AMUL: Introduction

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." - Varghese Kurien, Chairman GCMMF The Kaira District Milk Cooperative Union or AMUL in India is an example of how to develop a network of firms in order to overcome the complexities of a large yet fragmented market, by creating value for suppliers as well as the customers. AMUL has led the milk dairy revolution in India that has now emerged as one of the largest milk producers in the world.

AMULs journey towards Excellence

AMULs journey towards excellence is marked by some critical understanding of the business environment in large emerging economies like India. It aimed to provide remunerative returns to farmers and also serves the interest of consumers by providing quality products and value for their money It also changed the supply chain paradigm in order to reduce the cost to the consumer while increasing the return to the supplier. 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. AMUL developed distinct capabilities that would deliver competitive advantage to its operations. This included long term cost containment, world-class deployment of technological resources and R&D, and better leveraging of scarce resources.

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Micro and Macro Environmental Analysis of AMUL

Macro Analysis: PEST Analysis I) Political: Government policies and acts Operation flood and establishment of dairy co-operative in 1970 Delicensing of dairy sector 1991

Subsides Subsides given to Indian Farmers were lower than compared to farmers of developed nations Political Stability Gujarats relatively stable political environment favourable for co-operatives and industries Politicisation Too much political interference in dairy co-operatives

Infrastructure Setting up of institutes IRMA Transport- rail/road Establishment of markets

Budget allocates FDI Policy 100% FDI allowed

Export & Import Duties

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Government cutting down on import duties of milk and milk products(especially butter)

II)

Economic Economic globalization & liberalization The consumption pattern of people has changed and they demand for global products. Due to liberalization the private players are allowed to enter in the market. Competition has been increased. GDP trends have further improvised. India is a developing nation with high GDP growth rate 8-9%. High growth rates imply increase in per capita income of people therefore more consumption of food products WTO & international trade SPS & TBT international price fluctuations (especially for edible oils, milk powder)

III)

Social Lifestyle Food habits Fast food culture Demand for ice creams, cheese etc is very high so Amul came up with the products like Amul cheese spread and ice creams etc Improved per capita income The per capita income of people has increased but still they are price conscious (value for money) and due to that Amul has not increased the price of its products Culture Custom of morning tea Accustomed to milk & milk products Education Literacy level in India is going up at a very high rate and due to that product & safety awareness is increasing between them Demographics composition Amul came up with products for each target market segment. like for youth : Amul cheese spread and Amul Kool, for health conscious people: Amul sugar free icecream, Amul Lite cream etc.

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IV) Technological Automation process technology Transfer of technology Technological development institutes Innovations in cold chain technologies

Micro Analysis: SWOT Analysis I) Strength II) III) Amul- the largest food brand in India. Amul Brand represents high quality and value for money. Highly Diverse Product Mix. Robust Distribution Network. Amul Butter has become generic brand in butter category. World's Largest Pouched Milk Brand.

Weakness Risks of highly complex supply chain system Strong dependency on weak infrastructure Alliance with third parties who do not belong to the organized sector Shorter lifecycle of the product. Demand- supply mismatch as there is no control on milk yield

Opportunities: Diversify product portfolio to enter new product categories and expand existing categories like processed foods, chocolates etc. Doing business though internet- channel. Focus the promotional strategies on certain product such as Amul Gulab jamoon, chocolates etc which are not as popular as other Amul SBUs. Though Amuls hoardings are a huge success, it can penetrate even better in the rural areas by advertising.

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Can tap other mediums of advertising apart from promoting reality shows and hoardings.

IV)

Threat Growing price of milk. In short span there has been an increment by Rs. 7 in price of milk (Rs22- Rs.29) Competitors o Competition from MNCs o Competition from Local Players Both these players arent bound by inherent obligations of co-operatives. Substitutes Counterfeit Products Threat of new entrants o There is low barriers to entry in this segment o This segment enjoys high economies of scale

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Gujarat Co-operative Milk Marketing Federation Limited (GCMMF)

GCMMF (Gujarat Co-operative Milk Marketing Federation Limited) 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. Hence, GCMMF plays a vital role in designing the marketing mix of Amul: Product Introduction of new products and choice of product mix and markets is desgined in order to be consistent with the growth strategy, and synchronous with growth in milk supply. GCMMFs 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, (ii) Maintaining a healthy level of customer base for its base products (low value segment). Promotion and Pricing GCMMF preferred a lower price with emphasis on efficiency in advertising. Place GCMMF also plays a key role in working with the Unions to coordinate the supply of milk and dairy products. Retailing of GCMMFs products takes place through the FMCG retail network in India most of whom are small retailers. Since 1999, started web facilities for wellchain has to service order in this GCMMF has based ordering its customers. A defined supply been developed customers who manner.

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Amul: Product Portfolio

PRODUCT:- Amul has a very wide range of products vast and ever-growing range of 'tasteful' Amul delectables.

Poduct Category

Product Amul Butter Amul Lite Delicious Table Margarine

Bread Spreads

Milk Drinks

Amul cool milk shake o Amul cool o Amul cool caf o Kool coco o Nutramul Energy Drink o Amul cool chocolate milk Amul Kool Flavoured Bottled Milk Amul Kool Flavoured Tetra Pack Amul Masti Spiced Buttermilk Amul Lassee Amul Kool Thandai

Powder milk

Amul Spray Infant Milk Food Amul Instant Full Cream Milk Powder Sagar Skimmed Milk Powder Sagar Tea Coffee Whitener Amulya Dairy Whitener

Fresh milk Amul fresh milk Amul gold milk Amul Taaza Double Toned Milk Amul Lite Slim and Trim Milk

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Amul Fresh Cream Amul Shakti Toned Milk Amul Calci+ Amul Buttermilk

Cheese

Amul Pasteurised Processed Cheese Amul Cheese Spreads Amul Emmental Cheese Amul Pizza Mozzarella Cheese Gouda Cheese

For cooking

Amul / Sagar Pure Ghee Cooking Butter Amul Malai Paneer Utterly Delicious Pizza Mithai Mate Masti Dahi Pro-biotic Dahi

Desserts

Amul Ice Creams Amul Shrikhand Amul Mithaee Gulab Jamuns Amul Chocolates Amul Basundi Amul Yogi Yoghurt

Health Drink

Nutramul Amul Shakti Health Food Drink

Amongst this wide portfolio of Amul, we would concentrate on Amul Bread Spread Category and in that majorly on Amul Butter in this project.

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Segmenting- Targeting- Positioning

Market Segmentation I) Customer Based Segmentation Demographics Age- from 5 yrs 80 yrs. Sex- No bar Income- low to high Occupation-Any sector (not necessary) Education- Lower to higher Psychographics Personality- No discrimination. Life style- a basic normal life to high class living standard. For Example-Amul Liteis for calorie conscious people. Buying Motives- It is generic with butter category, renowned butter available in market, loved by all consumers. II) Industry Based Segmentation Bakery & Confectionaries Pizza retailers Snack retailers Targeting After having a glance on the market segmentation, it has been identified that Amuls bread spread products such as Amul Butter is a family product catering to large market i.e. a mass product. Hence, the targeting strategy applied here is Product specialization i.e. 1 product which is catering to all markets with help of its variants such as Amul Lite, Table Margarine etc.

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Positioning Positioning is the most difficult and a vital action that brand undertakes. And Amul has succeeded in it. Amul Butter which is a flagship product of Amul has created a distinct image for itself in consumers mind. Mental map which is a depiction of co-brand association explicitly associates Amul Butter with following terms:

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Hence, Amul has succeeded in positioning itself as: A mass market player Enjoying the position of market leader through cost leadership and no premium offerings Deliverer of Value: It is one of the few brands which provide value proposition of quality with affordability and ensuring value to both customers and suppliers. Emotional Connect Amul as Taste of India It reinforces Amuls commitment of taking quality food products right down to the rural man, products that the common man otherwise would have never afforded. Adaptive to markets needs It is the brand which understands the latent needs of the market and satisfies them before they urge for it by its constant new product offerings. Example: Amul Lite for calorie conscious, Amul Parlors for youth to ensure their presence.

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Product Life cycle

Product Life Cycle of Bread Spread category Amuls bread spread category is enjoying market presence since, 1990s. Amul Butter is the flagship product of Amul. It is enjoying the state of market leader since its entrance. The major reason for this success is amuls strategy of delivering value at affordable price. Amul Butter has reached maturity stage in its life cycle, but still enjoying 90% market share. The sale is definitely increasing but at a slower pace. And since, the brand awreness is high the advertising expenditure is reduced. On the other hand, Amul Lite and Table Margarine are at its growth stage. These two products are promoted under common brand name of Amul only. And there is no intensive promotional strategies are used to promote the products.

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BCG Matrix
BCG matrix

BCG matrix is a business model through which businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.

Amul Butter falls under Cash Cows category: Low growth , High market share Amul Butter is the flagship product of the brand but now has reached its maturity. Hence, the growth is seen but at a slower pace. Due to its unique positioning Amul Butter is generating cash more than required. As it has become generic name in butter segment the advertising expenditure is reduced.

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Branding
Brand Strategy: Umbrella branding Amul followed the umbrella branding strategy in its advertising. Amul is the common brand name for the companys products across categories- the Amul girl earlier used only for Amul butter is now used for all products under Amul. Brand Elements: 1) Brand Name-AMUL Its unclear whether the name Amul is an acronym of Anand Milk Producers Union Limited or as some reports cite, a version of the Sanskrit word Amoolya, meaning priceless. What is known the Amul brand has consistently won awards on quality, taste and value as well as taking top honors in independent consumer brand surveys.

2) Brand Logo Amul Butter is made up of milk fat; Amul Lite is made up of milk and vegetable fat, whereas Delicious Table Margarine is made up of only vegetable fat. Since it is not a milk product, and Amul brand is associated with milk and milk products, the brand name- Amul is not extended to Delicious Table Margarine. On the packaging of Amul Butter and Amul Lite, brand name Amul is printed in bold letters, however on the packaging of delicious table Margarine Amul logo is given in the corner of package and that too in small font.

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3) Brand Mascot- The moppet who put Amul on India's breakfast table Call her the Friday to Friday star, Round eyed, chubby cheeked, winking from strategically placed hoardings at many traffic lights. She is the Amul moppet everyone loves to love. Amul girl who lends herself so completely to Amul butter was created as a rival to the Polson butter girl in Britain. 4) Tagline: Amul- The Taste Of India 5) Jingle- Utterly Butterly Delicious Amul

Why AMUL is

Following elements make Amul THE BRAND Personality: Simple, Indian Culture: Co-operative, Sharing Self-Image: Proud Indian, Fun Loving Reflection: Value Oriented Relationship: Sociable Physique: Taste, Quality

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Packaging
Amul Butters packaging provides all round advantage to the product due to following reasons: It acts as a self- service medium It acts as a promotional tool, as the Amul Girl on the package and the color combination of red and yellow makes the package very attractive for all age groups. On the informational aspect packaging provides all the necessary information. It communicates effectively the companys brand image.

Package Sizes Earlier Amul Butter was mainly available in 100gm and 500 gm packs. However, market research showed that there was a demand for smaller packs especially in industrial segment. Therefore Amul Butter was made available in Munna packs (small sized) catered to Airlines, Railways.

AMUL Butter Munna Packs

Amul Butter- 100g, 500g, 50g, 20g, 8.1g Amul Lite-100g, 500g, 200g Delicious Table Margarine-100g, 500g, 200g tub and single served pack.

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Elements of Amul Butter- Packaging Quality Labelso Green mark specifies o AGMARK Collaborative Logo o AMUL Brand logo o AMUL Butter logo o AMUL SAGAR Storage conditions Nutritional Content Promotion of current advertisement Manufacturer source Other specifications: o Market Price o Batch Code o Weight o Product shelf life

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Promotion
One of the most Conservative FMCG entities- GCMMF- spends a mere 1% of its turnover on promotions. Amul has written and re-written the rules of the game. Amul Butter is one of the longest run campaigns in the country. The reason Amul topicals are so successful because it doesnt plead the customer to go buy Amul instantly. Instead, Amul captures latest news headlines and showcases them in such a way that the moment we see it, we register it in our brains. The basic aim here is to make butter synonymous to Amul. Next time we go to buy butter, the first brand that will come to the mind is Amul. Amul uses rotational promotion strategy to be in touch with customers throughout. Amul Promotion Strategies:

1) Events o Amul food Festival o Amul Chef of the year contest- creating recepies using Amul s products o Amul Maharani contest 2) Sponsoring Popular TV shows Amul has a tie-up with Star Plus. They sponsor shows which promote talent. o Amul Star Voice of India o Amul Star Voice of India-2 o Amul Chote Ustaad o Amul Star Voice of India Chote Ustaad o Amul Mummy Ke Superstars o Amul Comedy Ka Maha Muqabala o Amul Master Chef 3) Scholarships o Amul Vidya Shree and Amul Vidya Bhushan awards (to X and XII class students respectively) to deserving candidates in 10,000 schools across India. 4) Online -www. Amulgreetings.com

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5) Television Advertisements Story Board of a television add The TVC depicts people at various places, and of different ages, enjoying Amul butter. The Utterly Buttery Girl ( Symbolic of the product) is adding to peoples joy.

6) Print Media Advertisements a) The brand Amul butter also uses advertisements in the print media extensively. b) These are focused on current social or political issues c) They send across the message of i) Reliance ii) Good taste iii) Inevitability of Amul Butter at all occasions 7) Corporate Social Responsibility a) Amul Relief Trust b) Tree Plantation c) Farmers

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8) Movies a) Manthan- The Churning (1976) i) Producers Manthan Has been sponsored by 5,00,000 farmers from Gujarat, constituents of the Gujarat Co-operative Milk Marketing Federation. This was the first time in India that a feature film has been in financed by farmers. The Theme of Manthan is the churning up of the social structure when the milk co-operative movement erodes the power of traditional bosses in a village. ii) Director- Shyam Benegal b) Amul Indian Story i) Banner Gujarat Co-operative ii) Director- Ruth Herediya c) Sardar Feature Film 9) Books a) Milkman from Anand Dr. Kurien- MV Kamath b) The Amul Story By Ruth Herediya

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Pricing

At the time Amul butter had entered market, consumers had low purchasing power and had modest consumption levels for milk and dairy products. Hence, in order to sustain in such market it adopted a low cost pricing strategy to make its product affordable and attractive for consumers by guaranteeing value for money. According to Chandan Kumar (Senior sales Executive for Mumbai Zone)- Amul adopts a basic affordable price to appeal the common masses. Overall the bread spreads category of the brands follows a complete market oriented pricing strategy. Sr. No. Product Pack Size Max. Retail Price Rs. 29.00 Rs. 142.00 Rs. 13.50 Rs. 65.00 Rs. 35.00

1 2 3 4 5

Amul Butter Amul Butter Delicious Table Margarine Delicious Table Margarine Amul Lite Lowfat Breadspread

100g Pack 500g Pack 100g Pack 500g Pack 200g Tub

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Demand forecasting
In order to forecast demand, the brand uses Trend analysis method. In an interview with Chandan Kumar( Senior Sales Executive of Mumbai Zone) they forecast 20% further growth in demand as compared to their previous years actual sales. Demand in bread spread segment is estimated to grow around 8-9% but supply on the other hand grows only between 4-5%. The major reason for no control on supply is the main ingredient for all products is a natural resource. The brand faces demand-supply mismatch in two periods majorly i.e.: Lean Period(Summer Season)- Wherein availability of milk is less but demand for all its major products is high Flush Period (WinterSeason)- Wherein the availability of milk is high but the demand for the products is moderate.

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Distribution
Supply Chain The entire distribution network of Amul is governed via two main channels i.e. upstream and downstream channel. 1) Upstream Channel In this channel milk is procured from farmers to the manufacturing units. In the first step, the milk is taken to the centers by farmers in small quantities. In the second step, the transportation of the milk from co-operatives to the manufacturing units is done via special trucks which are equipped with tankers to carry milk. 2) Downstream Channel It is the distribution part of the supply chain i.e. at this stage the milk is distributed from units to retailers. First leg of transport is from units to company depots. This is done via trucks of 9 and 18 MT as it is economical. The temperature of these trucks is kept between 0-4 deg Celsius. Second leg is from the depot to the Warehouses Distributors. This transport is carried out in insulated 3 and 5 MT TATA 407s here a permanent dispatch plan is prepared where the distributor plans out the quantity of products to be ordered on a particular date. Third leg is the flow of good from Warehouses Distributors to retailers. Amul has installed an ERP system which governs the above mentioned supply chain. For example: there are automatic Milk Collection System units (AMCUS)at village societies to automate milk producers logistics. Amul has also connected its zonal offices, regional offices and members dairies through VSATs for seamless exchange of information. Amul is also using Geographic Information Systems (GIS) for business planning and optimization of collection processes.

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Retailing
Amuls success is aptly because of its strong distribution network via presence of exclusive retail outlets. GCMMF has 42 regional distribution centres, serves over 5,00,000 retail outlets. Amul Parlours operating in more than 1400 towns are direct retail outlets which provide one stop shop experience to customers. These parlours have various formats catering to different products offered by Amul. For Amuls bread spread category there are Amul Preferred Outlets. There are more than 6000 such retail formats running successfully. These stalls have made their presence in high streets, residential areas, Railway Stations, Bus Stations, Educational Institutions and a whole lot of Centres of Excellence. Bread Spreads Distribution Product Amul Butter Type Of retail outlets Kirana Stores, Modern Format Stores, Amul Parlors, Hotels& Restaurants, Railway and Flight Kitchen etc Format Stores, Refrigerated Retail Outlets & Amul Parlours Refrigerated outlets, Amul Parlours, Kirana Stores, Modern Format Stores

Amul Lite Delicious Table Margarine

Amul Cyber Store In order to enjoy the advantage of internet channel, Amul has put forward its first step on Ecommerce way via Amul Cyber store. It avails customers to place order online and enjoy the benefit of home delivery. International Presence Amuls growth rate in international market is around 35%. Amuls bread spread category has also made an active presence felt in International markets such as UAE, Bahrain, Kuwait, Oman, Hong Kong , Shi Lanka, USA, Malaysia, Singapore etc. Amul has tied an agreement with worlds largest retail giant Walmart to sell Amul products on its shelves under the brand name of Amul itself. Amul has 20-25 offshore offices in Dubai. And as per Chandan Kumar Amul would further penetrate in those markets where Indian Population is rising and is maximum.

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Future Strategies
Amul has been extremely doing well in terms of its market approach but Amul Butter has reached its maturity stage and thus saturation level in minds of consumers has reached. At this stage brand can bring in following changes to sustain its position: Product: Flavours in Amul Butter o Amul butter can be bought in flavours such as oregano, garlic, pepper. This would give an additional benefit to consumers. Packaging o Even though quality of packaging has been improved over a period of time, but consumer needs freshness, hence packaging can be revamped with same amul girl but change in colour. o Reusable packs can be used packaging making it convenient for end consumers. Ingredient Branding o Amul butter can be associated with restaurants and fast food joints and adopt ingredient branding strategy. Promotions: Activeness on Social Networking Even though Amul Butter has presence on social networking sites but it isnt active in its approach. Hence, these sites can be made active by engaging consumers on constant basis via games, calling in recipes on these sites instead of Amuls main websites. Further Amuls ads can also be uploaded on the same front. Tap other Medias- Competitors are coming with new and innovative marketing strategies hence, Amul needs to do something besides billboard advertising and sponsorships. It needs to cater to other active Medias. Distribution: Supply chain add-ons must be further strengthened For a company where perishability of its products is very high, strengthening of liquidity and working capital is a must

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