A PROJECT REPORT ON

Distribution channel of AMUL

At Gujarat Co-operative Milk Marketing Federation Ltd.

BY: Deepak.M.Gade

Submitted at DATTA MEGHE INSTITUTE OF MANAGEMENT STUDIES, NAGPUR

Company Guide: Mr. KEVIN ARAMBHADIYA EXECUTIVE (SALES) GCMMF LTD NAGPUR

Faculty Guide: Mr. SHIVAJI DHAWAD D.M.I.M.S. NAGPUR

CERTIFICATE

This is to certify that the project report titled is DISTRIBUTION CHANNEL OF AMUL. a benefited work of Deepak Gade the student of Master Degree in Business Administration course of the R.T.M. Nagpur University conducted by our institute. This report is product of his own work successfully carried out under our guidance during the academic year 2011-2012, at Amul. In partial fulfillment of the Master Degree in Business Administration, under Nagpur University.

Project Guide
Mr.Shivaji Dhwad

Director
Dr. Amishi Arora

ACKNOWLEDGEMENT
As a trainee, it has been a remarkable experience for my career to be a part of one of an automobile company. I have been fortunate enough to have a glimpse of working with the AMUL Nagpur.

In my endeavor to achieve successful completion of my project, I am thankful to number of people whose help and guidance enabled me to accomplish this project. I am thankful to Mr. Kevin sir, for giving me an opportunity to work in this organization.

I express my sincere gratitude to my project guide, Mr. shivaji dhawad for constantly guiding me throughout my training at DMIMS, her advice and suggestion have significantly contributed towards the completion of this project.

I am equally thankful to all those who have been of a great help for this project at different point of time and nevertheless their contribution has been immense.

Place: Nagpur Date:

(Deepak .Gade) MBA 4th SEM

DECLARATION
I Deepak. Gade a student of Datta Meghe Institute of Management Studies, Nagpur hereby solemnly declare that the project titled distribution channel of Amul. with AMUL is my original work as all the information, facts and figure procedures in this report is based on my own experience and study during my final project.

Further I also declare that I have tried my best to complete this project with almost sincerity, honesty and accuracy. Even then if any mistake or error has found in this, I shall most humbly request to the reader to point out those error. Any suggestions regarding this project will be most welcome.

Deepak.M. Gade DMIMS Nagpur

EXECUTIVE SUMMARY
The market research for authorized dealer of amul at nagpur. Was carried out in this year. The sample for the study was various Amul shops in and distributer of Nagpur city. A sample size of twenty various shops Amul company and three distributer. The sampling used in this study was observation and scheduled interviews and questionnaire method. The objectives of the study were To understand the different level of intensity in distribution channel and how it will add value to the marketing mix of Amul.

. The data collected was edited and tabulated for analysis and following conclusions were drawn from the analysis. 1. It is found. that Amuls product has a very good quality And its brand-name work positively for the company. 2. 3. Market demand of product is higher but avability of product is not good to distributer and retailer. 4. The company provides good quality product but profit margin is low for distributer as well as retailer but it also not bad one 5. 4. There is good potential for AMUL ICE-CREAM in Nagpur city.

INDEX Sr. No 1 2 3 Introduction Company Profile Research Methodology Research Objective Type of Research

Topic

Page No

Methods of Data Collection

4 5 6 7 8 9 10

Scope Of Study Limitation of Study Conclusion Findings Of The Research Suggestions And Recommendations Bibliography Questionnaires

INTRODUCTION:
CHANNELS OF DISTRIBUTION A channel of distribution or trade channel is defined as the path or route along which goods move from producers or manufacturers to ultimate consumers or industrial users. In other words, it is a distribution network through which producer puts his products in the market and passes it to the actual users. This channel consists of: - producers, consumers or users and the various middlemen like wholesalers, selling agents and Sretailers (dealers) who intervene between the producers and consumers. Therefore, the channel serves to bridge the gap between the point of production and the point of consumption thereby creating time, place and possession utilities. A channel of distribution consists of three types of flows: Downward flow of goods from producers to consumers Upward flow of cash payments for goods from consumers to producers Flow of marketing information in both downward and upward direction i.e. Flow of information on new products, new uses of existing products, etc from producers to consumers. And flow of information in the form of feedback on the wants, suggestions, complaints, etc from consumers/users to producers. An entrepreneur has a number of alternative channels available to him for distributing his products. These channels vary in the number and types of middlemen involved. Some channels are short and directly link producers with customers. Whereas other channels are long and indirectly link the two through one or more middlemen.

These channels of distribution are broadly divided into four types: Producer-Customer:- This is the simplest and shortest channel in which no middlemen is involved and producers directly sell their products to the consumers. It is fast and economical channel of distribution. Under it, the producer or entrepreneur performs all the marketing activities himself and has full control over distribution. A producer may sell directly to consumers through door-to-door salesmen, direct mail or through his own retail stores. Big firms adopt this channel to cut distribution costs and to sell industrial

products of high value. Small producers and producers of perishable commodities also sell directly to local consumers. Producer-Retailer-Customer:- This channel of distribution involves only one middleman called 'retailer'. Under it, the producer sells his product to big retailers (or retailers who buy goods in large quantities) who in turn sell to the ultimate consumers. This channel relieves the manufacturer from burden of selling the goods himself and at the same time gives him control over the process of distribution. This is often suited for distribution of consumer durables and products of high value. Producer-Wholesaler-Retailer-Customer:- This is the most common and traditional channel of distribution. Under it, two middlemen i.e. wholesalers and retailers are involved. Here, the producer sells his product to wholesalers, who in turn sell it to retailers. And retailers finally sell the product to the ultimate consumers. This channel is suitable for the producers having limited finance, narrow product line and who needed expert services and promotional support of wholesalers. This is mostly used for the products with widely scattered market. Producer-Agent-Wholesaler-Retailer-Customer:- This is the longest channel of distribution in which three middlemen are involved. This is used when the producer wants to be fully relieved of the problem of distribution and thus hands over his entire output to the selling agents. The agents distribute the product among a few wholesalers. Each wholesaler distributes the product among a number of retailers who finally sell it to the ultimate consumers. This channel is suitable for wider distribution of various industrial products.

COMPANY PROFILE : INTRODUCTION AND HISTORY

Type Industry Founded Headquarters

Cooperative Dairy 1946 Anand, India Chairman, Kaira District Cooperative Milk Producers' Union Limited. (KDCMPUL)

Key people

Revenue

$2.15 billion (2010-11) 735 employees of Marketing Arm. However, real pool consist of 2.8 million milk producers

Employees

INTRODUCTION
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing organization with annual turnover (2010-11) US$ 2.2 billion. Its daily milk procurement is approx 12 million lit (peak period) per day from 15,712 village milk cooperative societies, 17 member unions covering 24 districts, and 3 million milk producer members. It is the Apex organization of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', 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. Its success has not only been emulated in India but serves as a model for rest of the World. It is exclusive marketing organization of 'Amul' and 'Sagar' branded products. It operates through 47 Sales Offices and has a dealer network of 5000 dealers and 10 lakh retailers, one of the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc. GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. Many of our products are available in USA, Gulf Countries, Singapore, The Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 13 years. For the year 2009-10, GCMMF has been awarded "Golden Trophy' for its outstanding export performance and contribution of dairy product sector by APEDA. For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous awards and accolades over the years. It received the Rajiv Gandhi National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's Most Respected Company Award instituted by Business World. In 2003, it was awarded the IMC Ramkrishna Bajaj National Quality Award - 2003 for adopting noteworthy quality management practices for logistics and procurement. GCMMF is the first and only Indian organization to win topmost International Dairy Federation Marketing Award for probiotic ice cream launch in 2007. The Amul brand is not only a product, but also a movement. It is in one way, the representation of the economic freedom of farmers. It has given farmers the courage to dream. To hope. To live.

GCMMF - An Overview

Year of Establishment Members No. of Producer Members

1973 17 District Cooperative Milk Producers' Unions (13 Members & 4 Nominal Members) 3.03 Million

No. of Village Societies 15,712 Total Milk handling capacity per 13.67 Million litres per day day Milk Collection (Total - 20103.45 billion litres 11) Milk collection (Daily Average 9.2 million litres (peak 12 million) 2010-11) Milk Drying Capacity 647 Mts. per day Cattle feed manufacturing 3690 Mts. per day Capacity Sales Turnover -(2010-11) Rs. 9774 Crores (US $2.2 Billion)

AWARDS

Amul Bags Srishti G-cube Award For Good Green Governance - 2009 Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit Ramkrishna Bajaj National Quality Award - 2003 Qimpro Gold Standard Award - 2003 Amul - The Taste Of India (GCMMF) Receives International CIO 100 Award For Resourcefulness Rajiv Gandhi National Quality Award - 1999

THE AMUL MODEL

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

Establishment of a direct linkage between milk producers and consumers by eliminating middlemen Milk Producers (farmers) control procurement, processing and marketing Professional management

The Amul model has helped India to emerge as the largest milk producer in the world. More than 13 million milk producers pour their milk in 1,28,799 dairy cooperative societies across the country. Their milk is processed in 176 District Co-operative Unions and marketed by 22 State Marketing Federations, ensuring a better life for millions.

THE PRODUCTS Bread spreads Cheese ranges UHT milk Milk powders Fresh milk Ice creams Chocolates Mithaiee range

RESEARCH METHODOLOGY
RESEARCH PROCESS

Preliminary Study Discussion with faculty and company guide Survey, objectives and questionnaire design Data Collection Data Analysis Presentation of Findings & Recommendation

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the problem. It may be understood as a science of studying how researchers scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research method/ techniques but also methodology. Researchers not only need to know how to develop certain indices or test, how to calculate the mean, the mode , the median or the standard deviation or chi square, how to apply particular research technique, are relevant and which are not , and what would they mean and indicate and why. We can say research methodology has many dimension and research methods do constitutes a part of research methodology. The scope of research methodology is wider than that of research methods. Thus when we talk of research methodology we not only talk of the research method but also consider the logic behind the method we use in the context of our research study and explain why we are using a particular method of technique and why we are

using others so that research result are capable of being evaluate either by the researcher himself by others. Why a research study has been adopted, why particular technique of analyzing data has been used and a lot similar other question are usually answered when we talk of research methodology concerning research problem or also.

RESEARCH INSTRUEMENT
As we know there are two ways of collection of data; Observation Method Questionnaire Method and Personal interview

Observation Method: Under the method the information is sought by way of investigators own direct

observation without asking form the respondent. The main advantage of this method is that of subjective bias is eliminated, if observation is done accurately.

Questionnaire Method: This method of data collection is quite popular; particularly in case of big enquiries in

this method a questionnaire is provided to a person concerned with the request to answer the question and the return the questionnaire. A questionnaire consist of number of printed or type in definite form or set of forms. Between this two method best suited for research was questionnaire method. Since in observation method only the effect can be observed while the case remains unknown. More ever observation method requires special observational skill on the part of researcher. Whereas through questionnaire asking to the people who are thought to have the desired information collects data. Questionnaire is set of question with some space for answer. The questionnaire for the report consists of open ended, close ended and ranking type of questions.

TYPE OF RESEARCH
Exploratory Research is also known as qualitative research. This type of research is used to discover new relationship. It looks of hypothesis tentative answer to question that solve as a guide for most research project. The project is also exploratory in nature. I have conducted research with the help of questionnaire. I have also taken personal interview of different customers which provided key information about the product, service and goodwill of the organization. There are different questions in my questionnaire which focused problem solving seeking objective. This report is prepared on the basis of answer given by various customers.

Types of Research Data source

Exploratory Research Primary Data & Secondary Data

Data collection Techniques

Questionnaire Method and Personal Interview.

Contact Method

Personal Interview

Sampling Procedure

Convenience Sampling and satisfied Random Sampling.

METHODS OF DATA COLLECTION

PRIMARY DATA :-

By observation of distribution channel through dealer, retailer & customer By Questioner methods

SECONDARY DATA :- From website of Amul, Books & Magazines

RESEARCH OBJECTIVE :

To understand the role of distribution channel in the marketing mix of Amul. To study how distribution channel add value to the marketing mix of Amul. To understand the different level of intensity in distribution effort. To understand the type function those distribution channels perform in Amul. How strong relationship Amul has with the distributors and retailers. To study Retailer satisfaction from distributor the service

SCOPE OF STUDY AND ITS UTILITY

The scope of study is limited to Nagpur city. The survey was undertaken only this areas survey covered the whole Nagpur city that is the full information provided to company. The research have been undertaken by the researcher is useful to dealer, distributer & company in many ways. The study is useful in finding the market potential and the total consumption of AMUL in the city covered during the survey. The study will help the distributer in targeting those shops first where there is good potential and the selling of is higher. During the study it has been found has been found that still there are many company what strategy apply for theses area like rated, quality, schemes, service AMUL decide It gives information about role of the distribution channel in Amul. It gives information about the services given by distributor to their retailer.

LIMITATIONS OF STUDY: The research was conducted in NAGPUR city, if the research would have been conducted in other city or over the country, the conclusion would have been different.

The companys rules and regulations didnt allow researcher to go to in depth regarding some confidential strategies.

Only two months time is very less to know the each and every aspect of marketing activities.

The instrument used may not be 100 percent accurate.

DATA ANALYSIS AND INTERPRETATION

QUESTIONNARIE FOR DISTRIBUTERQue 1. What are the satisfaction levels of distributer considering following

details?
Level of Satisfaction

Deatails Supply of Product Availability of Product Packaging of Product Profit Margin Varieties of Product Offers Customer Satisfaction

Good 1 1 2 0 3 0 3

% 33.3 33.3 66.7 0 100 0 100

Avg 1 2 1 2 0 1 0

% 33.33 66.67 33.33 66.67 0 33.33 0

Poor 1 0 0 1 0 2 0

% 33.3 0 0 33.3 0 66.7 0

3 2.5 2 1.5 1 0.5 0 Good Avg Poor Supply of Product Availability of Product Packaging of Product Profit Margin Varieties of Product Offers Customer Satisfaction

From the survey it reveals that the most of the distributer are not satisfied from the availability and service of the Amul. Profit margin provides the average satisfaction to the distributor. Distributor are well satisfied from the different varieties of Amul product and also a good number of customers are satisfied from the .

Q.2 Are you satisfied from after purchase service?

Level of Satisfaction

Deatails Receiving of Order Time of Delivery Replacement Billing Response to Complaints Company Representative Visits

Good 0 1 0 2 2 1

0 33.3 0 66.7 66.7 33.3

Avg 2 2 1 1 1 2

66.67 66.67 33.33 33.33 33.33 66.67

Poor 1 0 2 0 0 0

2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Good Avg Poor Receiving of Order Time of Delivery Replacement Billing Response to Complaints Company Representative Visits

According to the survey, the receiving of order seems to be good, but time of delivery is average Distributer is not at all happy with the replacement policy of the company. And responses to the complaints are also very slow.

QUESTIONNARIE FOR RETAILER

1. Reason for retailing particular brand:

(1 is given first priority and 5 last most priority) Reason to Retail (%)

Reason To Retail
REASOM TO RETAIL 3 % 4 % 7 35 7 35 6 30 2 10 8 40 6 30 5 25 1 5 5 25 7 35 4 20 3 15 6 30 7 35

Details Low price Best Quality Profit Margin Higher Verieties Service Market Demand Follow up of a company representative

1 1 7 0 8 1 7 2

% 5 35 0 40 5 35 10

2 3 6 4 6 3 6 3

% 15 30 20 30 15 30 15

5 2 0 2 0 4 0 2

% 10 0 10 0 20 0 10

Interpretation of Graph 1 : On the basis of above chart & graph we can say that majority of Retailer choose Amul as brand it gives more importance to the Quality of the product plus varieties available in market. They give less importance to the service & the margin provided by the company to the retailers. There are also some retailers who select particular brands because of the company executive continually follow up them to open a shop.

2. What are the satisfaction levels of retailers considering following details? Level of Satisfaction (%)

Level of Satisfaction
Level of Satisfaction

Deatails V. Good Supply of Product 0 Availability of Product 1 Packaging of Product 4 Profit Margin 0 Varieties of Product 5 Offers 0 Customer Satisfaction 5

% 0 5 20 0 25 0 25

Good 3 3 4 3 8 3 9

% 15 15 20 15 40 15 45

Avg 9 7 7 12 6 6 5

% 45 35 35 60 30 30 25

Poor 8 7 4 4 1 8 1

% 40 35 20 20 5 40 5

V. Poor 1 2 1 1 0 3 0

% 5 10 5 5 0 15 0

Interpretation of Graph 2 &3 From the survey it reveals that the most of the retailers are not satisfied from the supply and service of the Amul. Profit margin provides the average satisfaction to the retailers. Retailers are well satisfied from the different varieties of Amul product and also a good number of customers are satisfied from the Amul .

3. Are you satisfied from after purchase service?

Level of Satisfaction
V. Good 3 0 0 0 0 0
% Level of Satisfaction Good % Avg %

Receiving of Order Time of Delivery Replacement Billing Response to Complaints Company Representative Visits

15 0 0 0 0 0

5 4 1 7 2 2

25 20 5 35 10 10

6 8 2 13 7 4

30 40 10 65 35 20

Poor 4 6 13 0 9 10

20 30 65 0 45 50

V. Poor 0 2 4 0 2 4

0 10 20 0 10 20

Interpretaion of Graph 4

According to the survey, the receiving of order seems to be good, but time of delivery is not seems okay. Retailers are not at all happy with the replacement policy of the company. And responses to the complaints are also very slow.

CONCLUSION
From survey we came to know that

The company provides good quality product but profit margin is low for distributer as well as retailer but it also not bad one.

Market demand of product is higher but avability of product is not good to distributer and retailer.

The company does not supply product to distributer on time.

The survey shows that company does not provide the good schemes to the retailers as well as distributer.

The replacement policy of the company is very poor and not good for the retailers.

Distributors do not make delivery of product on time. Customer happy with the amul product and qulity.

FINDINGS OF THE RESEARCH

It is found that Amuls product has a very good quality. And its brand-name work positively for the company. It is found that the retailers were not happy with service, supply and replacement of defective product. Retailers were sell other brands as it give them better margin and better service. Avability of product to distributer is not good. thats why Distributors does not make delivery of product on time to retailer.

SUGGESTIONS AND RECOMMENDATIONS

Amul has a relatively good distribution network, but still company is not able to fulfill the demand of outlet in the peak season when demand is very high. Here company should consider on the supply of product in the peak season.

Supply should be regular to all the outlets including those that lie in the pocket roads and not just in the outlets which lie on the easily accessible routes. Provide reasonable Margin to retailers as compared to competitors, this motivates them to promote companys Ice-cream and Dairy products. Improve delivery schedule to provide products on time for the retailers about who claimed that Amul Ice-cream is not available to them on time. Incentives & schemes should be given to the retailer. Provide consistent service to retailers as this will help gain company goodwill in the market.

BIBLIOGRAPHY
WEBSITES www.amul.com www.wikipedia.org www.indiadairy.com
www.Google.com

BOOKS Distribution channels by Julian Dent Marketing channels by Coughlan Anne T.

QUESTIONNARIE FOR RETAILER

Name retailer Address Contact. Email

1) State the reason to retail particular brand ? No 1 2 3 4 5 6 7 Detail Low price Best quality Profit margin Higher varieties service Market demand Follow up by company representative Mark

2) Give your opinion about following factors. No 1 2 3 4 5 6 7 Detail Supply of product Availability of product Packaging of product Profit margin Varieties of product Offer /free gifts Customer satisfaction Mark

3) Are you satisfied from after purchase service? No 1 2 3 4 5 6 7 Detail Receiving order Time of delivery replacement billing Response to complaints Market demand Follow up by company representatives Mark

4) What is monthly turnover of product? a) In peak season b) In rainy season c) In winter season

5) What is your about company representative? No 1 2 3 4 5 Detail knowledge of product courteousness Willingness to help Efficiency/quickness behavior Mark

6) Overall all opinion about Amul product? Good B) Better C) Best D) Poor E) Very Poor