Food processing industry- a comparative study between Amul and Mother Dairy

(First draft)

Anushka Bondal
Tybms a
Roll no 6634

Page | 1

Food processing industry- a comparative study between Amul and Mother Dairy
Table of contents
Chapter one1.1 Executive summary
1.2 introduction
1.3 objectives of study
1.4 rationale of study
1.5 research methodology
1.6 Hypothesis
Chapter two2.1 company profile
2.1.1 Amul India
2.1.2 Mother Dairy
2.2 quality control
2.2.1 Amul India
2.2.2 Mother Dairy
2.3 Product Portfolio
2.3.1 at Amul India
2.3.2 at Mother Dairy
Chapter three3.1 comparison of selling prepositions
3.1.1 Product
3.1.2 Price
3.1.3 Place
3.1.4 Promotion
Chapter four4.1 Swot Analysis
4.2 CSR Activities
4.2.1 Amul India
Page | 2

4.2.2 Mother Dairy

Chapter fiveAnalysis and Hypothesis Testing
Chapter six6.1 Conclusion
6.2 Recommendations and Suggestions
Annexure:
Blank questionnaire

Page | 3

Chapter One
1.1 Executive Summary
Introduction to the project in terms of objectives of the study, company policies,
company profiles which have been selected to be compared and about the product.
Target companies: Amul India and Mother Dairy.
This research project is based on the food processing industry with a focus on the way
the target companies Amul and Mother Dairy work. The objective of the paper is to
do a comparative analysis of Mother Dairy & Amul products. The paper contains a
brief introduction of Mother Dairy limited & GCMMF limited and its various
products. This paper clearly mentions objectives of study and research methodology
utilized. The sources of information are both of primary data and secondary data. The
data collection method used is structured non disguised questionnaire in which the
types of questions used are multiple choice etc. The project contains a detailed view
of the tasks, which have been undertaken to analyse the market of Mother Dairy &
Amul products. A set of questionnaire has been prepared to know perceptions and
preferences of the customers about dairy products and how they rate them.

Page | 4

1.2 introduction
Food processing industry
The Indian food industry is ready for huge growth, increasing its contribution in world
food trade every year. In India, the food sector has emerged as a high-profit sector on
the back of the scope it offers for value addition, particularly with the food processing
industry getting recognised as a high-priority area.
Accounting for about 32 per cent of the countrys total food market, the food
processing industry is one of the largest industries in India and is ranked fifth in terms
of production, consumption, export and expected growth.
Food processing is the transformation of raw ingredients, by physical or chemical
means into food, or of food into other forms. Food processing combines raw food
ingredients to produce marketable food products that can be easily prepared and
served by the consumer. Food processing typically involves activities such as
mincing, liquefaction, emulsification, and cooking (such as boiling, broiling, frying,
or grilling); pickling, pasteurization, and many other kinds of preservation; and
canning or other packaging. (Primary-processing such as dicing or slicing, freezing or
drying when leading to secondary products are also included.)
Food being perishable in nature has to be sometimes processed in order to increase its
shelf life. Benefits of food processing include toxin removal, preservation, ease in
marketing and distribution tasks, and increasing food consistency. In addition, it
increases yearly availability of many foods, enables transportation of delicate
perishable foods across long distances and makes many kinds of foods safe to eat by
de-activating spoilage and pathogenic micro-organisms. Modern supermarkets would
not exist without modern food processing techniques, and long voyages would not be
possible.
Processed foods are usually less susceptible to early spoilage than fresh foods and are
better suited for long distance transportation from the source to the consumer. When
they were first introduced, some processed foods helped to alleviate food shortages
and improved the overall nutrition of populations as it made many new foods
available to the masses.
Processing can be done in dairy products, fruits, vegetables, cereals, pulses etc. The
whole of industry is so huge, so this paper only covers one part of food processing
that is the dairy industry.

Page | 5

Indian dairy industry

The dairy industry in India has been on a steady path of progression since Indian
independence. India the world's largest milk producer, accounts for around 20 percent
of global milk production, with most of it consumed domestically. In India, about 60
percent of milk is consumed in liquid form, while the remaining 40 per cent is used in
the form of butter, clarified butter (desi ghee), cheese, curd, paneer, ice cream, dairy
whiteners and traditional sweets.
Since 90s India is the largest producer of milk in the world, the fact remains even in
2014-2015. It also has the largest milk-producing animal population of over 118
million.
The Indian dairy industry mainly got its boost after the operation flood, launched in
1970 which is a project of the national dairy development board (nddb), which was
the world's biggest dairy development program.
Operation flood's objectives included:

Increase milk production ("a flood of milk")

Augment rural incomes

Fair prices for consumers.

Page | 6

1.3 Objectives of Study

To perform a comparative study between Amul and Mother Dairy.

To understand the companies and their marketing strategies with the marketing
mix.

1.4 Rationale of Study

Both the companies, Amul and Mother Dairy being big brands in the dairy industry in
India, and are also food processing companies with different products that are
processed by them. Through the project we get to know what are the products offered,
what are the marketing strategies of the companies, enabled by a comparative study
between the two.

1.5 Scope of Study

The research was done among people of Mumbai with a sample size of minimum 50
people.

1.6 Research Methodology

Primary researchThe primary data has been collected with the help of a questionnaire, prepared
specially for the consumers, administered for their responses

Secondary researchSecondary data was collected with the help of reference books, internet.

1.7 Hypothesis
In order to test the competitiveness and market effectiveness of Amul and Mother
Dairy, the following hypothesis has been tested;
H1- Amul is preferred over Mother Dairy by the consumers of Mumbai.

Page | 7

1.8Limitations of the study

1. Biasness of the respondents
Some may or may not have revealed true information about their opinions regarding
the companies.
2. Inaccurate access
Risk of collecting incomplete and wrong information as people may be unable to
understand.
3. Time consuming
Collection of data, analysis, assembling of information from various sources is time
consuming.

1.9 Literature review

Page | 8

Chapter Two
2.1 Company Profiles
2.1.1 Amul India

Vision:
Amuls vision is to provide more and more satisfaction to the farmers, their
customers, employees and distributers.

Mission:
we the motivated and dedicated workforce at Amul are committed to produce
wholesome and safe foods of excellent quality to remain market leader through
development of quality management system, state of art technology, innovation and
eco-friendly operations to achieve delight of customers and milk producers

The birth of Amul

Amul was started when milk became a symbol of protest. It was founded in 1946 to
stop the exploitation by middlemen, inspired by the freedom movement.
The seeds of this unusual saga were sown more than 65 years back in Anand, a small
town in the state of Gujarat in western India. The exploitative trade practices followed
by the local trade cartel triggered off the cooperative movement. Angered by unfair
and manipulative practices followed by the trade, the farmers of the district
approached the great Indian patriot sardar vallabhbhai Patel for a solution. He advised
them to get rid of middlemen and form their own co-operative, which would have
procurement, processing and marketing under their control.
In 1946, the farmers of this area went on a milk strike refusing to be cowed down by
the cartel. Under the inspiration of sardar Patel, and the guidance of leaders like
Page | 9

Morarji Desai and Tribhuvandas Patel, they formed their own cooperative in 1946.
This co-operative, the kaira district co-operative milk producers union ltd. Began with
just two village dairy co-operative societies and 247 litres of milk and is today better
known as Amul dairy. Amul grew from strength to strength thanks to the inspired
leadership of Tribhuvandas Patel, the founder chairman and the committed
professionalism of dr Verghese Kurien, who was entrusted the task of running the
dairy from 1950.
The then prime minister of India, Lal
Bahadur Shastri decided that the same
approach should become the basis of a
national dairy development policy. He
understood that the success of Amul
could be attributed to four important
factors. The farmers owned the dairy,
their elected representatives managed
the village societies and the district
union, they employed professionals to
operate the dairy and manage its
business. Most importantly, the cooperatives were sensitive to the needs
of farmers and responsive to their
demands.
At his instance in 1965 the national
dairy development board was set up
with the basic objective of replicating
the Amul model. Dr. Kurien was
chosen to head the institution as its
chairman and asked to replicate this
model throughout the country.

Business model: the Amul model

The Amul model of dairy development is a three-tiered structure with the dairy
cooperative societies at the village level federated under a milk union at the district
level and a federation of member unions at the state level.

Page | 10

Establishment of a direct linkage between milk producers and consumers by

eliminating middlemen.
Milk producers (farmers) control procurement, processing and marketing.
Professional management.

The Amul model has helped India to emerge as the largest milk producer in the world.
More than 15 million milk producers pour their milk in 1, 44,500 dairy cooperative
societies across the country. Their milk is processed in 184 district co-operative
unions and marketed by 22 state marketing federations, ensuring a better life for
millions.

Page | 11

2.1.2 Mother Dairy fruit & vegetable pvt. Ltd.

Brand name: Mother Dairy

Vision and mission

Vision provide quality food and beverages to consumers at affordable prices while
ensuring fair returns to the producers.

Mission Mother Dairys heritage is intrinsically linked to the cooperative

movement in India. With determination & pride we will continue to serve our farmers,
rural India & our consumers. Our values reflect who we are & what we firmly believe
in.

About Mother Dairy

Mother Dairy was commissioned in 1974 as a wholly owned subsidiary of the
national dairy development board (nddb). It was an initiative under operation flood,
the world's biggest dairy development program launched to make India a milk
sufficient nation. Over the years, Mother Dairy has contributed significantly in
achieving this objective through a series of innovations and programs. Today, Mother
Dairy manufactures, markets & sells milk and milk products including cultured
products, ice creams, paneer and ghee under the Mother Dairy brand. The company
also has a diversified portfolio with products in edible oils, fruits & vegetables, frozen
vegetables, processed food like fruit juices, jams, pickles etc. To meet the daily
requirements of every household.
The company over the last many years has created a market position for itself in
branded milk segment in India through a robust network of its booth and retail
channels. It has also expanded its reach to other regions in north, south, east and west
with its offering of milk and milk products pegging it among the few companies to
own such a vast channel of distribution in India.
Brand Mother Dairy sources a significant part of its requirement of liquid milk from
dairy cooperatives and village level farmer centric organizations. The company is
committed to uphold institutional structures that empower milk producers and farmers
Page | 12

through processes that are equitable. A significant portion of its income is ploughed
back into the value chain to support and maintain the system.

2.2 quality control

2.2.1 at Amul India:
Food safety policy:

The policy is to produce safe and wholesome food, to continually remain as

the market leader by providing food products delighting customer
expectations and bestow safety.
Achieved by, improving raw milk quality, applying innovative technology for
manufacturing food products.
Employing quality and food safety management practices to, manufacture
food products in a eco-friendly environment, meeting applicable statutory and
regulatory requirements
Effectively communicate and constantly improve professional skills of
employees emphasizing continuous improvement of quality and food safety
issues.

Hygiene and clean milk production drive:

The primary village dairy co-operative societies operate every morning and
evening for the village farmers.
Milk delivered by a producer is measured and a sample is drawn for a qualitytesting. Each centre is equipped with an electronic milk-tester for testing
quality of milk, automatic weighing machine for weighing of milk with data
processing facilities.
The entire operation is electronically captured with member-id. Various
training programmes, especially on quality management system, good
management practises in animal husbandry are imparted on continuous basis
to member producers, dairy co-operative personnel and personnel at dairy
plants.

Bulk milk chillers:

As a part of Amuls quality movement bulk milk chillers are introduced at primary
village co-operative society level. This system has drastically improved the
microbiological quality of milk, therefore better return to farmers and good quality of
products to consumers. Special trainings are imparted to dairy co-operative personnel
for better management of bulk milk chillers.
Road milk carriers:
Page | 13

The chilled milk of the co-operative societies are transported to Amul dairy
plant through road milk tankers once in a day. These milk tankers are insulated
to safeguard the quality of milk.
A tanker carries three to four societies milk together which helps in achieving
economy in transportation of milk. These tankers are thoroughly cleaned at
every unloading of milk at dairy plant and certified for its hygiene for
transportation of milk by QC personnel. This system has almost wiped out any
possibility of spoilage to milk.
Chilling milk at grass root level and transportation of the same in road milk
tankers have reduced microbial load in raw milk which in turn has reduced
processing costs in terms of energy, thereby better return to farmer producers.
Geo-remote sensing based vehicle tracking system has been put in use for
efficient handling of road milk tankers carrying milk to dairy plant.

2.2.2 at Mother Dairy:

Milk
They are committed to:
apply state of the art technology and processes to enhance productivity that ensures
quality at competitive price.
apply processes for clean production, pollution prevention and optimize resource
utilization in all operations.
follow food safety management system and apply HACCP (hazard analysis critical
control points) principles to
Provide safe products to customers.
develop and empower employees for maintaining a vibrant work environment,
which encourages excellence.
comply with applicable regulations and legislations.
Fruit & vegetable
They strive to achieve this goal through:
facilitating a direct link between farmers and the consumer
developing a network of farmers / suppliers committed to improve quality,
productivity & safe agricultural practices.
efficient utilization of resources through continuous focus on reducing waste & non
value adding activities
identifying & applying innovative practices & state of the art technology
developing empowered & motivated workforce , committed to quality & continual
improvement
Page | 14

 helping employees and farmers to upgrade their skills by providing training and
exposure to food safety systems
ensuring food safety through effective implementation of food safety systems and
complying with statutory and regulatory requirements.
Fruit pulp & concentrate
To achieve a significant market share and popularize consumption of Indian tropical
fruit products in national & international markets and provide opportunities for the
growth of Indian farm produce
Quality policy is to:
constantly strive to understand and meet the ever growing needs of the
customer
meet national and international standards in processes and products ensuring
consistently high level of quality
constantly maintain highest level of cleanliness hygiene and practice hazard free
operations
utilize state-of- art technology in handling and processing of fruits and fruit products
forge a unique relationship with farmers for mutual benefits
The success of this policy shall be realized through trained and competent employees
who shall work as well knit team and have the requisite empowerment to discharge
their individual and collective responsibilities
Quality process
Procurement:
Fresh milk is sourced directly from state level co-operatives and Mother Dairy own
new generation co-operatives (NGC). Milk received from individual producer is
checked for all basic quality parameters meeting company specifications &
requirements at respective collection & chilling centres.
Milk is then supplied to the dairy units through insulated milk tankers under
refrigerated conditions to maintain the freshness. Strict quality checks are performed
for all incoming milk received at dairy units.
Commodities, ingredients & packaging material used for the products are checked,
approved and released by quality functions as per company specifications and
requirements.

Page | 15

2.3 Product Portfolio:

2.3.1 Amul India:
Milk

Amul gold, Amul taaza, Amul slim trim

milk, Amul chai maza

Bread spreads

Amul butter, Amul lite, table margarine,

Amul cooking butter

Cheese

Amul processed cheese, Amul emmental

cheese, Amul Gouda cheese, Amul
cheese spread

UHT (ultra high temperature) milk

Amul gold, Amul taaza, Amul slim trim,

Amul calci

Beverage range

Amul Kool flavoured milk, Amul Kool

caf, Amul Kool koko, Amul stamina

Amul pro

Amul pro range of whey protein malt

beverage

Ice cream

Flavoured ice creams

Paneer

Amul malai paneer, Amul fresh paneer

Dahi

Amul masti dahi, Amul probiotic dahi,

Amul flaavyo (flavoured yoghurt)

Ghee

Amul ghee, sagar ghee, Amul yellow

(cow) ghee, Amul brown

Milk powders

Amul spray, Amulya, sagar skimmed

milk powder, sagar tea coffee whitener

Mithai range

Amul shrikhand, gulab jamun, Amul

basundi, Amul avsar laddoo

Mithai mate

Amul mithai mate (condensed milk)

Chocolates

Amul chocolate, Amul chocozoo,

chocolate syrup, wafer chocolate

Fresh cream

Amul whipping cream, Amul fresh

cream

Butter milk

Amul masti chaas, Amul chaas

Amul cattle feed

Amul cattle feed

Page | 16

2.3.2 Mother Dairy:

Milk

Token milk, full cream milk, toned milk,

standardised milk, skimmed milk, UHT
toned milk,

Dairy products

Plain dahi, probiotic dahi, mishti doi,

cheese, lassi, salted lassi, plain chaas,
tadka chaas, butter, fresh paneer.

Mother Dairy chillz

Chocolate, kesar elaichi, coffee, vanilla

Ghee

Buffalo ghee, cow ghee, kathiawadi

ghee

Others

Yoghurt, milk cake, rosogulla, gulab

jamun, kheer, khoya, UHT cream, dairy
whitener, milkshakes.

Ice creams

Different flavours in tubs, family packs,

candies

Edible oils under brand name Dhara

Vegetable oil, rice bran oil, cottonseed

oil, groundnut oil, kacchi ghani mustard
oil, mustard oil

Fresh fruits and vegetables

Fresh fruits, fresh vegetables

Frozen food

Frozen peas, frozen corn, frozen mix

veg, corn chatkara, frozen aloo tikka

Juices and fruit beverages under brand

name Safal

Different flavours of fruit juices

Processed foods

Jams and pickles

Page | 17

Chapter Three
3.1 comparison of selling prepositions
3.1.1 Product
At the heart of a great brand is a great product. Product is a key element in the market
offering. To achieve market leadership, firms must offer products and services of
superior quality that provide unsurpassed customer value.
We define a product as anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need. Products include
more than just tangible objects, such as cars, computers, or cell phones. Broadly
defined, products also include services, events, persons, places, organizations,
ideas, or a mixture of these. Throughout this text, we use the term product broadly to
include any or all of these entities. Thus, an apple iPhone, a Toyota Camry, and a caf
mocha at Starbucks are products. But so are a trip to Las Vegas, E*TRADE online
investment services, and advice from your family doctor. Because of their importance
in the world economy, we give special attention to services. Services are a form of
product that consists of activities, benefits, or satisfactions offered for sale that are
essentially intangible and do not result in the ownership of anything. Examples
include banking, hotel services, airline travel, retail, wireless communication, and
home repair services.

Product classifications
Products fall into two broad classes based on the types of consumers that use them:
consumer products and industrial products. Broadly defined, products also include
other marketable entities such as experiences, organizations, persons, places, and
ideas.

Consumer products
consumer products are products and services bought by final consumers for personal
consumption. Marketers usually classify these products and services further based on
how consumers go about buying them. Consumer products include convenience
products, shopping products, specialty products, and unsought products. These
products differ in the ways consumers buy them and, therefore, in how they are
marketed.
1. Convenience products- convenience products are consumer products and services
that customers usually buy frequently, immediately, and with minimal comparison and
buying effort. Examples include laundry detergent, candy, magazines, and fast food.
Convenience products are usually low priced, and marketers place them in many
locations to make them readily available when customers need or want them.
2. Shopping products- shopping products are less frequently purchased consumer
products and services that customers compare carefully on suitability, quality, price,
and style. When buying shopping products and services, consumers spend much time
and effort in gathering information and making comparisons. Examples include
Page | 18

furniture, clothing, used cars, major appliances, and hotel and airline services.
Shopping products marketers usually distribute their products through fewer outlets
but provide deeper sales support to help customers in their comparison efforts.
3. Speciality products- speciality products are consumer products and services with
unique characteristics or brand identification for which a significant group of buyers
is willing to make a special purchase effort. Examples include specific brands of cars,
high-priced photographic equipment, designer clothes, and the services of medical or
legal specialists. A Lamborghini automobile, for example, is a speciality product
because buyers are usually willing to travel great distances to buy one. Buyers
normally do not compare speciality products. They invest only the time needed to
reach dealers carrying the wanted products.
4. Unsought products- unsought products are consumer products that the consumer
either does not know about or knows about but does not normally consider buying.
Most major new innovations are unsought until the consumer becomes aware of them
through advertising. Classic examples of known but unsought products and services
are life insurance, pre-planned funeral services, and blood donations to the Red Cross.
By their very nature, unsought products require a lot of advertising, personal selling,
and other marketing efforts.

Industrial productsindustrial products are those purchased for further processing or for use in conducting
a business. Thus, the distinction between a consumer product and an industrial
product is based on the purpose for which the product is purchased. If a consumer
buys a lawn mower for use around home, the lawn mower is a consumer product. If
the same consumer buys the same lawn mower for use in a landscaping business, the
lawn mower is an industrial product. The three groups of industrial products and
services include materials and parts, capital items, and supplies and services.
1. Materials and parts- include raw materials and manufactured materials and parts.
Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables)
and natural products (fish, lumber, crude petroleum, iron ore). Manufactured materials
and parts consist of component materials (iron, yarn, cement, wires) and component
parts (small motors, tires, castings). Most manufactured materials and parts are sold
directly to industrial users. Price and service are the major marketing factors;
branding and advertising tend to be less important.
2. Capital items- include industrial products that aid in the buyers production or
operations, including installations and accessory equipment. Installations consist of
major purchases such as buildings (factories, offices) and fixed equipment
(generators, drill presses, large computer systems, and elevators). Accessory
equipment includes portable factory equipment and tools (hand tools, lift trucks) and
office equipment (computers, fax machines, desks). They have a shorter life than
installations and simply aid in the production process.
3. Supplies and services- supplies include operating supplies (lubricants, coal, paper,
pencils) and repair and maintenance items (paint, nails, brooms). Supplies are the
Page | 19

convenience products of the industrial field because they are usually purchased with a
minimum of effort or comparison. Business services include maintenance and repair
services (window cleaning, computer repair) and business advisory services (legal,
management consulting, and advertising). Such services are usually supplied under
contract.

Product
Amul
Amul has a 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, dinshaws and

Mother Dairy
Mother Dairy has a strong product
portfolio. The portfolio along with dairy
products, consists of edible oils, jams,
pickles, fruit juices and beverages under
the brand names, Dhara and Safal
respectively.
Mother Dairy milk, dahi, ice creams are
consumed largely, while ghee and
sweets require the push strategy.
Competitors for the same are sagar and
gowardhan ghee which is preferred by
people.
The Mother Dairy tree has the following
brands token milk, full cream milk,
toned milk, standardised milk, skimmed
milk, UHT toned milk,
Plain dahi, probiotic dahi, mishti doi,
lassi, salted lassi, plain chaas, tadka
chaas, butter, fresh paneer.
Different flavours in tubs, family packs,
candies
Vegetable oil, rice bran oil, cottonseed
oil, groundnut oil, kacchi ghani mustard
oil, mustard oil
Frozen peas, frozen corn, frozen mix
veg, corn chatkara, frozen aloo tikka
Different flavours of fruit juices
Jams and pickles

Page | 20

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.

Page | 21

3.1.2 Price:
In the narrowest sense, price is the amount of money charged for a product or a
service. More broadly, price is the sum of all the values that customers give up to gain
the benefits of having or using a product or service. Historically, price has been the
major factor affecting buyer choice. In recent decades, non-price factors have gained
increasing importance. However, price still remains one of the most important
elements that determines a firms market share and profitability. Price is the only
element in the marketing mix that produces revenue; all other elements represent
costs. Price is also one of the most flexible marketing mix elements. Unlike product
features and channel commitments, prices can be changed quickly. At the same time,
pricing is the number-one problem facing many marketing executives, and many
companies do not handle pricing well. Some managers view pricing as a big
headache, preferring instead to focus on other marketing mix elements. However,
smart managers treat pricing as a key strategic tool for creating and capturing
customer value. Prices have a direct impact on a firms bottom line. A small
percentage improvement in price can generate a large percentage increase in
profitability. More importantly, as part of a companys overall value proposition, price
plays a key role in creating customer value and building customer relationships.
Instead of running away from pricing, says an expert, savvy marketers are
embracing it.

Types of pricing strategies

There are a number of pricing strategies that a company can use to sell its product.
The strategy used at any time will depend on the companys strategy and objectives.
Some of these pricing strategies are the following.

Page | 22

1. Penetration pricing
A low price is set by the company to build up sales and market share. This may be
done to establish position in a market with preexisting similar products on offer. Once
a position is created, the prices may be raised. A satellite channel provider may offer
an introductory price and then increase as business grows.
2. Skimming pricing
Here, the initial price is set high and may slowly be brought down. This will allow the
company to introduce the product step by step to different layers of the market.
Electronic and tech gadgets often start at a very high price which is subsequently
lowered with the lowest point reached right before a new model is launched.
3. Competition pricing
When trying to go head to head with competitors offering similar benefits, a company
may decide to:
a. Price higher to create a higher quality perception or to target a niche market
b. Price the same to show more benefits for the same price
c. Price lower to try to gain a wider customer base
4. Product line pricing
Here, different products in the same range may be set at different prices. Television
sets are priced differently depending on whether they are HD or not, whether they
have Wi-Fi features of not and whether they are 3d or not.
5. Bundle pricing
A group of products may be bundled together and sold at a reduced price.
Supermarkets often use this method through their buy one get one free offers.
6. Psychological pricing
Often a company will make small changes to prices to make a customer think the item
is priced lower than it is. This is often seen in prices ending in 99. For example, an
item market 199 will be perceived as closer in price to 100 than 200.
7. Premium pricing
A high price is set to establish an exclusive product of high quality. Designer cars and
premium brand stores are a good example of this type of pricing.
8. Optional pricing
Page | 23

A company may add optional extra items within the price to increase a products
attractiveness. Car sellers may offer car insurance for the first year for example.
9. Cost based pricing
Simply, a company may determine the exact cost of producing and selling an
objective, add a markup that may be desirable for profits and price accordingly. This
method may be used in a changing industry where even costs of production are
unpredictable.
10. Cost plus pricing
A percentage is added to the costs as a profit margin to determine final price.

Price
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 Amuls 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

Mother Dairy
Mother Dairy already had its competitor
Amul in the market when it entered. So
the pricing strategy required was
competitive strategy. This strategy is
used when a company wants to break in
the competition and create a place for
itself. Amul has its pricing reasonable,
so in order to keep up with them,
Mother Dairy has the pricing reasonable
to attract customers.

Page | 24

cost of Amul products gone up. But

considering their value for the average
India consumer, these products are still
priced at an affordable rate.

Page | 25

3.1.3 Place:
In the marketing mix, the process of moving products from the producer to the
intended user is called place. In other words, it is how your product is bought and
where it is bought. This movement could be through a combination of intermediaries
such as distributors, wholesalers and retailers. In addition, a newer method is the
internet which itself is a marketplace now.
Through the use of the right place, a company can increase sales and maintain these
over a longer period of time. In turn, this would mean a greater share of the market
and increased revenues and profits.
Correct placement is a vital activity that is focused on reaching the right target
audience at the right time. It focuses on where the business is located, where the target
market is placed, how best to connect these two, how to store goods in the interim and
how to eventually transport them.

Distribution channelDistribution channel intermediaries are middlemen who play a crucial role in the
distribution process. These middlemen facilitate the distribution process through their
experience and expertise. There are four main types of intermediaries:
1. Agents
the agent is an independent entity who acts as an extension of the producer by
representing them to the user. An agent never actually gains ownership of the product
and usually make money from commissions and fees paid for their services.
2. Wholesalers
wholesalers are also independent entities. But they actually purchase goods from a
producer in bulk and store them in warehouses. These goods are then resold in smaller
amounts at a profit. Wholesalers seldom sell directly to an end user. Their customers
are usually another intermediary such as a retailer.
3. Distributors
similar to wholesalers, distributors differ in one regard. A wholesaler may carry a
variety of competition brands and product types. A distributor however, will only
carry products from a single brand or company. A distributor may have a close
relationship with the producer.
4. Retailers
wholesalers and distributors will sell the products that they have acquired to the
retailer at a profit. Retailers will then stock the goods and sell them to the ultimate end
user at a profit.
Page | 26

Distribution strategies
Depending on the type of product being distributed there are three common
distribution strategies available:
1. Intensive distribution- used commonly to distribute low priced or impulse purchase
products e.g. Chocolates, soft drinks.
2. Exclusive distribution- involves limiting distribution to a single outlet. The product
is usually highly priced, and requires the intermediary to place much detail in its sell.
An example of would be the sale of vehicles through exclusive dealers.
3. Selective distribution- a small number of retail outlets are chosen to distribute the
product. Selective distribution is common with products such as computers,
televisions household appliances, where consumers are willing to shop around and
where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select
an intermediary which has experience of handling similar products, credible and is
known by the target audience.

Place
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 cooperatives. 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

Mother Dairy
Mother Dairy has a huge distribution
network, but products are found in lesser
places as compared to Amul. Mother
Dairy also follows the practice of
breaking bulk. From the factory to
distribution centres and to the retailers,
the bulk reduces to sale of single units
of their products.
Their products are marketed through a
chain of their own milk shops, retail
outlets and mobile vending units
maintaining best-in-class hygiene
standards. They ensure that products are
available, displayed appropriately and
cold chain conditions are maintained to
retain product quality & freshness.

Page | 27

individually delivered from farmers to

the cooperatives. The cooperatives then
collect all this milk and send the bulk to
the manufacturing facility. At the
manufacturing facility, the milk is used
to manufacture the finalized products.
In the distribution channel, there are
carrying and forwarding agents,
distributors, dealers and retailers
involved. There are also Amul Shoppes
which sell all products in the Amul
product portfolio. The distribution is as
follows.
Amul >> carrying and forwarding agent
>> distributor >> dealer / retailer / Amul
shopper >> customer
Amul >> modern retail
Thus there is a lot of transportation
involved for all of Amuls products.
However, the distribution channel of
Amul ensures that the products reach
every nook and corner of India.

Page | 28

3.1.4 Promotion:
Promotion is the communication aspect of the marketing mix. It is creating a channel
for conversation with the targeted consumer base. Through promotion, the company
aims to attract the customers attention and give them enough information about the
product to foster enough interest to motivate them to purchase.
The team tasked with these activities will begin by understanding the dynamics of the
target audience and deciding which modes of promotion are likely to help meet
targets. Once the channel is decided, information from other elements of the mix is
incorporated to ensure that the message sent corresponds to the actual product
features, benefits and user experience. None of the elements of the marketing mix
work in isolation. Instead a unified body of information acts as the source for all
activities within these 4ps. The available information is filtered to include those areas
which will be most relevant to the target audience.

A companys total promotion mixalso called its marketing communications mix

consists of the specific blend of advertising, public relations, personal selling, sales
promotion, and direct-marketing tools that the company uses to persuasively
communicate customer value and build customer relationships. The five major
promotion tools are defined as follows:

Advertising this mode of promotion is usually paid, with little or no personal

message. Mass media such as television, radio or newspapers and magazines is most
often the carrier of these messages. Apart from these, billboards, posters, web pages,
brochures and direct mail also fall in the same category. While this method has
traditionally been one sided, advertisement over new media such as the internet may
allow for quick feedback.

Public relations & sponsorship PR or publicity tries to increase positive mention of

the product or brand in influential media outlets. These could include newspapers,
Page | 29

magazines, talk shows and new media such as social networks and blogs. This could
also mean allowing super users, or influencers to test the product and speak positively
about it to their peers. This type of advertisement may or may not be paid. For
example, sponsoring a major event and increasing brand visibility is a paid action.
Sending free samples to a blogger then depends on their discretion and opinion and is
not usually swayed by payment.
3

Personal selling opposite of the one directional promotional methods, direct selling
connects company representatives with the consumer. These interactions can be in
person, over the phone and over email or chat. This personal contact aims to create a
personal relationship between the client and the brand or product.

Direct marketing this channel targets specific influential potential users through
telemarketing, customized letters, emails and text messages.

Sales promotions these are usually short term strategic activities which aim to
encourage a surge in sales. These could be buy one get one free options, seasonal
discounts, contests, samples or even special coupons with expiration dates.

Promotion
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. But we should know by
now that the Amul girl is hardly sweet
or cute. She is known to be the
naughtiest 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

Mother Dairy
Advertisement and product promotion
strategy it's trying to take its product
campaigns and communications to a
higher platform. It targets children and
are created around ideas such as "the
country needs you, grow faster". For
products such as butter, cheese and ice
creams go, the campaigns have been
created around "taste". Since 60 per cent
butter is consumed by kids, they have
created makkhan singh, a cartoon
character cow as its brand ambassador.

Page | 30

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 Amuls 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.

Page | 31

Different ads from Amul as means of promotion through outdoor advertising

Page | 32

Page | 33

3.2 BCG matrix of both

companies
BCG(Boston Consulting Group) matrix
More than 40 years after Bruce Henderson proposed BCGs growth-share matrix, the
concept is very much alive. Companies continue to need a method to manage their
portfolio of products, R&D investments, and business units in a disciplined and
systematic way. Harvard Business Review recently named it one of the frameworks
that changed the world. The matrix is central in business school teaching on strategy.
At the same time, the world has changed in ways that have a fundamental impact on
the original intent of the matrix: since 1970, when it was introduced, conglomerates
have become less prevalent, change has accelerated, and competitive advantage has
become less durable. Given all that, is the BCG growth-share matrix still relevant?
Yes, but with some important enhancements.
The matrix helped companies decide which markets and business units to invest in on
the basis of two factorscompany competitiveness and market attractivenesswith
the underlying drivers for these factors being relative market share and growth rate,
respectively. The logic was that market leadership, expressed through high relative
share, resulted in sustainably superior returns. In the long run, the market leader
obtained a self-reinforcing cost advantage through scale and experience that
competitors found difficult to replicate. High growth rates signalled the markets in
which leadership could be most easily built.
Putting these drivers in a matrix revealed four quadrants, each with a specific strategic
imperative. Low-growth, high-share cash cows should be milked for cash to
reinvest in high-growth, high-share stars with high future potential. High-growth,
low-share question marks should be invested in or discarded, depending on their
chances of becoming stars. Low-share, low-growth pets are essentially worthless
and should be liquidated, divested, or repositioned given that their current positioning
is unlikely to ever generate cash.
The utility of the matrix in practice was twofold:

The matrix provided conglomerates and diversified industrial companies with

a logic to redeploy cash from cash cows to business units with higher growth
potential. This came at a time when units often kept and reinvested their own
cashwhich in some cases had the effect of continuously decreasing returns

Page | 34

on investment. Conglomerates that allocated cash smartly gained an

advantage.

It also provided companies with a simple but powerful tool for maximizing the
competitiveness, value, and sustainability of their business by allowing them
to strike the right balance between the exploitation of mature businesses and
the exploration of new businesses to secure future growth

The four segments of the BCG Matrix

Placing products in the BCG matrix provides 4 categories in a portfolio of a company:
1) Stars (high growth, high market share)
a) Stars are using large amounts of cash. Stars are leaders in the business.
Therefore they should also generate large amounts of cash.
b) Stars are frequently roughly in balance on net cash flow. However if needed
any attempt should be made to hold your market share in Stars, because the
rewards will be Cash Cows if market share is kept.
2) Cash Cows (low growth, high market share)
a) Profits and cash generation should be high. Because of the low growth,
investments which are needed should be low.
b) Cash Cows are often the stars of yesterday and they are the foundation of a
company.
3) Dogs (low growth, low market share)
a) Avoid and minimize the number of Dogs in a company.
b) Watch out for expensive rescue plans.
c) Dogs must deliver cash, otherwise they must be liquidated.
4) Question Marks (high growth, low market share)
a) Question Marks have the worst cash characteristics of all, because they have
high cash demands and generate low returns, because of their low market
share.
b) If the market share remains unchanged, Question Marks will simply absorb
great amounts of cash.
Either invest heavily, or sell off, or invest nothing and generate any cash that you can.
Other uses and benefits of the BCG Matrix
1. If a company is able to use the experience curve to its advantage, it should be
able to manufacture and sell new products at a price that is low enough to get
early market share leadership. Once it becomes a star, it is destined to be
profitable.
2. BCG model is helpful for managers to evaluate balance in the firms current
portfolio of Stars, Cash Cows, Question Marks and Dogs.
3. BCG method is applicable to large companies that seek volume and
experience effects.
Page | 35

4. The model is simple and easy to understand.

5. It provides a base for management to decide and prepare for future actions.
Limitations of the BCG Matrix
Some limitations of the Boston Consulting Group Matrix include:
1.
2.
3.
4.
5.
6.
7.
8.

It neglects the effects of synergy between business units.

High market share is not the only success factor.
Market growth is not the only indicator for attractiveness of a market.
Sometimes Dogs can earn even more cash as Cash Cows.
The problems of getting data on the market share and market growth.
There is no clear definition of what constitutes a "market".
A high market share does not necessarily lead to profitability all the time.
The model uses only two dimensions market share and growth rate. This
may tempt management to emphasize a particular product, or to divest
prematurely.
9. A business with a low market share can be profitable too.
10. The model neglects small competitors that have fast growing market shares.
11.

Page | 36

3.2.1 BCG matrix of Amul:

Stars- ice creams and cheese are the most sold and popular products of Amul. Their
market share as well market growth is also high. UHT milk like Amul taaza is also
gaining popularity among the consumers due to its ready to consume properties.
Flavoured milk is quite popular among the children.
Cash cows- the most income generating products of Amul are Amul butter and Amul
milk in pouches. When consumers go out in the market to buy butter, it has become
synonymous with Amul butter. Amul milk is also readily available with the vendors.
The market growth of these products may be low, but the market share is really high
due to constant purchase and customer loyalty.
Question marks- Amul chocolates are not that popular in the market because of its
major competition from Cadbury.

Page | 37

3.2.2 BCG matrix of Mother Dairy

Stars- ice-creams from Mother Dairy under the name chillz is gaining popularity and
the variants under chillz are many. Mother Dairy cheese is also popular along with
Amul and Britannia cheese. Any purchase of frozen foods, the consumers prefer to
buy Safal products. Dhara oils have been in the market since a very long time.
Cash cows- pouch milk and dahi of Mother Dairy have a tough competition from
Amul, and local brands from Maharashtra like Chitale and Gowardhan. The sales of
these products are almost equivalent to those of Amul, and maximum sales are carried
out for milk and dahi
Question marks- consumers prefer to buy Amul, gowardhan ghee in place of Mother
Dairy ghee.

Page | 38

Chapter Four
4.1 SWOT Analysis:
The overall evaluation of a companys strengths, weaknesses, opportunities, and
threats is called swot analysis. Its a way of monitoring the external and internal
marketing environment.

External environment (opportunity and threat) analysis:

A business unit must monitor key macro environment forces and significant
microenvironment factors that affect its ability to earn profits.it should set up a
marketing intelligence system to track trends and important developments and any
related opportunities and threats. Good marketing is the art of finding, developing,
and profiting from these opportunities.
Marketing opportunity is an area of buyer need and interest that a company has a
high probability of profitably satisfying. There are three main sources of market
opportunities. The first is to offer something that is in short supply. This requires little
marketing talent, as the need is fairly obvious .the second is to supply an existing
product or service in a new or superior way. How? The problem detection method
asks consumers for their suggestions, the ideal method has them imagine an ideal
version of the product or service, and the consumption chain method asks them to
chart their steps in acquiring, using, and disposing of a product.
This last method often leads to a totally new product or service. Marketers need to be
good at spotting opportunities. Consider the following:
1. A company may benefit from converging industry trends and introduce hybrid
products or services that are new to the market.
2. A company may make a buying process more convenient or efficient.
3. A company can meet the need for more information and advice.
4. A company can customize a product or service
5. A company can introduce a new capability
6. A company may be able to deliver a product or service faster
7. A company may be able to offer a product at a much lower price.
To evaluate opportunities, companies can use market opportunity analysis (moa) to
ask questions like:
1. Can we articulate the benefits convincingly to a defined target market(s)?
2. Can we locate the target market(s) and reach them with cost-effective media and
trade channels?
3. Does our company possess or have access to the critical capabilities and resources
we need to deliver the customer benefits?
4. Can we deliver the benefits better than any actual or potential competitors?

Page | 39

5. Will the financial rate of return meet or exceed our required threshold for
investment?

Internal environment (strengths and weaknesses) analysis:

Internal factors include your resources and experiences. General areas to consider:
1. Human resources - staff, volunteers, board members, target population
2. Physical resources - your location, building, equipment
3. Financial - grants, funding agencies, other sources of income
4. Activities and processes - programs you run, systems you employ
5. Past experiences - building blocks for learning and success, your reputation in
the community
Don't be too modest when listing your strengths. If you're having difficulty naming
them, start by simply listing your characteristics (e.g., we're small, we're connected to
the neighborhood). Some of these will probably be strengths.
Although the strengths and weakness of your organization are your internal qualities,
don't overlook the perspective of people outside your group. Identify strengths and
weaknesses from both your own point of view and that of others, including those
you serve or deal with. Do others see problems--or assets--that you don't?
How do you get information about how outsiders perceive your strengths and
weaknesses? You may know already if you've listened to those you serve. If not, this
might be the time to gather that type of information.

Strengths

Amul

Mother Dairy

1. Demand profile: absolutely

optimistic.

1.awell-recognized brand
name

2. Margins: quite reasonable, even on

packed liquid milk.

2. Popular subsidiary
brands like Dhara, Safal,
b-activ, etc.

3. Flexibility of product mix:

tremendous. With balancing
equipment, you can keep on adding to

3.a wide variety of

products like milk, dairy
Page | 40

your product line.

4. Availability of raw material:
abundant. Presently, more than 80 per
cent of milk produced is flowing into
the unorganized sector, which requires
proper channelization.

products, fruits,
vegetables, groceries,
edible oil, beverages,
frozen food, etc.
4.strong and efficient
supply chain network
5.procurement of milk
from co-operative dairies
and vegetables from
farmers, providing them
with fair prices
6. Technological
advancement

Weaknesses

1. Perishability: pasteurization has

overcome this weakness partially.
UHT gives milk long life. Surely,
many new processes will follow to
improve milk quality and extend its
shelf life.
2. Lack of control over yield:
theoretically, there is little control over
milk yield. However, increased
awareness of developments like
embryo transplant, artificial
insemination and properly managed
animal husbandry practices, coupled
with higher income to rural milk
producers should automatically lead to
improvement in milk yields.

1. Limited number of
Mother Dairy and Safal
outlets
2. Difficult to maintain
competitive pricing
3. Vegetables and milk
products are perishable

3. Logistics of procurement.
4. Problematic distribution: yes, all is
not well with distribution. But then if
ice creams can be sold virtually at
every nook and corner, why cant we
sell other dairy products too?
Moreover, it is only a matter of time
Page | 41

before we see the emergence of a cold

chain linking the producer to the
refrigerator at the consumers home!
5. Competition: with so many
newcomers entering this industry,
competition is becoming tougher day
by day. But then competition has to be
faced as a ground reality. The market
is large enough for many to carve out
their niche.

Opportunitie
s

1. Value addition: there is a

phenomenal scope for innovations in
product development, packaging and
presentation.
2. Export potential: efforts to exploit
export potential are already on. Amul
is exporting to Bangladesh, sri lanka,
Nigeria, and the middle east.
Following the new GATT treaty,
opportunities will increase
tremendously for the export of agriproducts in general and dairy products
in particular.

Threats

Milk vendors, the un-organized

sector: today milk vendors are
occupying the pride of place in the
industry. Organized dissemination of
information about the harm that they
are doing to producers and consumers
should see a steady decline in their
importance

1.continuous demand of
dairy products and other
products by Mother Dairy
2.open more number of
Mother Dairy outlets
3.market and advertise the
products
4. Increase its market
share by expansion in
untapped markets

1. Strong marketing
muscle by competitors
2.unstable economic
condition in India
3.other competitor brands

Page | 42

4.2 CSR activities

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.

4.2.1 Amul India

To meet with the CSR it is expected that a business in its entire procurementproduction-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.

Amul Relief Trust

A devastating earthquake (Richter scale 7.9) hit Gujarat on 26th January 2001. The
epicentre of the quake was located in Kutch district. It caused death of thousands of
people, tens of thousands were injured, hundreds of thousands were rendered
homeless and damage of billions of Rupees was done.
GCMMF formed a specific organization named "Amul Relief Trust" (ART) under the
Chairmanship of Dr. V. Kurien in 2001 with a donation of Rs. 50 Millions for
reconstruction of the school buildings damaged in the 2001 earthquake in the Kutch
area.
The Trust reconstructed 6 schools damaged by the above earthquake at a cost of Rs.
41.1 millions in Kutch area. Four of these schools started re-functioning from the last
two academic sessions and the other two schools from the current session.

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 primary milk
producers, village and the ecological balance is fulfilled. The milk producers are paid
Page | 43

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
realized 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 cooperatives is purchased at an interim price. So as to maximize the earnings of the milk
producers the GCMMF changes the product profile during the fiscal and directs its
sales and marketing activities towards those products that would bring in maximum
returns. True! Every business organization 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
Page | 44

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 building to improve and
upgrade 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, friendly, 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 recognized for their
contribution (climate survey) CSR- Amul way
Green Gujarat tree plantation campaign by milk producers of dairy cooperativesMilk producer members of Gujarat dairy cooperatives- better known as Amul have
been celebrating the nation's independence day in a novel manner by planting lakhs of
saplings across Gujarat and have taken up an ambitious plan to save the environment
by planting trees, making India green and thereby reducing the effects of global
warming. The milk producers of Gujarat dairy cooperatives are conducting mass tree
plantation drive every year on Independence Day for last eight years. In last five years
(2007 to 2014) the milk producers have planted around 518.7 lakhs trees). The most
striking feature of these entire programmes was that it has been initiated by milk
producer members of the dairy cooperatives. The unique fact about the programme
was that the milk producer members took up the oath to protect tree saplings till it
survives and grows into tree.
Over the years, due to intensive agriculture and dairying various natural resources are
getting consumed at faster pace in Gujarat state of India. The state level apex body of
dairy farmers in Gujarat gave a serious thought in this direction and discovered a
novel idea for giving back to nature. The idea was "one member one tree" plantation
on our 60th independence day - 15th august 2007.to put this idea in to the practice a
design team constituting of representatives of member unions were formed. The team
accepted the idea by heart and immediately decided to spread it among farmer
members of village dairy cooperative societies. Then the idea was communicated to
farmer members and they all welcomed it and enthusiastically agreed to implement
the idea.
For smooth implementation of the idea, the design team chalked out the road map for
various activities. Execution teams were formed at district union level to give final
shape and put the plan in action. Village level coordinators were identified and they
were trained to streamline activity of tree plantation. Various awareness materials
Page | 45

were prepared. Through various communication media farmer members were made
aware of benefits of tree plantation and tree plantation activity schedule
The entire plantation activity was coordinated at all the three tiers of Anand pattern at village, district and state level dairy cooperatives. On 15th august, 2007, after the
flag hoisting ceremony, each member took an oath to plant saplings and ensure that
they grew in to trees. Then individually they planted sapling on their own at their
identified locations like their farm, near their home, on farm bunds, etc. They have
taken necessary care to ensure that this sapling survives and they also reported
regarding the survival to village level coordinator and district milk unions after five
months. In this way, 18.9 lakh trees were planted on 15th august 2007. This was just
the beginning. Henceforth, the village dairy cooperative societies of Gujarat as a mark
of respect for our nation decided to conduct such event on every Independence Day
and accepted 15th august (Independence Day) as a "green revolution day by
afforestation to protect mother earth from pollution, climate change and global
warming".
But all this required immaculate planning and execution. An action plan of tree
plantation programme was drawn up months back in advance. After the identification
of the chief coordinator for each district milk union, the organization of a task force
for the programme was put in place. Roles and responsibilities were assigned to each
member and area of operation allocated. After preparing the overall action plan, each
union issued a circular to the dairy cooperative societies regarding the programme and
arranged meetings with the societies covered. At the village level, coordinators were
identified in respect of the villages to be covered and the number of saplings required.
Along with logistical arrangements direct contact was established with different
agencies for receipt of saplings. Pointwise methodology for implementation of tree
plantation programme on such a mass scale is as following.

First tree plantation programme (15th august, 2007) was carried out on "one member,
one tree" basis. Second tree plantation programme (15th august, 2008) in which
around 52.74 lakhs tree were planted was conducted on "one member three tree"
basis.
In year 2009 and in year 2010, in mass tree plantation programme around 84.24 and
83.5 lakhs tree saplings were planted respectively. The programme was conducted on
"one member, five tree" basis. Further, this year 2011 around 72.6 lakhs trees were
planted, the programme was carried out as per the same process and procedures
followed in last year.

Page | 46

There from, in last eight years, milk producers of GCMMF planted around 518.7
lakhs tree saplings in 28 districts of Gujarat. By doing so, milk producers of Gujarat
dairy cooperatives have shown their concern, awareness and commitment for
betterment of environment. Year wise details of tree plantation and survival of tree
saplings planted is as under.
Year of tree
plantation
2007

No. Of trees (in

lakhs)
18.9

No. Of trees survived (in

lakhs)
11

Survival
percentage
58

2008

52.7

26

49

2009

84.2

38

45

2010

83.5

39

47

2011

72.6

34

47

2012

57.4

26

45

2013

72.0

34

47

2014

77.7

35

45

Total

518.7

243

47

Page | 47

4.2.2 Mother Dairy

Overview
The very genesis of the organization was a result of the initiative to provide value to
farmers and safe milk to consumers. Corporate Social Responsibility (CSR) is thus an
integral part of the business model we operate on.
Multitude of social development and other initiatives have been nurtured by Mother
Dairy from its earliest days. At Mother Dairy, their commitment to ethical conduct
and social responsibility is core to their way of doing business, and is strongly aligned
with vision to create and increase value for our Indian farmers and to provide
affordable, safe, healthy and tasty products to consumers.

Community
Their commitment to serve the farmers
Mother Dairy sources significant part of its requirement of Liquid Milk from Dairy
Cooperatives. Similarly Safal sources its requirement of Fruits and Vegetables from
farmers/growers association and Dhara helps the Oilseeds Grower Cooperatives by
sourcing the production of the wide range of Dhara edible oils from them.
This ensures that the farmers get the appropriate prices for their yield and quality.
Mother Dairy also works towards improving the standards of the farmers by educating
them about better farming techniques, hygienic practices and modern methods of
dairy farming. This initiative by Mother Dairy is directed towards making the farmers
independent and financially self-sufficient.

Environment
Their commitment to our environment
Though it may be just a daily affair at Mother Dairy, the Milk Giant, selling almost
11 lacs of loose pasteurized and homogenized milk every day through an extensive
incomparable network of almost 750 booths, 25 mini milk shops, 1,400 Insulated
container outlets and 800 container on wheels, covering the remotest corners of Delhi,
where even a two wheeler cant pass and yet contributing to a larger cause of Green
environment. By doing so, its not only providing nutritious unadulterated, hygienic
milk to every section of society but also modestly helping the society in saving 1,700
tons of plastic every year from getting into the environment.
To commemorate the Environment Day, Mother Dairy attributed this noble cause to
its Bulk Vended Milk Consumers and celebrated their role as Mascots of
Environment Friendly Vended Milk through a signature campaign. This event
witnessed a massive gathering at Mother Dairy outlets followed with lacs of
signatures of consumers who pledged for a better environment.
Overwhelmed by the cause and the occasion, the company spokesperson said: Every
day when more than 6 lac consumers walk to the Mother Dairy outlet to purchase the
Page | 48

bulk vended loose milk they contribute significantly to the environment by saving
tons of plastic from getting into the society at large. On Environment day, we salute
those consumers who have been with us for the last 38 years to contribute towards
greener society for tomorrow.
Many organizations today contribute a part of their profits towards CSR, but at
Mother Dairy the operation in itself is a CSR, allowing less plastic from getting into
the society and servicing the consumer in the remotest corner of Delhi.
Truly, Mother Dairy consumers leave a Green footprint everyday by reassuring their
trust on bulk vended loose milk.

Page | 49

Chapter Five
Analysis of data
Q1.

Out of the 54 respondents who have answered this question 49 are familiar with the
products offered by Amul and Mother Dairy. This constitutes about 96% of the
sample size.

Page | 50

Q2. Have you tried the products?

Page | 51

Page | 52

Page | 53

Respondents answering this question, overall more than 50% of them have tried the
generally available products offered by Amul like milk, butter, cheese, ice-creams,
dahi.
Mother Dairy products are overall tried by 50% of the people who answered but it is
still less than Amul.

Page | 54

Q3. How do you rate the products in terms of taste?

Page | 55

Page | 56

Page | 57

The products offered by Amul are voted as excellent overall in terms of taste, Mother
Dairy products are found to be good. These products are rated by the respondents
Page | 58

varying from the range excellent to average, however no respondent has found any of
the products to be poor in taste.
Q4. Availability of the products with retailers?

Amul products availability with the retailers is rated more than the availability of
Mother Dairy. 98.1% of the respondents say that Amul products are easily available
with the retailers, while only 42.6% people feel that mother dairy products are easily
available.

Page | 59

Q5. How do you rate the products for their value of money?

According to the respondents, Amul provides excellent products for their value of
money and Mother Dairy provides good products for its value.

Page | 60

Q6. Pricing of the products according to you.

People feel both the companies, Amul and Mother Dairy sell their products at a
reasonable price with 79.6% and 63% respectively. 16.7% people have found Amul
products to be priced high and 33.3% that is one-third of the people find Mother Dairy
products high priced. 3.7% people find the products priced low in both.

Page | 61

Q7. How do you find the promotion through TV advertisements?

Amul advertisements are found very effective by 55.6% of the respondents and 44.4%
found them to be effective.
Mother Dairy products have received reviews in all three where most people find the
advertisements to be effective, more people have found them not effective than being
very effective.

Page | 62

Q8. How do you rate the packaging in terms of safety and attractiveness?

Majority of the respondents feel that the packaging of products offered by Amul and
Mother Dairy are excellent and good respectively. Next they feel Amul products are
attractively packed and are safe from any damage etc. Mother Dairy products have
received an equal vote for excellent as well as average packaging of their products.

Page | 63

Q9. How do you rate the brand as a whole?

More than 50% responses are in favour of Amul brand being excellent as a whole,
whereas 46.3% feel that the brand is good.
Mother Dairy brand has been voted as a good brand overall, then average, and then
excellent.
Both brands have not received any vote as poor in terms of the brand as a whole.

Page | 64

Q10. Which brand do you prefer to purchase?

54 responses that is 100% of the people who answered prefer to purchase Amul
products over Mother Dairy.

Hypothesis testing
The hypothesis for the research that is Amul is preferred over Mother Dairy by the
consumers of Mumbai has proven to be correct with reference to the above analysis
of the questionnaire given out to people.
Since most of the responses have been in favour of Amul whether in terms of the
product taste, variety, attractiveness in packaging etc. the hypothesis turns out to be
true.

Page | 65

Chapter Six
6.1 Conclusion
Taking the hypothesis; that Amul is preferred over Mother Dairy by the consumers
into consideration, we know that 54 out of 54 respondents prefer to purchase Amul
products over Mother Dairy products given a choice.
Amul being one of the oldest dairy cooperative in India, it has created a place for
itself in the market and a very high benchmark for other companies in the dairy
industry.
The reason maybe Amuls reach to the consumers, be it easy availability with the
retailers, or its quirky ideas with the posters depicting recent ongoing in the country.
Mother Dairy is probably lacking behind in the reach to the consumers, because 31 of
the respondents have said that the products offered by Mother Dairy are not easily
available with all the retailers.
The responding consumers have felt that Amul products are excellent for their value
of money, while Mother Dairy provides good products for its price.
Both the companies Amul and Mother Dairy have kept their pricing very reasonable
for any category of consumer to purchase, the respondents have as well found the
same in case of price for the products.
The TV advertisements of Amul are directing towards the feeling of being together as
a family and Indianness, through the tag line the taste of India which itself indicates
that Amul products are generally chosen by the people.
Hence we come to know through the comparative study of both companies, Amul is
generally liked as well as preferred by the consumers.

Page | 66

6.2 Recommendations and suggestions

AmulTo improve further Amul can try out the following ideas
1. Amul can venture out on new products like Toned milk, Baby food products,
2. There are certain product like Amul basundi, gulab jamun, and chocolates etc.
which are not as popular as Amul ice cream. Amul must try to understand the cause of
this through thorough market research and work on improving these products
3. Though Amuls hoardings are a huge success, it can penetrate even better in the
rural areas by advertising through the media viz cable channels and newspapers.
Sponsoring shows in TV, sports events can be of great help.
4. Amul has a relatively good distribution network, but still company is not able to fulfill the
demand of outlet in the peak season when demand is very high. Here company should
consider on the supply of product in the peak season.

Mother DairyTo improve further Mother Dairy can try out the following ideas
1. Though Mother Dairy follows break bulk in its distribution system, it needs to
increase its distribution network to more retailers to increase its reach to the
consumers.
2. Penetration in the rural areas of India.
3. Different promotion strategies through advertisements or TV or event sponsorships
may increase its popularity among the consumers.

Page | 67

Annexure
Blank questionnaire:
Consumers perspective on Amul and Mother Dairy
Hi! This questionnaire is for a research project and your perspective on these brands is
required. This will take up a few minutes of your time, thank you!
* required

Are you familiar with the different products offered by Amul and Mother
Dairy?
o
yes
no

Have you tried the products? *

Yes

No

Amul- milk
Butter
Cheese
Ice-creams
Masti dahi
Mother Dairymilk
Butter
Cheese
Ice-creams
Dahi
How do you rate the products in terms of taste? *
Excellent

Good

Average

Poor

Amul- milk
Page | 68

Excellent

Good

Average

Poor

Butter
Cheese
Ice-creams
Dahi
Mother Dairymilk
Butter
Cheese
Ice-creams
Dahi

Availability of the products with retailers? *

Whether easily available or not.
Yes

No

Amul
Mother Dairy
How do you rate the products for their value of money? *
Excellent

Good

Average

Poor

Amul
Mother Dairy
Pricing of the products according to you. *
High

Reasonable

Low

Amul
Mother Dairy
How do you find the promotion through TV advertisements? *
Very effective

Effective

Not effective

Amul
Mother Dairy
Page | 69

How do you rate the packaging in terms of safety and attractiveness? *

Excellent

Good

Average

Poor

Average

Poor

Amul
Mother Dairy
How do you rate the brand as a whole? *
Excellent

Good

Amul
Mother Dairy
Which brand do you prefer to purchase? *
o
Amul
o

Mother Dairy

[,,"314334922124 0

31433492212408

Submit

Page | 70

Bibliography
Marketing Management 14th edition- Philip Kotler
Marketing Management: millennium edition- Philip Kotler
Official sites- National Dairy Development Board
Amul India
Mother Dairy
Wikipedia

Page | 71