A PROJECT

REPORT
ON
Amul Business and Product
Strategy
As a part fulfillment of Full time industry
integrated MBA + Post Graduate Program
in Business Management

Submitted
to:
Submitted by

NSB School of Business

SANJAY KUMAR

New Delhi
Roll NO- MJA09116

Semester- IV

Batch->Jan 2009-11

1
 Specialization-
>Marketing

DECLARATION

I Sanjay Kumar, student of MBA at NSB

BUSINESS SCHOOL, hereby declares that the
project report entitled “A Project Report on Amul
Business and Product Strategy” is an original
document and written by me on the basis of my
winter training , has been done with consultation
with the project guide. Feasible suggestions have
been incorporated in consultation with the project
guide.

2
 ACKNOWLEDGEMENT

This research in itself is an acknowledge to the

inspiration, drive, technical assistance contributed
to it by many individuals. This study even internal
part of our MBA programme and to do this project in
a short period was a heavy task. Intention,
dedication, concentration and hard work are very
much essential to complete any task. But still it
needs lot of support, guidance assistance, co-
operation of people to make it successful.

3
I bear to imprint of my people who have given me
their precious ideas and times to enable me to
complete the research and the project report. I
want to thank them for their continuous support at
my research and writing efforts.

SANJAY KUMAR

Table of content

Sr. No. Contents

Page No.

1. Company Profile
5

2. The brand name – Amul

9

3. List of products marketed

12

4
4. Performance of Amul in last decade
16

5. Plants
22

6. Amul Preferred outlets

24

7. Business Objective
26

8. Business Modal
27

9. Business Strategy
31

10. Market Development Strategy

39

11. Amul Best Practice

42

5
12. Product Positioning Strategy
43

13. Diversification
53

14. Research Methodology

55

15. Data Collection Tools

63

16. Questionnaire
65

17. Recommendation
67

18. Conclusion
69

19. Bibliography
72

6
 COMPANY PROFILE

AMUL AND THE COOPERATIVE

MOVEMENT:

Amul embarked upon its illustrious journey as a beacon for the

Indian cooperative movement in 1946. Since then, it has been
undergoing a multidimensional evolution whose overarching
objective has been the same throughout: serving the farmer and
catering to consumer requirements.

A structural landmark in this evolution process was the formation

of the GCMMF in 1974, under the charismatic leadership of V
Kurien, the father of milk revolution in India, the Amul model of
cooperatives soon became an example for others to emulate. This
model showed that an integrated approach along cooperative lines
could enhance production, procurement, processing and
marketing of milk.

Throughout these last 35 years, the company has demonstrated-

again and again-that Amul both represents and reconciles diverse
expectations and aspirations.

Amul has used the co-operative integrated approach to dominate

the dairy products market and is using its strong brand name to
diversify into non-dairy products, processed foods and other
products.

India’s largest cooperative society, Amul, had revenue worth

USD 672 million in 2004-05.

The company is also the largest food products organization of the

country and the market leaders in whole milk, condensed milk,

7
milk powder, butter, cheese, ice cream, dairy whitener and
sweets.

Every day, millions of Indians wake up to the taste of Amul, the

flagship brand name of Gujarat co-operative societies in the
India’s western state of Gujarat.

It had an annual turnover of Rs 29,225 million for 2004-05.

GCMMF links about 11,000 village societies across India, a total
of 2, 41 million milk-producing families

The success of Amul has also resulted in the proliferation of

numerous Amul-like cooperatives such as Aavin, Gokul, Him,
Mahananda, Milma, Nandini, Omfed, Parag, Sanchi, Saras,
Sudha, Verka, Vijaya, Vita-all, Warana, etc., and other private
players, including Amrut Industries, J K Dairy, Heritage Foods,
Indiana Dairy, Dairy Specialties, etc. across India. In the last
three years, as many as 1,300 milk societies have been registered.

According to industry experts, the scope for growth especially in

the organized dairy industry is huge, since it accounts for less
than 15% of the total milk produced and other packaged dairy
products. Nevertheless, it cannot be certainly said whether the
other dairy societies would be able to emulate the success of
Amul.

In 1991, following de-licensing of the dairy industry, GCMMF

was faced with a question of whether it should stick to its core
business of dairy products or diversify into other products,
especially into processed foods such as jams, sauces and fruit
juices where it had to compete with other multinationals.
8
In 1996, B M Vyas, Managing Director, GCMMF, commissioned
the Indian Market Research Bureau (IMRB) to conduct a market
survey to identify the products consumers wanted from Amul.
Based on the results, Amul forayed into non-dairy business for
the first time since its inception.

It forayed into value added products like ice creams, baby foods,
curds, confectioneries, energy drinks, cheese, paneer, pizza,
condensed milk and others.

According to an analyst, a part of Amul’s diversification is driven

by compulsion than anything else.

Being a cooperative, Amul was forced to buy all the milk that
was produced in Gujarat. Moreover, with milk production having
increased since the mid-1990s, GCMMF had to make use of all
the extra milk available and so the pressure to manufacture and
market more and more processed milk products arose.

He further added that only 15% of GCMMF’s revenues came

from these value-added offerings as of 2004-2005. Amul also
entered various overseas markets such as Mauritius, UAE, the
US, Bangladesh, Australia, China, Singapore, hong- Kong and a
few South African countries.

Gujarat Cooperative Milk Marketing Federation

(GCMMF):
9
Gujarat Cooperative Milk Marketing Federation (GCMMF) is an
India’s largest food product marketing organization. It is a 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, which are
good value for money.

GCMMF consists of:

10
Members: 13 district
cooperative milk
producer’s
Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13,328

Total Milk handling capacity: 11.22 million

litres per day

Milk collection (Total - 2008-09) : 3.05 billion litres

Milk collection (Daily Average : 2008- 8.4 million litres

09)

Milk Drying Capacity: 626 Million litres

per day

Cattle feed manufacturing capacity : 3500 Million

litres per day

11
AMUL BUTTER GIRL

12
 The moppet who put Amul on India's breakfast
table:
Amul products have been in use in millions of
homes since 1946. Amul Butter, Amul Milk Powder,
Amul Ghee, Amulspray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramul, Amul Milk and Amulya have made Amul a
leading food brand in India.

50 years after it was first launched, Amul's sale

figures have jumped from 1000 tons a year in 1966
to over 25,000 tons a year in 1997. No other brand
comes even close to it. All because a thumb-sized
girl climbed on to the hoardings and put a spell on
the masses.

For 30 odd years the Utterly Butterly girl has managed to keep
her fan following intact. So much so that the ads are now ready to
enter the Guinness Book of World Records for being the longest
running campaign ever. The ultimate compliment to the butter
came when a British company launched butter and called it
Utterly Butterly.

13
 The Brand Name - “AMUL”

AMUL means "priceless" in Sanskrit. The brand name "Amul,"

from the Sanskrit "Amoolya," was suggested by a quality control
expert in Anand. Variants, all meaning "priceless", are found in
several Indian languages.

Amul products have been in use in millions of homes since 1946.

Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul
Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramul, Amul Milk and Amulya have made Amul a leading
food brand in India.

Today “Amul” is a symbol of many things: -

• Of high-quality products sold at reasonable prices.

• Of the genesis of a vast co-operative network.

• Of the triumph of indigenous technology.

• Of the marketing savvy of a farmers organization.

14
 • Of a proven model for dairy development.

MILK PROCUREMENT

Total milk procurement by Member Unions during

the year 2008-09 averaged 2.79 billion. Milk
collection (Daily Average 2008-09): 8.4 million litres,
total milk handing capacity 11.22 million per day
achieved.

DISTRIBUTION
Alignment of four Distribution Highways of fresh,
chilled, frozen and ambient products is a major
factor for the company. The company is planning to
increase our Distributor Network in smaller towns.
The fast changing market scenario resulting from
rise in household incomes leading to metamorphosis
of rural and smaller markets, significant increase of
middle class families and migration from rural areas
to smaller developing towns has resulted in the
emergence of growing markets in smaller towns all
across the country.

An addition of almost 900 distributors in small towns

was undertaken on a Time Based Military (TMT)
technique. This initiative has already started
yielding results in the form increasing availability of

15
products in smaller towns and thereby generating
additional business.

SALES
During the year, Federation's sales registered a
growth of 1.4 percent to reach Rs. 2,922.53 crores
(Rs.29.22 billion) including consignment sales of
Rs.1.53 crores (Rs.0.02 billion). Despite intense
competition, sales value of Amul Butter grew by 4.5
percent.

LIST OF PRODUCTS MARKETED

Bread Spreads:
• Amul Butter
• Amul Lite Low Fat Bread spread
• Amul Cooking Butter

Cheese Range:
• Amul Pasteurized Processed Cheddar
Cheese
• Amul Processed Cheese Spread
• Amul Pizza (Mozzarella) Cheese
• Amul Shredded Pizza Cheese
• Amul Emmental Cheese
• Amul Gouda Cheese
• Amul Malai Paneer (cottage cheese)

16
 • Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

• Amul Shrikhand (Mango, Saffron, Almond
Pistachio, Cardamom)
• Amul Amrakhand
• Amul Mithaee Gulabjamuns
• Amul Mithaee Gulabjamuns Mix
• Amul Mithaee Kulfi Mix
• Avsar Ladoos

UHT Milk Range:

• Amul Shakti 3% fat Milk
• Amul Taaza 1.5% fat Milk
• Amul Gold 4.5% fat Milk
• Amul Lite Slim-n-Trim Milk 0% fat milk
• Amul Shakti Toned Milk
• Amul Fresh Cream
• Amul Snowcap Softy Mix

Pure Ghee:
• Amul Pure Ghee
• Sagar Pure Ghee
• Amul Cow Ghee

Infant Milk Range:

17
 • Amul Infant Milk Formula 1 (0-6 months)
• Amul Infant Milk Formula 2 (6 months
above)
• Amulspray Infant Milk Food

Milk Powders:
• Amul Full Cream Milk Powder
• Amulya Dairy Whitener
• Sagar Skimmed Milk Powder
• Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

• Amul Mithaimate Sweetened Condensed
Milk

Fresh Milk:
• Amul Taaza Toned Milk 3% fat
• Amul Gold Full Cream Milk 6% fat
• Amul Shakti Standardised Milk 4.5% fat
• Amul Slim & Trim Double Toned Milk 1.5%
fat
• Amul Saathi Skimmed Milk 0% fat
• Amul Cow Milk

Curd Products:
• Yogi Sweetened Flavored Dahi (Dessert)
18
 • Amul Masti Dahi (fresh curd)
• Amul Masti Spiced Butter Milk
• Amul Lassee

Amul Ice creams:

• Royal Treat Range (Butterscotch, Rajbhog,

Malai Kulfi)

• Nut-o-Mania Range (Kaju Draksh, Kesar Pista

Royale, Fruit Bonanza, Roasted Almond)

• Nature's Treat (Alphanso Mango, Fresh Litchi,

Shahi Anjir, Fresh Strawberry, Black Currant,
Santra Mantra, Fresh Pineapple)

• Sundae Range (Mango, Black Currant,

Sundae Magic, Double Sundae)

19
• Assorted Treat (Chocobar, Dollies, Frostik,
Ice Candies, Tricone, Chococrunch, Megabite,
Cassatta)

• Utterly Delicious (Vanilla, Strawberry,

Chocolate, Chocochips, Cake Magic)

Amul Chocolate
• Amul Milk Chocolate
• Amul Fruit & Nut Chocolate
• Amul Fundoo
• Amul bindaas
• Amul Almondbar

Performance of Amul in last decade:

Sales Turnover Rs (million) US $ (in millions)

1998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

20
 2003-04 28941 616

2004-05 29225 672

2005-06 37736 850

2006-07 42778 1050

2007-08 52554 1325

2008-09 67113 1504

Bread Spreads
Amul Butter Amul Lite
Utterly Butterly Delicious Low fat, low Cholesterol Bread
Spread

Delicious Table
Margarine
The Delicious way to eat
healthy

Milk Drinks
Amul Kool Millk Shaake Amul Kool

21
 Amul Kool Cafe Kool Koko
A delight to Chocolate Lovers.
Delicious Chocolate taste

Nutramul Energy Drink Amul Kool Chocolate

A drink for Kids - provides Milk
energy to suit the needs of
growing Kids

Amul Kool Flavoured Amul Kool Flavoured

Bottled Milk Tetra Pack

Amul Masti Spiced Amul Lassee

Buttermilk
Amul introduces the Best Thirst
Quenching Drink

Amul Kool Thandai

Powder Milk
Amul Spray Infant Milk Amul Instant Full
Food Cream Milk Powder
Still, Mother's Milk is Best for A dairy in your home
your baby

22
 Sagar Skimmed Milk Sagar Tea Coffee
Powder Whitener
Which is especially useful for diet
preparations or for use by people
on low calorie and high protein
diet.

Amulya Dairy Whitener

The Richest, Purest Dairy
Whitener

Fresh Milk
Amul Fresh Milk Amul Gold Milk
This is the most hygienic milk
available in the market.
Pasteurised in state-of-the-art
processing plants and pouch-
packed for convenience.

Amul Taaza Double Amul Lite Slim and

Toned Milk Trim Milk

Amul Fresh Cream Amul Shakti Toned

Milk

Amul Calci+ Amul Buttermilk

23
Cheese
Amul Pasteurised Amul Cheese Spreads
Processed Cheese Tasty Cheese Spreads in 3 great
100% Vegetarian Cheese made flavours..
from microbial rennet

Amul Emmental Cheese Amul Pizza Mozzarella

The Great Swiss Cheese from Amul, Cheese
has a sweet-dry flavour and Pizza cheese...makes great tasting
hazelnut aroma pizzas!

Gouda Cheese

For Cooking
Amul / Sagar Pure Cooking Butter
Ghee
Made from fresh cream.
Has typical rich aroma
and granular texture. An
ethnic product made by
dairies with decades of
experience.

Amul Malai Paneer Utterly Delicious

Ready to cook paneer to Pizza
make your favourite
recipes!

24
 Mithai Mate Masti Dahi
Sweetened Condensed
Milk - Free flowing and
smooth texture. White to
creamy color with a
pleasant taste.

Pro-biotic Dahi

Desserts
Amul Ice Creams Amul Shrikhand
Premium Ice Cream made in A delicious treat, anytime.
various varieties and flavours
with dry fruits and nuts.

Amul Mithaee Gulab Amul Chocolates

Jamuns The perfect gift for someone
Pure Khoya Gulab you love.
Jamums...best served piping
hot.

Amul Basundi Amul Yogi Yoghurt

25
Health Drink
Nutramul Amul Shakti Health
Malted Milk Food made from Food Drink
malt extract has the highest Available in Kesar-Almond and
protein content among all the Chocolate flavours.
brown beverage powders sold in
India.

Plants:

First plant is at ANAND, which engaged in the

manufacturing of milk, butter, ghee, milk powder,
flavored milk and buttermilk.

26
Second plant is at MOGAR, which engaged in
manufacturing chocolate, Nutramul, Amul Ganthia
and Amul lite.

Third plant is at Kanjari, which produces

cattelfeed.

27
Fourth plant is at Khatraj, which engaged in
producing cheese.

28
 AMUL PREFERRED OUTLETS

Amul has justified its undisputed leadership in foods

business by creating 5000 Amul preferred outlets in
a record time which exclusively sell wide range of
Amul products. This has been possible due to strong
brand equity and I mmense consumer support. We
now have now ambitious plans of creating 10,000
Amul parlours by 2012.

Amul Parlours are successfully operating in more

than 1400 towns at high streets, residential areas,
Railway Stations, Bus Stations, Educational
Institutions and a whole lot of Centres of Excellence.

29
Here is a list of the few of the Amul parlours
operating across the various parts of the country

1. Indian Institute of Management, Ahmedabad

2. New Delhi Railway Station PF6/7 & PF10/11
3. National Institute of Design
4. Infosys Technologies in Bangalore, Mysore
& Pune
5. Wipro, Bangalore
6. Indian Institute of Management, Kolkata
7. Ahmedabad Airport
8. Koyambedu Bus Station, Tamilnadu
9. Savitha Dental College, Chennai
10. IIT, Guwahati

EXPORT AND AWARDS

GCMMF is India's largest exporter of Dairy Products.
It has been accorded a "Trading House" status.
GCMMF has received the APEDA Award from
Government of India for Excellence in Dairy Product
Exports for the last 11 years.

The major export products are:

Consumer Packs

• Amul Pure Ghee

• Amul Butter
• Amul Shrikhand
• Amul Mithaee Gulabjamuns
• Nutramul Brown Beverage
• Amul Cheese
• Amul Malai Paneer
• Amul UHT Milk (Long Life)
• Amul Gold Milk
• Amul Taaza Full Cream Milk
• Amul Lite Slim and Trim Milk
• Amul Fresh Cream

30
Bulk Packs

• Amul Skimmed Milk Powder

• Amul Full Cream Milk Powder

Many of our products are now available in the

USA, Gulf Countries and Singapore.

AWARDS
• GCMMF bags APEDA AWARD for 11th year in a
row
• Amul Pro-Biotic Ice-cream Gets No. 1 Award At
World Dairy Summit
• Ramakrishna Bajaj National Quality Award-
2003
• Amul - The Taste Of India (Gcmmf)Receives
International Cio 100 Award For
Resourcefulness
• Rajiv Gandhi National Quality Award - 1999

Business OBJECTIVES
AMUL’s Journey towards Excellence
The essences of AMUL’s efforts were as follows:

• It combined market and social development in an

emerging economy. It recognized the inter-
linkages between various environments that
governed the lives of marginal milk farmers and
the unmet needs of consumers. It also changed
the supply chain paradigm in order to reduce the
cost to the consumer while increasing the return
to the supplier.

• It realized that in order to achieve their

objectives, it had to benefit a large number of

31
 people – both suppliers and consumers. While
large scale had the danger of failure due to poor
control and required more resources, it also had
the advantage of creating a momentum that
would be necessary to bring more people into the
fold and thereby help more suppliers and
consumers.

• It also realized that its goal could only be

achieved in the long run and this required
developing values in people and processes that
were robust, replicable and transparent.

• It also realized that the cooperative would not be

independent and viable in the face of
competition if it were not financially sound. This
implied that AMUL had to develop distinct
capabilities that would deliver competitive
advantage to its operations. This would include
long term cost containment, world-class
deployment of technological resources and R&D,
and better leveraging of scarce resources.

The Business Model

The objective of the network was to deliver
profitable and equitable returns to a large number
of farmers for a long period of time. This follows
rather directly from the fact that the member
farmers own essentially the network of
32
cooperatives. Given the weak economic status of
these members, an additional objective was to
develop the supplier over the long term through
social change. Consequently, the business model
had to include both the costs and benefits of
services that would be needed to deliver milk with
high productivity as well as to assist farmers in
improving their social environment.

The success of the network depended on high

collection rate of milk. This required increasing
membership with more VSs, raising the number of
members per VS, and improving the milk yield (i.e.,
better cattle management), constant concern about
the cost to farmers in the network and delivering
quality to customers at low prices.

The cooperative had decided as part of its value:

• To charge for each service provided to the
supplier
• To purchase all milk that member farmer
produced
• To sell liquid milk at affordable prices so as to
serve a large number of consumers
• To develop and deliver services that will improve
lives of people in the network
• To hire professional managers, to run the
federation and unions, whose values
included upliftment of rural poor.

The network explicitly includes secondary services

to the farmer-suppliers.
Several of the entities in the network are organized
as cooperatives linked in a hierarchical fashion.

33
34
Strengths
1. The company is having Indian origin thus
creating feeling of oneness in the mind of the
customers.
2. It manufactures only milk and milk products,
which is purely vegetarian thus providing
quality confidence in the minds of the
customers.
3. It is aiming at rural segment, which covers a
large area of loyal customers, which other
companies had failed to do.
4. People are quite confident for the quality
products provided by Amul.
5. Amul has its base in India with its butter and so
can easily promote chocolates without fearing
of loses.
6. The prices of chocolates of Nestles are
comparatively cheap as compared to other
companies.

Weaknesses

1. There are various big players in the chocolate

market, which acts as major competitors
restricting their growth.

35
 2. Lack of capital invested as compared to other
companies.

3. Improper distribution channel in India.

4. Weak distributors service channel to retailers

(in some areas).

5. Lack of availability of stock at various

locations.

Opportunities
1. There is a lot of potential for growth and
development as huge population stay in rural
market where other companies are not
targeting.
2. The chocolate market is at growth stage with
very less competition so by introducing new
brand and intensive advertising there can be a
very good scope in future.
3. Promotions will pay good results, market is
lacking with the same.

4. A great opportunity to cash the brand name

once again by giving good quality product.

5. Weak areas can be targeted to cover up the

entire market as per the demand.

36
Threats

1. The major threat is from other companies who

hold the majority share of consumers in Indian
market i.e. Cadburys and Nestle.
2. There exists no brand loyalty in the chocolate
market and consumers frequently shift their
brands
3. Competitor brands are offering huge profit
margin to retailers, whereas few of them
are selling at lower retail prices.

AMUL’s business strategy is driven by its

twin objectives
(i) long-term, sustainable growth to its
member farmers, and
(ii) Value proposition to a large customer
base by providing milk and other dairy
products a low price. Its strategy, which
evolved over time, comprises of
elements described below.
Simultaneous Development of Suppliers and
Customers:

37
From the very early stages of the formation of
AMUL, the cooperative realized that sustained
growth for the long-term was contingent on
matching supply and demand. The organization also
recognized that in view of the poor infrastructure in
India, such development could not be left to market
forces and proactive interventions were required.
The time AMUL was formed; the vast majority of
consumers had limited purchasing power and was
value conscious with very low levels of consumption
of milk and other dairy products. Thus, AMUL
adopted a low price strategy to make their products
affordable and guarantee value to the consumer.
The success of this strategy is well recognized and
remains the main plank of AMUL's strategy.

 On the supply side, as mentioned earlier,

the member-suppliers were typically small
and marginal- farmers had severe liquidity
problems, were illiterate and had no prior
training in dairy farming. AMUL and other
cooperative Unions adopted a number of
strategies to develop the supply of milk and
assure steady growth.
First, for the short term, the procurement prices
were set so as to provide fair and reasonable
return.
Second, aware of the liquidity problems, cash
payments for milk supply was made with
minimum of delay.
For the long-term, the Unions followed a multi-
pronged strategy of education and support. only
part of the surplus generated by the Unions is
paid to the members in the form of dividends. A
38
 substantial part of this surplus is used for
activities that promote growth of milk supply and
improve yields. These include provision of
veterinary services, support for cold storage
facilities at the village societies etc. In parallel,
the Unions have put in place a number of
initiatives to help educate the members.
The dual strategy of simultaneous
development of the market and member
farmers has resulted in parallel growth of demand
and supply at a steady pace and in turn assured
the growth of the industry over an extended
period of time.

Cost Leadership:

AMUL’s objective of providing a value proposition to

a large customer base led naturally to a choice of
cost leadership position. Given the low purchasing
power of the Indian consumer and the marginal
discretionary spending power, the only viable option
for AMUL was to price its products as low as
possible. This in turn led to a focus on costs and had
significant implications for managing its operations
and supply chain practices.

Focus on Core Activities

It chose a strategy to focus on core dairy activities

and rely on third parties for other complementary
needs. This philosophy is reflected in almost all
phases of AMUL network spanning R&D, production,
collection, processing, marketing, distribution,
retailing etc.

39
For example, AMUL focused on processing of liquid
milk and conversion to variety of dairy products and
associated research and development. On the other
hand, logistics of milk collection and distribution of
products to customers was managed through third
parties.

But, it played a proactive role in making support

services available to its members wherever it
found that markets for such services were not
developed. For example, in the initial stages, its
small and marginal member farmers did not have
access to finance, veterinary service, knowledge
of basic animal husbandry etc. Thus to assure
continued growth in milk production and supply,
AMUL actively sought and worked with partners
to provide these required services.

Managing Third Party Service Providers:

Well before the ideas of core competence and the

role of third parties in managing the supply chain
were recognized and became fashionable, these
concepts were practiced by GCMMF and AMUL. From
the beginning, it was recognized that the core
activity for the Unions lay in processing of milk and
production of dairy products. Accordingly, the
Unions focused efforts on these activities and
related technology development. Marketing efforts
(including brand development) were assumed by
GCMMF. All other activities were entrusted to third
party service providers. These include logistics of
milk collection, distribution of dairy products, sale of
products through dealers and retail stores, some
veterinary services etc.

40
Financial Strategy:

AMUL’s financial strategy may be characterized by

two elements:

a) Retention of surplus to fund growth and

development.
b) Limited/ no credit, i.e., all transactions are
essentially cash only.

Marketing

GCMMF is the marketing arm of the network and

manages the physical delivery and distribution of
milk and dairy products from all the Unions to
customers. GCMMF is also responsible for all
decisions related to market development and
customer management.
GCMMF’s demand growth strategy may be
characterized by two key elements:

(i) Developing markets for its high value products

by graduating customer segments from low
value products, and

(ii) Maintaining a healthy level of customer base

for its base products (low value segment).
This strategy often requires GCMMF to
allocate sufficient quantity of milk supply to
low value products, thereby sacrificing
additional profits that could be generated by
converting the same to high value products.

GCMMF provides umbrella branding to all the

products of the network. For example, liquid milk as

41
well as various milk products produced by different
Unions is sold under the same brand name of AMUL.
The advertising has centered on building a common
identity (e.g., a happy & healthy “cartoon” AMUL
girl) and evoking national emotion (e.g., the key
advertising slogan says “AMUL - The Taste of
India”).

Retailing of GCMMF’s products takes place through

the FMCG retail network in India most of whom are
small retailers.

Operations & Supply Chain Management

The strategy, design and practices in AMUL’s
network are strongly driven by the objective of
establishing and operating an efficient supply chain
from milk production and procurement to product
delivery to customers. Management of this network
is built around two key elements –

(a) Coordination of the diverse elements of the

network and

(b) Use of appropriate technology that includes

product, process and information technology and
managerial practices and systems.

Coordination for Competitiveness

Robust coordination is one of the key reasons for

the success of operations involving such an
extensive network of producers and distributors at
GCMMF. Some interesting mechanisms exist for
coordinating the supply chain at GCMMF. These

42
range from ensuring fair share allocation of benefits
to various stakeholders in the chain to coordinated
planning of production and distribution. More
importantly, the reason for setting up of this
cooperative is not amiss to anyone in this large
network organization. Employees, third part service
providers, and distributors are constantly reminded
that they work for the farmers and the entire
network strives to provide the best returns to the
farmers, the real owners of the cooperative. It may
be remembered that coordination mechanisms have
to link the lives and activities of 2.12 million small
suppliers and 0.5 million retailers!

There appear to be two critical mechanisms of

coordination that ensure that decision making is
coherent and that the farmers gain the most from
this effort. These mechanisms are:

• Inter-locking Control

• Coordination Agency: Unique Role of

Federation

Inter-locking Control
Each Village Society elects a chairperson and a
secretary from amongst its member farmers of good
standing to manage the administration of the VS.
Nine of these chairpersons are elected to form the
Board of Directors of the Union. The Chairperson of
the Union Board is elected from amongst these
members. The managing director of the Union, who
is a professional manager, reports to the
chairperson and the board. All chairpersons of all
the Unions form the Board of Directors of GCMMF.
The managing director of GCMMF reports to its
Board of Directors. Each individual organization, the

43
Union or GCMMF, is run by professional managers
and highly trained staff.

Coordination Agency: Unique Role of the

Federation

In addition to being the marketing and distribution

arm of the Unions, GCMMF plays the role of a
coordinator to the entire network within the State –
coordinating procurement requirements with other
Federations (in other states), determining the best
production allocation for its product mix from
amongst its Unions, managing inter-dairy
movements, etc.

It works with two very clear objectives:

 To ensure that all milk that the farmers

produce gets sold in the market either as milk
or as value added products and

 To ensure that milk is made available to an

increasingly large sections of the society at
affordable prices.

 In making allocations to Unions, GCMMF is

guided by two main objectives:

• Maximizing the network surplus.

44
• Maintaining equity among unions for the
surplus realized. In this regard, very often
GCMMF is willing to sacrifice realizable
surplus and allocate products to “less
efficient” Unions in order to achieve better
balance in surpluses accruing to the Unions.

45
Technology for Effectiveness

Technology or knowledge that was embodied in

products, processes, and practices became an
important factor in delivering effectiveness to the
network of cooperatives. One distinguishing feature
of AMUL (in comparison with other similar
cooperatives globally) is the large variety in their
product mix. AMUL dairy led the way in developing
many of these products and establishing the
processes for other member Unions.

Equally impressive are the achievements on

process technology. While several continuous
innovations to equipment and processes have
been done at AMUL, the most significant one has
been the development of processes for using
buffalo milk to produce a variety of end products.
Gujarat (and most of India) is a buffalo
predominant area. As more farmers joined the
cooperatives, the need to develop a mechanism
for storage of increasing quantities of milk
became intense. The need to store milk in
powder form increases as excess milk quantities
in winter seasons could then be used in lean
summer seasons. Demand for liquid milk was not
growing along with growth in milk production. No
technology existed worldwide to produce powder
from buffalo milk. Engineers at AMUL successfully
developed a commercially viable process for the
same – first time in the history of global diary
industry. Subsequently, it also developed a
process for making baby food out of this milk
powder. It has also developed a unique process
for making good quality cheese out of buffalo

46
milk thereby converting a perceived liability into
a source of comparative advantage – the task
was done through process technology research.
Most of its plants are state of art and automated.
Similar efforts in the area of “embryo transfer
technology” have helped create a high yield
breed of cattle in the country.
AMUL’s innovations in the areas of energy
conservation and recovery have also contributed
to reduction in cost of its operations. AMUL also
indigenously developed a low cost process for
providing long shelf life to many of its perishable
products.
TQM at the grassroots has been a strong
movement to develop leadership, operational and
strategic capabilities in the entire network –
farmers, village cooperatives, dairy plants,
distributors and wholesalers and retailers. Key
elements of this TQM movement have been:

 Friday Departmental Meetings: Each

Friday, at a prescribed time, everyone in the
network (from the farmers to the carry &
forwarding agents) joins their respective
departmental meeting to discuss quality
initiatives and share policy related information.

 Training for Transformational Leadership

so that individuals are able to control their
thoughts, feelings and behavior and take more
responsibility in one’s life and surrounding
environment.

47
 Application of Hoshin Kanri principles to
bring about a bottom-up setting of objectives –
aligning policies for effective management of
Unions & village societies on hand with those
of channel member on the other hand.
ISO/HACCP certification was obtained for all the
Unions and each village society is in the
process of obtaining the same.

 Training for farmers and their families

emphasizing the need for good health care for
not only cattle during its pregnancy and
feeding but also for expecting and feeding
mothers and the whole family. This effort has
brought about a significant social change
towards such issues in villages that have
cooperative milk societies.

 Retail Census: GCMMF undertakes a census

of all retail outlets (over 500,000) to evaluate
customer perceptions and distribution efficacy
of their network. This is being done by
wholesalers in their respective territories at
their own cost. This information is used for
policy deployment exercise.

The extent of IT usage includes a B2C ordering

portal, an ERP based supply chain planning
system for the flow of material in the network, a
net based dairy kiosk at some village societies
(for dissemination of dairy related information),

48
 automated milk collection stations at village
societies and a GIS based data network
connecting villages societies to markets. Milk
collection information at more than 10,000
villages is available to all dairies (or Unions) to
enable them make faster decisions in terms of
production & distribution planning, and disease
control in more than 6,700,000 animals. This is
linked with information at all 45 distribution
offices and 3900 distributors. This network is
being extended to cover all related field offices in
the network. The GCMMF cyber store delivers
AMUL products at the doorsteps of the consumers
in 125 cities across the country.

Market Penetration Strategy

This strategy involves achieving growth through
existing products in existing market. Amul’s market
penetration strategy involves its expanding its
customer base in the existing market. Currently
Amul is trying to expand its customer base through
the following measures –

• Amul is set to build up 10,000 `Amul Parlors’

across the country during the year. These stores will
sell the entire product range of Amul products, in
addition to the existing retail network for ice cream,
milk and other products.
• It is trying to get more and more customers
through a more intensive distribution. It is opening
more stores at Highways, Railway stations, Airports,
Bus stations, Schools, Colleges, and Industrial
Canteens etc.
• It is trying to find place in various retail outlets,
the latest story being Amul trying to acquire a shelf

49
in the yet to come Wal-Mart.
• Opening small Amul-exclusive stores in each and
every neighborhood to reach to the very near of the
consumer.

Market Development Strategy

This strategy is concerned with creating business
through developing new markets with existing
products in hand. Amul is using this strategy to
capture new and unexplored sectors without
creating new products

• Amul is now shifting its focus from urban to

rural markets and smaller towns. In 2005, Amul
added 900 new stores all across small towns to
increase its reach.
• Amul is capturing the market of diabetic and
health conscious people through sugar free
ice-cream, which is a variation of an existing
product.
• Amul will expand its fresh milk markets to
Kanpur and Lucknow and other smaller towns
this year, thereby increasing its market base
for the existing products.
• Amul is also increasing its market base for
milk through a new version – the Amul Tazaa.
Tazaa is the long-life version of milk which has
a longer shelf life as compared to normal fresh
milk. This product is highly picking up in the
domestic and export market.

Product Development Strategy

Product development deals with producing new
products for the existing customer base. Amul has

50
vastly capitalized on this strategy by constantly
coming up with newer products

• Amul-Cool (milk based cool drink) and Amul-

Kool café – these are the products aimed at the
youth of the country with synonymous
marketing campaigns.
• It is coming up with a chain of pizza corners.
This chain would consist of around 2000 stores
all over India.
• Stamina – the instant energy whey based
sport drink has been launched to provide its
customers with a totally new product.
• Amul has recently launched a new variation
of ice-cream, the sundae swirl to its existing
base of ice-cream customers.
• Amul-Masti, the packaged buttermilk is
aimed to be another non-carbonated cool drink
in the Amul Cool range which is not only aimed
at the youth but also at the more mature
chunk of the society.
Diversification Strategy
Diversification is a high-risk strategy as it involves
taking a step into a territory where the parameters
are unknown to the company. Amul has identified
the need to increase its presence in newer markets
and thus have come up with many new such
strategies for increasing its presence in the entire
market.

There are different types of diversification process

that any company can adopt they are as follows:

• Concentric Diversification Strategy

• Conglomerate Diversification Strategy
• Horizontal Diversification Strategy

51
Concentric Diversification Strategy: Amul
has identified a segment for the health conscious
people and is introducing two pro-biotic ice cream
ranges, Amul Sugar free and Amul Profile and both
of these products will be available in five different
flavors this is apart from the various regular ice
cream products that it offers. They have identified
the working class women as a new segment and has
introduced frozen easy to cook stuffed parathas,
matar paneer and paneer pakoras which makes
them easy to cook quality tasty food in less time.

Conglomerate Diversification Strategy:

Amul in this concern has come up with an idea of
introducing an altogether new spots drink named
"Stamina" which will be the first sports drink by an
Indian company and it will be priced at only Rs 12
for 200ml which will be lower than its competitors
whose price ranges around 60 to 75 Rs. In this they
have also introduced the Amul Pizza in order to
enter the pizza market. They have also come up
with flavored milk and also flavored lassis to enter
newer markets.

Horizontal Diversification Strategy

In this concern Amul is to provide something new to
its older and loyal customers have come up with a
facility whereby they could order the food through
the internet and this was at a time when internet
was heard by very few in India during 1996.
AMUL’s Best Practices

• Umbrella Brand Strategy:

52
The most successful strategy of Amul has been the
Umbrella Brand strategy. The GCMMF skillfully
avoids inter-union conflicts through this strategy by
giving every union and sub-brand the opportunity to
contribute in the developing products. Amul is the
common brand for most of the product categories
rolled out by the unions and there are also some
sub-brands of Amul which come out with variants
like Amulspray, Amulya, Amulspray and Nutramul.

• Improvement Programs
Another intriguing feature about Amul is that it
constantly encourages improvement programs. For
instance, all employees of the GCMMF meet every
Friday between 10 to 11 am to discuss quality
issues at a depot, department or branch. Every
meeting has a Purpose, Agenda and Limit (PAL) and
such meetings are held in the village societies,
union and at the wholesalers’ level too.

• Constant Innovation:
Constant innovation is another typical trait of Amul.
However, the cooperative ensures that the
sequence and product mix of high value brands is
consistent with Amul’s philosophy of low pricing and
affordability. For instance, when Amul entered the
Pizza business, the price of a pizza was, at Rs 30
was much lesser than what the other players
charged.

53
 Product positioning strategy

In marketing, positioning has come to mean

the process by which marketers try to create
an image or identity in the minds of their
target market for its product, brand, or
organization.

Generally, the product positioning process

involves:

 Defining the market in which the product

or brand will compete (who the relevant
buyers are)

 Identifying the attributes (also called

dimensions) that define the product 'space'

 Collecting information from a sample of

customers about their perceptions of each
product on the relevant attributes

 Determine each product's share of mind

 Determine each product's current location

in the product space

54
  Determine the target market's preferred
combination of attributes (referred to as
an ideal vector)

 Examine the fit between:

 The position of your product

 The position of the ideal vector

 Position.

 India’s First Pro-Biotic Wellness Ice cream &

Sugar Free Delights for Diabetics.

 Low Priced Amul Ice Creams made Kwality

Walls life hell.

55
Flank Attack applied in AMUL product on Aug 25
2007

56
 Amul launches Chocolate milk under brand
name of ‘Amul Kool Koko’.

 This is targeted at teenagers and youths.

 Nov 11, 2007: Amul in Multinational Arena With

Snack Launch:
“Munch Time”.

Flavors: Masala, Mint and Tomato.

 New Product Activity.

 Nov 26, 2007 : Amul Launches “Fresh Paneer”

(Free From Any Harmful Chemicals)
Flank Attack—Expanding its Cheese Segment.

57
Current market share 65%.

Product Repositioning

Re-positioning involves changing the identity of a

product, relative to the identity of competing
products, in the collective minds of the target
market.
Repositioning a company involves more than a
marketing challenge. It involves making hard
decisions about how a market is shifting and how a
firm's competitors will react. Often these decisions
must be made without the benefit of sufficient
information, simply because the definition of
"volatility" is that change becomes difficult or
impossible to predict.

58
  Amul marketed bottled water product
named “JALDHARA” but due to less
potential in the market it turned out to be
blunder.

 Now Amul is all set to launch bottled

water “NARMADA NEER”.

Product Overlap

Product overlap is situation where company decides

to company decides to compete against its own
brands

59
  Powdered Milk

 Health and price Conscious.

“SAGAR Vs Amulya”.

USP: Sagar is affordable whitener for health

conscious one.

 Cheese Spreads

Specific Vs General

60
“Amul Processed Cheese Vs Cheese Spread”

USP:

Cheese spread is highly accepted spread for regular

use.

 Milk Drinks

“Nutramul Energy Drink Vs Amul Kool”

61
 Product Design Strategy

Product design is concerned with the efficient and

effective generation and development of ideas
through a process that leads to new products.
Product designers follow various methodologies that
require a specific skill set to complete.

Initial Stage

 Idea Generation can be

from imagination, observation, or research.
 Need Based Generation can be from the
need to solve a problem, the need to follow the
popular trends, or the need for a product to do a
specific task.

Mid Stage

 Design Solutions arise from meeting user

needs, concept development, form exploration,
ergonomics, prototyping, materials, and technology.
62
  Production involves fabrication and manufact
uring the design.

Final Stage

 Marketing involves selling the product. It can

either be client based which mean the client buys
the design and manufactures it and then sells it to
customers. Or it can be user based where the
product is sold directly to the user by the designer.

 Amul has offered a mix of both standard and

customized products.

 Use of Utterly - Butterly Girl:

 Using since 1967

 Entered in the Guinness Book Of World

Records for being the longest running
campaign ever.

63
 Product Elimination strategy

The elimination strategies used by companies to

implement the elimination decision, which includes
the following options:

(1) phase out immediately;

(2) phase out slowly;

(3) drop the product from the standard range and

reintroduce it as a “special” sell out.
64
The study also determined that the “phase out
slowly” strategy is generally preferred and that
“stock on hand” and “replacement product
development” are two of the main factors
influencing the formulation of phase out plans. A
systematized model for the implementation of the
product elimination decision based on the findings
of the study is described.

Amul eliminated “JALDHARA” a decade ago as

Bottled water products do not have potential
customers

Amul is all set to launch bottled water

“NARMADA NEER”

Diversification

65
 AM U

66
 Value Marketing Strategy

Providing a product that works as claimed, is

accompanied by decent service, and is delivered on
time.

 Commitment to quality.

 Value for money

 The generation for awareness.

 Fostering of Loyalty

RESEARCH METHODOLOGY
There are various types and methods of research design

but we mainly used two types of research design in this

67
report. They are exploratory research and Descriptive

research.

(a) Exploratory Research:-Exploratory research is

preliminary study of an unfamiliar problem about which

the researcher has little or no knowledge. It is similar to a

doctor’s initial investigation of a patient suffering from an

unfamiliar malady for getting clues for identifying it. “It is

ill-structured and much less focused on pre-determined

objectives.” It usually takes the form of a pilot study.

Though it is a separate type of research, it is appropriate

to consider it as the first stage of a three-stage process of

exploration, description and experimentation.

Purposes

The purpose of an exploratory study may be:

• to generate new ideas or

• to increase the researcher’s familiarity with the

problem or

• to make a precise formulation of the problem or

68
 • to gather information for clarifying concepts or

• to determine whether it is feasible to attempt the

study.

The Steps in Exploration

Selltiz and others have suggested have suggested the

following three steps for the exploratory study:

(1) A review of pertinent literature

(2) An experience survey

(3) An analysis of ‘insight stimulating’ cases.

Literature survey: A study of related and pertinent

books, articles and reports turns up a number of leads

and clues for further investigation that will advance the

research. A workable hypothesis may be formulated;

important variables may be identified.

Experience survey: Informal interviews with persons

experience in the area of study will help the researcher

in securing insight into the subject and its various facts.

69
In selecting the person for this survey, representation to

different facts of experience should be given. For

example, in an exploratory study of the problem of rural

development, it is profitable to interview researchers

familiar with rural studies, rural development

administrators, social workers, rural financial institutions

and village leaders.

This survey may yield a new hypothesis and information

on the various dimensions of the study, facilities and

cooperation available for the study, and the factors to be

controlled.

(b) Descriptive Research: Descriptive research/study

is a fact-finding investigation with adequate

interpretation. It is the simplest type of research. It is

more specific than an exploratory study, as it has

focus on particular aspects or dimensions of the

problem studied. It is designed to gather descriptive

information and provides information for formulating

more sophisticated studies. Data are collected by

70
 using one or more appropriate methods: observation,

interviewing and mail questionnaire.

Objective:

A descriptive study aims at identifying the various

characteristics of a community or institution or problem

under study, but it does not deal with the testing of

proposition or hypothesis. However, it “can reveal

potential relationships between variables thus setting

the stage for more elaborate investigation later.”

A descriptive study also aims at a classification of

the range of elements comprising the subject matter of

study. The classification must satisfy two criteria, viz.,

(1) exhaustiveness and (2) mutual exclusiveness occurs

when each item can be unambiguously placed in only

one category in the system. Descriptive information

should also be useful for explanation, prediction and

awareness.

Usefulness

71
The descriptive studies are useful in their own way.

1. They have much to contribute to the

development of a young science, as descriptive

information can focus directly on a theoretical

point. It may be useful in verifying focal concepts

through empirical observation, “The more

adequate the description, the greater is the

likelihood that the units derived from the

description will be useful in subsequent theory

building.”

2. Descriptive information can highlight important

methodological aspects of data collection and

interpretation. The collection of factual data

increase’s our awareness of the relative accuracy of

our measuring devices. Thus, our ability to

accumulate further knowledge is significantly

broadened.

3. Descriptive information obtained in a research may be

useful for prediction about

72
areas of social life outside the boundaries of the

research.

73
 SAMPLING DESIGN

A part of the population is known as a sample. The process of drawing a

sample from a larger population is called sampling. The list of sampling

units from which a sample is taken is called the sampling frame, e.g., a

map, a telephone directory, a list of industrial undertakings, a list of car

licenses etc.

Aims of Sampling: Well-selected sampling may reflect fairly accurately

the characteristics of the population. For example, with a survey of a

sample of voters, one can predict the voting intentions of millions of

voters. A specified value of the population, such as average or variance is

named as parameter; the corresponding value in the sample is termed as

statistic. The chief aim of sampling is to make an inference about an

unknown ‘parameter’ from a measurable sample ‘statistic’.

The second aim of sampling is to test a statistical hypothesis relating to

population. A sample is drawn and the data collected from the sample

informants are analyzed and on the basis of the result the hypothesis may

be accepted or rejected.

74
 Benefits of Sampling:

Sampling is done in a wide variety of research

settings. Listed below are a few of the benefits of

sampling:

1. Reduced cost: It is obviously less costly to obtain

data for a selected subset of a population, rather

than the entire population. Furthermore, data

collected through a carefully selected sample are

highly accurate measures of the larger population.

Public opinion researchers can usually draw

accurate inferences for the entire population of the

United States from interviews of only 1,000 people.

2. Speed: Observations are easier to collect and

summarize with a sample than with a complete

count. This consideration may be vital if the speed of

the analysis is important, such as through exit polls

in elections.

3. Greater scope: Sometimes highly trained

personnel or specialized equipment limited in

75
 availability must be used to obtain the data. A

complete census (enumeration) is not practical

or possible. Thus, surveys that rely on sampling

have greater flexibility regarding the type of

information that can be obtained.

4. Quality of a study is often better with sampling

than with a complete coverage.

5. Sampling provides much quicker results than does

a census.

SOURCES OF DATA
The sources of data may be classified into (a)

Primary sources and (b) Secondary sources.

Primary Sources

Primary sources are original sources from which the

researcher directly collects data that have not been

previously collected, e.g., collection of data directly

by the researcher on brand awareness, brand

76
preference, brand loyalty, and other aspects of

consumer behavior from a sample of consumers by

interviewing them. Primary data are first-hand

information collected through various methods such

as observation, mailing etc.

Primary sources can include

• Interviews, diaries, letters, journals, speeches,

autobiographies, and witness statements

• Articles containing original research, data, or

findings never before shared

• Original hand-written manuscripts

• Government documents and public records

• Art, photographs, films, maps, fiction, and

music

Secondary Sources

These are sources containing data which have been

collected and compiled for another purpose. The

secondary sources consists of readily available

77
compendia and already compiled statistical

statements and reports whose data may be used by

researches for their studies, e.g., census reports,

annual reports and financial statements of

companies, Statistical statements, Reports of

Government Departments, Annual Reports on

currency and finance published by the Reserve Bank

of India, Statistical statements relating to

cooperatives and regional rural banks, published by

the NABARD, reports of the national sample survey

organization, reports of trade associations,

publications of international organizations such as

UNO,IMF, World Bank, ILO,WHO, etc., Trade and

Financial Journals, newspapers, etc.,

Secondary sources can include

• Textbooks

• Review articles and critical analysis essays

• Biographies

• Historical films, music, and art

78
 • Articles about people and events from the past

DATA COLLECTION TOOLS

The various methods of data gathering involve the use of appropriate

recording forms.

These are called tools or instruments of data collection. They consist

of-

• Observation schedule or Observationnaire

• Interview guide

• Interview schedule

• Rating scale

• Check list

• Opinionnaire

• Document schedule/data sheet

• Schedule for institutions

• Inventories

Each of the above tools is used for a specific method of data

gathering: Observation

79
Schedule for observation method, interview schedule and

interview guide for

Interviewing, questionnaire and optionnaire for mail survey, and

so on.

Methods of Primary Data Collection

There are various methods of data collection. A ‘Method’ is different

from a ‘Tool’. While a method refers to the way or mode of gathering

data, a tool is an instrument used for the method. For example, a

schedule is used for interviewing. The important methods are:

(a) Observation, (b) Interviewing, (c) mail survey, (d)

experimentation, (e) Simulation, and (f) Projective technique. Each

of these methods is discussed in detail in the subsequent sections.

Observations involve gathering of data relating to the selected

research by viewing and or listening. Interviewing involves face-to-

face conversion between the investigator and the respondent. Mailing

80
is used for collecting data by getting questionnaires completed by

respondents. Experimentation involves a study of independent

variables under controlled conditions. Experiments may be conducted

in a laboratory or in a field in a natural setting. Simulation involves

creation of an artificial situation similar to the actual life situation.

Projective methods aim at drawing inferences on the characteristics of

respondents by presenting to them stimuli. Even method has its

advantages and disadvantages.

QUESTIONNAIRE
Market Survey

Name:
Age:
Profession:
Sex:

Q1) Which Amul Product does you like?

 Cheese
 Milk
 Desserts

81
  Others
Q2) How often do you visit an Amul Parlor Shop?
 Almost Daily
 2-3 times a week
 2-3 times a month not often
Q3) How much money do you usually spend at an Amul
Parlor Shop?
 25-75 Rupees
 75-125 Rupees
 Over 125 Rupees
Q4) How much time do you usually spend at an Amul
Parlor Shop?
 Less than 1/2 hour
 1/2- 1 hour
 1-2 hours Over 2 hours

Q5) How you use an Amul Product?

 Daily
 Weekly
 Monthly
Q6) what is the single most important factor for you to
choose an Amul product?
 Taste
 Service
 Experience

82
  Value for money
Q7) Please rate the following, according to your
personal choice
1) Taste and Quality of products : (1=Bad and 5= Excellent)
Fresh Milk 1 2 3 4 5 1 2 3 4 5
Cheese 1 2 3 4 5 1 2 3 4 5
Desserts 1 2 3 4 5 1 2 3 4 5
Other Drinks 1 2 3 4 5 1 2 3 4 5
Your comments:

2) Prices : (1=Cheap and 5=Expensive)

Fresh Milk 1 2 3 4 5 1 2 3 4 5
Cheese 1 2 3 4 5 1 2 3 4 5
Desserts 1 2 3 4 5 1 2 3 4 5
Other Drinks 1 2 3 4 5 1 2 3 4 5
Your comments:

RECOMMENDATIONS
 ‘Unavailability of Amul product’ is main part.
This part can be taken into consideration for
improving the service quality as well as
ensuring maximum availability of Amul product
at every possible location.

 Right time to go for advertisement and

promotion schemes. No such major strategy is
being followed by the competitor’s brand right
now. The company can draw the attention of
customers and can take advantage out of it.

83
 Only milk and ice cream products are there for
displays and advertisements in the market.
There is an absence of ‘Amul chocolate’
displays, danglers, posters, illuminated boards
etc. to focus on the ‘Amul Chocolate’.

 There is a great demand from retailer’s side

that the company should offer greater profit
margins. As the profit margin in ‘Amul Product’
is less as compared to the competitor’s brand,
retailers are switching and giving their
preference to the competitor’s brand that is
offering maximum margins to them.

 The old manufacturing date on packs is

creating the shifting of preference in
consumer’s choice. The consumer wants fresh
product and due to the old manufacturing
date, the consumer opts for other product
brands.

 Relationship with retailers and company should

be kept under a close watch.

 Salesmen should be given the responsibility to

handle the retailer’s grievances

84
 Orders by the retailers should be executed in a
proper manner to avoid irregular availability.

 Promotion activities should take into

consideration in two different ways a)
Company should associate themselves with
social events, b) Company should use
electronic as well as print media for their
advertisement.

 Company should give special offers to retailers

frequently.

Company should expand their business

throughout the small towns.

 Company should open exclusive Amul parlors

and outlets in big shopping Malls for promotion
in higher segment.

 There have been a lot of complaints about

replacement policy of Amul. Amul should try to
improve its replacement policy and make it
somewhat liberal.

85
 Conclusion

 It is well recognized that markets that are

fragmented or producers that are
too small to build competitive infrastructures
or those who are unable to manage
technological changes in their operational
processes would benefit the most through a
cooperative organization..

 The example of AMUL provides a number of

lessons for organizations to compete
successfully in the face of increasing
globalization and competition.

 The AMUL case presents a successful model for

operating in emerging economies
characterized by both large under-developed
suppliers and markets with high potential.

 The largest segment of the market in emerging

economies desires value for money from its
purchases.

 Development of such markets requires careful

nurturing and a long-term approach. Initial
success in these markets is typically based on
a low price strategy (providing value for
money) supported by cost leadership.

 This strategy helps to grow the market

exponentially by focusing on the largest

86
 segment of the population, the middle and the
lower middle class.

 In this context, it is important for global players

to note that the value proposition perceived by
consumers is influenced to a large extent by
the state of markets and the economy and
cultural factors.

 Development of an appropriate value

proposition suitable for large mass markets in
India requires a thorough understanding of the
environment and a focus on costs.

 This in turn, requires designing the

organization structure and practices in a
manner that it delivers continued market share
through cost leadership. AMUL is a good
example of this strategy.

 Amul are able to develop control processes

through better use of operational practices and
supply chain coordination are the ones that are
able to serve large volumes and enjoy top line
growth in revenues.

 Development of suppliers likewise requires

nurturing with a long-term perspective.

87
 This was achieved by AMUL through a process
of education and social development activities
- activities that are not usually considered to
be standard business practices.

 This type of ‘out of the box’ vision is essential

for developing innovative mechanism in new,
unfamiliar environments where building of
relationship with consumers goes much
beyond marketing messages and useful
product offerings.

 Environments with underdeveloped markets

and suppliers (as in the case of AMUL) add one
more dimension of complexity relating to the
relative pace of growth of these two areas.

88
Through its pricing strategy, AMUL has been able to
balance the growth in markets and suppliers and
has achieved some degree of synchronization.
Otherwise, gaps between demand and supply
would require complementary strategies.

In this Project, using the example of AMUL, we have

presented a robust business model for operating
in large emerging economies characterized by
underdeveloped markets, infrastructure and
suppliers.

Cooperative network with interlocking arrangement

as in GCMMF is one example of success in
managing such complex supply chain. Of course,
the long-term challenge in such cases is to bring
more members into the network and increase
their capabilities

89
 BIBLIOGRAPHY

Books:

Kotler Philip, “Marketing Management”

Kothari C.R., “Marketing Research”

Ramaswamy, “Marketing Management”

Websites:

http://www.amul.com

http://projectstoday.com/sitemap/dairy_products_
database.asp

90