Post Graduate Course in Business Management

Name : Param saxena

SMS ID / SID : 2405915/DB09154

Name of the center : IIFT Building, Bistupur,

Jamshedpur

Batch : PGCBM-16

Faculty : Prof.Sanjay Patro

Sector :Food

Concept :AMUL- the taste of India“

 Contents
Chapter Page number

1. Intorduction : The AMUL story 3

2. Market Segmentation Of AMUL products 7
3. Positioning 16

4. Pricing 18

5. Promotion 19

6. Product strategy 21

7. Positioning 22

8. Distribution 23

9. Conclusion 24
Project Outline for Sales and Brand Management Course

Sector : Food products

Company : Gujarat Cooperative Milk Marketing Federation (GCMMF)

The AMUL Story

The AMUL story started with the formation of The Kaira District
Cooperative Milk Producers’ Union Limited on December 14, 1946 to
counter the exploitation of petty milk producers in the city of Anand in
Kaira district of Gujarat by middlemen or traders. These villagers had to
travel long distances to deliver milk to the only dairy, the Polson Dairy in
Anand resulting in often milk becoming sour, particularly in the summer
season.
The prices and the off-take from the farmers were dictated by these
middlemen and ofter the poor milk producers were at the receiving end.
Milk is a commodity that has to be mulched regularly twice a day from
each cow/buffalo. Thus producers were either left with surplus unsold
milk or had to sell it at very low prices.
The producers of Kaira district took advice of the nationalist leaders,
Sardar Vallabhbhai Patel, who advised the farmers to form a
Cooperative and supply directly to the Bombay Milk Scheme instead of
selling it to Polson, who did the same but gave much lower prices to the
producers. Thus the Kaira District Cooperative was established to collect
and process milk in the district of Kaira. Milk collection was also
decentralized as most producers were marginal farmers who would
deliver 1-2 litres of milk per day. Village level cooperatives were
established to organize the marginal milk producers in each of these
villages. The first modern dairy of the Kaira Union was established at
Anand with the name of Anand Milk-producers Union Limited (AMUL).
AMUL also meant priceless from the Sanskrit word Amoolya.

50 years down the time tunnel the dairy industry in India and particularly
in the State of Gujarat looks very different. India for one has emerged as
the largest milk producing country in the world. Gujarat emerges as the
most successful State in terms of milk and milk product production
through its cooperative dairy movement. AMUL becomes the focal point
of dairy development in the entire region and emerged as one of the
most recognized brands in India, ahead of many international brands.
Starting with a single shared plant at Anand and two village cooperative
societies for milk procurement, the dairy cooperative movement in State
of Gujarat had evolved into a network of 2.12 million milk producers who
are organized in 10,411 milk collection independent cooperatives
(Village Societies). These Village Societies (VS) supply milk to thirteen
independent dairy cooperatives (called Unions). AMUL is one such
Union. Milk and milk products from these Unions are marketed by a
common marketing organization called Gujarat Cooperative Milk
Marketing Federation (GCMMF), which is India's largest food products
marketing organization. It is state level apex body of milk cooperatives in
Gujarat which aims to provide remunerative returns to the farmers and
also serve the interest of consumers by providing quality products.

CRISIL, India's leading Ratings, Research, Risk and Policy Advisory

company, has assigned its highest ratings of "AAA/Stable/P1+" to the
various bank facilities of GCMMF.

AMUL has become household name in India, when one thinks of AMUL
one gets reminded of AMUL butter with its polka dotted butter girl,
famous for its longest running advertisement campaign “utterly butterly
delicious AMUL”.
Besides India, AMUL has entered overseas markets such as Mauritius,
UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a
few South African countries
First hoarding of AMUL was put up in 1967 in Mumbai after the concept
was conceived by Sylvester daCunha, then the managing director of the
advertising agency, ASP, clinched the account for AMUL butter. Since
then AMUL is consistent in targeting its customers. Positioning of AMUL
is “Taste of India”.
Most of AMUL’s communication is based on latest happenings in the
country. That is why its ads are termed different from what is that of its
nearest rival, Mother dairy. Most of Mother dairy ads are directly targeted
to children where as AMUL’s ad are on current affairs, in which adults
are also involved.
AMUL has high brand equity and umbrella branding of AMUL has helped
the company in bigger sense. AMULs’s brand name has helped its other
brands also like Mitahi made, AMUL Ice creams, chocolates, AMUL Kool
etc. So umbrella Brand, AMUL is used to build and offer value to
customers in bigger sense. In literal sense, a company has high brand
equity if it has multi dimensions. AMUL has explored various available
opportunities to reach to mass customers. It has opened a community
on public forums like orkut, sponsored events like AMUL voice of India
etc. The brand value of AMUL will surely help company to maintain the
status of largest food brand in India at least for sometime in future.
AMUL is the biggest brand in the pouched milk sector in the world and in
India it is the biggest food brand. AMUL's range of products includes
milk, ghee, milk powders, curd, ice cream, paneer, cream, chocolate,
cheese, butter, and shrikhand. The various brands of AMUL's bread
spreads are AMUL Lite, AMUL Butter, and Delicious Table Margarine.
The Brand AMUL's milk drinks are sold under various names such as
AMUL Kool, AMUL Kool Cafe, Kool Koko, AMUL Kool Chocolate Milk,
and AMUL Masti Spiced Buttermilk. AMUL's powder milk are sold under
many names like AMULya Dairy Whitener, Sugar Tea CoffeeWhitener,
Sugar Skimmed Milk Powder, and AMUL Instant Full Cream Milk
Powder. The brand's cheese are also sold under various names such as
Gouda Cheese, AMUL Cheese Spreads, and AMUL Emmental Cheese.
AMUL Brand's desserts are sold under many names like AMUL Basundi,
AMUL Lassee, Gulab Jamun Mix, AMUL Shrikhand, and AMUL Ice
Creams. AMUL has around 2.6 million producer members and the total
capacity for handling milk is around 10.16 million liters every day. The
brand's capacity for milk drying is around 594 Mts. each day and its
capacity for cattle feed manufacturing is about 2640 Mts. each day.
The Brand AMUL has been recipient of various awards such as the
Ramkrishna Bajaj National Quality Award in 2003, Award International
Cio 1000 for Resourcefulness, and also the Rajiv Gandhi National
Quality Award in 1999. AMUL exports its products to various countries
such as USA, Australia, Mauritius, China, Hong Kong, Singapore, UAE,
and Bangladesh. The sales turnover of the Brand AMUL amounted to
Rs. 29225 million in 2004- 2005, in 2005- 2006 the figure stood at Rs.
37736 million, and in 2006- 2007 the figure increased to Rs. 42778
million.
AMUL has Competitive sustainable advantage (CSA) over its
competitors. AMUL’s CSA lies in its procurement part ,the ability to
collect 447,000 litres of milk every day from 2.12 million farmers ,convert
them into goods worth Rs 6 crore and distribute them to 5,00,000
retailers across country. No other dairy in India has such a sustainable
procurement network.

AMUL Rated No. 1 “Indian” Brand in Asia-Pacific

The “Media Magazine” published from Hong Kong and Singapore has
ranked AMUL as the No. 1 Dairy Products brand of Asia-Pacific ahead
of Kraft, Dutch Lady, Dumex, Walls, Anchor, Magnolia, Everyday and
several other leading brands of the region.

It has also ranked AMUL as the 83rd Best Brand in its ranking of Top
1000 brands of Asia-Pacific based on a consumer survey conducted in
Australia, China, India, Japan, Korea, Hong Kong, Malaysia, Singapore,
Taiwan and Thailand. It’s rank has jumped from 180th Rank in 2008 to
83rd in Asia Pacific this year.

There is no other “Indian” brand in the list of Top 1000 brands ahead of
AMUL (#83). The other Indian brands ranked as per the survey are
Kingfisher (# 158), ICICI Bank (# 173), Tata (# 225) and Big Bazaar (#
239) to name a few.

As per the rankings published for INDIA Market, the top 4 out of the top
5 brands are MNCs viz. Sony (#1), LG (#2), Samsung (#3), AMUL (#4)
and HP (# 5). Thus, the Indian consumers too have given AMUL a top
rank in the Food and FMCG category.

Asia Pacific’s Top 1000 brand listing is based on a proprietary survey

co-funded by Media Magazine. Ten markets were included in the sixth
round of survey: Australia, China, India, Japan, Korea, Hong Kong,
Malaysia, Singapore, Taiwan and Thailand.
Market Segmentation Of AMUL products

The purpose of segmentation is to identify and target prime customer

groups so that returns are maximized. Some of the attributes of
segmentation are as follows:

1. Homogeneity within the segment

2. Heterogeneity between various segments
3. Segments are measurable and identifiable
4. Segments are easily accessible and actionable
5. Segment should be large enough to be profitable.....

Since the product range of AMUL is in food category, the market

segmentation essentially targets various food groups like
Bread spreads
Milk Drinks
Dairy whitener
Fresh Milk
Cheese products
Fast Foods

Sweets
Cooking media

Ready to eat food

Chocolates

Health Drinks

From the above array, it is clear that the products are carefully chosen
and segmented to individual customer preference. Product range caters
needs from morning breakfast needs to after dinner deserts and includes
media to cook food also. Health drinks are another segment targeted to
urban mother, who is worried about the nutrition and growth of her
children.
Positioning

After the most attractive segments are selected, a company should not
directly start targeting all these segments. The attractiveness of the
segments is also depending on other important factors. In the main
activity of defining a target market, four sub activities are given which are
the bases for deciding on which segments will actually be targeted.

In all three age groups are targeted namely children (7-20 years of age),
Adults (21-40 years of age) and seniors (40-60 years of age) on the
basis of their specific product preferences and taste

The four sub activities performed by AMUL while targeting are:-

1. Defining the abilities of the product and resources needed to enter a

market segment
2. Analyzing competitors on their resources and skills
3. Considering the company’s abilities compared to its’ competitors.
4. Deciding on the actual target markets.

This analysis lead to a list of segments which are most attractive to

target and have a good chance of leading to a profitable market share.

Marketing Mix

The major marketing management decisions can be classified in one of

the following four categories:

1. Product

2. Price

3. Place

4. Promotion

These variables are known as the marketing mix or the 4 P's of

marketing. They are the variables that marketing managers can control
in order to best satisfy customers in the target market. The marketing
mix is portrayed in the following diagram:
 PRODUCT POSITION

TARGET
MARKET

PROMOTION
PRICE

These strategies in terms of their products, price, place and promotion

are discussed below:
Pricing strategy

AMUL products pricing is based upon prices of the similar competitor

products. For example, AMUL’s new launch Choco Crunch Pricing is
based on three types:-
1) Product is lasting distinctiveness from competitor's product.
Assumptions are
a) The product has low price elasticity.
b) The product has low cross elasticity.
c) The demand of the product will rise.
2) Products have low perishable distinctiveness from competitor's
product, assuming the product features are medium distinctiveness.
3) Products have little distinctiveness from competitor's product.
Assumptions are :
a) The product has high price elasticity.
b) The product has some cross elasticity.
c) No expectation that demand of the product will rise.
Price is the factor that beats out all other chocolates in the competition.
Such as Cadburys. In many a cases AMUL and Cadbury frenchise are
right next to each other. But if given the choice people would prefer
AMUL products and not Cadbury as the prices of AMUL product is
cheaper as compared to their competitors like Cadbury and this has
worked as an advantage.
The price of AMUL and Cadbury dry fruit Coch crunch is Rs 80 vs. Rs.
100 for a pack of 20 pcs. By comparing the prices of the products of
AMUL and cadbury, it can be seen that that the prices offered by
Cadbury are on the higher side as compared to AMUL. Thus it may be
concluded that cadbury’s target customers are professionals, working
couples and families in the categories that prefer multinational brand and
who are willing to pay higher prices. Whereas AMUL’s typical customers
are from the upper middle class or middle class families, who can afford
these prices and looking at these target customers the company has
designed its outlet to look young and trendy with vibrant colors such as
brownie, black current(purple) and Butter scotch predominating the
outlets.
Promotion Strategy

A successful product or service will mean nothing unless the benefit of

product are communicated clearly to the target market. An organization’s
promotional strategy can consist of:

1. Advertising:
2. Public relations:
3. Sales promotion:

AMUL hoarding has been one of the most talked about Friday changes
apart from new movie releases.
Its advertising has also started using tongue-in-cheek sketches starring
the AMUL baby commenting jovially on the latest news or current
events. The pun in her words has been popular.
The AMUL ads are one of the longest running ads based on a theme,
now vying for the Guinness records for being the longest running ad
campaign ever whose charm has endured fickle public opinion,
gimmickry and all else.
AMUL has been using various channels to promote the brand. AMUL
Hoardings are already a legend, besides various print advertisements
and sponsorship of various television programs,
Corporate social activities have also been cleverly used to promote
brand such as AMUL vidyashree awards, AMUL vidyabhushan award,
AMUL Maharani awards, AMUL disaster relief fund, online contests,
treeplantation drive etc
Product Strategy:

Cost

Strong emphasis on targeting cost saving by utilizing value engineering,

minimum product variety, integration of suppliers into the supply chain,
usage of high volume equipments automation to optimize production,
quality and cost, and automated material handling equipments to add
the cutting edge to remain cost competitive.

Quality/ Reliability

Disciplined product development process is employed with specific focus

on customer needs. Use of modern manufacturing techniques and
stringent quality controls ensure that products are of top quality and
meet customer’s expatiations completely. Computer aided inspection
and testing equipments are deployed to check the quality of products
and control process to ensure minimum waste/ rejection.

Time to Market

Continuous surveillance of the market and profound understanding of

customer needs. Well planned and managed programs with clearly laid
out definitions and roles and responsibilities.

A starting point is to define and understand the company's marketplace,

customers’ needs and competition. Based on this assessment, the
company's primary competitive dimensions can be selected and a
strategy defined to develop and enhance these competitive dimensions.
Once this is done, product and process design can be oriented to
implement this strategy.
Positioning

With the list of target markets in hands, next step is to start on deciding
on a good marketing of a product.

The Process of Positioning the Product:

1. Identify the differential advantages in each segment

2. Decides on a different positioning concept for each of these
segments.
3. When the positioning statement is created, one can start on
creating the marketing mix.

All AMUL products are cleverly positioned to cater to the needs of

middle to upper middle class customers, who form the bulk of clientele of
the product range AMUL products have been placed in. By pricing the
products cheaper than the competitor (Cadbury for chocolates, Vadilal &
Quality for ice creams, and Bornvita and Complan for health drinks etc),
attractive packaging appealing to the target customer segment they
have been able to carve out a market for their products and retain their
customers.
Distribution Strategy

In order to ensure a continuous & efficient distribution, AMUL has

launched multiple strategies to ensure that products are made available
to the customers. AMUL products are available at various stores, friendly
neighborhood grocer, specialty stores, exclusive outlets, parlors at
railway stations, scooping parlors and even ordered thru net. AMUL has
embarked on standardizing their retail outlets and have set following
conditions:

 The criteria for selection of APOs would be -

a. Visibility - How prominent is the location of shop?
b. Shop area: 100 - 300 sq. ft.
c. Good Business potential
d. Exclusive AMUL outlet - no other products
e. Willingness to sell the entire range of AMUL Products
f. Creditworthiness and past business experience

 Field force would visit the proposed site, who would fill the APO proposal form.
Required documents are:
i. Shops and Establishment license
ii. Layout of the shop and frontage - The layout of the shop designed by a
local architect/local contractor.
iii. 2 Passport size photographs

 Renovation Work of the Shop to give it a standard look - would be done to

meet the design and specifications at vendor’s cost. The cost of renovation of a typical
shop would normally be between Rs. 60,000 to Rs. 1 lac.
 Branding- The APOs would be branded as "Amul Utterly Delicious". The cost of
the signage fabrication and installation would be borne by GCMMF office operating
in your region.
 Equipment- Following equipments are required to be bought:
a. 1or 2 deep freezers can be purchased through Hamara Apna Deep
Freezer Scheme
b. 1 Refrigerator through Hamara Apna Refrigerator Scheme
c. 1 pizza oven
d. 1 Chest Milk Cooler for Pouch Milk
Conclusion

It has been a pleasure to undertake a journey thru time tunnel while

researching material on AMUL. The journey took some pages from my
own childhood and made understand many strategies hitherto
unexplained as to why that chubby girl keep changing on every Friday
in the hoarding next to the market. The journey for AMUL has been
long starting off as a cooperative for villagers and ultimately emerging
as a corporate ready to take on multinationals on their home turf and be
proud to be a truly Indian entity. While negotiating the journey in the
growth path, GCMMF has created value for its stake holders,
generated confidence among the members and made white revolution
a reality in India. The saga was well captured by noted director Shyam
Benegal in his movie “Manthan”.

AMUL has emerged as a brand, India can be proud of, and in bringing
the brand to this status, many strategies relating to segmentation,
positioning, promotion and distribution have been put to use since
inception and by being a continually proactive player in the market,
AMUL has emerged into a success story. Some of the strategies have
been discussed here and they have provided a deeper understanding
of product and brand management and also, gave hands on
experience. Also, it provided the insight that product and brand
management can be used in our daily operations, and thus, is a useful
aid in the marketing of different products.

I am extremely thankful to Dr. Sanjay Patro for providing with an

opportunity to this very insightful study which has helped understand
product and brand management better.
Bibliography

 www.AMUL.com
 www.wikipedia.org
 www.thehinhubusinessline.com
 http://www.brandstoday.in/2009/06/11/AMUL-rated-no-1-
%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/
Annexure 1:

Some memorable AMUL Hoardings