CHAPT

1.1.

PRODUCT EVOLUTION:

1.1.1.Mother Dairy Milk

In this booming period Mother Dairy is looking to take advantage of the
opportunities which are in galore available for all milk manufacturers. Mother Dairy Delhi was set up in 1974 under the Operation Flood Program. It is now a subsidiary
company of National Dairy Development Board (NDDB). Mother Dairy sources its
entire requirement of liquid milk from dairy cooperatives.
Mother Dairy milk (bulk vended) is fortified with vitamin A with 2000 IU per
litre as social accountability. This program started with the Mother Dairy, Delhi, in
February 1980. Thereafter the dairy continues this program on their own without
having any financial assistance from the government since it is felt that BVM is
generally consumed by the middle/lower middle/poor population. It is found that the
dietary practices adopted by these classes are deficient in Vitamin A. Mother Dairy
sources significant part of its requirement of liquid milk from dairy cooperatives.
Processing of milk is controlled by process automation whereby state-of-theart microprocessor technology is adopted to integrate and completely automate all
functions of the processing areas to ensure high product quality, reliability and
safety.
Mother Dairy markets approximately 4.8 million liters of milk daily in the
markets of Delhi, Mumbai, Saurashtra and Hyderabad. They have a market share of
66% in the branded sector in Delhi where it sells 2.3 million liters of milk daily and
undertakes its marketing operations through around 14,000 retail outlets and 845
exclusive outlets. As of April 2013, the dairy commands 71% and Amul commands
29% of market.
1.1.2.Amul Milk
Amul has spurred the White Revolution of India, which has made India the largest
producer of milk and milk products in the world. Amul's genesis is linked to the

freedom movement in India. Sardar Vallabh bhai Patel, an eminent Indian freedom
fighter encouraged the dairy farmers from the Kaira district in Gujarat to form
a cooperative to counter the 'exploitatively' low prices offered for their milk by the
monopoly milk Supplier of the area, Polson's Dairy. The dairy farmers met in
Samarkha (Kaira district, Gujarat) on the 4th of January 1946, and decided to set
up a milk producers' cooperative that would deal directly with the Bombay
government, the final buyer of their milk. This was the origin of the Anand model.
Initially, when the Bombay government refused to deal with the cooperative, the
farmers called a strike. The government finally relented when Bombay went without
milk for a fortnight. The successful union registered itself as the Kaira District
Cooperative Milk Producers' Union Ltd. (KCMPUL), Anand, in Gujarat in December
1946. And so did GCMMF and brand AMUL establish consequently. The main motto
of Amul is to help farmers i.e. Milk producers. Amul system works under objective of
highest possible compensation to the milk producers and lowest possible price to
consumers. Farmer are paid money in cash payment for the milk. Milk gives them
money for the daily necessities. Amul is the one who started using their profits for
the milk producers common good.
Over the last five and a half decades, Dairy Cooperatives in Gujarat have
created an economic network that links more than 3.1 million village milk producers
with millions of consumers in India. These cooperatives collect on an average
9.4 million liters of milk per day from their producer members, more than 70% of
whom are small, marginal farmers and landless labourers and include a sizeable
population of tribal folk and people belonging to the scheduled castes. The turnover
of GCMMF (AMUL) during 201213 was

97.74 billion (US$1.77 billion). It markets

the products, produced by the district milk unions in 30 dairy plants.

1.2.

DETAIL OF THE MARKET

1.2.1.Mother Dairy:
Mother dairy ensures milk availability across all the retail outlets through a control
room set up at the dairy premises. The control room is very vital for efficient
distribution of milk to all the retail outlets. It organizes distribution routes so that
shops do not run out of milk. Each milk tanker is fitted with a wireless set. As soon

as the person in the control room learns that a shop is running out of milk,
he contacts the tanker nearest to the shop on wireless which then delivers the milk
to the shop.

Figure 2.1 Full Cream Milk Sales

Mother Dairy markets approximately 4.8 million liters of milk daily in the markets of
Delhi, Mumbai, Saurashtra and Hyderabad. They have a market share of 66% in the
branded sector in Delhi where it sells 2.3 million liters of milk daily and undertakes
its marketing operations through around 14,000 retail outlets and 845 exclusive
outlets. As of April 2013, the dairy commands 71% and amul commands 29% of
market.

Figure 2.2 Tonned Milk Sales

1.2.2.Amul Milk
AMUL has the largest distribution network for any FMCG company. It has nearly 50
sales offices spread all over the country, more than 5 000 wholesale dealers and
more than 700 000 retailers. Amul became the world's largest vegetarian cheese
and the largest pouched-milk brand. AMUL is also the largest exporter of dairy
products in the country. AMUL is available today in over 40 countries of the world.
AMUL is exporting a wide variety of products which include Whole and Skimmed
Milk Powder, Cottage Cheese (Paneer), UHT Milk, Clarified Butter (Ghee) and
Indigenous Sweets. The major markets are USA, West Indies, and countries in Africa,
the Gulf Region, and SAARC neighbors, Singapore, The Philippines, Thailand, Japan
and China, and others such as Mauritius, Australia, Hong Kong and a few South
African countries.
Over the years Amul has been witnessing strong growth in this portfolio, with
the segment growing at 53%, as a result of growing consumer awareness and
demand for good quality milk, the urban population has especially been showing
great interest in long life UHT products like Amul Taaza, which are packed in Tetra
Pak cartons, which undergoes UHT treatment to remove all harmful microorganisms

while retaining the nutrition in the milk. Today Amul sells around 4-500,000 liters of
UHT milk and other value added products per day and forecast this demand to
continue growing at 25%.The UHT products have enabled Amul to position itself as
the market leader in packaged milk segment by penetrating the deeper and vast
markets by maintaining long shelf life of milk, without the need of maintain cold
supply chains.
Amul has installed an "Any Time Milk" machine dispenses a 300-ml pouch of
fresh milk for Rs 10, at Anand's Amul Dairy. As a first step, Amul plans to install six
such ATMs in Anand itself. According to Rahul Kumar, MD of Amul Dairy, Amul wants
to add a whole range of dairy products, which could be dispensed through these
machines.

1.3.

COMPARISON OF SELLING PREPOSITIONS

1.3.1.Product:
Amul India
Amul Gold is Pasteurized milk and
most hygienic liquid milk available in
the market.
Amul Gold is available in Poly Pack 500ml, 1000ml, 5 Ltr
Amul Gold can be used for Tea or
Coffee, Sweets, Khoa, Curd,
Buttermilk, Ghee
Amul Taaza is pasteurized milk and
most hygienic liquid milk available in
the market
Amul Taaza is available in Poly Pack 500ml, 1000ml, 200ml, 5 Ltr
It can be used for Direct
consumption, Making of: Tea or
Coffee, Sweets, Khoa, Curd,
Buttermilk, Ghee

Mother Dairy

Mother dairy full cream is wholesome and

packed with energy and nutrition thats
essential for growing kids It makes them
stronger from within and keeps them
active and healthy.
Mother Dairy Toned Milk is a perfect blend
of good health and wholesome taste. Its
an ideal choice for people in search of a
nutritionally balanced diet that does not
compromise on taste. It is the right way to
stay fit and fine, jolly and cheerful.

1.3.2.Price
Amul India
At the time Amul was formed, consumers
had limited purchasing power, and modest
consumption levels of milk and other dairy
products. Thus Amul adopted a low-cost
price strategy to make its products
affordable and attractive to consumers by
guaranteeing them value for money.
Amul's Taaza brand of toned milk that sold
for Rs 34 now costs Rs 36. In early 2013, it
was available for Rs 24-26 per litre. Amul
Gold, the full cream variant, now costs Rs
46 over Rs 44. The rate in 2013 was Rs
34-36 per litre.

Mother Dairy

Mother Dairy toned milk now costs Rs

36 per liter
Mother Dairy, the full cream variant,
now costs Rs 46

1.3.3.Place
Amul India

Mother Dairy

Currently Amul has 2.41 million producer

members with milk collection average of
5.08 million liters/day. Besides India, Amul
has entered overseas markets such as
Mauritius, UAE, USA, Bangladesh,
Australia, China, Singapore, Hong Kong
and a few South African countries. Its bid
to enter Japanese market in 1994 had not
succeeded, but now it has fresh plans of
flooding the Japanese markets. Other
potential markets being considered
include Sri Lanka.

However, as far as other dairy

products are concerned, Mother Dairy
plans to expand across the board.
Other than milk, for most state
federations, dairy products are still a
small part of their operations. So they
are taking their products to regions
across India, where they see enough
market potential. In ice creams, it
was only two years ago that Mother
Dairy entered its first market outside
Delhi -UP and Punjab. Today, it's
extended its operation to Haryana,
Jaipur, Mumbai and Kolkata as well.
Next year, it plans to go south to
Hyderabad and Bangalore. In the
case of butter and cheese, it's
present across north India, Mumbai
and Kolkata, and has plans to enter
Bangalore by year-end. In UTH milk, it
has entered Mumbai and the milkshort areas of West Bengal and northeast. For ghee, although the current
focus is the northern region, it has
plans for a nationwide presence.

1.3.4.Promotion:
Amul India
Gujarat Co-operative Milk Marketing
Federation (GCMMF) has launched a
print and digital campaign for its
brand Amul.
Each ad of the campaign features a
person with a milk moustache who
Eats milk with every meal, and lists
exaggerated benefits of doing so
alongside nutritional benefits of Amul
products. The characters depicted
include a tennis player who wins
doubles playing alone; a man who lifts
the car to change the tyre; an office
geek who hasnt taken sick leave in
five years; and a young woman who
flaunts her out-of-the-shower look
24x7. Amuls dairy product range
including milk, butter, paneer, ice
cream and ghee are showcased.

Mother Dairy
On the marketing front, Mother Dairy
says it's trying to take its product
campaigns and communications to a
higher platform. For instance, in the case
of milk, the campaigns do not talk about
the obvious benefits - milk is good for
health, it has calcium and so on - but
rather it targets children and are created
around ideas such as "The country needs
you, grow faster".

Amul takes humour route, to say

Eat milk with every meal

1.4.

POSITIONING MAP:

Figure 2.3 Positioning Map

The above figure 2.3 shows the positioning map of Amul and Mother Dairy. Amul has
positioned it as a slow perishable and high on purity comparative to other milk
brands. On the second map, Amul has positioned as high on taste and health. On
the other hand, Mother Dairy has positioned as fast perishable as compared to Amul
however high on purity as compared to Amul. Mother Dairy is less healthy and low
on taste as compared to Amul.