Académique Documents
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On
‘Marketing and Product strategy of Amul’
‘A report submitted as a part of the requirements for the degree of
Master of Business Administration’
SUBMITED BY
Prerita Rawat
A2701409019
Batch 2009-11
Submitted To:-
Professor Pranshu Chomplay
Program Leader
MBA-HM
Submitted By:-
Prerita Rawat
MBA-HM 2nd year
A2701409019
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ACKNOWLEDGEMENT
While presenting this report I would like to express my sincerest thanks to Prof..
Pranshu Chomplay. He was always a constant source of inspiration during the
whole time of project. His valuable feedbacks, guidance & motivation helped me to
accomplish my task.
I would also like to thank every person individually who have devoted their
valuable time and provided valuable inputs for completion of my project.
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GUIDE CERTIFICATE
This is to certify that the Project Report titled “Marketing and Product
Strategy of Amul.” is a bona fide work carried out by Miss. Prerita Rawat of
MBA-Hospitality Management (2009-11) program of Amity School of
Hospitality for fulfillment of MBA-Hospitality Management course of Amity
University, Noida.
Guide:
Date:
Place:
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CONTENTS
1 COMPANY PROFILE
7 MARKETING STRATEGIES OF
AMUL
9 BIBLIOGRAPHY
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COMPANY PROFILE
If Amul has become a successful brand - if, in the trade lingo, it enjoys brand
equity - then it is because we have honoured our contract with consumers for close
to fifty years. If we had failed to do so, then Amul would have been consigned to
the dustbin of history, along with thousands of other brands. For close to fifty years
now, Amul has honoured its contract with the consumer. The contract that is
symbolized by the Amul brand means quality. It means value for money. It means
availability. And it means service."
Amul embarked upon its illustrious journey as a beacon for the Indian cooperative
movement in 1946. Since then, it has been undergoing a multidimensional
evolution whose overarching objective has been the same throughout: serving the
farmer and catering to consumer requirements.
A structural landmark in this evolution process was the formation of the GCMMF
in 1974. Throughout these last 31 years, the company has demonstrated-again and
again-that Amul both represents and reconciles diverse expectations and
aspirations.
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and also serve the interest of consumers by providing quality products, which are
good value for money.
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INTRODUCTION AND HISTORY
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The Brand Name - “AMUL”
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit
"Amoolya," was suggested by a quality control expert in Anand. Variants, all
meaning "priceless", are found in several Indian languages.
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 and Amulya have made
Amul a leading food brand in India. (Turnover: Rs. 29 billion in 2004).
Today “Amul” is a symbol of many things: -
MILK PROCUREMENT
Total milk procurement by Member Unions during the year 2004-05 averaged 2.08
billion litres (7.4 million litres per day). Milk collection (Daily Average 2004-05):
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5.71 million litres, representing a massive growth over 51.13 lakh kilograms (5.1
million kg) per day achieved during 2003-04.
DISTRIBUTION
SALES
During the year, Federation's sales registered a growth of 1.4 percent to reach Rs.
2,922.53 crores (Rs.29.22 billion) including consignment sales of Rs.1.53 crores
(Rs.0.02 billion). Despite intense competition, sales value of Amul Butter grew by
4.5 percent.
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LIST OF PRODUCTS MARKETED
Bread Spreads:
• Amul Butter
• Amul Lite Low Fat Bread spread
• Amul Cooking Butter
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)
• Utterly Delicious Pizza
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• Amul Mithaee Kulfi Mix
• Avsar Ladoos
Pure Ghee:
• Amul Pure Ghee
• Sagar Pure Ghee
• Amul Cow Ghee
Milk Powders:
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• Amul Full Cream Milk Powder
• Amulya Dairy Whitener
• Sagar Skimmed Milk Powder
• Sagar Tea and Coffee Whitener
Fresh Milk:
• Amul Taaza Toned Milk 3% fat
• Amul Gold Full Cream Milk 6% fat
• Amul Shakti Standardized Milk 4.5% fat
• Amul Slim & Trim Double Toned Milk 1.5% fat
• Amul Saathi Skimmed Milk 0% fat
• Amul Cow Milk
Curd Products:
• Yogi Sweetened Flavored Dahi (Dessert)
• Amul Masti Dahi (fresh curd)
• Amul Masti Spiced Butter Milk
• Amul Lassee
•
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• Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza,
Roasted Almond)
• Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh
Strawberry, Black Currant, Santra Mantra, Fresh Pineapple)
• Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae)
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PEOPLE POWER: AMUL'S SECRET OF SUCCESS
The system succeeded mainly because it provides an assured market at
remunerative prices for producers' milk besides acting as a channel to market the
production enhancement package. What's more, it does not disturb the agro-system
of the farmers. It also enables the consumer an access to high quality milk and milk
products. Contrary to the traditional system, when the profit of the business was
cornered by the middlemen, the system ensured that the profit goes to the
participants for their socio-economic upliftment and common good.
Looking back on the path traversed by Amul, the following features make it a
pattern and model for emulation elsewhere.
Amul has been able to:
• Produce an appropriate blend of the policy makers farmers board of
management and the professionals: each group appreciating its rotes and
limitations,
• Bring at the command of the rural milk producers the best of the technology
and harness its fruit for betterment.
• Provide a support system to the milk producers without disturbing their agro-
economic systems
• Plough back the profits, by prudent use of men, material and machines, in the
rural sector for the common good and betterment of the member producers.
• Even though, growing with time and on scale, it has remained with the
smallest producer members. In that sense. Amul is an example par
excellence, of an intervention for rural change.
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The Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the
village societies. Basically the union and cooperation of people brought Amul into
fame i.e. AMUL (ANAND MILK UNION LIMITED), a name which suggest
THE TASTE OF INDIA.
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SWOT ANALYSIS OF AMUL
Strengths
• Wide range of products
• Affordable price
• Effective ad campaign
• Distribution network
• Diversification
• Brand image
Weakness
• Need to focus on other products as well
• Improve on road transport infrastructure
Opportunity
• Export segment good market
• Entry in retailing
• Packaged sweet market
• Sports drink new market
Threats
• Increasing population
• Increasing requirement
• Adulteration
• Difficult to expand
• Population of milch animal
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BCG MATRIX FOR SBU’S OF AMUL
Star
• Amul butter
• tazaaUTH
• Amulya dairy whitener
Question mark
• Chocolate
• Masti dahi
• Lassi
• Mithaimate
Cash cow
• Mozarella chesse
• Amul pizza base
• Tazza fresh milk
Dog
• Infant milk range
• Amul Shakti
• Nutramul
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PEST ANALYSIS OF AMUL
P
• Since the budget range is decontrolled, no political effects are envisaged.
E
• Increasing per capita income resulting in higher disposable income
• Growing middle class/urban population, increase in demand.
• Low cost of production, better penetration.
S
• Per capita consumption expected to increase
• Increasing gifts culture, increase in demand.
• Lower cholesterol than ‘Mithais’ (sweet meat), substitute demand
T
• Will have to reinforce technology to international levels
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SWOT ANALYSIS OF DAIRY INDUSTRY
Strengths-
• Demand profile
• Margins
• Product mix flexibility
• Availability of raw material
Weakness-
• Perishability
• Lack of control over yield
• Procurement logistics
• Problematic distribution
Opportunities-
• Export potential
• Value addition
i) New products
ii) Complete utilisation of resources.
Threats-
• The un-organised sector.
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4 P’S OF MARKETIN G
1) Product:-
Satisfaction suffices. But delight dazzles the average company will compete for
customer by conforming to their expectations consistently. But the winner will
surpass them by constantly exceeding their expectation, delivering to their door
step additional benefits which they would never have imagined possible. The wide
variety of products offered by the company proves the same.
2) Pricing:-
Second P of marketing is not another name for blindly lowering prices and relying
on this strategy alone to increase sales dramatically. The strategy used by Amul is
for matching the value that customer pays to buy the product with the expectation
they have about what the production is worth to them.
AMUL has launched various products which cater to all customer segments. So
every customer segment has different price expectation from the product. Therefore
maximizing the returns involved, identifying right price level for each segment, and
then progressively moving through them.
3) Physical distribution-place:-
In a product and price parity situation, the brand that sells more is the one that
reaches the highest number of customers.
Amul stats read at -
India ± 1 billion people, 155 million household has over 4 million retail outlets in
5351 urban markets and 552725 villages, spread cross 3.28 million sq.
4) Promotion:-
If an advertisement is to communicate effectively, the receiver must at least half
want it to, and be prepared to take step towards the sender. Effective advertising is
rarely hectoring or loudly explicit. It often both attracts and generates warm
feelings. More often than not, a successful campaign has a stronger element of the
unexpected, a quality that goods advertising shares with much worthwhile
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literature. To penetrate into the inner recesses of their memory, communication
must first ensure exposure, grab their attention evoke their comprehension, grab
their acceptance and then extract retention competing with thousands of other units
of communication trying to do the same.
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AMUL’s BEST PRACTICES
Developing demand
At the time Amul was formed, consumers had limited purchasing power, and
modest consumption levels of milk and other dairy products. Thus Amul adopted a
low-cost price strategy to make its products affordable and attractive to consumers
by guaranteeing them value for money.
Beginning with liquid milk, GCMMF enhanced the product mix through the
progressive addition of higher value products while maintaining the desired growth
in existing products.
Despite competition in the high value dairy product segments from firms such as
Hindustan Lever, Nestle and Britannia GCMMF ensures that the product mix and
the sequence in which Amul introduces its products is consistent with the core
philosophy of providing milk at a basic, affordable price.
Amul products are available in over 500,000 retail outlets across India through its
network of over 3,500 distributors. There are 47 depots with dry and cold
warehouses to buffer inventory of the entire range of products.
GCMMF transacts on an advance demand draft basis from its wholesale dealers
instead of the cheque system adopted by other major FMCG companies. This
practice is consistent with GCMMF's philosophy of maintaining cash transactions
throughout the supply chain and it also minimizes dumping.
Wholesale dealers carry inventory that is just adequate to take care of the transit
time from the branch warehouse to their premises. This just-in-time inventory
strategy improves dealers' return on investment (ROI). All GCMMF branches
engage in route scheduling and have dedicated vehicle operations.
Umbrella brand
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The network follows an umbrella branding strategy. Amul is the 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.
Even though the cooperative was formed to bring together farmers, it was
recognised that professional managers and technocrats would be required to
manage the network effectively and make it commercially viable.
Coordination
Given the large number of organisations and entities in the supply chain and
decentralised responsibility for various activities, effective coordination is critical
for efficiency and cost control. GCMMF and the unions play a major role in this
process and jointly achieve the desired degree of control.
Buy-in from the unions is assured as the plans are approved by GCMMF's board.
The board is drawn from the heads of all the unions, and the boards of the unions
comprise of farmers elected through village societies, thereby creating a situation of
interlocking control.
The federation handles the distribution of end products and coordination with
retailers and the dealers. The unions coordinate the supply side activities.
These include monitoring milk collection contractors, the supply of animal feed and
other supplies, provision of veterinary services, and educational activities.
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From the beginning, it was recognised that the unions' core activity lay in milk
processing and the production of dairy products. Accordingly, marketing efforts
(including brand development) were assumed by GCMMF. All other activities
were entrusted to third parties. These include logistics of milk collection,
distribution of dairy products, sale of products through dealers and retail stores,
provision of animal feed, and veterinary services.
It is worth noting that a number of these third parties are not in the organized
sector, and many are not professionally managed with little regard for quality and
service.
In developing these practices, the federation and the unions have adapted successful
models from around the world. It could be the implementation of small group
activities or quality circles at the federation. Or a TQM program at the unions. Or
housekeeping and good accounting practices at the village society level.
More important, the network has been able to regularly roll out improvement
programs across to a large number of members and the implementation rate is
consistently high.
For example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., all
employees of GCMMF meet at the closest office, be it a department or a branch or
a depot to discuss their various quality concerns.
Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL)
with a process check at the end to record how the meeting was conducted. Similar
processes are in place at the village societies, the unions and even at the wholesaler
and C&F agent levels as well.
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implementation of Zero Stock Out through improved availability of products at
depots and also the implementation of Just-in-Time in finance to reduce the float.
Kaizens at the unions have helped improve the quality of milk in terms of acidity
and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly
focussed projects, reliant on a structured approach based on data gathering and
analysis.) For example, Sabar Union's records show a reduction from 2.0% to 0.5%
in the amount of sour milk/curd received at the union.
The most impressive aspect of this large-scale roll out is that improvement
processes are turning the village societies into individual improvement centres.
Few dairies of the world have the wide variety of products produced by the
GCMMF network. Village societies are encouraged through subsidies to install
chilling units. Automation in processing and packaging areas is common, as is
HACCP certification. Amul actively pursues developments in embryo transfer and
cattle breeding in order to improve cattle quality and increases in milk yields.
GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India
to employ Internet technologies to implement B2C commerce.
Today customers can order a variety of products through the Internet and be
assured of timely delivery with cash payment upon receipt.
Farmers now have better access to information on the output as well as support
services while providing a better planning tool to marketing personnel.
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Advertising and Sales Promotion
Over the years, Amul's advertising philosophy had been "to be simple, fresh and
innovative". The clean, emotion-based ads refrained from using hi-tech special
effects, and aimed at maintaining the perfect balance between the traditional and
the modern...
Looking Ahead
The liberalization of the dairy industry in 1991 had seen a number of multinational
players like Britannia, Le Bon, Dabon and Hi-Life enter the sector.
Analysts wondered whether a co-operative with limited financial means could stand
up to the might of these MNCs, and if it’s low pricing strategy would continue to
stay relevant. MNCs like Pizza Hut, Domino's, Hindustan Lever Limited and
Cadbury had also become competitors. Amul had proved its detractors wrong and
firmed up ambitious growth plans...
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MARKETING STRATEGY OF AMUL
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PRODUCT STRATEGY OF ‘AMUL-THE TASTE
OF INDIA’
PRODUCT STRATEGY
• Product Positioning Strategy
• Product Re-Positioning Strategy
• Product Overlap Strategy
• Product Design Strategy
• Product Elimination
• Diversification Strategy
• Value Marketing Strategy
• Product Scope Strategy
• India’s First Pro-Biotic Wellness Ice cream & Sugar Free Delights for
Diabetics.
• Low Priced Amul Ice Creams made Kwality Walls life hell.
Flank Attack.
• 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 26, 2007: Amul Launches “Fresh Paneer” (Free From Any Harmful
Chemicals)
Powdered Milk
Health and price Conscious.
“SAGAR vs. Amulya”.
USP:
Sagar is affordable whitener for health conscious one.
Cheese Spreads
Specific vs. General
“Amul Processed Cheese vs. Cheese Spread”
USP:
Cheese spread is highly accepted spread for regular use.
Milk Drinks
“Nutramul Energy Drink vs. Amul Koo
DIVERSIFICATION STRATEGY
6.
Seeking unfamiliar products or markets or both in the pursuits of growth.
BENEFITS OF DIVERSIFICATION
• High Growth
• Expansion of network
• Advantage of each underlines objectives.
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8. PRODUCT SCOPE STRATEGY
“Perspective of the product mix of a company”
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BIBLIOGRAPHY
1. www.amul.com
2. www.amuldairy.com
3. www.google.com
4. www.marketresearch.com
5. www.dairy.com
6. Research Methodology. ( Harper W.Boyd, C. R. Kothari )
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