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Amul ("priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya," (meaning Precious) formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)
The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India.
In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in 2002.
The portfolio consisted of impulse products like sticks, cones, cups as well as take home packs and institutional/catering packs. It achieved the No 1 position in the country. This position was achieved in 2001 and it has continued to remain at the top.
Today the market share of Amul ice cream is 38% share against the 9% market share of HLL (Kwality Walls), thus making it 4 times larger than its closest competitor.
Not only has it grown at a phenomenal rate but has added a vast variety of flavours to its ever growing range. In January 2007, Amul introduced SUGAR FREE & ProLife Probiotic Wellness Ice Cream, which was a first in India.
Amuls entry into ice creams is regarded as successful due to the large market share it was able to capture within a short period of time due to price differential, quality of products and of course the brand name.
FACTS
The portfolio consisted of impulse products like sticks, cones, cups as well as take home packs and institutional/catering packs. In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in 2002. Nationally it was rolled out across the country in 1999.
Has combated competition like Walls, Mother Dairy and achieved the No 1 position in the country. Today the market share of Amul ice cream is 38%. Amuls entry into ice creams is regarded as successful due to the large market share it was able to capture within a short period of time.
Major players: Amul - Market Leader with share of 36% HLL - Kwality Walls - 2nd biggest player Mother Diary Arun - Chennai Based Hatsun Agro Product
COST SHEET
Particulars
Opening Stock Raw Materials Dry Fruits Milk Flavours Other Ingredients Sugar Cup Cutlery Seasonal Fruits Waffle Cocoa Carriage Inward RAW MATERIAL CONSUMED
CPU
10 3 2.5 3 3.5 2 2.5 1.5 1 0.5 1 1.5 8 1.845 33.845
Amount
1000000 300000 250000 300000 350000 200000 250000 150000 100000 50000 100000 150000 3200000 184500 3384500
Particulars
Direct Expenses Direct Labour PRIME COST Factory Overheads: Fixed: Depreciation Rent Power Insurance Supervisors Salary Variable: Electricity Running exp of machine WORKS COST
CPU
2.2 5.3 40.045
Amount
220000 530000 4134500
Particulars
CPU
Amount
Office Overheads Employee Cost Other Expenditure: Computer Telephone Taxes Carriage Outward COST OF PRODUCTION
1000000
120000 10000 40000 20000 6229500 200000 6429500
Particulars
Selling&Dist Exps: Advertisement Delivery Vehicles Petrol Packaging Rates COST OF SALES
CPU
4 3.5 1.75 0.505 74.05
Amount
400000 350000 175000 50500 7405000
PROFIT
18.5 92.5625
1851250 9256250
SALES
Since the company is earning some percentage of profit above the cost, it means a slight increase in the cost will not have too much of an effect on the profit since there is a large margin of safety.
Since the company is earning some amount of profit, the business is capable to expand and diversify over a period of time.
Determination of SP
Amul Ice Cream has marked the selling price of their product roughly 20% above the cost price.
This implies that they are making a profit on each unit of output that is sold.
These profits can be ploughed into the business again to create more output.