jawaharlal Nehru, the prime minister of India declared it open at Amul dairy on November
20, 1955.

GCMMF TODAY

GCMMF is India’s largest food products marketing organization. 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-I 990’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
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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
Syncopate to find out Asia’s top 1000 Brands

Total Quality management:

According to Mr. B M Vyas, Managing Director GCMMF:


“We’re in between the two extremes – the customer and the farmer. Both expect the
maximum intake. In one way, the customer wants to have the best product available at the
lower price.To sustain in the business we have to make sure that we give them what they
want”. As all these require a tight integration in the supply and value chain activities,
GCMMF is able to excel it by educating the farmer and providing him the necessary
guidance on one end and on the other end approaching the consumer with the best product
and understanding the Indian consumer better. The information technology and total quality
management came together to help the GCMMF to gain control on the procurement,
processing and distribution functions.

The TQM Model- GCMMF

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I.T. Initiative:
According to Mr. B M Vyas, Managing Director GCMMF, “Information
Technology is our thrust area from our inception that is because we are marketing the
perishable goods. There is every chance that we may collapse in between if we don’t
understand the market realities and the village farmers. There should be a 24x7 hrs
information flow in between us and the remaining nodes of our supply chain”. The need for
coordinating a highly distributed system was clearly understood. Close coordination has
been the main feature of the value chain.

The GCMMF Value Chain

Enterprise Wide Systems: EIAS and GIS:-

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GCMMF has connected its Zonal Offices, Guwahati Regional Office as well as Member
Dairies, Milk Unions and its own Unit-Mother Dairy through VSAT for seamless exchange of
“Online” information. All Sales Offices, C&F points & Wholesale distributors of GCMMF
have been connected through TCP/IP Internet Mail Account for exchange of information.
In addition to the above, GCMMF is using Geographical Information System (GIS) at its
Head Office and key Marketing Offices. Using the All India Map in GIS. They are in position
to plot zone/depot boundary as well as pointer for zone, depot & distributor locations, which
are superimposed by product-wise sales data. The same is being used for sales &
distribution planning and review. Moreover, GIS is being used for business planning activity
at milk centers and it covers animal census data. This has helped them to know average
milk production and productivity of cows and buffaloes in Gujarat and track the animals and
trend analysis etc. The EIAS customized ERP packages of GCMMF is designed in such a
way that is can be plugged into various points of supply chain,

Managing Complex Supply Chains:-


Here I am going to describe the breakthrough vision that led to the simultaneous
development of the market and supply side through a process of social development and
education at AMUL.
Here I tried my level best to provide some insights into management of very large supply
chains by adapting and integrating a variety of strategies and techniques. This includes
building networks, developing trust & values in the network, developing fair mechanisms for
sharing benefits across the supply chain, coordination for operational effectiveness,
innovation and new technology for gaining competitiveness. It is noteworthy that these
successes were achieved within the framework of a network of cooperatives organized in a
hierarchical manner. There are many lessons in AMUL’s success not only for the
cooperative sector but also for firms who intend to do business in emerging markets.

AMUL’s Journey towards Excellence:-


AMUL’s journey towards excellence is marked by some critical understanding of the
business environment in large emerging economies like India where markets have to be
developed by combining efficiency related initiatives with increasing the base of marginal
suppliers and consumers. The essence of AMUL’s efforts was as follows:

 It combined market and social development in an emerging economy. It recognized


the inter linkages between various environments that governed the lives of marginal
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milk farmers and the unmet needs of consumers. It also changed the supply chain
paradigm in order to reduce the cost to the consumer while increasing the return to
the supplier.
 It realized that in order to achieve their objectives, it had to benefit a large number of
people –both suppliers and consumers. While large scale had the danger of failure
due to poor control and required more resources, it also had the advantage of
creating a momentum that would be necessary to bring more people into the fold and
thereby help more suppliers and consumers.
 It also realized that its goal could only be achieved in the long run and this required
developing values in people and processes that were robust, replicable and
transparent
 It also realized that the cooperative would not be independent and viable in the face
of competition if it were not financially sound. This implied that AMUL had to develop
distinct capabilities that would deliver competitive advantage to its operations. This
would include long term cost containment, world-class deployment of technological
resources and R&D, and better leveraging of scarce resources.

Characteristics of AMUL’s Approach to Excellence

Managerial Elements Implementation


Dimensions Mechanisms

Leadership Charisma, long term vision, Constantly raising the bar,


commitment, promoting a can-do attitude,
trustworthy, selfless gain, strong communication of the vision
managerial style (bordering on to
stubbornness), technocrat, pan-Indian farmers, consumers and the
vision/nationalism, persuasion government

Strategy Farmer Orientation, technology, cost R&D focus, efficient supply


leadership, product variety in later years chain, simultaneous
development of suppliers &

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markets, financing projects
from internal accruals

Organization Network of cooperatives, National Dairy Democratic governance of


Development Board, nature of cooperatives, unique
professional managers composition and role of
board
members of cooperatives,
proactive role of the village
societies division at AMUL
Marketing Gujarat Cooperative Milk Marketing Product mix, pricing, dealer
Federation network, managing supply
and
demand growth,
advertisement

Leadership:

While Kurien Union (or AMUL) had the support of national leaders who were at the forefront
of the Indian independence movement, its local leaders were trained in Gandhi’an
simplicity17 and had their feet rooted firmly amongst people whom they had mobilized – the
poor farmers of Anand. The foremost amongst them was Tribhuvandas Patel18 who had
led the movement for the formation of cooperatives of small and marginal farmers in order
to compete against investor owned enterprises on one hand, and keep bureaucracy away
on the other hand. Tribhuvandas was the first Chairman of the cooperative. His skills lay in
organizing the village producers, in making them believe in the power of cooperation and
their rights towards improvement of human condition. He is remembered as fair and honest
person whose highest sense of accountability to the members of the union laid the
foundation of trust between network members19. Another important aspect of his
remarkable management style was his gentleness and ability to repose trust in people – he
gave complete autonomy to managers of the union and earned complete commitment from
them20. Verghese Kurien21 was one such manager who would, first, shape the destiny of
the Union and then the milk movement throughout the country.
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Kurien emerged as the father of the dairy movement in India. He managed to keep the
government and bureaucrats away from the cooperative22 and gave shape to the modern
structure of the cooperative, worked tirelessly to establish the values of modern economics,
technology and concern for farmers within the cooperative. He interfaced with global
financing agencies to build new projects at AMUL. He worked with the Unions to bring the
best of technology to the plants. He worked with marginal village farmers to create systems
that would increase milk yields. He understood that without meeting the needs of customers
he would not be able to satisfy his obligations to the farmers. In short, Kurien shaped the
destiny of the milk movement in India through NDDB (as it’s Chairman) and particularly at
GCMMF and cooperatives in Gujarat. Several young people left better paying jobs to help
create a dream of making India the milk capital of the world. Kurien had learnt the
persuasive charm of Tribhuvandas through plain speaking and had soon created a cadre of
highly capable managers to whom he had delegated both management as well as
commitment These leaders were created at the village, district and state levels in different
organizations of the network.

K
urien had transformed AMUL from a dream into a major industrial entity – a network of
plants, cooperative societies, research centers, an institute for training future managers
in rural management, secondary services like veterinary/artificial insemination
expertise/feed factory etc. Kurien’s biggest strength lay in his ability to convince people that
the cause of rural farmers was important thus establishing an important shared value.
Subsequently, he could convince the government to replicate the AMUL model in almost all
states of the country.

Strategy:
AMUL’s business strategy is driven by its twin objectives of (i) long-term, sustainable
growth to its member farmers and (ii) value proposition to a large customer base by
providing milk and other dairy products a low price. 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

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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 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.

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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.

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 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
18
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.

Organization:
AMUL is organized as a cooperative of cooperatives (i.e., each village society, a
cooperative in itself, is a member of the AMUL cooperative) thereby deriving the advantage
of scale and uniformity in decision making. The founders of Kaira Union realized that to
fulfill their objectives, a large number of marginal farmers had to benefit from the
cooperative – a network of stakeholders had to be built. And once built, it had to grow so as
to draw more rural poor to undertake dairy farming as a means of livelihood. The network
had to have several layers – the organizational network where the voice of the owners
governed all decisions, a physical network of support services and product delivery process
and a network of small farmers that could deliver the benefit of a large corporation in the
market place. More importantly, a process had to be put in place to build these networks.
Building an organizational network that would represent the farmers and the customers was
the most complicated task. A loose confederation was developed with GCMMF
representing the voice of the customers, the Unions representing the milk processors and
the village societies representing the farmers. Competition in the markets ensured that the
entire network was responding to the requirements of the customers at prices that were
very competitive. The task of ensuring that returns to the farmers was commensurate with
the objectives with which the cooperatives were setup was achieved through representation
of farmers at different levels of decision making throughout the network – the board of
directors of societies, Unions and the Federation comprised farmers themselves. In order to
ensure that most returns from sales went to the producers, the intermediaries had to
operate very effectively and on razor thin margins. This turned out to be a blessing in
disguise – the operations remained very “lean” and started to provide cost based advantage
to the entire network.
AMUL established a group to standardize the process of organizing farmers into village
societies. In addition to establishing the criteria for selecting members, the group had to

19
train the VS to run the cooperative democratically, profitably and with concern for its
members.
This included establishing procedures for milk collection, testing, payment for milk
purchased from member farmers and its subsequent sale to the union, accounting,
ensuring timely collection and dispatch of milk on milk routes established by the union, etc.
The Village Societies Division at AMUL acts as the internal representative of village
societies in their dealings with the Union. Cooperative development programmes at the
village level for educating & training its members have become an important part of the
strategy to build this extensive network.
Milk procurement activity at AMUL comprises development and servicing of village
societies, increasing milk collection, procurement of milk from societies & its transport to the
chilling locations, and resolving problems of farmers and village societies. Their stated
objective is to ensure that producers get maximum benefits. The Village Societies Division
coordinates these activities. Milk collection takes place over a large number of pre-defined
routes according to a precise timetable. The field staff of this division also helps village
societies interface with the Union on various issues ranging from improvement of collection,
resolving disputes, repair of equipments to obtaining financing for purchase of equipment
etc. In addition, they are also responsible for the formation of new societies, which is an
important activity at AMUL.

Marketing:
GCMMF is the marketing arm of the network and manages the physical delivery and
distribution of milk and dairy products from all the Unions to customers. GCMMF is also
responsible for all decisions related to market development and customer management.
These activities, which range from long-term planning to medium-term and short-term
operational decisions are described below.
As mentioned earlier, introduction of new products and choice of product mix and markets
should be consistent with the growth strategy, and synchronous with growth in milk supply.
GCMMF’s demand growth strategy may be characterized by two key elements: (i)
developing markets for its high value products by graduating customer segments from low
value products, and (ii) maintaining a healthy level of customer base for its base products
(low value segment).

20
This strategy often requires GCMMF to allocate sufficient quantity of milk supply to low
value products, thereby sacrificing additional profits that could be generated by converting
the same to high value products.
For example, liquid milk as well as various milk products produced by different Unions are
sold under the same brand name of AMUL. Interestingly, the advertising has centered on
building a common identity (e.g., a happy & healthy “cartoon” AMUL girl) and evoking
national emotion (e.g., the key advertising slogan says “AMUL - The Taste of India”)

Operations:
As mentioned earlier, the strategy, design and practices in AMUL’s network are strongly
driven by the objective of establishing and operating an efficient supply chain from milk
production and procurement to product delivery to customers. Management of this network
is built around two key elements – (a) coordination of the diverse elements of the network
and (b) use of appropriate technology that includes product, process and information
technology and managerial practices and systems. In what follows, we describe various
features of these elements that have contributed to the evolution of an efficient supply
chain.

Coordination for Competitiveness


Robust coordination is one of the key reasons for the success of operations involving such
an extensive network of producers and distributors at GCMMF. Some interesting
mechanisms exist for coordinating the supply chain at GCMMF. These range from ensuring
fair share allocation of benefits to various stakeholders in the chain to coordinated planning
of production and distribution. More importantly, the reason for setting up of this cooperative
is not amiss to any one in this large network organization. Employees, third part service
providers, and distributors are constantly reminded that they work for the farmers and the
entire network strives to provide the best returns to the farmers, the real owners of the
cooperative.

Technology for Effectiveness:


Service to customers required the following: better and newer “products”, “processes” that
would deliver the low cost advantage to the network and “practices” that would ensure high
productivity and delivery of the right product at the right time. Thus technology or
knowledge that was embodied in products, processes, and practices became an important
factor in delivering effectiveness to the network of cooperatives. One distinguishing feature
of AMUL (in comparison with other similar cooperatives globally) is the large variety in their
21
product mix. Producing them not only requires diverse skills but also knowledge of different
types of processes. AMUL dairy led the way in developing many of these products and
establishing the processes for other member Unions.
Equally impressive are the achievements on process technology. While several continuous
innovations to equipment and processes have been done at AMUL, the most significant one
has been the development of processes for using buffalo milk to produce a variety of end
products. Gujarat (and most of India) is a buffalo predominant area. As more farmers joined
the cooperatives, the need to develop a mechanism for storage of increasing quantities of
milk became intense. Moreover, the cooperative was established on the promise that it
would buy any quantity of milk that a member farmer wanted to sell. The need to store milk
in powder form increases as excess milk quantities in winter seasons could then be used in
lean summer seasons. Moreover, demand for liquid milk was not growing along with growth
in milk production. No technology, however, existed worldwide to produce powder from
buffalo milk. Engineers at AMUL successfully developed a commercially viable process for
the same – first time in the history of global diary industry. Subsequently, it also developed
a process for making baby food out of this milk powder. It has also developed a unique
process for making good quality cheese out of buffalo milk thereby converting a perceived
liability into a source of comparative advantage – the task was done through process
technology research. Most of its plants are state of art and automated. Similar efforts in the
area of “embryo transfer technology” have helped create a high yield breed of cattle in the
country. AMUL’s innovations in the areas of energy conservation and recovery have also
contributed to reduction in cost of its operations. AMUL also indigenously developed a low
cost process for providing long shelf life to many of its perishable products.

Growth and Challenges:


AMUL’s growth during the past five decades has been fuelled primarily by growth in milk
supply with corresponding pricing strategy to generate demand. This growth has been
sustained by a two-pronged strategy – (a) growth in the number of member farmers by
widening its coverage with more village societies and increasing the membership in each
society, and (b) growth in per capita milk supply from its members.
This growth is achieved by increasing milk yields and by helping members raise their
investments in cattle. It is worth noting that AMUL has funded these support activities from
its earnings (instead of repatriating them to the members either as dividends or with a
higher procurement price). It is expected that AMUL’s growth in the immediate future will

22
continue to rely on this strategy. However, in the new emerging environment, several
challenges have become apparent and AMUL network needs to evolve proactive
mechanisms to counter these threats.
First, competitors are cutting into milk supply by offering marginally higher procurement
prices thereby challenging the practice of provision of services for long-term growth in lieu
of higher prices in the short-term.
Second, for a section of its membership, dairy activity is a stepping-stone for upward
mobility in the society.
Typically, such members move on to other occupations after raising their economic position
through milk production. As a result, AMUL is unable to realize the full benefits of its long-
term strategy, and finds new members (mostly marginal farmers) to replace those who have
higher potential and capacity.
By progressively increasing the share of higher value products AMUL has been able to
grow at a faster rate than the growth in milk supply.
A part of AMUL’s growth has come from diversification into other agri-products such as
Vegetable oils, instant foods etc. In some of these initiatives AMUL adapted its successful
Cooperative organization structure, but the experience to date has been somewhat mixed.
More recently, the network is exploring conventional joint venture arrangements with
suitable partners for diversification into areas such as fast food and speciality chocolates.
While it is too early to assess the success of these ventures, challenges involved are
becoming quite visible.
For example, diversification has resulted in expansion of the network with disparate
elements, each motivated by their own objectives. This in turn has led to a lack of focus
within the network and dilution in the commonality of purpose. These developments are
likely to have serious implications for coordination and control in the network. More
important, shared vision and common goal was one of the main planks of AMUL’s growth
during the past 50 years, and its dilution is likely to adversely impact the network
performance

GCMMF: An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products
marketing organization. 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.

23
Members: 13 district cooperative milk
producers' Union
No. of Producer Members: 2.6 million
No. of Village Societies: 12,792
Total Milk handling capacity: 10.16 million liters per day
Milk collection (Total - 2006-07):
2.38 billion liters
Milk collection (Daily Average 2006-
07): 6.5 million liters
Milk Drying Capacity: 594 metric Tons per day
Cattle feed manufacturing Capacity:
2640 Mts per day

GCMMF AWARDS

 GCMMF bags APEDA Award for 11th year in a row.

 AMUL pro-Biotic Ice-Cream gets No. I Award at the World Dairy Summit.

 Ramakrishna Bajaj National Quality Award - 2003

 AMUL-The Taste of India (GCMMF) receives International ClO 100 Award for
resourcefulness.
 Rajiv Gandhi National Award - 1999

PRODUCT PORTFOLIO

1. Bread spreads
• Amul Butter
24
• Amul Lite Low Fat Bread Spread
• Amul Cooking Butter

2. Cheese Range
• Amul pasteurized processed Cheddar Cheese
• Amul Processed cheese Spread
• Amul Pizza (mozzarella) cheese
• Amul Shredded pizza Cheese
• Amul Emmental Cheese
• Amul Gouda Cheese
• Amul Malai Paneer (Cottage Cheese)

3. Mithaee Range
• Amul shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)
• Amul Amrakhand
• Amul Mithaee Gulab Jamub Mix
• Amul mithaee Kulfi Mix
• Amul Avsar Ladoos

4. UHT Milk Range


• Amul Shakti 3% Fat Milk
• Amul Taaza 1.5% Fat Milk
• Amul Gold 4.5% Fat Milk
• Amul Lite Slim-n-Trim Milk 0% Fat Milk
• Amul Shakti Toned Milk
• Amul Fresh Cream
• Amul Snowcap Softy Mix

5. Infant Milk Rang


• Amul Infant Milk Formula 1(0-6 months)
• Amul Infant Milk Formula 2(6 months)
• Amul spray Infant Milk Food

6. Milk Powders
• Amul Full Cream Milk Powder

25
• Amulya Dairy Whitener
• Sagar Skimmed Milk Powder
• Sagar Tea & Coffee Whitener
• Amul Saathi Skimmed Milk 0% Fat
• Amul Cow Milk
• Amul Pure Ghee
• Yogi Sweetened Flavored Dahi (Dessert)
• Amul Masti Dahi (Fresh Curd)
• Amul Masti Spiced Butter Milk
• Amul Lassee

7. Milk Drink
• Amul Kool Flavored
• Amul Kool Café

8. Health Beverage
• Amul Shakti White Milk Food

9. Chocolate & Confectionery


Amul Milk Chocolate
Amul Fruit & Nut Chocolate

10. Amul lce-Cream


• Royal Treat Range (Butter Scotch, Rajbhog, Malai Kulfi)
• Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond)
• Nature’s Treat (Aiphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black
Currant, Santra Mantra,
Fresh Pineapple)
• Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae)
• Assorted Treat (Choc-bar, Dollies, Frostik, Ice Candies, Tricone, Chocó crunch, Megabite,
Cassata)
• Utterly Delicious (Vanilla, Strawberry, Chocolate, Chocó chips, Cake Magic)
• Pro-Biotic

26
GCMMF TURNOVER

Sales Turnover Rs. (million) US $ (in millions)


1994-95 111.40 `355
1995-96 137.90 400
1996-97 155.40 450
1997-98 188.40 455
1998-99 221.92 493
1999-00 221.85 493
2000-01 225.88 500
2001-02 233.65 500
2002-03 274.57 575
2003-04 289.41 616
2004-05 292.25 672
2005-06 377.36 850
2006-07 427.78 1050
2007-08 525.54 1325
2008-09 609 1875

VALUE-ADDED PRODUCTS

Amul had humble, yet solid beginnings. From milk alone, the portfolio had expanded to
include some very marketing-intensive products. Amul commissioned IMRB to do a study
on what products the customers expected from its stable. Butter and ghee were the old
success stories. Flavored mild under the brand name ‘Kool’ has also been accepted as a
success story. Over time, Amul expects to collect sufficient data to validate the same. Says
R S Sodhi, “We have been trying to figure out how we can dispose of the milk procured. Its

27
52 lakh liters a day, so how does one maximize returns on it? Hence the foray into value-
added products.” Amul outlined its advantages as follows:
1. Cost-effective production, including primarily, procurement of milk from over two million
dairy farmers, which in turn, assures poor farmers reasonable prices.
2. Climbing up in the value-chain by diversifying in value-added products, such as milk
sweets, ice creams, pizzas, confectioneries, truly as a food company, rather than merely
selling milk, to be known only as an organized milk-vendor.
3. Sustained building of loyalty of customers, not by promoting individual products, but all
products under the umbrella of its premium brand, Amul, by investing a good 40 per cent of
its ad budget towards brand promotion.
4. Facilitating reach to customers throughout the country by a strong chain of distribution
outlets (Amul reached out to five lakh retail outlets and had 2,600 distributors under its fold,
and a well-established cold chain). The investment in relationship with business partners:
both farmer-based co-operatives and distribution networks for purchasing and selling
functions respectively, enables Amul enter into any food category without much time or
investment.

The key categories were chocolates, ice creams, soups and retail initiatives.

1. CHOCOLATES:
GCMMF, which had been lying low for a while with its generic chocolate variants such as
Fruit & Nut and Milk, intended segmenting its chocolates, catering to different age groups
and categories that were likely to consume its brand. Sanjay K. Panigrahi, General
Manager, GCMMF, said, “We intended to take advantage of our already existing cold chain
to get more active in the growing market of molded chocolates and confectionery.” Having
launched an occasion-related sub-brand of Nuts ‘bout U on the eve of Valentine’s Day and
Kite Bite for the kite flying festival in Ahmedabad, Amul decided to segment the market with
brands catering to the `impulse’ and `teen’ segments, as well as having brands catering to
different occasions.

2. ICE-CREAMS:
For its ice-cream and milk business, GCMMF had invested in increasing its milk capacity. It
firmed up plans to invest Rs 100-120 crore to expand this from 1.1 million liters a day to 1.8
million liter a day at its Gandhinagar factory. The cooperative also planned to expand its
production facilities beyond Gujarat to service other regions in India. GCMMF bought an
ice-cream manufacturing unit in Nagpur and installed a dairy unit alongside. Through this
28
unit, Amul extended its milk supply to over 10 cities spread over Rajasthan, Madhya
Pradesh and Maharashtra.
Amul also focused on its supply system. Efforts were on to ensure greater availability of
Amul ice-cream at pushcarts and small outlets. The company felt that availability was the
most important factor in ice cream sales. Thus, Amul ice-cream could be found in ‘just
around the corner shops,’ local STD booths, local kirana shops, chemists and bakers, who
stocked the ice-cream in deep freezers.
Both Amul and Hindustan Lever’s (HLL) Kwality Walls claimed to be the largest selling ice-
cream brands in India. While HLL quoted a market research study by AC Nielson, which put
Kwality Walls at the No 1 spot, an independent study by Ahmedabad-based Consumer
Education and Research Society (CERS) ranked Amul as No 1, followed by Kwality Walls
(among four brands including Vadilal and four loose samples) on various parameters of
taste, melting quality, weight, fat and sugar content.
Amul ice-cream was positioned as ‘real ice-cream’ made from real milk cream, while HLL’s
Kwality Walls was made from vegetable oil and its items were dubbed Frozen Deserts.
There was also stiff competition from the other cooperative, NDDB in the form of Mother
Dairy Ice Creams. Amul sold its Ice Cream in New Delhi, India’s biggest Ice Cream market,
where its anti-compete agreement with Mother Dairy had expired. Amul had been sourcing
its entire Ice Cream requirement for the northern market (including Delhi) from its
Gandhinagar plant.

3. SOUPS:
Amul introduced ready-to-use (just pour and heat) soups branded ‘Masti’ in tetra packs of
one liter. To begin with they were introduced in two flavors - Hot ‘n’ Sour and Tomato. Said
Sodhi, “It was a test marketing drive in Gujarat and in a month or two it would be introduced
all over India.” And there wasn’t much competition for there were not many companies in
India that sold ready-to-use soups.
Sodhi added, “Soup is a milk product and that’s a secret. You will come to know only when
you consume it.” Keeping the ingredients a closely guarded secret, the company stated that
one of the reasons to launch soups was to utilize the already installed equipment for tetra
packaging.

4. RETAILING:
The retailing initiative included not only milk booths, but also restaurants. Amul had also
taken the initiative to set up 100 of its own brand retail parlors under the name ‘Utterly

29
Delicious’, an initiative which would give it a retail edge, compared to its competitors such
as HLL and Cadbury. Panigrahi estimated Rs. 100 crore in turnover in the three years after
launching the `Utterly Delicious’ parlors. As an extension of this retail initiative, Amul also
test-launched a restaurant chain under the Utterly Delicious brand at Vashi in Navi Mumbai.
Amul wanted to open more of such eateries in Mumbai soon, which would dish out ready-
to-eat stuff like parathas, lassi, buttermilk, sandwiches and pizzas, using ingredients from
Amul and also vending the products already available under the Amul franchise like soups,
butter, ghee etc;

DISTRIBUTION NETWORK
GCMMF already has a wide retail distribution network, which market its other milk products
such as cheese and butter. Hence distribution reach the single most important factor in
creating a critical mass is already available. Distribution expansion in emerging markets of
Small Towns continued to be a major initiative of our Federation during this year. Almost
500 new Distributors were inducted as Channel partner—mostly in Small towns. At the
same time, to cope up with the fast emergence of organized Retail in India, suitable
Distribution model was developed during the year for servicing Modern format stores. Along
with the changes in ‘consumption occasions’, distribution was expanded to Highways,
Railways, Airports, Bus Stations, Schools, Colleges, Industrial Canteens etc.
Our Amul Yatra Program ensures that our Distributors visit Anand, thereby, imbibing
an appreciation of cooperative philosophy and culture as well as operational systems and
processes. Top retailers of the Country also participate in Amul Yatra. So far, 2779
Distributors, 1654 salesman, and 1490 top retailers have participated in Amul Yatra.
During this year of 80 key decision makers of top Modern format stores from various Metros
have also participated.
The company has gone national during FY01 with setting up proper infrastructure
facilities of cold storage for eastern markets. It has also tied up with various regional dairy
cooperative like Mother Dairy (DELHI) for northern market, Mother Dairy (BANGLORE) for
the southern market; and the Patna Dairy Project for increasing its reach. The company
presently is said to be in talk with cooperative Dairies in Ujjain and Lucknow for its
operations in northern and eastern market. The company also launched a number of
flavours during the year and response to HLL’s Max it launched its Fundoo range of ice
creams in price category of Rs 1 onwards.

30
SALES
During the year, sales of our Federation registered a growth of 29% to reach Rs. 3773.55
crores (Rs. 37.74 billion) including consignment sales of Rs. 39.42 crores (Rs. 0.39 billion).
This is a very robust growth rate shown by our Federation vis-à-vis the industry average. I
am pleased to note that our federation has done remarkably well in most of the value added
consumer packs. Sales of Amul Milk in pouches increased by 31%. UHT Milk has grown in
value terms by 12% with 60% market share. Amul Ice cream achieved a sales value growth
of 18%, and has strengthened its position as the undisputed market leaders with 35%
market share. Sales of Masti Dahi grew by 25%. The sales of the Amul Cheese range is
increased by 18%. Products like Amul Masti Spiced Buttermilk, Flavoured Milk, Amul Fresh
Ice cream, Paneer and Mithaimate demonstrated their potential to become dominant
brands in the coming few years. New products like Amul Basundi, Stamina, Yogi Flavoured
Yoghurt, Kool Café etc. launched during the year are expected to do well in the current year
while diversifying our portfolio of offerings the consumer

DISTRIBUTION NETWORK CHART

Head OFFICE

ZONAL OFFICE

31
DEPOT

DISTRIBUTORS

RETAILERS

END USER

32
BREADTH OF GCMMF LTD. (AMUL) PRODUCTS

The federation produces different type of branded milk and milk product with the co-
operation of various member unions.
The products are as follows:
• AMUL Butter
• AMUL mithaimate
• AMUL Lite bread
• AMUL Infant Milk food
• AMULKOOL
• AMULTAZA Milk
• AMUL Dairy whitener
• AMUL Instant full cream milk powder
• AMUL Fresh milk
• AMUL spray infant milk powder
• AMUL Cheese powder
• AMULEmmental cheese
• AMULPasteurised processed cheese
• AMUL Shakti
• AMULshrikhand
• AMULMithaigulabjamun
• AMUL Ice cream
• AMUL and SAGAR Brand pure ghee
• AMUL Chocolates
• AMUL Malaipaneer
• AMUL FRESH Curd

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EXPORT

GCMMF LTD (AMUL) regular export branded consumer pack dairy product together to
U.S.Persian gulf & Fareast market .The federation has exported large quantities of full &
skimmed cream milk powder, natramulya, amuly amithai made and Amul paneer.
New market like Madagascar, Russia and Saudi Arabia are being developed building on
strong base future.
The federation has won the APPEDA award for the Excellence in exports. The major export
market is given below:
• U.S.A
• ZAMBIA
• RUSSIA
• IRAQ
• KU WAIT
• U.A.E.
• SAUDIARABIA
• MUSCAT
• NEPAL
• SRILANKA
• BANGLADESH
• TANZANIA
• UGANDA
• SINGAPORE
• QATAR

34
GCMMF MEMBER UNION

 AMUL DAIRY,ANAND

 SABAR DAIRY, HIMMATNAGAR

 BARODA DMRY,BARODA

 PANCHMAHALDAIRY,GODHRA

 RAJKOT DAIRY,RAJKOT

 DUGDHDHARA DAIRY,BHARUCH

 MOTHER DAIRY,GANDHINAGAR

 UTTAM DAIRY,AHEMEDABAD

 DUGHSAGAR,MEHSANA

 BANAS DAIRY,PALANPUR

 SUMUL DAIRY,SURAT

 VASUNDHARA DAIRY,VALSA

FUTURE PLANNING OF GCMMF LTD.(AMUL)

Gujarat co-operative milk marketing federation ltd. (AMUL) will be a outstanding marketing
organization, with specialization in a marketing Of fresh and long life food and dairy
products. With Costumer focus & information technology integration.

The network would consists of over 100 offices, Seven thousand & five hundred (4000
urban & 3500 rural ) stockiest covering at a last every district headquarters town, serving
nearly 10 lakh outlets With a turnover of Rs.10,000 crores and serving several co-operation
operatives.
GCMMF LTD. (AMUL) shall also create market for its products in its neighboring countries.

35
RESEARCH METHODOLGY

The system of collecting data for research projects is known as Research Methodology.
The data may be collected for either Theoretical or Practical Research

RESEARCH DESIGN
The report is conclusive one. I visited the place of Jaipur and contacted retailers and
customers.
The efforts were to inculcate a variety of outlets so as to evince the deep information
and facts regarding the market mechanism and customer perception about Amul Ice-cream
available in the market.
FIELD WORK
1. ROUTE RIDING
I spent the time in market for collecting the information about the various product of the
company at different retail outlets and knowing the opinion of the retailers and as well as
customers.
2. DATA COLLECTION
I covered the different outlets in Jaipur. Interactions with dealers and the retailers
provide me experience, knowledge. It also helped me to get information regarding customer
choice and the taste.
It helped me out in making my report assessing the Market share of Amul Ice-cream
in comparison to other Ice-cream in jaipur and also about their taste and preferences and
what should be done to overcome those problems.
3. DIRECT INVOLVEMENT
I helped me in knowing the problems of the retailers and market which helped the
company to know its strengths and weaknesses.

RESEARCH INSTRUMENTS
(a) Observation :- Careful observation of the outlets were done where Amul
Ice-cream is being sold along with other companies questions were asked
from retailers why they prefer to sell other companies in the same segment
36
where Amul Ice cream is already as everyone knows the good quality and
brand image of Amul.

(b) Questionnaire:- Structure non disguised questionnaire and structured


disguised questions has been asked from the respondents to collect
information about company products and their performance level.

3.1 TITLE OF THE STUDY


“Analysis the working and establish the Market for the Brand Amul Ice-cream”

3.2 DURATION OF THE PROJECT


45 Days

3.3 OBJECTIVE OF THE STUDY

The sales team at Amul assigned me the project market share of Amul Ice-cream in
comparison to other Ice cream in Jaipur with the following broad objectives:-
1. To collect the information about the sugar free ice cream
2. To know awareness of people towards Amul Sugar free Ice cream among the customers
in Jaipur.
3. To know in which segment ice cream are mostly like/preferred.
4. To know the preference of Amul Sugar free ice cream with comparison to other
competitive brands.
5. To collect detailed information about the price, supply or any required improvement
towards the AMUL Prolife & Sugar free ice cream.
6. To determine the awareness level of variants of Amul Ice-cream among the customers in
Jaipur.

3.4 Types of research:


Historical Research Design - The purpose is to collect, verify, synthesize evidence to
establish facts that defend or refute your hypothesis. It uses primary sources, secondary

37
sources, and lots of qualitative data sources such as logs, diaries, official records, reports,
etc. The limitation is that the sources must be both authentic and valid.
Case and Field Research Design - Also called ethnographic research, it uses direct
observation to give a complete snapshot of a case that is being studied. It is useful when
not much is known about a phenomenon. Uses few subjects.
Descriptive or Survey Research Design - It attempts to describe and explain conditions
of the present by using many subjects and questionnaires to fully describe a phenomenon.
Survey research design /survey methodology is one of the most popular for
dissertation research. There are many advantages.
Correlation or Prospective Research Design - It attempts to explore relationships to
make predictions. It uses one set of subjects with two or more variables for each.
Causal Comparative or Ex Post Facto Research Design - This research design attempts
to explore cause and affect relationships where causes already exist and cannot be
manipulated. It uses what already exists and looks backward to explain why.
Developmental or Time Series Research Design - Data are collected at certain points in
time going forward. There is an emphasis on time patterns and longitudinal growth or
change.
Experimental Research Design - This design is most appropriate in controlled settings
such as laboratories. The design assumes random assignment of subjects and random
assignment to groups (E and C). It attempts to explore cause and affect relationships where
causes can be manipulated to produce different kinds of effects. Because of the
requirement of random assignment, this design can be difficult to execute in the real world
(non laboratory) setting.
Quasi Experimental Research Design - This research design approximates the
experimental design but does not have a control group. There is more error possible in the
results.

3.5 SAMPLING SIZE AND METHOD OF SELECTING SAMPLE


SAMPLING
Sampling method is used to know the opinion of the customer regarding Amul Ice-
cream and what are the changes they want in the product.
SAMPLE SIZE
A sample size of 100 individuals was determined on a random basis, which existed
in the Jaipur. So that sample size is large to get the right information with less error. As
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error is inversely proportional to N (size of sample) and this is not so large that any
distortion comes in conclusion due to some fault of miscommunication.

METHOD OF SELECTING SAMPL


PRIMARY DATA
(a) Direct integration with retailers.
(b) Integration with company distributors and personnel.
(c) Integration with the various customers.
SECONDARY DATA
(a) From the company website, brochures of various products available in the market.
(b) From the competitors website.
(c) From various newspaper and magazines.

3.6 SCOPE OF THE STUDY


The scope of the study is for improving AMUL’S market share in ice cream ingredients and
binding customers loyalty by providing best quality to the customer as well as retailers and
also providing best distribution channel as well as possible.

3.6 LIMITATION OF THE STUDY


1) Wide area of Jaipur had to be covered in short span of 45 days.
2) Some of the individuals were very apprehensive about responding.
3) Some respondents could not provide any time for the survey because of their busy
schedules.
4) Biasness is the most serious limitation although measures have been taken to
reduce the biasness.
The survey conducted reveals that though there is an excellent image of Gujarat
Co-operative Milk Marketing Federation (AMUL) in market & among the customers.
The time spent at Gujarat Co-operative Milk Marketing Federation (AMUL) office,
provide me an insight into the corporate world functioning. This opportunity enabled me
to learn basics of marketing skills. Also this has been an excellent exposure to the
corporate world and has helped me sharpen my skills and knowledge of business
environment. This project report is prepared after thorough analysis and in intended to
be conclusive and comprehensive.

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The learning of this project would go a long way in my future assignments which I would
undertake.

FACTS AND FINDINGS

1) In the consumer survey it came out that 96% people are aware of Amul Ice-cream.
So almost every person is aware about Amul Ice-cream.
2) The two most important media of spreading awareness about Amul Ice-cream are
television and wall paintings.
3) Only 37% of people prefer to buy Cup ice-cream rest of them prefer to buy cone ice-
cream.
4) Market share of Amul Ice-cream is less than its competitor Vadilal. In consumer
survey it came out that from all the customers of Amul Ice-cream only half of them
are there loyal customers, remaining prefer to buy Amul Ice-cream along with Vadilal
& other brands.
5) Amul Ice-cream reaches to the customers mostly by the retailers, than by the road
side vendors.
6) Most of the customers know about the good taste and quality of Amul Ice-cream as it
is shown in analysis that 66% of customers repurchase Amul Ice-cream.
7) Customers rate Amul Ice-cream as good quality Ice-cream
8) About pricing of Amul Ice-cream most of the customers say that it is
Average.
.9) Some customers also have complaints about the availability of amul
Ice-cream.

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ANALYSIS & INTERPRETATION

ICE-CREAM
TOTAL NO OF BRAND: FIVE
> Amul
> Vadilal
> Cream bell
> Mother dairy
> Havmor

MOST PREFERRED: AMUL


At country level:
In 2008-09, in the branded ice cream market, Amul held the no. one spot, with the market
share of 38%, followed by kwality waIls 14%, vadilal 12% and mother diary at 8%.
On the basis of questionnaire used I found following fact...
• Quality of AMUL ice-cream is very good.
• All the products of AMUL are health concise.
• Company provides innovation in products every year.
• Amul ice-cream is most preferred in the area surveyed though vadilal ice-cream is no. 1
with market share followed by Amul ice cream.

CARRYING BRANDS IN JAIPUR


a) AMUL 25%
b) VADILAL28%
c) CREAM BELL 20%
d) SARAS 15%
e) OTHERS 12%
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PRODUCTS SALE IN MARKET
a) FAMILY PACKS 27%
b) CUP&CONE22%
c) BARS 18%
d) OTHERS 33%

Robust Supply chain


2. The vast and complex supply chain hierarchical network of cooperatives stretches from
small suppliers to large
Fragmented market
3. Low Cost Stagey
4. Amul adopted a low cost strategy to make it’s products affordable.
5. Diverse Product Mil
6. Amul ice-cream. Milk power, cheese, ghee. chocolotes.naturalml
7. Strong Distribution Network
8. Amul product is available over 500 000 retail outlets across India

1. Income group in the surveyed area —

Less than 5000 15


5000 – 10000 40
10000 – 15000 30
15000 & above 15

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IncomeGroup

15 15
Lessthen 5000
5000-1000
10000-15000
30
40 15000 & above

Interpretation:-
• From the survey it analyzed that minor group of people are below income
slab of 10,000.
• People residing in the surveyed area will be segmented according to there
income slab.

2. Do you heard about AMUL ICE CREAM?


Yes 85
No 15

Awareness

15%

Yes
No

85%

Interpretation:-

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• This survey shows that-
1. Amul awareness is dominant in the surveyed area.
2. Due to the dominancy distributors having the wider scope in the market
place.

3. If, yes then how you come to know about AMUL ICE-CREAM?

Hoarding 20
Television 35
Wall painting 10
Newspapers 25
Household Survey 10

Media spreading awareness about Amul Ice-cream

KnowledgeSources
40

30

20

10

0
Hordings T.V Wall Printings News Paper House Hold
Servey

Knowledge Sources

Interpretation:-

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• Television is showing the higher rate of awareness medium for the concerned
product.
• As household survey is not successful for spreading the awareness into the
consumer so company has to keep the checkpoint in this medium.
• Hoarding, Wall painting & newspaper are also the good way of advertising.

4. What type of ICE CREAM do you prefer?

80
Cone Ice Cream

Cup Ice Cream 20

ProductLikingStatus

20

80

Cone Cup

Interpretation:-

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• Market potential is good for Ice-cream but the consumption of cup ice-
cream is less than cone ice-cream.
• Reason for this cause due to the untimely distribution of Cup ice cream as
consumer is having the mind set that the Cone ice-cream, so company has
to do some awareness programmed regarding this issue.

5. Ice-cream which brand you buy earlier?

AMUL 30

VADILAL 40

ANY OTHER 30

BrandKnowledge

30 30

40

Amul Vadilal Others

Interpretation:-

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• Performance wise Amul is in the 2nd position which desalts; it can give better
competitive edge to Vadilal.
• In between of Vadilal & Amul there is minute difference of 45. Which is not a
big issue for the Amul?

6. Do you buy AMUL Ice-cream only?

Amul 60

Along with Vadilal & any other 40

LOYAL customers of AMUL Ice-cream

CustomerLoyalty

40

60

Amul Alongwith Vadilal & any other

Interpretation:-

• This graph shows the loyalty for Amul which is a good sign for the company.
For these loyal customers companies role get increased for these existing
customers. like (offers, coupons, etc)
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7. Where do you buy Amul Ice-cream?

Retail outlet 80

Home delivery 5

Road side vendor 15

Point of purchase

Pointof Purchase

15
5 Retail Outlet
Home Delivery
Road Side Vendor
80

Interpretation:-

• The delivery of the Amul Ice-cream is through home delivery boy is very less,
so distributors have to increase this number so that they can capture more
numbers.

SWOT ANALYSIS

Strengths
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•. Largest food brand in India
•• High Quality, Low Price
•:• World’s Largest Pouched Milk Brand
•• Annual turnover of US $1504 million
•• Highly Diverse Product Mix
•• Robust Distribution Network
•• Only brand that provide pure milk based products.

Weaknesses
> Risks of highly complex supply chain system
> Strong dependency on weak infrastructure
> Alliance with third parties who do not belong to the organized sector

Opportunities
 Penetrate international markets

 Diversify product portfolio to enter new product categories and expand existing
categories like processed foods, chocolates etc.
 Growth of fast food culture in India.

 Market share of ice creams is growing at the rate of 18% per year.

Threats
• Competitors - Hindustan Lever (kwality), vadilal, cream bell.
• Still competition from local brand in ice cream.
• Growing price of milk and milk products
• MNC’S competition in foreign countries.
• Heavy advertising and sales promotion schemes by FMCG companies.

CONCLUSION

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• This survey was done to assess the market share of Amul Ice-cream among the
customer at various places in Jaipur, so that company can follow the weak points of
its policies and make efforts to rectify them in future to increase its market share.

• Due to improper services & lack of availability most of shopkeepers and consumers
are reluctant to deal with Amul.

• Less margin as compared to other companies, is also one of the prominent factor
that retailer don’t want to take Amul.

• Due to low promotional schemes consumers don’t want to buy Amul Ice-cream.

• The quality of Amul Ice-cream is good and brand image is also very good but due to
poor services and availability it becomes useless.

• Bad promotional policies of Amul, mostly people do not recall advertisement of


Amul, people don’t know about full range of Amul products.

• Mostly distributors deals with the retailers who are not enough capable of handling
the situation and due to this retailers gets away from brand.

• Most of customers don’t prefer to buy Amul Ice-cream because of its higher price
than its major competitors.

RECOMMENDATIONS & SUGGESTIONS

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• In order to maintain and increase market share of Amul Ice-cream in the city of
Jaipur, the following recommendations regarding distribution and promotional policies
are hereby suggested.

• First and the foremost action is that Amul should improve its service and availability.

• Margins should be tailor made; it should be dependent on the sales of particular


outlet.

• Amul should do more for the new outlet and for exclusive Amul Parlors. Amul can
insist retailers to do home delivery.

• Amul should give some local advertisement and it should mention exclusive Amul
retailer of the city.

• The company’s personnel should head the distributor because the retailers believe
in company and not the distributor.

• There should be more distributors for proper supply of products.

• Company should replace the damage product as soon as possible because this
problem is very common in all shopkeepers

APPENDIX

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Guidelines to respondent: The questions are close ended in nature. Each question
is followed by few options. Mark ( ) the option which best suits you. These are not
correct or incorrect answers. Your response will keep completely confidential and it
will used only for the purpose of completion of the project.
1. NAME –
2. ADDRESS--
3. INCOME GROUP--
a) Less then 5000 b) 5000 – 10000 c) 10000-15000 d) 15000 & above
4. Do u heard about Amul Ice-cream?
a) YES b) NO
5. If, yes how you come to know about Amul Ice-cream?
a) Hoarding b) Television c) Wall painting d) Newspapers
e) Household survey
6. What type of Ice-cream do you buy?
a) Cone Ice-cream b) Cup Ice-cream
c) Family Pack d) Bars
7. If Cup Ice-cream then which of the brand you were buying earlier?
a) AMUL b) VADILAL c) OTHERS

8. Do you buy Amul Cone Ice-cream only?


a) Yes b) Along with {(I) PARAG (II) OTHER}
9. Where do you buy Amul Ice-Cream?
a) Retail outlets b) Home delivery boy c) Road side vendors
10. Have you repurchase Amul Ice-cream?
a) Yes b) No
11. Why do you buy Amul Ice-cream?

Criteria Excellent Good Average Poor


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Quality
Price
Brand Image
Services
Availability

12. Any suggestions you want to give about Amul Ice-cream?


…………………………………………………………………………………………
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……………………………

BIBLIOGRAPHY
.
 Philip Kotler Marketing Management

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 Donald R Cooper & Pamela S Schindler` The McGraw-Hill Business research
methods

Net:-
• www.amul.com
• www.amuldairy.com
• wwwamul.coop

• www.indiatimes.com
Magazines:-
• Business Today

• Business World

Newspaper:
• Times of India

• Economic Times

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