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Introduction
The largest food brand in India and world's Largest Pouched Milk Brand Amul is a brand name managed by Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF).
This name has its origin in the Sanskrit word "Amoolya," (meaning Priceless) and was actually suggested by an employee of Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)
The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India and is the apex organization of the Dairy Cooperatives of Gujarat.
With a turnover of INR 67.11 billion GCMMF has created an economic network that links :
millions of consumers in India and abroad, 2.8 million village milk producers, a cooperative system that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level, further affiliated to 13 District Cooperative Milk Producers Unions at the District level and GCMMF at the State level.
History
Formation of GCMMF
There was exploitation of marginal milk producers by traders or agents of existing dairies in the small town named Anand (in Kaira District of Gujarat) and Polson Dairy . Other problems faced by dairy farmers in Gujrat.
So under the leadership of Tribhuvandas Patel dairy farmers approached Sardar Vallabh Bhai Patel for a solution.
cooperatives were established to organize the marginal milk producers in each of these villages.
The brand Amul was formally registered on December
14th, 1946
Formation of GCMMF
Later on with the help of Dr. Verghese Kurien and Shri H M Dalaya this revolution spread to most of the districts in Gujrat. Thus GCMMF came into being in the year 1973.
Initially, the brand name Amul was with Kaira district dairy cooperative, but later they decided to give it to GCMMF
The father of the White Revolution, Dr. Verghese Kurien and the World Food Prize & the Magsaysay Award winner, is responsible for the grand success of brand Amul.
In a recent survey,
GCMMF ranked amongst the top ten FMCG
Business Model
Objective :
Deliver profitable and equitable returns to a large number of farmers for a long period of time
Additional objective
Develop the supplier over the long term through social change.
Raw milk
Pasteurization
Packaged Milk ->Ice cream and beverages Dried Milk ->Skimmed milk powder
Success depends on
High collection rate of milk
Developing Demand
Consumers- Limited Purchasing power Modest consumption levels of milk Low cost price strategy Products affordable & attractive
Distribution Network
Dry and cold warehouses to buffer inventory Transactions on an advance demand draft
basis
Just-in-time inventory strategy improves
Umbrella brand
Common brand for most product categories
produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk
Avoided inter-union conflicts Opportunity for the union members to
Co-ordination
Large number of organisations and entities in the supply chain GCMMF and the unions play a major role in achieving control Interlocking control - The board is drawn from the heads of all
the unions, and the boards of the unions comprise of farmers elected through village societies
The federation handles the distribution of end products and
Best practices
Small group activities or quality circles at the federation TQM program at the unions Improvement programs across to a large number of members
The Turnaround Farmer s realization that they had to market milk themselves to earn better is what led to the establishment of the Kaira District Cooperative Milk Producers' Union Limited (popularly known as Amul) An assured market proved a great incentive to the milk producers of the district. By the end of 1948, more than 400 farmers joined in more village societies, and the quantity of milk handled by one Union increased from 250 to 5,000 liters a day. Socio-Economic Impact The yearly elections of the management committee and its chairman, by the members, are making the participants aware of their rights and educating them about the democratic process. Voluntary mix of the various ethnic and social groups for common causes and mutual betterment has resulted in eroding many social inequilibria. The rich and the poor, the elite and the ordinary come together to cooperate for a common cause.
Live exposure to various modern technologies and their application in day-to-day life has not only made them aware of these developments but also made it easier for them to adopt these very processes for their own betterment. More than 900 village cooperatives have created jobs for nearly 5000 people in their own villages -- without disturbing the socio-agrosystem -- and thereby the exodus from the rural areas has been arrested to a great extent. Besides, women, who are the major participants, now have a say in the home economy. Initiated Mahila Pashupalan Talim Karyakram for women resource persons of the member unions 48 per cent of the income of the rural household in Kaira District is being derived from dairying. Since dairying is a subsidairy occupation for the majority of the rural population, this income is helping these people not only to liberate themselves from the stronghold of poverty but also to elevate their social status.
CSR sensitive organizational structure the 3 tier model from village societies to state cooperatives ensures accumulation of human capital which in itself leads to development of society and the economy. Amul Relief Trust formed in 2001 by GCMMF under the Chairmanship of Dr. V. Kurien. The Trust reconstructed 6 schools damaged by the 2001 earthquake at a cost of Rs. 41.1 millions in Kutch area.
Ripple Effects
Anand Pattern extended to other districts in Gujarat - Mehsana, Sabarkantha, Banaskantha, Baroda and Surat where farmers easily adopted Amul s gameplan. The Himalayan Cooperative Milk Producers Union Limited (HIMUL) was formed at the foot of the Himalayas in West Bengal in 1973 on the same lines as Amul.It includes both dairy and non-dairy. At a later stage oilseeds, fruit and vegetables, salt, and tree sectors also benefited from it's success.
Institution Building
The National Dairy Development Board (NDDB) was created in 1965, fulfilling the desire of the late Lal Bahadur Shastri - to extend the success of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India. Founded by Dr. Verghese Kurien and Dr. Amrita Patel is the current Chairman of the National Dairy Development Board, Anand. 96000 cooperatives have been integrated by this to date. To promote the development of cooperatives NDDB has set up separate units and works in close association with a number of national level institutions Sabarmati Ashram Gaushala (SAG), Bidaj, Animal Breeding Centre (ABC), Salon, Institute of Rural Management, Anand (IRMA), National Cooperative Dairy Federation of India (NCDFI), Anand and Foundation for Ecological Security (FES), Anand, Mother Diary, Delhi. Institute Of Rural Management formed in 1979 with Swiss Agency for Development Coordination and Govt of Gujarat to develop people through management education.
3)Availability Brand available when and where customers want. Amul has nation s finest distribution network. 4)Service Committed to total quality.
Milk Powders Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener Sweetened Condensed Milk Amul Mithaimate Fresh Milk Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk
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Curd Products
Yogi Sweetened Flavoured Dahi (Dessert) Amul Masti Dahi (fresh curd) Amul Lite Dahi Amul Prolife probiotic Dahi Amul Masti Spiced Butter Milk Amul Lassee
Brown Beverage
Nutramul Malted Milk Food
Malai Kulfi)
Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit
Sundae)
Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies,
Cake Magic)
Milk Drink Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate, Butterscotch) Amul Kool Cafe Amul Kool Koko Health Beverage Amul Shakti White Milk Food
Product Positioning
Placing a product in that part of the market where it will receive a favorable reception compared to competing products. A mass market player, no premium offerings USP Quality with affordability Up against niche players value addition to customers Sheer size and scale of operation New offerings for health conscious and vibrant India
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India s First Pro-Biotic Wellness Ice cream & Sugar Free Delights For Diabetics.
Low Priced Amul Ice Creams made Kwality Walls life hell.
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Flank Attack.. Age Wise.. Aug 25 2007 Amul launches Chocolate milk under brand name of Amul Kool Koko .
This is targeted at teenagers and youths.
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Nov 11, 2007 Amul in Multinational Arena With Snack Launch: Munch Time . Flavors: Masala , Mint and Tomato New Product Activity. Nov 26, 2007 Amul Launches Fresh Paneer (Free From Any Harmful Chemicals) Flank Attack Expanding its Cheese Segment. Current market share 65%.
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Product Repositioning
New Competition Change in consumer preference Wrong original positioning Amul marketed bottled water product named JALDHARA but due to less potential in the market it turned out to be blunder. Now Amul is all set to launch bottled water NARMADA NEER .
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Product Overlap
Situation where company decides to compete against its own brands. Powdered Milk Health and price Conscious SAGAR Vs Amulya . USP: Sagar is affordable whitener for health conscious one.
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Amul Processed Cheese Vs Cheese Spread USP: Cheese spread is highly accepted spread for regular use.
Milk Drinks
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Product Elimination
Product reaches the stage where continued support is no longer justified where performance is falling short of expectations, it is desirable to pull the product out of the market place.
It eliminated JALDHARA a decade ago as Bottled water product do not have potential customers.
100 90 80 70 60
50 40
30 20 10 0 AMULYA AMUL BU ER CHEESE SPREAD MOZARELLA
Defense Strategy
Moving consumers from loose milk to packaged milk and gradually move them up the value chain (tetra pack to beverages, all available under the Amul brand) A sound strategy likely to work. Being exposed to a brand, it is natural for a customer to try more products Improving socio-economic condition of the customer anchors the desire to enhance lifestyle
Segmentation
Wide range of product categories caters to consumers across all market segments. For example, Amul Kool is targeted at children, while teenagers prefer Kool Caf, as it has a cool imagery associated with it. Segmentation is not as easy in curd and low fat products, due to mixed audiences, various culinary applications , eg. ghee, butter and cheese.
In India, the most used spread is ghee, then butter, cheese, low fat butter, margarine, cheese spread and mozzarella cheese.
Targeting
Changing retail environment Striking out on its own, with Amul Outlets or parlors to deliver consumers total brand experience Launched in 2002, there are now 400 Amul parlors across the country, which contributed 3% to the brand s total turnover last year.
High profile locations: Amul parlors are today present on campuses of Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail and railway stations in Gujarat.
Promotion
Given this wide product portfolio, Amul s approach is to promote its brands in a rotational cycle of two to three years. After ice-creams were launched in 1996, the category was re-visited in 1999, in order to improve availability of the product and make it affordable.
The focus shifted to cheese in 2001, Amul Masti Chaas in 2004-05 (sales of Masti dahi grew by 25%), Nutramul and Kool Kafe in 2006 and Amul Koko cold chocolate drink in 2007
Uses a variety of media to communicate Most famous is billboard campaign The endearing polka dressed girl and pun at various issues increased brand s fan following. Below-the-line activity has grown too such as the Amul food festival, which has been held for the last four year between October and December in about 50,000 retail outlets. The Chef Of India promo invites hotel chefs to come up with recipes using as many Amul products as possible, and is conducted at city, state and national level.
Entered in the Guinness Book Of World Records for being the longest running campaign ever.
Amul butter girl is one of the longest run ad campaigns in the country for 43 years.
Digital Advertising
Amul Cyber Store Amul in Social Networking Amul Indulges in Second Life marketing Advergaming
Amul Parlors
Amul Competitors
Butter Britannia Nestle Cheese Britannia Baby Food Nestle Heinz Dairy Whitener Segment Nestle Britannia Ice creams HLL
Amul Competitors
Chocolates & Confectionaries Cadbury Nestle Pizza Pizza Hut Dominos Nirulas Frozen pizza Curd Nestle Mother Dairy Ultra High Treated Milk Nestle Britannia
Amul Competitors
Sweet Condensed milk
Nestle
Cottage Cheese(Paneer)
Britannia
Milk Additives
Cadbury Smithkline Beecham
Flavored Milk
Britannia Nestle
Period of diversification
In 1996, B M Vyas, Managing Director, GCMMF,
commissioned the Indian Market Research Bureau (IMRB) to conduct a consumer survey to identify the products consumers wanted from Amul .Based on the findings, Amul entered into the following areas: ice cream, curd, paneer, cheese, and condensed milk.
In 1997, Amul launched ice creams after Hindustan Lever acquired
Kwality, Milkfood and Dollops. Positioned as the 'Real Ice-cream,' Amul Ice cream was one of the few milk-based ice creams in the market.
In 1999, Amul launched branded yoghurt in India for the first time,
when it test marketed "Masti Dahi" in Ahmedabad first and then introduced it all over the country
market with the launch of "Amul Taaza" in Mumbai. Amul Taaza was non-sweetened, plain, low fat milk. The product was positioned as a lifestyle as well as functional product.
In November 2000, Amul decided to promote mozzarella cheese,
which was used in pizza. The growing demand for mozzarella cheese from pizza making companies like Pizza Hut and Domino's Pizza was expected to give Amul's cheese sale an additional push.
In August 2001, Amul decided to enter the ready-to-eat stuffed
paratha, cheeseburger, cheese and paneer pakoda, and cheese sandwich segments. The products were marketed under the SnowCap brand. The SnowCap brand also included tomato sauce and ketchup.
Why Diversification
With the liberalization of the Indian economy in the early 1990s, and
the subsequent entry of new players, there was a change in lifestyles and the food tastes of people. The new team that took over the management of the GCMMF in the mid-1990s hoped to take advantage of the change.
According to some analysts, this diversification was probably not
entirely demand-driven. Being a cooperative, GCMMF was compelled to buy all the milk that was produced in Gujarat. And with milk production having increased since the mid 1990s, GCMMF had to make use of additional milk, and hence the pressure to make and market more and more processed-milk products.
products in India. It planned to make its products (butter and cheese) a part of the regular diet in most households. Amul launched its new products with the intention of increasing the offtake of its basic milk products, including cheese.
This flurry of launches helped Amul broaden its appeal across all segments. Price was an advantage that Amul enjoyed over its competitors. Amul's products were priced 20-40 % less than those of its competitors. Analysts felt that Amul could price its products low because of the economies of scale it enjoyed.
The pizzas were expected to increase the sale of its cheese. The entry
into the confectioneries market was another avenue for increasing milk consumption
Amul's obsession with keeping down manpower costs and dealer commissions added to the strength . In ice-creams for example, Amul's retail commission in Ahmedabad city was 17.5% which was 10% lower than what competitors offered.
However, all said and done, Amul seemed to be all set to make steady
progress in the coming years with its products having become quite popular in both rural and urban households. Said Vyas, "We've handled liberalization and globalization far better than our transnational rivals. It has made us fitter than ever."
Exports
GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 11 years. Amul export turnover registered a 93 percent increase, over the previous year in 2009. Apart from regular exports of branded, consumer-packed dairy products to the US, Persian Gulf and Far East markets, they exported large quantities of skim and full cream milk powder. Nutramul, Amulya, Mithaimate and Amul paneer were launched in the Gulf countries. New markets like Sri Lanka ,Madagascar, Russia and Saudi Arabia are being developed, building a strong base for the future. Amul dairy plants have now received ISO 9000 and HACCP certification, helping it to obtain the required Export Inspection Agency plant certification for dairy products.
AMUL S Indian desserts are very well liked in countries like Singapore and Malaysia. Amul has list of products marketed to various countries few of its products are Amul butter, Amul cooking butter, Amul cheese spread, Amul pizza cheese, Amul shrikhand, Amul fresh cream etc.
India's largest dairy brand Amul would soon be seen on the shelves of leading international stores like Wal-Mart and Mustafa in Singapore after its successful foray into the United Arab Emirates (UAE).
Amul envisages that the dairy cooperatives of Gujarat will have a group turnover of Rs. 27000 crores by the year 2020. This will be a three-fold increase over its current group turnover of approx. Rs. 9600 crores. Milk production in milk shed area will increase to 231 lakh kg per day (23.1 million kg per day), at an annual growth rate of 4%. Amul will create fresh avenues for growth by tapping the rising demand for new value-added products. Special emphasis will be given to strengthening their presence in the large market for liquid milk, in metropolitan cities. Plan to double to processing capacity of dairy plants to 20.7 million kg per day, by 2020. This would include multi-fold capacity expansion for major product categories including milk powders, Ice-cream, paneer, cheese, ethnic sweets, curd, ghee and other dairy products.
Weakness
Logistics of procurement Competition Short self life of its products Completely dependent on villages for its raw material Salaries offered is less compared to competitors
Opportunities
Value addition Export potential Used internet to sell its products Introduced hybrid products in the market Exploring foreign markets
Threat
Milk vendors, the un-organized sector Strong competition from MNCs Competition from private dairies and local milk suppliers The yield of Indian cattle still much lower than other dairy countries