AMUL

INTRODUCTION
The Taste of India, a brand so distinctively Indian has been a part of our lives for
nearly five decades now and still is able to touch a chord in our hearts. As a brand
AMUL has grown from being merely a differentiating factor to protect the interests of
producers and consumers. AMUL 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 ooze compared to the flood it has become today. AMUL distributes
over a million liters of milk per day, it also collects and processes various milk
products, during the peak, on behalf of more than a thousand village individually
owned by half a million farmer members. AMUL too has become a symbol of the
aspirations of millions of farmers.

AMUL sprung from the seeds sown in the black soil of CHAROTAR, an area in the
KAIRA district of Gujarat, as a cooperative movement to empower the milk
producers. At that time POLSON Dairy was the biggest buyer of the milk being
produced in KAIRA. Polson was built on the basis of providing superior quality
products to up-market consumers. However Polson’s products were not the reason
that led to the rise of AMUL, it was its exploitative practices that started the
cooperative revolution. For several years the KAIRA cooperative supplied milk and
allied products without a formal distribution network leave alone a brand name. The
name Amul was most probably suggested by a quality control expert in Anand. It was
derived from ”Amulya”, which in Sanskrit, Gujarati and many other Indian languages,
means priceless, and implies matchless excellence. The name was short, memorable
and easily pronounced. It could also serve as an acronym for the organization – the
unusable KDCMPUL (Kaira District Cooperative Milk Producer’s Union Limited)
taken from Kaira Cooperative’s full name, could be substituted by AMUL, standing
for Anand Milk Union Limited. Even though AMUL products have been in use in
millions of homes since 1946, the brand AMUL was registered only in 1957.

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HISTORY
Amul-cooperative registered on 14 December 1946 as a response to the exploitation
of marginal milk producers by traders or agents of the only existing dairy,
the Polson dairy, in the small city distances to deliver milk, which often went sour in
summer, to Polson. The prices of milk were arbitrarily determined. The government
had given monopoly rights to Polson to collect milk from Kaira and supply it to
Bombay city.
Angered by the unfair trade practices, the farmers of Kaira
approached Sardar Vallabhbhai Patel under the leadership of local farmer
leader Tribhuvandas K. Patel. He advised them to form a cooperative and supply milk
directly to the Bombay Milk Scheme instead of Polson (who did the same but gave
them low prices).[8] He sent Morarji Desai to organise the farmers. In 1946, the milk
farmers of the area went on a strike which led to the setting up of the cooperative to
collect and process milk.[7] Milk collection was decentralized, as most producers were
marginal farmers who could deliver, at most, 1–2 litres of milk per day. Cooperatives
were formed for each village, too.
The cooperative was further developed and managed by Dr. Verghese Kurien
with H.M. Dalaya. Dalaya's innovation of making skim milk powder from buffalo
milk (for the first time in the world) and a little later, with Kurien's help, making it on
a commercial scale, led to the first modern dairy of the cooperative at Anand, which
would compete against established players in the market. Kurien's brother-in-law
K.M. Philip sensitized Kurien to the needs of attending to the finer points of
marketing, including the creation and popularization of a brand. This led to the search
for an attractive brand name. In a brainstorming session, a chemist who worked in the
dairy laboratory suggested Amul, which came from the Sanskrit word "amulya",
which means "priceless" and "denoted and symbolised the pride of swadeshi
production.
The trio's (T. K. Patel, Kurien and Dalaya's) success at the cooperative's dairy soon
spread to Anand's neighbourhood in Gujarat. Within a short span, five unions in other
districts – Mehsana, Banaskantha, Baroda, Sabarkantha and Surat – were set up. To
combine forces and expand the market while saving on advertising and avoid
competing against each other, the GCMMF, an apex marketing body of these district
cooperatives, was set up in 1973. The Kaira Union, which had the brand name Amul
with it since 1955, transferred it to GCMMF.
In 1999, it was awarded the "Best of all" Rajiv Gandhi National Quality Award.
Technological developments at Amul have subsequently spread to other parts of
India.
The GCMMF is the largest food products marketing organisation of India. It is the
apex organisation of the dairy cooperatives of Gujarat. It is the exclusive marketing
organisation for products under the brand name of Amul and Sagar. Over the last five

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and a half decades, dairy cooperatives in Gujarat have created an economic network
that links more than 3.1 million village milk products with millions of consumers in
India. Gujarat Cooperative Milk Marketing Federation Ltd.

VISION
 Our Vision is not just to be rated among the top 5 brands of India in Interior
Field, but, more importantly, to strive to attain the leadership position in
makin our people aware to protect & save the nature by using plywood and
related products for their wood work.

MISSION

 Our Mission is to manufacture world class products of outstanding qualities,

providing related services and solutions to our client while utilizing latest
technologies, highest business standard, work ethics Corporate Governance so
we can make every customer SMILE.

OBJECTIVES OF THE COMPANY

The objective of Amul, the dairy cooperative in India, is to spur the White Revolution
in the country and make India the largest producer of milk and milk products in the
world. The cooperative is shared between over 2.8 million dairy producers and the
three-tier Amul Model has increased India's milk production on an incredible scale.

· The White Revolution. The Amul Model was the main contributor to the beginning
of the White Revolution. The revolution led to India becoming the country with the
most milk production in the world. It also helped reduce malpractices carried out by
merchants and milk traders. The White Revolution was a huge contribution to the
alleviation of poverty and famine levels from levels that were dangerously low.
· The Three-Tier Amul Model. The cooperative structure of the Amul Model is three-
tier. The Village Dairy Cooperative Society is affiliated with the District Cooperative
Milk Producers' Union that, in turn, is linked with the State Cooperative Milk
Federation. This structure allows various functions to be delegated across the three
tiers. For example, milk collection is carried out at the Village Dairy Society level,
milk procurement and processing takes place at the District Milk Producers' Union
level and milk and milk products marketing occurs at the State Milk Federation tier.
Designating the functions in such a way avoids the problems of internal competition
and ensures that the economies of scale are achieved.

· Impacts of the Amul Model. This three-tier model has led to India increasing its
production of milk by 40 million metric tonnes. The model has been instrumental in
improving the economy of India. However, it has also introduced on a much bigger
scale, an ingredient that has helped improve the health and nutrition of many within
the country.

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BOARD OF DIRECTORS

Shri Rakesh Agarwal, B. Com (Hons), Managing Director.

Looking after the commercial affairs and adopts the marketing strategies of the
Company. He is an energetic young man and has set up 5 Companies under his
dynamic leadership. He is also a recipient of coveted award of Bharat Udyog
Ratan from the Indian Development and Research Association, New Delhi as well
as Bharatiya Udyog Ratan Award from Achievers Forum, New Delhi. He has also
been adjudged as Brand Ambassador of Corporation Bank, Gandhidham.

Shri Mukesh Agarwal, B. Com, Director.

Looking After Day-To-Day Working And Development Aspect Of the Company.

Shri Alok Agarwal, B. Com (Hons), Managing Director.

Looking After Overseas Purchases Of Raw Materials (Round Timber).

Shri Rajesh Agarwal, B. Com (Hons), Director.

Looking After Day to Day Commercial Affairs i.e. Marketing, Liaisoning In All
Respects.

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 ORGANIZATION STRUCTURE

Small producers of milk in the state of Gujarat established Amul Diary in 1946. This
was a reaction to the inefficient, corrupt monopoly (Polson) in place at that point of
time. The objective was the ensure that the small fragmented milk producers received
the maximum possible remuneration while creating low cost high quality products for
consumers, while eliminating the middlemen. Ensuring availability and providing
great service to both the suppliers and consumers was of great importance as well.

Amul’s Organizational Model

The main challenges to effectively achieving Amul’s vision are

 Highly fragmented, small scale supplier base

 Low income consumers
 Lack of infrastructure
 Milk is a highly perishable good
 Lack of capital
Operating Model
Amul has very effectively aligned its business and operational models to achieve its
vision since its launch.

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Supply Chain
Amul has effectively managed both upstream and downstream partners in establishing
one of the most complex supply chains across the globe. The producers bring milk to
the village cooperatives (foot/bicycle), which is then transported to the unions by
specialised trucks. From the union’s production facility, milk is transported to
wholesale distributors who then transport the milk to retailers in specialised trucks.

All of these processes are outsourced to third party logistics and retail partners to
ensure efficient execution. A stringent verification process and guarantees for the
safety of the milk products are required from channel members before they are on-
boarded to the network.

To the wholesalers and retailers, Amul offers reasonable margins on a high volume
good. It offers support in demand prediction, reducing the potential bullwhip effects
that might arise from inexperienced sales partners. It also offers easy repayment
programs for capital investments in infrastructure (freezers etc) by the retailers.
Organisational Alignment
The heads of the village cooperatives sit on the management of the union at the
district level. The heads of the unions at the district level comprise the governing
board for the federation. This board appoints the chairman of Amul diary. This
strategy has effectively ensured that the management has “skin in the game”.

The incentive structure is also aligned in that it reward suppliers who generate the
most amount of business, which is judged based on a mix of the quality and quantity
of milk supplied.

Increasing the Supply of Milk

As we saw in the e-choupal case, increasing the supply of product leads to better
economies of scale (optimizing sunk costs). To this end, the unions provide various
aids to the milk producers (like cattle-feed, veterinary aid, technical training) obtained
at a low cost due to large scale sourcing, to increase supply. Aids are also aimed at
overall community development.

Bridging Gaps in a Fragmented/Unstable Supply Side Market

Given the fragmented nature of the producers, supply tends to vary based on various
factors, but demand remains fairly constant. The unions have invested in cold storage
facilities to ensure that surpluses can be stored and redistributed to village level
centers that are facing a shortage of supply, efficiently reducing supply instabilities.

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Technology Initiatives
An automatic Milk Collection System was established that could identify and test the
quality/quantity of milk. This leads to time saving since over 1000 producers enter a
village cooperative each day and increased transparency.

Enterprise-wide Integrated Application Systems were used to align various sub

software systems in place. A Geographic Information System was also established to
view supply disparities in real time. Cyber stores have been recently launched as well.

Marketing/Advertising Campaign
One of the most interesting things about Amul is how a dairy cooperative evolved into
a social commentator through their advertisements. The cartoon is usually has the
Amul mascot (Amul Girl) in a current context with a catchy tagline. These ads have
now become an establishment of their own right, elevating Amul’s brand image from
just a diary cooperative to a household name outside the diary products context.

COMPANY LOCATION AND ITS BRANCHES

GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading
House"status. Many of our products are available in USA, Gulf Countries,Singapore,
The Philippines, Japan, China and Australia. GCMMF has received the APEDA
Award from Government of India for Excellence in Dairy Product Exports for the last
16 years. For the year 2009-10, GCMMF has been awarded "Golden Trophy" for its
outstanding export performance and contribution in dairy products sector by APEDA.
In 2013-14, GCMMF took giant strides in expanding its presence in International
markets. Amul’s presence on Global Dairy Trade (GDT) platform in which only the
top six dairy players of the world sell their products, has earned respect and
recognition across the world. By selling milk powders on GDT, GCMMF could not
only realize better prices as per market demand but it also firmly established Amul in
the league of top dairy players in world trade.

For its consistent adherence to quality, customer focus and dependability, GCMMF
has received numerous awards and accolades over the years. It received the Rajiv
Gandhi National Quality Award in1999 in Best of All Category. In 2002 GCMMF
bagged India's Most Respected Company Award instituted by Business World. In
2003, it was awarded the The IMC Ramkrishna Bajaj National Quality Award - 2003
- certificate of merit- for adopting noteworthy quality management practices for
logistics and procurement. GCMMF is the first and only Indian organisation to win
topmost International Dairy Federation Marketing Award for probiotic ice cream
launch in 2007. For the innovations, GCMMF has received AIMA-RK Swamy High
Performance brand award 2013 and CNN-IBN Innovating for better tomorrow award
in 2014. World Dairy Innovation Awards- 2014 for Best Marketing Campaign - "Eat

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 Milk with Every Meal". For the tree plantation activity GCMMF has received seven
consecutive Good Green Governance award from Srishti during 2007 to 2013.

The Amul brand is not only a product, but also a movement. It is in one way, the
representation of the economic freedom of farmers. It has given farmers the courage
to dream. To hope. To live.

GCMMF - An Overview
Year of Establishment 1973

Members 18 District Cooperative Milk Producers' Unions

No. of Producer Members 3.6 Million

No. of Village Societies 18,549

Total Milk handling capacity per day 30 Million litres per day

Milk Collection (Total - 2016-17) 6.44 billion litres

Milk collection (Daily Average 2016-17) 17.65 million litres

Cattlefeed manufacturing Capacity 7800 Mts. per day

Sales Turnover -(2016-17) Rs. 27043 Crores (US $ 4.1 Billion)

Our Member Unions

1. Kaira District Cooperative Milk Producers' Union Ltd., Anand
2. Mehsana District Cooperative Milk Producers' Union Ltd, Mehsana
3. Sabarkantha District Cooperative Milk Producers' Union Ltd., Himatnagar
4. Banaskantha District Cooperative Milk Producers' Union Ltd., Palanpur
5. Surat District Cooperative Milk Producers' Union Ltd., Surat
6. Baroda District Cooperative Milk Producers' Union Ltd., Vadodara
7. Panchmahal District Cooperative Milk Producers' Union Ltd., Godhra
8. Valsad District Cooperative Milk Producers' Union Ltd., Valsad
9. Bharuch District Cooperative Milk Producers' Union Ltd., Bharuch
10.Ahmedabad District Cooperative Milk Producers' Union Ltd.,Ahmedabad
11. Rajkot District Cooperative Milk Producers' Union Ltd., Rajkot
12. Gandhinagar District Cooperative Milk Producers'Union Ltd., Gandhinagar
13. Surendranagar District Cooperative Milk Producers' Union Ltd., Surendranagar
14. Amreli District Cooperative Milk Producers Union Ltd., Amreli
15. Bhavnagar District Cooperative Milk Producers Union Ltd., Bhavnagar
16. Kutch District Cooperative Milk Producers' Union Ltd., Anjar

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17. Junagadh District Cooperative Milk Producers' Union Limited,Junagadh
18. Porbandar District Cooperative Milk Producers’ Union Ltd, Porbandar

ACHIEVEMENTS OF THE DAIRY COOPERATIVES DURING

THE LAST 100 YEARS
During the pre-independence era, public and private agencies dominated the dairy
industry, although government policy did not favour any one organizational form.
Early efforts to organize dairying along cooperative lines were made immediately
after the enactment of the Cooperative Societies Act, 1912. The present day Anand
Pattern dairy cooperatives trace its origin to the establishment of a dairy cooperative
at Anand in 1946 under the direction and guidance of Sardar Vallabhbhai Patel. The
dairy farmers of the then Kheda District of Gujarat organized themselves to form a
dairy cooperative in order to directly undertake sale and processing of milk collected
from member dairy farmers of the district.

The government of India took some steps to improve the quality of milch animals and
their productivity through the Key Village Scheme, launched as part of the First Five-
Year Plan (1951-56) and the Intensive Cattle Development Plan, launched under the
Third Five-Year plan (1961-66). However, in the absence of a stable and
remunerative market for milk, production remained more or less stagnant. During the
two decades between 1951 and 1970, milk production grew by barely 1 per cent
annually, while per capita milk availability declined by an equivalent amount.

During the 1960s, various state governments tried different strategies to develop
dairying, including establishing dairies run by their own departments, setting up cattle
colonies in urban areas, and organizing milk schemes. Almost invariably, dairy
processing plants were built in cities rather than in the milk sheds where milk was
produced. This urban orientation to milk production led to the establishment of cattle
colonies in Mumbai, Calcutta, and Madras. The objective was to meet the demand for
milk and milk products in big cities through improvements in milk collection,
processing, and distribution.

The Operation Flood (OF) programme implemented by the National Dairy

Development Board (NDDB) from 1970 to 1996 played the key role in bringing about
the transformation in dairy development in the country. The OF programme
established milk producers cooperatives in villages and made modern technology
available to them. The broad objectives were to increase milk production ("a flood of
milk"), augment rural incomes, and transfer to milk producers the profits of milk
marketing that were hitherto enjoyed by well-to-do middlemen.

The importance of Operation Flood lies in its focus on small rural producers.
Lucrative alternate employment opportunities are often not available in Indian

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 villages, making dairying an attractive option for many villagers. Low capital
intensity, a short operating cycle, and steady returns make dairying a preferred
activity among marginal (less than one hectare of

land holding) and small farmers (those having 1-2 hectares of land holding), who
make up about 57 per cent of rural households in India. Dairying is feasible even for
the landless, who depend for fodder on common grazing and forest lands. Nearly 70
million Indian households hold a total of 98 million cows and buffaloes. A majority of
milk producers have one or two milch animals, and these small producers account for
some 70 per cent of the milk production. On average, 22.5 percent of the income of
rural households is contributed by milk.

The Operation Flood programme is based on what are known as Anand Pattern dairy
cooperatives, referring to their origin in Anand District in the state of Gujarat. Starting
in 1970, NDDB replicated the Anand Pattern cooperatives through the OF programme
all over India. Under the Anand Pattern structure, individual farmers are joined in
village-level dairy cooperative societies (DCS), which are joined to form district-level
unions, which in turn are joined in state-level marketing federations. In each state, the
Anand Pattern features:

 decentralized milk production by the small milk producers;

 milk procurement by the village-level dairy cooperative societies;
 centralized milk processing by the district-level unions; and
 marketing of milk and milk products by the state-level federation.

The primary milk producers democratically govern this entire federal cooperative
structure to ensure that the higher-tier organizations serve the purpose of the lower
levels and that the gains at all levels flow back to the milk producers in significant
measure. The core feature of the Anand Pattern model is farmer control of the three
stages following production, that is, procurement, processing, and marketing of milk
and milk products.The value added at the procurement and processing stages can be
realized by the cooperatives only through control over marketing, which is therefore
an essential requirement for success. In contrast, many dairy cooperatives worldwide
end up as suppliers of raw material to private companies that own the brands and
control marketing. By cutting out the need for middlemen in procuring and selling
milk, the Anand Pattern cooperatives have helped to reduce seasonal price variations
and have enabled the farmers to enjoy the fruits of their labour instead of surrendering
most of the profit to corrupt and exploitative middlemen.

Consumers too have benefited. In 2003, dairy cooperatives accounted for the major
share of processed liquid milk marketed in India. Milk reaches consumers in 750
towns and cities through the National Milk Grid network. Over the years, brands of
dairy products created by the cooperatives have become known for quality and value.

The achievements of the dairy cooperatives are summarized in the box below.

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 Achievements of the Dairy Cooperatives in India till 2003-04

Reach

 The dairy cooperative network is owned by nearly 12 million farmer members.

 These producers are grouped in nearly 1,08,574 village-level dairy cooperative
societies.
 The societies are grouped in 170 district-level unions spanning 338 districts.
 The unions make up 22 state-level marketing federations.

Milk production

 Indias milk production increased from 21.2 million metric tons in 1968-69 to 88.1
million metric tons in 2003-04.
 Per capita availability of milk increased from 112 grams per day in 1968-69 to 231
grams per day in 2003-04.
 Indias 3.8 percent annual growth of milk production surpasses the 2 per cent growth
in population; the net increase in availability is around 2 per cent per year.

Marketing

 In 2003-04, average daily cooperative milk marketing stood at 14.87 million litres;
annual growth has averaged about 4.2 per cent compounded over the last five years.
 Dairy cooperatives now market milk in about 200 class I cities including metros and
some 550 smaller towns.
 During the last decade, the daily milk supply has increased from 17.5 to 52 litres per
1,000 urban consumers.

Innovation

 Bulk vending saves money and conserves the environment.

 Milk travels as far as 2,200 kilometres to areas of shortage, carried by rail and road
milk tankers.
 India produces 95 per cent of its own dairy equipment, saving valuable foreign
exchange.

Macro impact

 The annual value of Indias milk production amounts to about Rs.880 billion.
 Dairy cooperatives generate employment opportunities for about 12 million farm
families.

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AWARDS

Making of Developed India IT Awards For Digital India

Special Jury citation for Risk Management Award 2018

GCMMF awarded best FMCG in food sector by IAA

BML Munjal Award 2017

Champions of Excellence Award for brand Amul

Amul received ET Iconic Brand Award

CFBP Jamnalal Bajaj Award

GCMMF won Indian Marketing Awards – 2015

Forbes India Leadership Awards 2015

Development Leadership Award 2015

GCMMF received Bronze Trophy at the Indian Marketing Awards – 2014

GCMMF – Finalist in World Beverage Innovation Awards - 2014

GCMMF received APEDA Awards for 16 years continuously

Amul wins World Dairy Innovation Awards - 2014

Amul receives Srishti Good Green Governance award for the year 2013

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GCMMF Receives Prestigious CNN-IBN Innovating for a Better Tomorrow
Award

Amul wins AIMA High Performance Brand Award-2013 for brand Amul

Shri R S Sodhi, MD-GCMMF, receives prestigious QIMPRO GOLD

STANDARD Quality Award 2013

GCMMF wins the SAP Award for Customer Excellence (SAPACE) 2013
under the category of "Best Run Award in Finance"

ET-Corporate Citizen Award of the Year 2010-11 to GCMMF

Amul receives Green Globe Foundation Award

Dr. V.Kurien honoured with Life Time Achievement Award

GCMMF receives Srishti's G-Cube Award - 2010

Amul Bags International Dairy Federation Award

Amul Bags Srishti G-cube Award For Good Green Governance - 2009

Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit

Ramkrishna Bajaj National Quality Award - 2003

Qimpro Gold Standard Award - 2003

Amul - The Taste Of India (GCMMF) Receives International CIO 100 Award
For Resourcefulness

Rajiv Gandhi National Quality Award - 1999

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THE AMUL VIDYA SHREE AWARD
Amul takes immense pleasure in presenting 'The Amul Vidya Shree Award', India's
first of its kind award that recognises and rewards Standard X toppers across India.
The awards are:
* Memento
* Citation
* A Gift hamper of books
* The winner will be featured in one of India's leading newspaper and will get
national recognition.
Terms and Conditions:
* Application for Awards must be made by the Principal of the school as per the
application form.
* To be eligible for the Amul Vidya Shree Award, the student must have passed
Std.10 in the academic year 2010-11 at the State or Central Board Examinations in
any medium and must have scored the highest aggregate marks in the school.
* Online application entries should be done by 20th July 2011
From the entries received, students scoring the highest aggregate marks will be
selected for the Awards.
The decision of GCMMF Ltd., Anand will be final in all matters as regards this
Award.

COMPANY POLICIES

Three things make Gujarat Cooperative Milk Marketing Federation (GCMMF) a very
impressive company.

First, it promotes the Amul brand of milk and milk products. Amul is easily the most
valuable food products brand in India.

Second because GCMMF has made Amul Asia's largest milk brand. GCMMF
accounts for an annual turnover of Rs 18,143 crore (2013-14) and is thus a $3 billion
organisation. The Amul brand, which is also licensed to some member cooperatives –
subject to quality and pricing controls laid down by GCMMF – accounts for a larger
turnover of Rs 25,500 crore ($4.25 billion).

But it is the third reason why GCMMF has actually changed the way farmer-
producers are encouraged, and common consumers' interests are also protected.
Unlike any other company which seeks to purchase cheap and sell the finished
product at a high price, GCMMF does quite the opposite.

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GCMMF seeks to pay the highest price possible to all milk producers who belong to a
milk cooperative. Almost 80% of the money it gets for the milk it sells goes back to
the farmer-producers. At the same time, conscious of the need to remain relevant to
consumers, it tries to offer its products to the markets at the lowest price possible.
Thus, GCMMF manages to meet its processing, marketing and distribution costs
within the remaining 20% of revenues garnered.

To reconcile these seemingly contradictory objectives has compelled GCMMF to

continually hone operational efficiencies, and create new markets. As a result,
GCMMF has become the biggest wealth generator for rural India especially in the
states where it has managed to promote cooperatives.

GCMMF, it may be recalled, was born out of the vision of the founders of the
cooperative movement in India – Verghese Kurien and Seth Tribhovandas Patel. Both
realised that unless the small producer was protected, and his business interests
nurtured, domestic production would falter, and the trader instead would benefit. They
had seen how traders squeezed producers to supply milk to them at the lowest price
possible, and yet managed to ensure that the customer was persuaded to part with the
maximum money.

Kurien also realised that India was destined to become the world's largest producer of
milk – provided multinationals and other large players were kept away, so that their
predatory pricing policies would not hurt the local producer . To protect the

15
producer, Kurien opted for the cooperative model. Today, unlike most private players,
GCMMF does two things that few private players can do: GCMMF maintains prices
for farmer-producers both when the markets are starved of adequate supplies of milk,
as well as when the markets are flush with milk. "The farmer who is part of the Amul
cooperative movement is not allowed to witness a fall in milk prices – even when
there is a glut in the market," says R S Sodhi, managing director, GCMMF. That is
why, GCMMF makes it a point only to purchase milk only from members of a
cooperative registered with it. GCMMF refuses to buy milk from a non-cooperative or
a private individual, and also refuses to sell milk for resale to a private party.

Obviously, this means that as producers enhance their production of milk, GCMMF
has to discover new ways to sell the additional produce in the markets without
incurring a loss. To do that, it has to first extend the shelf life of the milk either by
converting it into milk powder – so that it can be used to make milk during lean
periods of the year – or to make other milk products from yoghurt to ice-cream to
cheese and other delicacies, and then devise a marketing strategy which will make
consumers pick them up.

But the increasing relevance of the Amul model will soon become evident, as it
embarks of an expansion programme that could have far reaching repercussions for
North India. But more on that next week.

COMPETITORS

Competition

1.Britannia Industries
2.Nestle Ltd
3.Mother Dairy
Competitors 4.Local dairies

EMPLOYMENT

Training and Development programme of Amul is an ongoing programme since its inception
as it believes the development of the institution lies in the development of the people –
producer members. It organizes various training programmes based on the need and a few of
these are as follows:

VMS Workshops: This programme aims at to create a document on Vision, Mission and
Strategy for Village Dairy Co-operative Societies. This process has helped to involve and
develop dairy farmers for their future planning and review of the growth thereby improve

16
their income and quality of life.
Milk Day Celebration: This programme aims at bringing
together all members, including Chairman, Management
Committee Members and respective producer members of Dairy
Co-operative Societies to identify and solve their problems. This
programme is attended by the respective Board of Director and
Chairman from the District Union, Internal Consultant of Co-
operative Department of District Union.

Amul Darshan: This programme aims at exposing producer members to various facets of
dairy operations to keep them informed and aware of the development and adopt to good
management practices in production of milk. The exposure visits include visit to Cattle Feed
Plant, Dairy Plant, Chocolate Plant, Dairy Demonstration Farm and presentation by the Co-
operative Development Group.

Management Development Programme: This programme aims

at capacity building of Secretaries of Dairy Co-operative
Societies in better management and maintenance of ISO
standards. For the Management Committee Members it imparts
training on management strategies, co-operative laws and their
roles and responsibilities.

Zonal Meeting: This programme aims at review of internal audit on Quality Management
System and Cleanliness of Dairy Co-operative Societies for continuous improvement. This
helps in knowing achievements and identifying grey areas for improvement.

Village Group Discussion: It aims at encouraging discussion

among dairy farmers on scientific animal husbandry practices
and its application. The discussions are facilitated by the
Internal Consultant of District Union.

Awareness and Refreshers Training: It aims at training of Dairy Co-operative Society

personnel on Quality Management System in order that the ISO is effectively followed.

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 Dairymen Training: This programme aims at building
managerial skills of progressive farmers who have more than
five milch animals to bring more success in their dairy
husbandry.

Development Review: This programme aims at District Union’s review of the

comparative progress of five year programme of Dairy Co-operative Societies and
suggests remedial measures.

Self Managing Leadership Programme: Amul undertakes

Self Managing Leadership Programme for women resource
persons through Brahmakumari Iswariya Vishwa Vidyalaya at
Mt. Abu to bring a value based approach in development
process.

Amul Patrika: It is an in-house Newsletter distributed monthly to producer members to

strengthen their knowledge on scientific animal husbandry practices, quality of milk and
sharing success stories.

Corporate Social Responsibility, The

Amul Way
Corporate social responsibility (CSR) has been defined as the commitment of
business to contribute to sustainable economic development working with employees,
their families, the local community, and society at large to improve their quality of
life, in ways that are both good for business and good for development.
To meet with the CSR it is expected that a business in its entire procurement-
production-processing-marketing chain should focus on human development
involving the producer, the worker, the supplier, the consumer, the civil society, and
the environment.
Indeed, a very tough task. Most businesses would certainly flounder in not being able
to achieve at least one or many of those expectations. But AMUL has shown the way.

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CSR-sensitive Organisational Structure
AMUL is a three tier co-operative organisation. The first tier is the co-operative
society at the village,of which; milk producers are voluntary members, managing the
co-operative through a democratically elected 9-member managing committee, and
doing business by purchasing milk from members and selling it to the district level
co-operative. There are more than 11,000 co-operatives in villages of Gujarat.
The second tier is the district co-operative that processes milk into milk products,
markets locally and sells surplus to the state co-operative for national and
international marketing. There are 12 district co-operatives each being managed by a
15-member board elected by the college comprising the nominated representatives or
chairmen of the village co-operatives.
Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing
Federation (GCMMF) responsible for national and international marketing of milk
and milk products produced and sold to it. The GCMMF is managed by the board
democratically elected by and from amongst the chairmen of the district co-
operatives.
The entire three-tier structure with the GCMMF at its apex, is a unique institution
because it encompasses the entire chain from production of raw material to reaching
the consumer with the end product. Every function involves human intervention:
23.60 lakh primary milk producers; 35,000 rural workmen in more than 11,400
village societies; 12,000 workers in 15 dairy pla-nts; 750 marketing professionals;
10,500 salesmen in distribution network and 600,000 sal-esmen in retail network.
Accu-mulation of human capital is sine qua non for the development and growth of
any enterprise or economy. The GCMMF is sensitive towards CSR. It believes that
technology and capital are replicable inputs but not the human capital. Since men are
the basis for achieving the CSR, the GCMMF lays emp-hasis on their development
into competent, courteous, credible, reliable, responsive communicators and
performers.
CSR-sensitive Business Philosophy
The first step towards discharging the CSR is the business philosophy of the
GCMMF. It is two-fold: one, to serve the interests of milk producers and second, to
provide quality products to consumers as value for money. Evolution of an
organisational system has ensured that the corporate social responsibility towards the

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primary milk producers, village and the ecological balance is fulfilled. The milk
producers are paid for their milk in accordance with market forces and realisation of
value for their produce. Invariably the price paid to the member-producers in Gujarat
is higher by 15 per cent than the national average.
CSR-orientation To Distributors & Retailers
The GCMMF has identified the distributors and retailers are its important link in its
vendor supply chain. Through surveys the GCMMF found that 90% of the distributors
do not get any opportunity of exposure to latest management practices. The GCMMF
realised that it was a corporate social responsibility to strengthen the core business
processes of its distributors so as to keep them in mainstream business and compete
with those with formal training in management. The GCMMF has developed and
trained all its distributors through Value-Mission-Strategy Workshops, competence
building, Amul Yatra, Amul Quality Circle meetings, computerisation, and electronic
commerce activities.
Competency Building Module of the GCMMF is meant to infuse professional selling
skills by making the distributors and their salesmen aware of latest sales management
tools and techniques; enhance their knowledge of products; positioning and
segmentation strategies for various products. Under Amul Yatra the distributors and
their salesmen are taken on a visit to Anand. During this visit they are shown dairy
plants, their upkeep, international standards of hygiene and quality; the practices
adopted for clean milk production, and above all the cooperative philosophy. Through
one to one talk with the farmers, the distributors and salesmen realise AMUL is a
large business of small farmers. The visit leaves an everlasting impression on their
minds that by selling AMUL products, they are discharging a social responsibility
towards a large number of poor farmers whose livelihood depends upon their skill and
integrity. They feel proud that they are participants in development of rural society
and thus in nation building.
Earnings Of GCMMF
Nurturing its primary members - the milk producers - is the first mission of the
GCMMF. Discharge of this responsibility is reflected in the manner in which the
GCMMF conducts its business and shares its earnings. The milk from the village co-
operatives is purchased at an interim price. So as to maximise the earnings of the milk
producers the GCMMF changes the product profile during the fiscal and directs its

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sales and marketing activities towards those products that would bring in maximum
returns. True! Every business organisation follows the same principle. But the
GCMMF follows it with the central interest of the producers. During the fiscal, as the
GCMMF finds that from its earnings it is possible to pay more to the producers for
milk, the final price is declared higher than the interim price being paid. Before the
GCMMF closes its financial accounts the co-operatives are paid price difference, the
amount between the interim price and the final price. Thus profit of the GCMMF is
very low. The net profit (PADT) of the GCMMF during 2003-04 was Rs 7.31 crore
against a turnover of Rs 2,947 crore, a meagre 0.25%. Further out of the net profit of
Rs 7.31 crore, Rs 4 crore was given as share dividend to the co-operatives. To fulfill
its corporate social responsibility towards its milk producers and co-operatives the
GCMMF works on razor thin profits and retention of funds.
CSR-oriented To Staff
The GCMMF hires and trains people to take advantage over its competitors. It has
developed in-house modules for training and competence buil-ding to improve and up
grade of their knowledge; communication skills to understand the customer, be
responsive to customer requirements, and communicate clearly for trouble shooting of
problems. They are expected to be courteous, frie-ndly, respectful, and considerate to
the customer. To improve the credibility and trustworthiness of the managers it is
important they perform consistently and accurately every time and at all times. The
structure of salary and perquisites is altogether different. The first and foremost the
staff must get satisfaction from the job they. They are recognised for their
contribution (Climate Survey) CSR-AMUL WAY
The writer is an officer on special duty, Gujarat Co-operative Milk Marketing
Federation, New Delhi)

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AMUL PRODUCTS
Amul Product focused on bringing more productive products and expanding the
market rapidly. It was founded in 1946. It has a history of over 75 years and its
business has grown tremendously stepping at higher growth and satisfying consumer
needs by giving higher and superior quality of brands. Their brand name including the
features, quality, reasonable price, would help them in growth of rapid sales and
keeping trust of around million of Indians using this product every single day by
marking it as the best and a reasonable product. Amul cares for its huge customers
and tries to offer them the best products at best price.

Amul and its product

It consists of wide ranges of products which are outlined below:

Amul Bread Spreads Range

Amul Beverage Range / Milk Drinks
Amul Powder Milk Range
Amul PRO
Amul Fresh Milk Range
Amul Cheese Range
Amul Cooking Range
Amul Dhai Range
Amul Mithai / Desserts Range
Amul Health Drink
Amul Chocolates
Amul Icecreams
Amul's New Products

Amul Bread Spreads Ranges

Amul has varieties of Bread Spreads ranges and are preferred by many consumers on
a daily basis. These are outlined below.

Amul Butter
Amul Butter is made up of pure milk fat. It consists of 100g, 500g, 50g, 20g, and 8.1g
packing. It can be eaten with bread, paratha, roti, nans, and sandwiches.

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Amul Lite

Amul Lite is a low cholesterol, low calorie and low fat bread spread. It is available in
100g, 500g, and 200g packing. It is been used for topping on parathas, pav-bhaji, and
also for preparation of cakes.

Delicious Table Margarine

Delicious Table Margarine is the substitute of butter. Margarine is prepared from

vegetable oils and fats. It contains zero cholesterol and fortified with vitamin A & D.
100g, 500g, 200g tub & Single serve pack are available.

Amul Beverage Range / Milk Drinks

Amul Kool Milk Shaake

Amul Kool Millk Shaake comes with four awesome flavours which are Banana,
Mango, Strawberry and Badam. The price of this is Rs. 22 for 220 ml can. These are
also sold in tetra pack in three flavours i.e. Mango, Strawberry and Banana. The price
of this is Rs 15 for 180 ml tetra brick. It is rich in nutrients and is the healthiest drink
against any other soft drinks.

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Amul Kool

Amul Kool is very tasty and healthy drink and come with five flavour i.e Kesar,
Elaichi, Rose, Mango, and Strawberry. Available in 200ml Glass Bottle, 200ml Tetra
Pack, 250ml Can, and 1 Litre Tetra Pack.

Amul Kool Café

Amul Kool Café is a tonned milk flavoured with coffee. It is very good and
convenient for parties, picnics, etc. Available in 200ml Glass Bottle, 200ml Tetra
Pack, 250ml Can.

Amul Kool KoKo

Amul Kool Koko is a Chocolate Flavour Milk. Available in 200 ml Glass Bottle, 250
ml Can, 200 ml Tetra pack.

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Nutramul Energy Drink

This is an energy drink and available in 200ml Glass Bottle.

Product in the marketing mix of Amul

Amul has a very very strong product portfolio. Amul product portfolio is comprised
mainly of Dairy products. Amul butter, Amul cheese and Amul ice cream are cash
cows for Amul as they have the major market share in their product category. Amul
ice cream is amongst the top 10 ice cream brands of India.

Amul milk, Amul Paneer and Amul Dahi consumption is on the rise. In fact Amul
milk has 26% of market share in the packaged milk segment. The only
disappointing performance is seen in Amul Chocolates which are a burden for Amul
and lot of push is required for the sales of the same. This is because the chocolate
market has established players like Parle, Dairy milk and others.

The Amul family tree has the following brands – Amul Milk, Amul bread spreads,
Amul Cheese, Amul Milk, Amul kool and its variants, Amul pro, Amul ice cream,
Amul Paneer, Amul Dahi, Amul Ghee, Amul Milk powders, Amul Nutramul, Amul
mithai range, Amul mithai mate, Amul chocolates, Amul butter milk. Thus the
product portfolio of Amul considering its dairy origins is astounding. Amul
has various competitors based on different products. In ice cream it is Vadilal,

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Dinshaws and Havmor. In butter and milk there is mother dairy, Britannia and others.
However, no competitor has such a vast dairy based product portfolio as Amul. This
is the major reason that Amul has a sustainable competitive advantage over its
competitors.

Price in the marketing mix of Amul

Amul has a strategy of low cost pricing. Some may call it penetrative pricing. But
penetrative pricing strategy is used when the market has a high level of competition
and a player wants to establish itself in the market by giving low prices. However, in
the case of Amul, when Amul started, there were no national players and the dairy
market was unorganized. During the introduction stage itself, Amul had a vision to
provide their products to end customers at the best affordable rates. And the same
vision is in place even today.

Today also, you will find that Amul butter, milk and cheese are available at affordable
prices keeping in mind the end customers. You may call these products costly, but the
cost has nothing to do with Amul’s strategy. Remember that transportation costs as
well as storage and distribution costs are very high in FMCG. Thus, as the cost of
transportation, storage and distribution has increased over the years, so has the cost of
Amul products gone up. But considering their value for the average India consumer,
these products are still priced at an affordable rate.

Place in the marketing mix of Amul

Amul has a massive distribution network because its ice creams, milk, butter and
cheese is found practically everywhere. As it is a FMCG product, Amul follows the
methodology of breaking the bulk. The initial factory output is in bulk. Later on this
bulk becomes smaller and smaller and finally one individual slab of butter or scoop of
ice cream is sold at the retail place.

There are two different channels through which Distribution happens in Amul. One is
the procurement channel which is responsible for collection of Milk through dairy co
operatives. The other is the distribution channel which is responsible for distributing
the finalized product to the end customers.

In the procurement channel, the milk is individually delivered from farmers to the co
operatives. The co operatives then collect all this milk and send the bulk to the
manufacturing facility. At the manufacturing facility, the milk is used to manufacture
the finalised products.

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In the distribution channel, there are carrying and forwarding agents,
distributors, dealers and retailers involved. There are also Amul shoppe’s which sell
all products in the Amul product portfolio. The distribution is as follows.

Amul >> Carrying and forwarding agent >> Distributor >> Dealer / Retailer / Amul
Shoppe >> Customer

Amul >> Modern retail

Thus there is a lot of transportation involved for all of Amul’s products. However, the
distribution channel of Amul ensures that the products reach every nook and corner of
India.

Promotions in the marketing mix of Amul

Amul is responsible for one of the most unique and longest running outdoor campaign
as well as one of the most known outdoor advertising characters – The Amul girl. We
would like to take this opportunity to specially thank Mr Eustace fernandes, the
creative brain behind the sweet girl. But we should know by now that the Amul girl is
hardly sweet or cute. She is known to be the most naughty advertising girl ever. Amul
hoardings mainly feature the current news and are used to take a tongue in cheek
viewpoint at current happenings. However, each advertisement hits the nail on the
head.

The promotions of Amul are mainly for butter but for all the other products there is
hardly any promotions. During the launch of products, Amul is known to go ATL and
advertise milk, butter etc. The Smita Patil ad wherein Smita patil is shown as a village
milk collector is one of the most famous ads for Amul. But overall, the main
advertisement is BTL through outdoor, trade promotions, discount schemes and sales
promotions.

The major reason for Amul’s absence in hardcore advertising is that Amul does not
want to give away margins in advertising its products. As per Amul, their
maximum budget for advertising is 1% of the turnover. Above and beyond that will
directly affect the cost of the product. And the major reason for Amuls strong
presence in the market is its excellent quality combined with the affordable price.
Thus, overall promotions will always be low for Amul except for the outdoor
advertising of Amul butter.

This concludes the marketing mix of Amul. The bottom line is that we love that an
Indian brand like Amul has reached such staggering heights and that we are a part of
the time when such a white revolution took place.

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