A STUDY OF

MARKETING STRATEGIES OF AMUL

Marketing Management – Individual Assignment

Prepared and Submitted By

Krishna Bhatt

Roll No 53

PGDM – Communications

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TABLE OF CONTENTS

Introduction 3History 3Product Mix 4

Logo / Slogan / Promotional Marketing 5Amul Vision / Mission 6

Milestones / Awards 6Competitors and Market Share 6

Value Proposition 7Packaging and Distribution 8

Segmentation, Targeting and Positioning 9Four P’s of Marketing10

Three C’s 11BCG Matrix Analysis 11SWOT Analysis 13PESTLE Analysis 13

Ansoff Matrix Analysis 14Conclusion / Suggestions 15

References 16

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Introduction

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word Amul is derived from the Sanskrit word Amulya, meaning invaluable. The cooperative is also sometimes referred to as Anand Milk Union Limited. Amul products have been in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amoolya have made Amul a leading food brand in India. Today Amul is a symbol of many things, of the genesis of a vast co-operative network, of the triumph of indigenous technology, of the marketing savvy of a farmers' organization and of a proven model for dairy development. It is a brand name managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat, India.

Amul spurred the white revolution of India, which made India the largest producer of milk and milk product in the world. Amul has overseas market in Mauritius, UAE, USA, Bangladesh and Australia. Dr. Varghese Kurien, the former chairman of GCMMF, is the man behind the success of Amul. Today Amul dairy is No. 1 dairy in Asia and No. 2 in the world, which is matter of proud for Gujarat and whole India. Amul has more than 150 chilling centers in various villages. Every day Amul Collects 7 million liters of milk from 2.6 million formers, converts the milk into branded, packed products and delivers goods to over 5,00,000 retail outlets across the country. Its supply chain one of the most complicated in the world.

History

The Kaira District Co-operative Milk Producers' Union Ltd. was registered on 1 December 1946 as a response to the exploitation of marginal milk producers by traders or agents of the only existing dairy, the Polson (brand) dairy, in the small city Anand (Near Anand railway station) (in Kaira District of Gujarat). Milk producers had to travel long distances to deliver milk, which often went sour in summer, to Polson. The prices of buffalo and cow milk were arbitrarily determined. Moreover, the government at that time had given monopoly rights to Polson to collect milk from Anand and supply it to Bombay city.

Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai Patel under the leadership of local farmer leader Tribhuvandas K. Patel. The Cooperative was further developed and managed by Dr. Verghese Kurien along with H.M. Dalaya. Dalaya's innovation of making skim milk powder from buffalo milk for the first time anywhere in the world and a little later, along with Kurien's help, making it on a commercial scale, led to the first modern dairy of the cooperative at Anand, which would compete against established players in the market.

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Product Mix

Bread SpreadsAmul Butter, Amul Lite, Delicious Table Margarine (Or Butter substitute)

Milk Drinks

Amul Kool Milk shake, Amul Kool, Amul Kool Café, Kool Koko, Nutramul Energy Drink, Amul Kool chocolate milk, Amul Kool flavoured Bottled Milk, Amul Kool Flavoured Tetra Pack, Amul Masti Spiced Buttermilk, Amul Lasee, Amul Kool Thandai

Powder Milk

Amul Spray Infant milk Food, Amul Instant Full Cream Milk Powder, Sagar Skimmed Milk Powder, Sagar tea Coffee whitener

Fresh Milk

Amul Fresh Milk, Amul Gold Milk, Amul Taaza Double toned Milk, Amul lite slim and trimmed milk, Amul Fresh Cream, Amul Shakti Toned Milk, Amul Calci+, Amul butter Milk

Cheese

Amul Pasteurised Processed Cheese, Amul cheese Spread, Amul Emmental Cheese, Amul Pizza Mozzarella Cheese, Gouda Cheese

For Cooking

Amul Sagar Pure Ghee, Cooking Butter, Amul Malai Paneer, Utterly Delicious Pizza, Mithai Mate, Masti Dahi, Pro – Biotic Dahi,

Desserts

Amul Ice Creams, Amul Shrikhand, Amul Mithaee Gulab Jamuns, Gulab Chocolates, Amul Basundi, Amul Yogi Yoghurt 

Health Drink

Nutramul, Amul Shakti Health Food Drink

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Logo / Slogan / Promotional Marketing

Brand Name: “Amul” is the acronym of Anand Milk Union Limited.

The Logo:

The Tagline / Slogan: “The taste of India”

The Jingle: Utterly, butterly, delicious…..Amul.

The Character / Mascot: The Amul moppet has been the mascot of Amul since 1967, sporting a young girl in red polka dot frock with 'utterly butterly delicious’ jingle.

Given the wide product portfolio, Amul’s approach is to promote its brands in a rotational cycle of two to three years. After ice-creams were launched in 1996, the category was re-visited in 1999, in order to improve availability of the product and make it affordable.

Amul uses a variety of media to communicate of which billboard campaign is the most famous. The endearing polka dressed girl and pun at various issues has increased the brand’s

fan following. Amul food festival, which has been held for the last four year between October and December in about 50,000 retail outlets, is also one of the very effective promotional strategies used by Amul. The Chef of India contest invites people to come up with recipes using as many Amul products as possible. The recipe can be submitted on Amul’s website. Also the Slogan likho Disneyland dekho contest and Amul Maharani Contest has been successful promotional events. Amul also sponsored the Singing Competition AMUL Star Voice of India and Amul music ka maha mukabla.

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Amul Vision / Mission

Vision

Amul’s vision is to provide more and more satisfaction to the farmers, their customers, employees and distributors.

Mission

We the motivated and dedicated workforce at Amul are committed to produce wholesome and safe foods of excellent quality to remain market leader through development of quality management system, state of art technology, innovation and eco-friendly operations to achieve delightment of customers and milk producers.

Milestones and Awards

GCMMF has bagged award for excellent performance in exports of dairy products for the year 2006-07 from Agricultural and Processed Food Exports Development Authority (APEDA), Minister of Commerce, New Delhi

Amul Probiotic Ice-cream got No. 1 Award at World Dairy Summit The Gujarat Cooperative Milk Marketing Federation Ltd. has emerged as the top

scorer in the service category of the prestigious IMC Ramkrishna Bajaj National Quality Award – 2003

GCMMF wins the SAP Award for Customer Excellence (SAPACE) 2013 under the category of "Best Run Award in Finance"

ET-Corporate Citizen Award of the Year 2010-11 to GCMMF Amul receives Green Globe Foundation Award Dr. V. Kurien honoured with Life Time Achievement Award by CNN-IBN GCMMF receives Srishti's G-Cube Award - 2010 Amul Bags International Dairy Federation Award Srishti G-cube Award for Good Green Governance - 2009 Mr. B M Vyas receives the Qimpro Gold Standard Award-2003 Amul – The Taste of India (GCMMF) receives International CIO 100 Award for

Resourcefulness. Rajiv Gandhi National Quality Award – 1999

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Competitors and Market Share

The brand positions itself as a brand of both masses and classes, unlike competitors like Nestle. Gujarat Co-operative Milk Marketing Federation (GCMMF), owners of Amul brand of milk and dairy products, posted sales of Rs 11,670 crore for the year ended March 2012, almost 55% more than Nestle India’s Rs 7,541-crore sales.

Amul owns 85 percent share in butter market and 75 percent in cheese share market. It may be mentioned here that Amul is the market leader in Rs 600 crore cheese market in India with 65-66% share. It also has 88% market share in butter, 63% share in infant milk and 45% market share in dairy whitener. Amul also enjoys a 26% share in the 25,000-crore packaged milk market.

Some of the competitors of Amul are listed in the following table in terms of different products of Amul. Major and tough competition is faced by Amul products like Amul Pizza and Amul chocolates from competitors like Pizza Hut and Cadbury respectively.

Value Proposition

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Functional – Quality, Variety of products, Range of Products is the functional value proposition of Amul.

Emotional – Amul attracts people emotionally with launching various products like Energy Drinks, Sugar free Products for health conscious people and diabetics.

Economical – The Price of Amul Products is Equivalent to its quality. The fresh products which Amul deliver in reasonable prices are one of the Economical Propositions of Amul.

Packaging and Distribution

Amul’s marketing strategy has always been consumer centric. Thus it is kept in mind that the packaging of all Amul products appeals to the emotional side of the consumer.

Use of Expression

For example the human facial expression of delight on the cheese variant packing reveal the pleasure people derive from consuming cheese and cheese products.

Use of expression in Packaging

Information

Also the need to highlight the nutrient value and best possible use of the product is an important feature of all Amul products packaging.

Use of Information in Amul’s packaging

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Protection

Recently Amul has focused largely upon capturing the branded tetra pack market with, variants that would last for over 2 weeks to three months even without refrigeration.

For example Amul Moti, a new variant of toned milk is priced a little higher than the fresh milk pouch. The UHT treated milk is then packaged in five-layered special pouch to increase its shelf life to 90 days.

As far as distribution is concerned, Amul products are available in over 5,00,000 retail outlets across India through its network of over 3,500 distributors. Amul is considered to be one of the strongest players in the market as far as distribution is concerned. Also, it has 47 depots with dry and cold warehouses to buffer inventory of the entire range of products.

Segmentation, Targeting and Positioning

Amul products are segmented in two broad categories, namely customer based market segmentation and industry based market segmentation.

Customer based market segmentation

Industry based market segmentation

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Targeting

Amul has targeted their milk products to various segments of the market. Products Like Nutramul Energy Drink, Amul Kool chocolate milk, Amul Kool flavoured Bottled Milk are targeted for the Kids aged 4-16 specially school going. Products such as Amul Kool Milk shake, Amul Kool, Amul Kool Café, Kool Koko, Nutramul Energy Drink, are mainly targeted for the College going young people, Whereas products such as Amul Masti Spiced Buttermilk, Amul Lasee, Amul Kool Thandai are targeted in specific season. Amul launches Chocolate milk under brand name of “AMUL KOOL KOKO”. This is targeted at teenagers and youths.

Positioning

Placing a product in that part of the market where it will receive favorable reception compared to competing products. Positioning of Amul is “TASTE of INDIA”. It has created value for everyone on value chain, be it customer or farmers. Amul’s USP is Quality with affordability. India’s First Pro- Biotic Wellness Ice cream& Sugar Free Delights For Diabetics. Low priced Amul Ice cream made Kwality Walls life hell. Amul Milk has positioned itself as a healthy substitute for the Soft Drink (Carbonated Drinks).

Four P’s of Marketing

Product

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Product specification:- Meets “AGMARK” standards and BIS specification .no IS. 13690.1992

Product personality:- It is a “UNISEX” product

USP(unique selling point):- USP of Amul is its “TASTE”. Amul butter is made from fresh cream by modern continuous butter making machines.(purely vegetarian)

Price Analysis

The price of final product includes cost of milk, labour cost and processing cost. Also the cost of transportation and sales promotion costs are added to the final price of the product. The cost of the milk keeps on increasing due to the increase in demand and limited supply and thus all the products of Amul have their prices incremented accordingly. Also, the taxes play a vital role in determining the final prices.

Place

Amul is a very strong marketing channel.

The GCMMF has a network of more than 3500 distributers and more than 5 lakh retail outlets.

More than 2.8 million farmers of 12 districts are operational and has 47 depots

Promotion

Given the wide product portfolio, Amul’s approach is to promote its brands in a rotational cycle of two to three years. After ice-creams were launched in 1996, the category was re-visited in 1999, in order to improve availability of the product and make it affordable.

Amul uses a variety of media to communicate of which billboard campaign is the most famous. The endearing polka dressed girl and pun at various issues has increased the brand’s

fan following. Three C’s

Competitors

Amul has been defending its products against Mahananda, Vijay, Milma & other co-operative milk brands. Also it has taken aggressive moves against Britannia, Nestle, Mother Dairy and Kwality.

Customers

Customers of Amul are extremely satisfied. Amul made people move from loose milk to packaged milk. Due to the brand image of Amul, people do not hesitate to try more products form Amul. Amul also improved socio-economic conditions of society.

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Company

Amul is the largest milk brand in Asia and has been market leader in ghee and butter. It has very strong supply chain and enjoys fine reputation. It has more than 30 dairy brands and its USP is Quality with Affordability.

BCG Matrix Analysis

BOSTON CONSULTING GROUP (BCG) MATRIX is developed by “BRUCE HENDERSON “of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s. According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:

Stars

Question marks

Cash cows

Dogs

It is based on the combination of market growth and market share relative to the next best competitor.

Stars stand for ‘High growth, High market share’. They are the leaders in business. Cash cows stand for ‘Low growth, High market share’. They are foundation of the company and often the stars of yesterday. Dogs stand for ‘Low growth, Low market share’. Dogs do not have potential to bring in much cash. Question marks stand for ‘High growth , Low market share’. Most businesses start of as question marks.

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As we can see from the above figure, products like Amul Cheese spread, Amul Kool, Amul Ghee and Amul Ice-creams come under star category as they have high market share and they are also highly growing products.

Products like Amul Paneer, Amul Butter, Amul milk and Amul Cheese are coming under cash cow category due to having high market share but low growth.

Amul health drinks come under the category of dog products as they have market share and also low growth whereas products like Amul Mithai mate, Amul Ice-cream Cake, Amul chocolates and Amul Pizza come under the Question mark category as they have high growth but low market share.

SWOT Analysis

Strengths

Largest food brand in India High Quality, Low Price

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World's Largest Pouched Milk Brand Annual turnover of US $1504 million Highly Diverse Product Mix Robust Distribution Network

Weaknesses

Risks of highly complex supply chain system Strong dependency on weak infrastructure Alliance with third parties who do not belong to the organized sector

Opportunities

Penetrate international markets Diversify product portfolio to enter new product categories and expand existing categories like processed foods, chocolates etc

Threats

Competitors - Hindustan Lever, Nestle and Britannia Still competition from MNCs in butter Growing price of milk and milk products Ban on export of milk powder

PESTEL Analysis

P: Political Since the budget range is decontrolled, no political effects are envisaged. 

E: Economic The Increasing per capita income of the whole population is resulting into a higher

disposable income to the consumer as the purchasing power parity is also rising steadily.

The Growing middle class of cities and urbanization of the general population as a whole

Low cost of production and economies of large scale production and operating at optimal capacity.

S: Social Per capita consumption of the entire dairy product consumers is expected to

increase in the future Payout to the farmers has also been registered amounting to 23% CAGR in the

preceding last 4 years. Increasing gifts and incentives culture to the society The health-conscious appeal to the society by providing Lower cholesterol in its

products than Mithais (sweet meat) T: Technological

Will have to reinforce and raise the standard of technology employed to international levels once India is a free economy

New and varied diversified products are needed Process innovation and technology enhancement is required

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Complementary assets to enhance milk production and capacity E-commerce to facilitate promotion and enhance consumer reach as e-commerce has

almost become a necessity nowadays

Ansoff Matrix Analysis

The Ansoff matrix shows four ways that businesses can grow, and helps people think about the risks associated with each option. The Matrix essentially shows the risk that a particular strategy will expose you to, the idea being that each time you move into a new quadrant (horizontally or vertically) you increase risk.

Conclusion / Suggestions

GCMMF that owns Amul, Asia’s largest milk brand realized that with the changing lifestyle & increased awareness about health issues, there has been a discernible shift towards health

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based drinks from carbonated drinks. Thus utilizing the potential of flavored milk, butter milk & other milk based beverages that have an age old tradition in India was a smart move. It was done by identifying the targeted teenagers & youth, who were biggest consumers of colas & aerated drinks.

The New variants of the brand were advertised through major national channels with special focus on youth oriented TV channels like MTV & Cartoon Network. By identifying the trend & introducing variants, Amul has been emerged as the fastest growing brand in non-carbonated soft drinks category. Also apart from health drink categories, Amul has been doing marginally well in other products like butter, cheese, ice-cream etc. The marketing and positioning strategies implemented by Amul are pretty attractive and thus Amul has been successful in creating a brand image.

Amul should focus on retail expansion in Indian cities, towns and villages and increase branded Amul parlors to capture the consumer attention and keep the competition at bay. Amul can venture into offering more low-fat versions of its products and also more variants in those products as it would help capture the hearts of second and third generation Indians in US & Global Market.

Amul must try to understand the cause of certain products like Amul basundi, gulab jamoon, and chocolates etc not being very popular. Amul need to take up thorough market research and work on improving these products. Also Amul can venture out on new products like dairy based sweets, baby food products.

Though Amul’s hoardings are a huge success, it can penetrate even better in the rural areas by advertising actively through the media viz cable channels and newspapers. Sponsoring more shows on TV, sports events can be of great help.

References

http://www.researchandmarkets.com/reports/607378/milk_and_dairy_products_in_india

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http://www.digitalimpulse.in/insights/tag/amul-market-share/#.Ujs88cakw5M

http://www.slideshare.net/ajaykrgupta12/amul-ppt-presentation-largest-food-brand-in-india-asia

http://en.wikipedia.org/wiki/Amul

http://www.slideshare.net/sabirsamad/amul-b12

http://www.mindtools.com/pages/article/newTMC_90.htm

http://www.slideshare.net/ajay_dhutawale/bcg-matrix-of-amul?from_search=1

http://www.amul.com/

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