avish project

8/14/2019 Avish Project

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A PROJECT OF REPORTA PROJECT OF REPORTA PROJECT OF REPORTA PROJECT OF REPORT

ONONONON

AMUL MILK AND PROJECT WORKAMUL MILK AND PROJECT WORKAMUL MILK AND PROJECT WORKAMUL MILK AND PROJECT WORKENTITLED ASENTITLED ASENTITLED ASENTITLED AS

GAPGAPGAPGAP ANALYSIS &EVALUATION OF AMULANALYSIS &EVALUATION OF AMULANALYSIS &EVALUATION OF AMULANALYSIS &EVALUATION OF AMUL

DISTRIBUTION SDISTRIBUTION SDISTRIBUTION SDISTRIBUTION SYSTEM VISYSTEM VISYSTEM VISYSTEM VIS----VIS MOTHER DAIRY INVIS MOTHER DAIRY INVIS MOTHER DAIRY INVIS MOTHER DAIRY IN

SOUTH DELHI MARKETSOUTH DELHI MARKETSOUTH DELHI MARKETSOUTH DELHI MARKETANAND MILK UNION LIMITEDANAND MILK UNION LIMITEDANAND MILK UNION LIMITEDANAND MILK UNION LIMITED

GUJARAT COOPERATIVE MILK MARKETINGUJARAT COOPERATIVE MILK MARKETINGUJARAT COOPERATIVE MILK MARKETINGUJARAT COOPERATIVE MILK MARKETINGGGGFEDERATIONFEDERATIONFEDERATIONFEDERATION


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UNDER THE GUIDANCE OFUNDER THE GUIDANCE OFUNDER THE GUIDANCE OFUNDER THE GUIDANCE OFMr.Manish Tripathi Prof.PrashantRastogiAsst.manager (sales) Head of departmentAmul ltd INJ Business school

BY

AWADHESH KUMAR

PGDM (2008-2010)(1STMAY TO 30TH JUNE )

INJ BUSINESS SchoolGreater noida


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PREFACEThe PGDM programme is well structured and integrated course ofBusiness studies. The main objective of practical training at PGDMlevel is to develop skill in student by supplement to the theoreticalStudy of business management in general.Industrial training helps To gain real life knowledge about theindustrial environment and Business practices. The PGDMprogrammed provides student with a Fundamental knowledge ofbusiness and organizational functions And activities, as well as an

exposure to strategic thinking of Management.In every professional course, training is an important factor.Professors give us theoretical knowledge of various subjects in theCollege but we are practically exposed of such subjects when weget the training in the organization. It is only the training throughwhich I Come to know that what an industry is and how it works.I can learn about various departmental operations being performedin the industry, which would, in return, help me in the future when Iwill enter the practical field. During this whole training I got a lot of

experience and came to know about the management practices inreal that how it differs from those of theoretical knowledge and thepractically in the real life.In todays globalize world, where cutthroat competition is prevailingin the market, theoretical knowledge is not sufficient. Beside thisone need to have practical knowledge, which would help anindividual in his/her carrier activities and it is true that

Experience is best teacher.


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ACKNOWLEDGEMENT

This work is an outcome of eight weeks of hard labour and

commitment towards the company I worked for. This task could not

been possible without the help and support of people with whom I

worked. It is with great pleasure and privilege that I wish to thank

all the people who actively supported me and with whom I worked

and met during my training period.

I would like to thank Mr. Manish tripathi and Mr.Jogindra Singh

(Asst. Sales Manager of AMUL MILK in DELHI Office) for

allowing me as Management Trainee in for giving me knowledge

about the marketing and deal with retailer & distributers and let me

aware about business tactics.

I extended my sincere thanks to Mr. Rajesh jha for extending his

cooperation at every possible time when I face any difficulty in

market and giving me a concept of PO (Possible) instead of

NO and so many other concepts that helped me to learn the

nuances of the real corporate world.

Last but not the least I would like to thank all my faculty members

in INJ BUSINESS SCHOOL who gave me a real chance to get the

taste of real corporate world.


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CONTENTS

Sr. no. Chapter name Page no.1 Introduction 07-08

2 Amul milk product 09-15

3 History 15-19

4 Marketing research 20-24

5 Research design 24-27

6 Distribution channel

SUPPLIER 36-38

Cooperatives 38-39

Milk processing 41-47

Marketing function 48-50

Retailers 50-56

28-56

7 SWOT analysis 57-62

8 My assignment 62-64

9 Scope of training 64

10 Experience & learning 65-67

11 Finding 68-69

12 Suggestion 69-70

13 Limitation 70

14 Conclusion 71-72

15 Appendices 73-75


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Gujarat Cooperative Milk Marketing FederationGCMMF: An introduction

Gujarat Cooperative Milk Marketing Federation (GCMMF) is

India's largest food products marketing organization. It isa 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 providingquality products which are good value for money Gujarat

Cooperative Milk Marketing Federation Ltd (GCMMF) is the

largest Organisation in FMCG industry engaged inmarketing of milk & milk products under the brand names

of AMUL and SAGAR with an annual turnover exceeding Rs5000 crores.

GCMMF is a unique organisation. It's a body created byFarmers, managed by competent professionals serving avery competitive and challenging consumer market. It is a

true testimony of synergistic national development

through the practice of modern management methods. We

in GCMMF stand for integrity, excellence and qualitythrough innovation. Our roots are embedded in the phrase

" Work is worship.

". Those who share these values will find themselves athome with us. At GCMMF Ltd, while in pursuit ofexcellence, we offer a unique career opportunity to unlock

your own potential. If you are looking fora challenging opportunity, you can explore your options

with us. We firmly believe that you will never look back inyour career again.


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Members: 13 district cooperative

milk producers' Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13328

Total Milk handling capacity: 11.22 million litres per day

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

Milk collection (Daily Average 2008-09): 8.4 million litres

Milk Drying Capacity: 626 Mts. per day

Cattle feed manufacturing Capacity: 3500 Mts. per day

Sales growth of amul ltd

Sales turnover Rs. (million) US $ (in million)2000-01 22588 5002001-02 23365 5002002-03 27457 5752003-04 28941 6162004-05 29225 6722005-06 37736 8502006-07 42778 10502007-08 52554 13252008-09 67113 1504


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AMUL MILK PRODUCT

AMUL FREASH MILK Amul Taaza Double

Amul gold milk Amul Lite Slim and Trim Milk AMUL SPRAY INFANT MILK food

Fresh Cream Toned Milk Amul Shakti toned milk


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AMIL MASTI SPICED BUTTERMILK Masti dahi

Composition:

VARITY FAT (%) SNF (%)

Amul gold (whole milk) 6 9

Amul shakti(standardizedmilk)

4.5 8.5

Amul taaza (toned milk) 3 8.5

Amul slim n trim 1.5 9.0

*Every 100 parts of SNF (Solids Not Fat) contains 56 parts ofcarbohydrates, 34 parts of protein and 9 parts of minerals.

Special Features:

Amul Milk is the most hygenic liquid milk available in the market. Itis pasteurised in state-of-the-art processing plants and pouch-

packed to make it conveniently available to consumers.

AMUL FRESH MILK :-

AMUL MILK is made from Pasteurised Milk


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AMUL GOLD MILK :-

Amul Gold is Long Life standardised milk. It is fresh and only fresh

milk, which has been processed with a technology called UHT

(Ultra High Temperature), hence also known as UHT milk.

Notwithstanding popular misconception, UHT technology does not

involve any use of preservatives.

The UHT treatment ensures zero microbial activation, while

preserving the maximum flavour, taste, and nutritional value. The

aseptic packaging system protects the product from air and light

and guarantees a long shelf life of 180 days without refrigeration.

Amul Gold contains 4.5% fat and 8.5% SNF minimum and is

ideal for making sweet dishes (like kheer, payasam etc.) and

for setting curds. It is also ideal for drinking straight from the pack

for kids and adolescents who simply love its creamy taste sans the

inconvenient cream layer!

Amul Gold comes in convenient 1 liter and 500ml packs


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AMUL TAAZA DOUBLE TONED MILK :-

Amul Taaza is Long Life double toned milk. It is fresh and only

fresh milk, which has been processed with a technology called

UHT (Ultra High Temperature), hence also known as UHT milk.


involve any use of preservatives. The UHT treatment ensures zero

microbial activation, while preserving the maximum flavour, taste,

and nutritional value. The aseptic packaging system protects the

product from air and light and guarantees a long shelf life of 180

days without refrigeration.

Amul Taaza contains 1.5% fat and 9% SNF minimum and is ideal

for tea and coffee whitening and for setting curds. It is also just

right for drinking straight from the pack for those who would like to

enjoy the taste the goodness of natural while avoiding the hazards

of too much fat! Amul Taaza comes in convenient 1 liter, 500ml and

200ml packs.

AMUL LITE SLIM AND TRIM MILK :-

Amul Lite is Long Life skimmed milk. It is fresh and only fresh milk,

which has been processed with a technology called UHT (Ultra


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High Temperature), hence also known as UHT milk.


involve any use of preservatives. The UHT treatment ensures zero

microbial activation, while preserving the maximum flavour, taste,

and nutritional value. The aseptic packaging system protects the

product from air and light and guarantees a long shelf life of 180

days without refrigeration.

Amul Lite Milk is a unique offering to health conscious milk lovers.With virtually zero fat content, nil cholesterol and 8.7% SNF

minimum, it gives you all the proteins, vitamins and minerals of

natural milk without your having to imbibe unnecessary flab in the

deal! Amul Lite Milk comes in convenient 1 liter, 500ml and 200ml

pack.

AMUL SHAKTI TONED MILK :-

Amul Shakti is Long Life toned milk. It is fresh and only fresh milk,

which has been processed with a technology called UHT (Ultra

High Temperature), hence also known as UHT milk.


involve any use of preservatives.

The UHT treatment ensures zero microbial activation, while

preserving the aximum flavour, taste, and nutritional value. The


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aseptic packaging system protects the product from air and light

and guarantees a long shelf life of 180 days without refrigeration.

Amul Shakti contains 3% fat and 8.5% SNF minimum. It is the ideal

ultipurpose milk. Growing children love its taste while benefiting

from its comprehensive nutrition. Amul Shakti comes in convenient

1 liter and 500ml packs.

AMIL MASTI SPICED BUTTERMILK :-

Amul introduces the Best Thirst Quenching Drink which is Free of

Colour, Preservatives, Acids and Sucrose Sugar (unlike Cola

drinks)

Product Details: Product - Amul Masti Spiced Buttermilk

Pack - 200ml Tetra Brik , MRP - Rs. 5.00

Ingredients -

Milk Solids, Common Salt, Spices and Condiments, Contains

permitted StabilizerMost importantly, Unlike carbonated soft drinks,

Amul Masti Spiced Buttermilk is 100% Natural and Sucrose Free

without any color or preservative added.


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It is a low fat product with lower sodium salt content. It contains

protein with almost 50% lower calorie than soft drinks. The spices

and condiments added to the product enhance its taste and flavour.

Available in convenient and attractive, take-away tamper proof 200

ml Tetra Pak Brik with 120 days shelf life at ambient temperatures.

Presently available in India only.

DAHI :-

AMUL MASTI DAHI is made from Pasteurized Toned Milk

Approximate Composition: Fat 3.5%, SNF 8.5%

Special Features: Only Packed curd available in market, made in

the hygienic way in modern processing plant. Made with special

culture to give a smooth, mild acidic taste and pleasant flavour

consistently.

HISTORY of GCMMFL

In the year 1946 the first milk union was established. This union

was started with 250 liters of milk per day. In the year 1955 AMULwas established. In the year 1946 the union was known as KAIRA

DISTRICT CO-OPERATIVE MILK PRODUCERS UNION. Thisunion selected the brand name AMUL in 1955.


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The brand name Amul means AMULYA. This word derivedform the Sanskrit word AMULYA which means

PRICELESS.

A quality control expert in Anand had suggested thebrand nameAMUL. Amul products have been in use in millions ofhomes since1946. 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 aleading food brand in India. (The total sale is Rs. 6 billion in 2005).Today Amul is a symbol of many things like of the high-qualityproducts sold at reasonable prices, of the genesis of a vast

cooperative network, of the triumph of indigenous technology, of

the marketing savvy of a farmers' organization. And have a provenmodel for dairy development (Generally known as ANANDPATTERN).In the early 40s, the main sources of earning for the farmers ofKaira district were farming and selling of milk. That time there washigh demand for milk in Bombay. The main supplier of the milkwas Polson dairy limited, which was a privately owned company

and held monopoly over the supply of milk at Bombay from theKaira district. This system leads to exploitation of poor and

illiterates farmers by the private traders. The traders used to

beside the prices of milk and the farmers were forced to accept itwithout uttering a single word.However, when the exploitation became intolerable, the farmers

were frustrated. They collectively appealed to SardarVallabhbhai Patel, who was a leading activist in the freedommovement. Sardar Patel advised the farmers to sell the milk ontheir own by establishing a co-operative union, Instead ofsupplying milk to private traders.Sardar Patel sent the farmers to Shri MorarjiDesai in order to

gain his co-operation and help. Shri Desai held a meeting atSamarkha village near Anand, on 4th January 1946. He advised

the farmers to form a society for collection of the milk.


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These village societies would collect the milk themselves and woulddecide the prices at which they can sell the milk. The district unionwas also form to collect the milk from such village cooperativesocieties and to sell them. It was also resolved that theGovernment should be asked to buy milk from the union.However,

the govt. did not seem to help farmers by any means. It gave thenegative response by turning down the demand for the milk.To respond to this action of govt., the farmers ofKaira districtwent on a milk strike. For 15 whole days not a single drop of milkwas sold to the traders. As a result the Bombay milk scheme wasseverely affected. The milk commissioner of Bombay then visitedAnand to assess the situation. Having seemed the condition, hedecided to fulfill the farmers demand.Thus their cooperative unions

were forced at the village and district level to collect and sell milkon a cooperative basis, without the intervention of Government.

Mr. Verghese Kurien showed main interest in establishing unionwho was supported by ShriTribhuvandas Patel who lead the farmers in forming theCooperative unions at the village level. The Kaira district milkproducers union was thus established in ANAND and wasregistered formally on 14th December 1946. Since farmers sold


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all the milk in Anand through a co-operative union, it wascommonly resolved to sell the milk under the brand name AMUL.

At the 11 initial stage only 250 liters of milk was collectedeveryday. But with the growing awareness of the benefits of the

cooperativeness, the collection of milk increased. Today Amulcollect 11 lakhs liters of milk everyday. Since milk was a

perishable commodity it becomes difficult to preserve milk floralonger period. Besides when the milk was to be collected from the

far places, there was a fear of spoiling of milk. To overcome thisproblem the union thought out to develop the chilling unit atvarious junctions, which would collect the milk and could chill it, soas to preserve it for a longer period. Thus, today Amul has morethan 150 chilling centers in various villages. Milk is collectedfrom almost 1073 societies. With the financial help fromUNICEF, assistance from the govt. of New Zealand under theColombo plan, of Rs. 50 millions for

factory to manufacture milk powder and butter was planned.Dr.Rajendra Prasad, the president of India laid the foundation on

November 15, 1954. Shri Pandit Jawaharlal Nehru, the primeminister of India declared it open at Amul dairy on November

20,1955.


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PEOPLE POWER: AMUL'S SECRET OF SUCCESSThe system succeeded mainly because it provides an assuredmarket at remunerative prices for producers' milk besides acting asa channel to market the production enhancement package.What'smore, it does not disturb the agro-system of the farmers. Italso enables the consumer an access to high quality milk and milkproducts. Contrary to the traditional system, when the profit of thebusiness was cornered by the middlemen, the system ensured thatthe profit goes to the participants for their socio-economic

upliftment and common good.Looking back on the path traversedby Amul, the following features make it a pattern and model for

emulation elsewhere.Amul has been able to:-

Produce an appropriate blend of the policy makers farmersboard of management and the professionals: each group

appreciating its rotes and limitations,Bring at the command of the rural milk producers the best of

the technology and harness its fruit for betterment.Provide a support system to the milk producers

withoutdisturbing their agro-economic systems, Plough back the profits, by prudent use of men, material and

machines, in the rural sector for the common good andbetterment of the member producers and

Even though, growing with time and on scale, it hasremained with the smallest producer members.


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MARKETING RESEARCH

Marketing research plays an important role in the process ofmarketing. Starting with market component of the total marketingtalks. It helps the firm to acquire a better understanding of the

consumers, the competition and the marketing environment.

DEFINITION :-Marketing research is a systematic gathering, recording andanalysis marketing problem to facilitate decision making.- Coundiff & Still.Marketing research is a systematic problem analysis, model

building and fact finding for the purpose of important decisionmaking and control in the marketing of goods and services- Phillip Kotler .

MAIN STEPS INVOLVED IN MARKETING RESEARCH :-

Defining the Marketing Problem to be tackled and identifying themarket research problem involved in the task.(1) Define the problem and its objectives.(2) Identify the problem.

(3) Determine the information needed.(4) Determine the sources of information.

(5) Decide research methods.(6) Tabulate, Analyze and interpret the data.(7) Prepare research report.(8) Follow-up the study.

(1) Define the problem and its objectives :-This

includes an effective job in planning and designing aresearch project that will provide the needed information. Italso includes the establishment of a general framework ofmajor marketing elements such as the industry elements,competitive elements, marketing elements and companyelements.


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(1) Identify the problem :-Identifying the problem involves

getting acquainted with the company, its business, its

products and market environment, advertising by means oflibrary consultation and extensive interviewing ofcompanys officials.

(2) Determining the specific Information needed :-

Ingeneral the producer, the manufacturer, the wholesaler andthe retailer try to find out four things namely :-

(1) What to sell

(2) When to sell

(3) Where to sell(4) How to sell(4) Determine the sources of information :-

Primary Data :-Primary datas are those which are

gathered specially for the project at hand, directly e.g.

through questionnaires & interviews. Primary data sourcesinclude company salesman, middleman, consumers, buyers,

trade associations executives & other businessman & even

competitors.Secondary Data :-

These are generally published sources,

which have been collected originally for some other purpose.Source are internal company records, governmentpublication, reports & publication, reports & journals, trade,professional and business associations publications & reports.

(4) Decide Research methods for collecting data :-

If it isfound that the secondary data cannot be of much use, collection of

primary data become necessary. Three widely used methods ofgathering primary data are

SurveyObservationExperimentation


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A)Survey Method :-In this method, information gathered

directly from individual respondents, either through personal

interviews or through mail questionnaires or telephoneinterviews.

B)Observation Method :-The research data are gathered

through observing and recording their actions in a marketingsituation. This technique is highly accurate. It is rather anexpensive technique.

C)Experimental Method :-

This method involves carrying out

a small scale trial solution to a problem, while at the sametime, attempting to control all factors relevant to theproblem. The main assumption here is that the testconditions are essentially the same as those that will beencountered later when conclusions derived from theexperiment are applied to a broader marketing area.

D)The Panel Research :-

In this technique the same groupof respondents is contacted for more then one occasion; and

the information obtained to find out if there has been any in

their taste demand or they want any special quality, color,size, packing in the product.

a) Preparation of questionnaireb) Presetting of questionnairec) Planning of the sample

(5) Tabulate, Analysis and Interpret the Data :-The report

must give/contain the following information:-a) The title of research

b) The name of the organization for which it has been Conductedc) The objectives of research

d) The methodology usede) Organization and the planning of the report


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f) A table of contents along with charts and diagrams used in thereports

g) The main report containing the findings

h) Conclusion arrived at end recommendations suggestedi) Appendices (containing questionnaire / forms used sampledesign, instructions.)(6) Follow-up the study :-

The researchers, in the last stage,should follow up this study to find if his recommendation are beingimplemented and if not, why

MARKET RESEARCH

Market research is discovering what people want, need, or believe. It canalso involve discovering how they act. Once that research is complete it canbe used to determine how to market your specific product. Wheneverpossible, try to reduce risks at the earliest possible stage. For example youcould carry out market research early on and not wait until you are almostready to enter the market. If early market research reveals that your businessidea has real potential, you can use this information in planning the build-upof your business. [Ilar 1998]

For starting up a business there are a few things should be found out throughmarket research in order to know if your business is feasible. These arethings like:

Market Information

Market information is making known the prices of the different commoditiesin the market, the supply and the demand. Information about the markets can

be obtained in several different varieties and formats. The most basic form ofmarket information is the best quotation and last sale data, including thenumber of shares, with respect to a particular security at a given time.[Market research 2006]

Examples Of Market Information Questions Are:


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Who are the customers?

Where are they located and how can they be contacted?

What quantity and quality do they want?

What is the best time to sell?

What is the long-term or historical price data over a number of

years?

What is the expected production in the country?

Is there more demand for one product or another? Etc.

RESEARCH DESIGN

Advertising is a paid form of non-personalpresentation and promotion of ideas, goods

or services by an identified sponsor.1. RESEARCH PROBLEM:-

Increase the awareness level of AMUL MILK .

Seek the general perception of consumer towards AMUL MILK .To find the performance of AMUL MILK vis--vis other Brands.To know the consumer psyche and their behaviour towards AMULMILK.

2. RESEARCH OBJECTIVES & related sub objectives :-To know the relationship of sales with the advertisement.To know awareness of people towards Amul MILK.To know in which segment chocolates are mostly like/preferred.To know which advertisement tool is mostly preferred by people.To know the preference of Amul MILK with comparison to Othercompetitive brands.To know the factors which affects consumers buying behavior topurchase milk.


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3.RESEARCH INSTRUMENT USED :-If one wants to know what type of

dentifrice people use, thequestionnaire method has come to be the morewidely used of thetwo data collection method. Many consumers are nowfamiliar withthe telephone caller who greets them with We are making asurvey, and then proceeds to ask a series of questions. interviews areconducted in retailer, others by ,distributer . Each of these has its specialadvantages and disadvantagesand limitations. The questionnaire method ingeneral, however, hasa number of pervasive advantages anddisadvantages. Discussion ofparticular variations will be more meaningful ifthese characteristicsof the general methods are brought out first.A questionnaire consists of list of questions to be asked from the

respondents and the space provided to record the answer /responses. Thechoice among these alternatives is largely determined by the type ofinformation to be obtained and by the type of respondents from whom it is tobe obtained. The common factor in all varieties of the questionnaire methodis this reliance on verbal responses to question, written or oral.Questionnaire in the project consists of:

MULTIPLE CHOICE QUESTIONS:Questions of this type offer the

respondents an alternative to choose the right answer among others. Itis faster, time saving and less biased. It also simplifies the tabulatingprocess.

OPEN END QUESTIONS:In this type respondents are free to answer

in their own words and express the ideas they think are relevant, suchquestions are good as first questions or opening questions. Theyintroduce the subject and obtain general reaction.

FIELD WORK- METHOD USED FOR DATA COLLECTION :-

Questionnaire was prepared keeping the objective of researchin mind.


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Questions were asked to respondents as regards to therewillingness to purchase milk.

The help of questionnaires conducted direct interviews, inorder to get accurate information.

I visited as many respondents as I can and asked them theirreal likings about amul milk and other competitor milk andalso got an idea, How a milk should be?

It is really a Herculean task to understand Consumer

Behavior, as the definition suggest, Consumer behavior isa physical activity as well as decision process individualengaged in when evaluating, acquiring, using and

disposing goods and services.

Retailers were not willing to answer, when they werecontacted between 1.00 pm to 3.00 pm, the time when most

of the retailers take rest during the scorching heat.

[1] Market share of amul milk in south Delhi

Amul - 22%

Mother dairy - 46%

Paras dairy - 10%

Saras dairy - 08%

DMS - 09%

Others - 05%


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AMUL

MOTHER DAIRY

PARAS

SARAS

DMS

OTHERS

[2] At What time retailers required milk?

3am - 5am 14%

4am - 6am 60%

5am - 7am 20%

Other 06%

Requirement of Milk

14%

60%

20%6%

3am-5am

4am-6am

5am-7am

Other


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INFERENCE

The above diagram suggest that the most preferred time is 4am

6am i.e. 60%.

Distribution channel of amul milk

Understand the procurement, processing and distribution activities of

GCMMF's supply chain

"Amul is a supply chain which has taken the form of a cooperative

association. It has developed the technology and methods to store surplus

stocks of milk and dairy products in the form of powered milk and to

reconstitute and distribute products made from the powered milk during

seasons of the year when dairy farm yields fall below demand levels."1

- Ron Kopicki, Lead Private Sector Development Specialist, World

Bank in 1999.

"Amul, the showcase for the cooperative sector in developing countries,

encompasses the poor farmer with two buffaloes and world-classprocessing facilities and distribution system with a national and

increasingly global reach."

- CK Prahalad3

in The Fortune at the Bottom of the Pyramid.

Building Networks:-

The founders of Kaira Unionrealized that to fulfill their objectives, a large number of marginal farmers hadto benefit from the cooperative a network of stakeholders had to be built.And once built, it had to grow so as to draw more rural poor to undertakedairy farming as a means of livelihood.The network had to have several layers the organizational network wherethe voice of the owners governed all decisions, a physical network of supportservices and product delivery process and a network of small farmers that


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could deliver the benefit of a large corporation in the market place. Moreimportantly, a process had to be put in place to build these networks.

Building an organizational network that would represent the farmers and thecustomers was the most complicated task. A loose confederation evolvedwith GCMMF representing the voice of the customers, the Unionsrepresenting the milk processors and the village societies representing thefarmers.Competition in the markets ensured that the entire network was respondingto the requirements of the customers at prices that were very competitive.The task of ensuring the returns to the farmers was commensurate with theobjectives with which the cooperatives were setup was achieved throughrepresentation of farmers at different levels of decision making throughout

the network the societies, Unions and the Federation boards comprisedfarmers themselves.In order to ensure that most returns from sales went to the farmersthemselves who were the producers, the intermediaries had to operate veryeffectively and on razor thin margins. This turned out to be a blessing indisguise the operations remained very lean and started to provide costbased advantage to the entire network.AMUL established a group to standardize the process of organizing farmers

into village societies. In addition to establishing the criteria for selectingmembers, the group had to train the VS to run the cooperative demo-

cratically, profitably and with concern for its members.This included establishing procedures for milk collection, testing, payment formilk purchased from member farmers and its subsequent sale to the union,accounting, ensuring timely collection and dispatch of milk on milk routesestablished by the union, etc.The village societies department at AMUL acted as internal representativesof the village societies in their dealings with the Unions. Milk procurementactivity at AMUL comprises development and servicing of village societies,increasing milk collection, procurement of milk from societies & its transportto the chilling locations, and resolving problems of farmers and village

societies.The physical delivery network for distribution of milk and milk products ismanaged by the marketing arm of the network GCMMF. GCMMF providesumbrella branding to all the products of the networked.The two brands that GCMMF supports are AMUL and SAGAR. Milk and milkproducts from all Unions are sold under these two key brands (Table 3shows the market share of AMUL across various product segments). Inessence, GCMMF procures from multiple production plants (the thirteen


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Dairy cooperative structure and details for state ofGujarat:-


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GCMMF S DISTRIUBTION CHANNEL STUCTURE:-


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While figure ( 1) describes the hierarchical nature of the cooperativestructure, Figure 2 presents the(1)Supply chain linking farmer -

Suppliers of milk with the millions of consumersGujarat Cooperative Milk Marketing Federation or GCMMF is the marketingentity for the State of Gujarat. GCMMF has 42 regional distribution centers inIndia, serves over 5, 00,000 retail outlets and exports to more than 15countries. All these organizations are independent legal entities yet looselytied together with a common destiny!Today AMUL is a symbol of many things. Of high-quality products sold atreasonable prices Of developing and coordinating a vast co-operativenetwork Of making a strong business proposition out of serving a largenumber of small and marginal suppliers Of the triumph of indigenous

technology of the marketing savvy of a farmers' organization.We will now try to address the central issue of how to develop and manage anetwork of firms in an emerging market environment.

(2) Characteristics of a Network EnvironmentDuring late 1980s and 90s

network structure emerged as an innovative mechanism for enhancingcompetitiveness and providing value to the consumer. Essentially, a networkis made up of various stake holders ranging from suppliers to retailers,loosely linked by a common interest of remaining competitive in a demanding

environment. This is in contrast to the traditional mechanism of verticalintegration, joint ventures etc.In recent years, much of the interest in the network structure has beenmotivated by the increased attention to supply chain management with thefocus shifting from the individual firm to the supply chain. A typical supplychain network spans several levels of suppliers, manufacturers/assemblers,distributors, wholesalers, and retailers.It is now quite wellrecognized and well documented that cooperation amongthe members isnecessary to manage such chains effectively and efficiently.Further, research on the subject has highlighted the role of coordination and

its importance in supply chain management. It is also recognized that suchchanges are not easy to implement and require a paradigm shift in theoutlook of firms in the chain. Specifically, this requires that decision makingby various players be driven by the objective of optimizing the performanceof the chain (global optimum) rather than by the interests of the individualfirms (local optimum). Further, complexity anddynamics of the supply chain make it very difficult to assess the interactioneffects. Increased cooperation among network members has resulted in a


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number of changes at all levels -- operational, tactical and strategic, and hasled to the emergence of practices and strategiesfor improving the chain's performance. Most prominent among these include

the following:

Information sharing, often dynamically, to improve planning andexecution. Sharing of POS data is a classic example for minimizing thedistortions due to bull-whip effect and reducing perceived variability ofdemand by the partners in the chain. Typically, information Sharingextends to costs as well.

Focus on core competence of each player in the chain. The objectiveis to ensure that each task is performed by the entity best suited for it.

As a result, firms have become willing partners in ceding control to anetwork partner for improving performance. VMI in Much industry is adirect result of such change in management thinking. Similarly, theRole of third parties for providing specific expertise such as logisticshas grown sub statically with emphasis on supply chain.

Help network partners in improving their capability and making themcompetitive. Again, this represents a sea change from the past whensuch entities were viewed as rivals in a zero sum game. The newthinking is motivated by the recognition that helping partners become

competitive will make the chain more effective and lead to highergrowth i revenues and profits, thus leading to a win-win situation for allparties. Helping suppliers with process improvements andimplementation of JIT methods are examples of such initiatives leadingto overall improvement. With many of the above characteristics beingembodied in a network, it may start to perform all the functions of a firmby satisfying the requirements of an organization, i.e., having multipleagents, having a legal standing, presence of group objective as well asindividual objectives amongst agents, existence of a hierarchy ofrelationship and pooled interdependence, sharing of common

information and centralized planning (to some extent), sharing of risks,having centralized marketing function for most products etc. (Carley1992, Dyer and Singh 1998, Van Zandt, 1998).

It is interesting to note that AMUL has adopted the network model inearly 1950s in a broader context and more complex environment, wellbefore the approach was recognized in Western Europe and NorthAmerica. In the following sections we describe the AMUL story andelaborate on its practices.


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The Business ModelThe objective of the network was to deliver

profitable and equitable returns to a large number of farmers for a longperiod of time. This follows rather directly from the fact that the memberfarmers own essentially the network of cooperatives. As explained later,given the weak economic status of these members, an additional objectivewas to develop the supplier over the long term through social change.Consequently, the business model had to include both the costs and benefitsof services that would be needed to deliver milk with high productivity as wellas to assist farmers in improving their social environment.The success of the network depended on high collection rate of milk. Thisrequired increasing membership with more VSs(Village societies), raising the

number of members per VS, and improving the milk yield (i.e., better cattlemanagement), constant concern about the cost to farmers in the network anddelivering quality to customers at low prices. The cooperative haddecided as part of its value: to charge for each service provided to thesupplier to purchase all milk that member farmers produced to sell liquid milkat affordable prices so as to serve a large number of consumers to developand deliver services that will improve lives of people in the network to hireprofessional managers, to run the federation and unions, whose valuesincluded upliftment of rural poor. It is noteworthy that from the verybeginning, in the early 1950s, AMUL adopted the network as the basic model

for long-term growth. Two aspects of this network deserve special attention.First, the network explicitly includes secondary services to the farmer-suppliers. Second, several of the entities in the network are organized as cooperatives linked in a hierarchical fashion. In what follows, we describebriefly the environmental characteristics and the rationale for the underlyingbusiness model.Market / Customers:

In comparison with developed economies, the marketfor dairy products in India is still in an evolutionary stage with tremendouspotential for high value products such as ice cream, cheese etc. The

distribution network, on the other hand, is quite reasonable with access toruralareas of the country. Traditional methods practiced in westerneconomies are not adequate to realize the market potential and alternativeapproaches are necessary to tap this market.


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Suppliers:A majority of the suppliers are small or marginal farmers who

are often illiterate, poor, and with liquidity problems as they lack direct

access to financial institutions. Again, traditional market mechanisms are notadequate to assure sustenance and growth of these suppliers.

The three tier structure ANAND PATTERN

State Level Marketing Federation

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

Villagers

The three-tier Anand Pattern structure consists of a Cooperative Society at

village level affiliated to a Milk Union at District level and they are further

federated into a Milk Federation at State level. The above three-tier structure

was formed in order to delegate responsibilities at various levels such that

there is no internal competition and economics of scale is achieved.


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The Village Cooperative is the primary society under the three-tierstructure. It has membership of milk producers of the village(approximately 200 member milk producers per village) and is

governed by an elected Management Committee consisting of 9 to 12elected representatives of the milk producers. The main function of thiscooperative society is to collect surplus milk from the milk producers ofthe village and make payment based on quality and quantity. It alsoprovide support services to the members like Veterinary First Aid,Artificial Insemination Services, Cattle-feed sales, mineral mixturesales, fodder & fodder seed sales, conducting training on AnimalHusbandry and Dairying, etc.

The district-level Milk Union is the second tier under the three-tierstructure. It has membership of Village Societies of the District and is

governed by a Board of Directors consisting of 9 to 18 electedrepresentatives of the Village Societies. The main function of the MilkUnion is to process milk into various milk and milk products as per themarket requirement. The Union procures milk from the VillageSocieties of the District and arranges for the transportation of raw milkfrom the villages to the Milk Union. It also provides input services to theproducers and other support to the village level societies.

The State-level Federation is the apex tier under the three-tier

structure. It has membership of Milk Unions of the State and is

governed by a Board of Directors consisting of one elected

representative of each Milk Union. The main function of the Federationis to market the milk and milk products, manufactured by Milk Unions.

The Federation establishes distribution network for marketing of milk

and milk products and maintains the supply chair network. It also

provides support services to the Milk Unions and members like

Technical Inputs.

Technologies:-

A basic milk collection transaction done by Akashganga comprises:

Measuring weight of milk with electronic weighing scale. Fat testing using milk-o-tester. Capture of unique member ID by the PC software. Printing of pay slip, with all this data and the amount to be paid.


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The MS DOS based system offers scalability for an information-kiosk likeservice. Thus, DISK has been added as an enhancement, which offers amultitude of animal husbandry related services, besides maintaining

databases and offering Internet connectivity at the Dairy CooperativeSociety.

Cooperative milk producing societies in Gujarat :-

Following are the cooperative that function under the GCMMF :

Ahmadabad Dist Coop Milk Producers Union Ltd, Ahmadabad.

Soc: 433, Memes: 52,428. Av Milk Proc: 90,000 lpd.

Banaskantha Dist Coop Milk Producers Union Ltd, Palanpur.Soc: 1,130, Mems: 97,251. Av Milk Proc: 295,000 lpd.

Baroda Dist Coop Milk Producers Union Ltd, Baroda. Soc: 783,

Mems: 156,691. Av Milk Proc: 225,000 lpd.

Bharuch Dist Coop Milk Producers Union Ltd, Bharuch. Soc:

289, Mems: 37,900. Av Milk Proc: 38,000 lpd.

Bhavnagar Dist Coop Milk Producers Union Ltd, Bhavnagar.

Soc: 190, Mems: 25,532. Av Milk Proc: 23,000 lpd.

Gandhinagar Dist Coop Milk Producers Union Ltd, Gandhinagar.


Junagadh Dist Coop Milk Producers Union Ltd, Junagadh. Soc:

400, Mems: 41,500. Av Milk Proc: 73,000 lpd.

Kaira Dist Coop Milk Producers Union Ltd, Amul Dairy, Anand.


Kutch Dist Coop Milk Producers Union Ltd, Kutch Dairy,

Madhapar. Av Milk Proc: 25,000 lpd.

Mehsana Dist Coop Milk Producers Union Ltd, Dudhsagar Dairy,

Mehsana. Soc: 1,020, Mems: 292,800. Av Milk Proc: 704,402

lpd.


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Panchmahal Dist Coop Milk Producers Union Ltd, Godhra. Soc:

1,133, Mems: 126,510. Av Milk Proc: 112,000 lpd.

Rajkot Dist Coop Milk Producers Union Ltd, Rajkot. Soc: 193,

Mems: 29,620. Av Milk Proc: 50,000 lpd.

Sabarkantha Dist Coop Milk Producers Union Ltd, Sabar Dairy,

Himatnagar. Soc: 1,315, Mems: 200,482. Av Milk Proc: 322,346

lpd.

Surat Dist Coop Milk Producers Union Ltd, Sumul Dairy, Surat.


Surendranagar Dist Coop Milk Producers Union Ltd,

Surendranagar. Soc: 486, Mems: 31,000. Av Milk Proc: 30,000

lpd.

PLANT LAYOUT

Plant layout is the overall arrangement of the machine tools, handling

equipments, storeroom and other various accessories required for facilitating

production in a factory. These arrangements are pre-planned with the results

that the building has been constructed to fit a layout of a given process.

AMUL plant is indigenously worked out with facilitation of various production

processes and production of multi products under one plant. The total plot is

nearly about 2.27 kms. Separate buildings are provided with required

arrangements of machine tools handling and computers connection through

the control room to fit for varying product-manufacturing departments.

The plant is engaged in producing milk, ice creams, milk powder and ghee.

Entire department is uniquely provided with facilities for the processing each


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product. There are 4 production departments and packaging departments

pertaining to each product respectively.

Thus, plant layout encompasses all production and service facilities and

provides for the most effective utilization of the men, materials and machines

constituting the process. It is the master blue print of coordinating all

operations.

A good layout results in elimination or minimization of accidents and hazards

and cost while increases the output. Thus a good layout specifically is

observed to be beneficial on the following grounds:

Efforts minimization

Fewer material handling will be provided manufacturing units cost

will be lover

Bottlenecking of production will be eliminated

Total item in process will be less

Specialization of operations is facilitated

Less inspection will be required

Production control will be easier to achieve

Plant investment can be held to the necessary minimum

Plant and equipment obsolescence may be less

Wastage space will be eliminated

Thus, a true beneficiary is provided to the plant through good and sound

planning for plant layout.

Operating Analysis:-

Amuls only source of raw material is Village Milk societies. Milk is

brought from such village milk societies every morning and evening.


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This milk is then sent to the dairy plant. In the dairy plant the milk is

processed i.e. it is made free from germs.

Milk Processing

The entire process of milk can be divided into following steps:

Milk Processing Chart:

Collection of Raw-Milk

Electronic Milk Test

Methyline Blue

Reduction Test

Purchasing And Standardizing Process

Separation Process

Quality Check

Packaging Process

Cold Storage


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Steps in Production Process

1. Collection of Raw Milk

Raw milk is collected from different co-operative societies of Gujarat.

About 122000 liters of raw milk is collected per day. Before this milk is

sent to the laboratory for testing the FAT & SNF proportion, the milk is

separated from the raw milk. The milk is taken from the chilling centers

to Ahmadabad with the help of trucks.

After collecting the samples of milk, they are taken to the laboratory,where two types of tests are conducted.

Electronic milk test

Methyline blue reduction test

(a) Electronic Milk Test

Before pasteurizing the milk the samples are taken to the laboratory. In

the laboratory with the help of machine called electronic milk tester, the

proportion of SNF & FAT is checked with phosphate solution. When the

colour of the milk becomes yellow, it is sent for pasteurisation.

(b) Methyline blue reduction test

Another test, which is taken in the laboratory, is called Methyline blue

reduction test. This test is conducted for checking for how long the milk will

remain fresh. To check this, 10 ml of milk is taken and 1 ml of methyline blue

solution is added to it. It is then kept under water at 57-degree C. After one

hour, if the solution losses its color than it is called raw milk. If the solution

remains the same even after 5 hours than it is considered as fresh milk,

which remains constant for a long period of time.


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The dairy fixes the proportion of FAT & SAF.

MILK SNF FAT

Buffalo 9% 6%

Cow 8.5% 4.5%

After laboratory gives green signal and confirming the raw milk at the

reception dock is brought in to the house connected with the pump is

sent to the milk processing plant. This is than chilled below 4 degree C.

and then stored in milk silos. After that milk is processed which has two

steps i.e. pasteurising and standardizing?

2. Pasteurizing & standardizing

After collecting and checking and conducting laboratory tests, thepasteurising process is conducted. To pasteurized the milk means to

kill all the germs in the milk by a particular method which was invented

by a scientist called James Pasteur and so the name pasteurization.

In pasteurizing, the milk is first heated at 72 C to 76 C for 15 seconds

and then it is immediately cooled below 4 C. By this method they

destroy the pathogenic bacteria present in the raw milk. But if the right

degree of temperature is not provided there are chances that the milk

might still contain germs. After this process some milk goes to

separator machine and remaining is proportionately sent for

standardization.


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Standardization process is known such as it bifurcates the milk in 3

categories varying according to that FAT & SNF contents. The

equipment named OSTA. Auto standardization adjusts the fat directly.

The computer is just ordered whether gold or standard milk is to be

rationed and the same will be received with appropriate contents.

Ready Milk = Pasteurized + Standardized.

3. Separation process

Separator machine separates two kinds of products, skimmed milk &

cream, through channels. There are 100 disks fixed in separator

machines, which revolve at 5000 rpm (revolution per minute). It is

taken to the tanks, which has the capacity of 20000 litres. Whenever

the milk is needed from the tank, it is tested in the laboratory and the

deficit proportion fat is added by mixing cream. This process continues

for 24 hours.

4. Quality Check

Pasteurized milk is sent for a quality check in the Quality Assurance

laboratory of the dairy plant. Within 14 seconds FAT and SNF

proportion is received regarding 30 lack liters of milk. The total

investment put into the lab by the Dairy plant is of Rs. 6 crores.

This laboratory only checks and analyses the powder, milk and ghee.

There is a separate ice-cream analyzing laboratory.


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4 Packing Process

After this the milk is sent for packing to the milk packing station in the

dairy plant. In the milk packaging station there are huge pipelines and

behind each of them there is polyfill machine from which the material to

pack milk comes out. There are 12 such polyfill machines in the

packaging station from which the materials to pack milk comes out.

From each of these 12 machines 100 pouches are packed in one

single minute.

6. Storage

Then the milk is sent to the cold storage of the dairy where the milk is

stored until it is dispatched. Here the milk is stored at temperature

ranging from 5 C to 10 C, it is maintained with the help of exhaust fans

having silicon chips. About 40000 litres of milk is dispatched from the

cold storage of the dairy plant everyday. The damaged pouches are

kept a side and the milk is once again put to the tank.

Milk Powder :-

For converting milk powder first of all water content is evaporated in

condensing plant. By this process they get condensed milk, it is used

as a raw material. There after the milk is sent to the drying plant. The

spray drying plant is huge in size with a height of 70 feet. The plant is

divided into many floors to enable easy use of the plant. First of all the

raw material i.e. condensed milk is put into the first floor of the plant

along with air at 200 C. By this process the remaining water, which the

condensed milk might have retained is also evaporated and milk

comes as powder but this is not the last stage.


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This powder is again put in to a machine called milk calendaria, where

it is turned in to real milk powder. Its capacity is 1000 litres per 15

minutes. Then again this milk powder is put into a Dense Waise

Vessel. Here the lumps are removed and uniform milk powder is sent

up.

After processing the powder is sent for quality checking at quality

assurance laboratory. After the quality confirms, this milk powder is

differentiated, by adding different flavors to them like elaichi, chocolate

& sugar free milk powder. Thereafter they are packed in tins and

boxes. Afterwards it is stored at storage department.

First plant is at ANAND, which engaged in the manufacturing of milk,

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


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Second plant is at MOGAR, which engaged in manufacturing

chocolate, nutramul, Amul Ganthia and Amul lite.

Third plant is at Kanjari, which produces cattelfeed

Fourth plant is at Khatraj, which engaged in producing

cheese.


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Today, twelve dairies are producing different productsunder the brand name Amul. Today Amul dairy is no. 1

dairy in Asia and no. 2 in the world, which is matter ofproud for Gujarat and whole India.

Distribution network of marketingfunctionMost producers work with marketing intermediaries to bring their products to

market. The marketing intermediaries make up a marketing channel alsocalled distribution cannel. Distribution channels are sets of interdependent

organizations involved in the process of making a product or service

available for use or consumption.

The Head Office of GCMMF is located at Anand. The entire market is

divided in 5 zones. The zonal offices are located at Ahmedabad, Mumbai,

New Delhi, Kolkata and Chennai. Moreover there are 49 Depots located

across the country and GCMMF caters to 13 Export markets.

A zero level of channel also called a direct marketing channel consists of a

manufacturer selling directly to the final customers. A one level channel;

contains one selling intermediary such as retailer to the final customers. A

two level channel two intermediaries are typically wholesaler and retailer. A

three level channel are typically wholesaler, retailer and jobber in between.

GCMMF has an excellent distribution. It is its distribution channel, which has

made it so popular. GCMMFs products like milk and milk products are

perishable. It becomes that much important for them to have a good

distribution.


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Distribution Chart

Products

Agents

Wholesaler

Retailer

Consumer


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We can see from above figure that GCMMF distribution channel is simple

and clear. The products change hands for three times before it reaches to

the final consumer. First of all the products are stored at the Agents end who

are mere facilitators in the network. Then the products are sold to wholesale

dealers who then sell to retailers and then the product finally reaches the

consumers.

Amul Parlors

Amul has come out with a unique concept of Amul Parlours. They haveclassified them under four types namely:

Center for excellence

On the Move

Amul Parlors

Amul Preferred Outlets

Center for Excellence: These Amul Parlors are specifically at a place,

which has a class of excellence of its own. We can find such parlors at

the Infosys, IIMA, NID Ahmadabad etc.

On the Move: These parlors are at the railway stations and at different

state bus depots across different cities.


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R S Sodhi, general manager, GCMMF, said that a few executives fromAmul's headquarters in Gujarat have already been dedicated to this channel.

This will be rolled out to the branch level over a period of time. Most FMCGcompanies such as Hindustan Lever, Procter & Gamble and Marico havededicated units, which work with the organized retailers.

Apart from managing the supply chain, this team would also work to createconsumer schemes and offers, which would be run at these outlets.

At present, modern trade contributes less than five per cent to the total brandsales for Amul.

The company is also working on increasing its retail presence, both through

branded outlets and in-store presence. In the past year, Amul has set upclose to 900 Amul Priority Outlets and these will be increased to 10,000 overthe next three years.

V J Matthai, assistant general manager, GCMMF said that by March 2008,the total number of outlets would go up to 3,000. Since these are being setup on a franchisee model, it requires almost no investment from thecompany, said Sodhi.

We will increase our presence at various points of sale likerailway stations, highways, chemists and BPO's apart from

the supermarket and kirana outlets,"

Third Party Logistics Services:In addition to the

weaknesses in the basic infrastructure, logistics and transportation servicesare typically not professionally managed, with little regard for quality andservice. Even from the cursory description of the environment providedabove, it should be clear that the traditional management practices of the

west are not sufficient for success in emerging markets.

Many MNCs that ventured into India following the first phase of liberalizationin 1990s found this at a great cost. The success of GCMMF and AMUL is inglaring contrast to the experience of these MNCs and thus provides analternative business model that may be useful for others considering entryinto emerging markets like India.


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A schematic description of the business model showing the demand-supplylinkages is presented in Figure 3. In addition to material flows, the figureshows Major decisions, support services, and planning and coordination

activities.

For example, procurement prices set by Unions are a major determinant ofmilk supply. Similarly, GCMMFs pricing strategy for dairy products has astrong influence on consumer demand. As shown in the figure, the Unionsand GCMMF share coordination activities. In addition to outbound logistics,GCMMF takes responsibility for coordinating with the distributors to assureadequate and timely supply of products

It also works with the Unions in determining product mix, product allocations

and in developing production plans.The Unions, on the other hand, coordinate collection logistics and supportservices to the member-farmers. In what follows we elaborate on theseaspects in more detail and provide a rationale for the model and strategiesadopted by GCMMF.


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On the supply side, as mentioned earlier, the member-suppliers weretypically small andmarginalfarmers with severe liquidity problems, illiterate and untrained.

AMUL and other cooperative Unions adopted a number of strategies todevelop the supply of milk and assure steady growth.First, for the short term, the procurement prices were set so as to provide fairand reasonable return. Second, aware of the liquidity problems, cashpayments for the milk supply was made with minimum of delay. This practicecontinues today with many village societies making payment upon the receiptof milk.For the long-term, the Unions followed a multi-pronged strategy of educationand support. For example, only part of the surplus generated by the Unionsis paid to the members in the form of dividends.

A substantial part of this surplus is used for activities that promote growth ofmilk supply and improve yields. These include provision of veterinaryservices, support for cold storage facilities at the village societies etc. Inparallel, the Unions have put in place a number of initiatives to help educatethe members.

Managing Third Party Service Providers:Well before the

ideas of core competence and the role of third parties in managing thesupply chain were recognized and became fashionable, these concepts were

practiced by GCMMF and AMUL. From the beginning, it was recognized thatthe core Activity for the Unions lay in processing of milk and production ofdairy products. Accordingly, the Unions focused efforts on these activitiesand related technology development.The marketing efforts (including brand development) were assumed byGCMMF. All other activities were entrusted to third parties. These includelogistics of milk collection, distribution of dairy products, sale of productsthrough dealers and retail stores, some veterinary services etc. It is worthnoting that a number of these third parties are not in the organized sector,and many are not professionally managed. Hence, while third parties perform

the activities, the Unions and GCMMF have developed a number ofmechanisms to retain control and assure quality And timely deliveries. This isparticularly critical for a perishable product such as liquid milk.


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DEMAND & SUPPLY ANALYSIS OF MILK IN THE SOUTH

DELHI MARKET:

Looking into the demand of the Milk in the South delhi region it has shown a

great potentiality and great demand of the products in the market. Many

companies are existing in the milk market, such as Mother dairy, Dairy India

& GCMMF, Gujarat Co-operative Milk Marketing Federation Limited (AMUL).

All the national players doing good business in the market, along with them

local manufacturers like Parag and Paras are also doing very good business

holding a good market share along with Big One. All these companies are

catering to the need of the consumers and supplying their products among

the consumers.

Again apart from these organized sectors players many local unorganized

players are also doing good business in the South Delhi market. They are

also holding a major portion of the market share. Demand is very good in the

market so all these local companies have been able to do good businesswhere big giants like Amul and Mother Dairy exists.

So from the data collected I have seen that there is a huge demand of the

product in the market and it has a very good future market.

But looking to the demand of the product in the market the marketers have

not been able to supply the products in the market for meeting the demand of

the consumers. Different marketers are using different marketing strategy in

the market to make more demand of their products in the market. But the

question arise that to what extent the marketers become successful in their

strategies.


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Here again the question arise that why these marketers have not been able

to satisfy the need of these consumers. Its not like that it has not been able

to supply the goods to the consumers but it has not been able to meet the

whole demand of the product required in the market. Here we have seen that

other companies have been able to cater the needs of the consumer to very

much extent, but in case of Amul it has seen that there is a shortage of

supply than the product actually demanded by Consumers in the market.

Many products which have been promoted by Amul have not been able to

make available in the market. So in such cases the company should look inthe matter and try to solve the problem. But making Shortage of supply of the

products in the market the marketers sometimes use it as a strategy to

create more demand of its products in the market. By making shortage of

their product marketers sometimes want to see that is there any panic arises

among the sellers and the buyers. So we have seen that the supply of Amul

milk is less than that of its competitors in the South Delhi market.

SWOT ANALYSIS OF AMUL

STRENGTHS:

Demand profile: Absolutely optimistic.

Margins: Quite reasonable, even on packed liquid milk.

Flexibility of product mix: Tremendous. With balancing equipment, you

can keep on adding to your product line.


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Availability of raw material: Abundant. Presently, more than 80 per cent of

milk produced is flowing into the unorganized sector, which requires proper

channelization.

Technical manpower: Professionally-trained, technical human resource

pool, built over last 30 years.

WEAKNESSES:-

Perishability: Pasteurization has overcome this weakness partially. UHT

gives milk long life. Surely, many new processes will follow to improve milkquality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk

yield. However, increased awareness of developments like embryo tans

plant, artificial insemination and properly managed animal husbandry

practices, coupled with higher income to rural milk producers should

automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate

transportation facility make milk procurement problematic. But with the

overall economic improvement in India, these problems would also get

solved.

Problematic distribution: Yes, all is not well with distribution. But then if ice

creams can be sold virtually at every nook and corner, why cant we sell

other dairy products too? Moreover, it is only a matter of time before we see

the emergence of a cold chain linking the producer to the refrigerator at the

consumers home!


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Competition: With so many newcomers entering this industry, competition

is becoming tougher day by day. But then competition has to be faced as a

ground reality. The market is large enough for many to carve but their niche.

OPPORTUNITIES:-

"Failure is never final, and success never ending. Dr Kurien bears out this

statement perfectly. He entered the industry when there were only threats.

He met failure head-on, and now he clearly is an example of never ending

successes! If dairy entrepreneurs are looking for opportunities in India, the

following areas must be tapped:

Value addition: There is a phenomenal scope for innovations in product

development, packaging and presentation. Given below are potential areas

of value addition:

Steps should be taken to introduce value-added products like SHRIKHAND,

ice creams, PANEER, KHOA, flavored milk, dairy sweets, etc. This will lead

to a greater presence and flexibility in the market place along with

opportunities in the field of brand building. Addition of cultured products like

yoghurt and cheese lend further length - both in terms of utilization of

resources and presence in the market place. A lateral view opens up

opportunities in milk proteins through casein, caseinates and other dietary

proteins, further opening up export opportunities.

Yet another aspect can be the addition of infant foods, geriatric foods and

nutritionals.

Export potential: Efforts to exploit export potential are already on. Amul is

exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following


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the new GATT treaty, opportunities will increase tremendously for the export

of agri-products in general and dairy products in particular

Some of the more important factors that emerge as additional opportunities

to the GCMMF:

Size: India is possibly the largest contributor of milk and milk products to the

world.

Communication: Made easier due to widespread use of English among the

educated farmer.

Government: India is the world's largest independent judiciary, well

established and free from government interference.

Geography: Geographical location in the center of the eastern hemisphere.

Low inflation rate: Rarely double digit

Low margin of retail selling

Inexpensive manpower: A pool of inexpensive technical and non-technical

manpower

Low cost of milk collection: At 20 cents a liter, the farm-gate price of milk

is perhaps the lowest in the world. The farmers of other country do not

receive any subsidy. So the Indian milk products in the post-GATT world can

out compete those from many advanced nations that now dominate global

markets. As per recent data available, the cost of milk per 100 kg was at

$14.75 in India as compared to $15.5 in New Zealand and $33 in USA and

EU countries.


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THREATS:-

Milk vendors, the un-organized sector: Today milk vendors are occupying the

pride of place in the industry. Organized dissemination of information about

the harm that they are doing to producers and consumers should see a

steady decline in their importance.

The study of this SWOT analysis shows that the strengths and

opportunities far outweigh weaknesses and threats. Strengths and

opportunities are fundamental and weaknesses and threats are transitory.

Any investment idea can do well only when you have three essential

ingredients: entrepreneurship (the ability to take risks), innovative approach

(in product lines and marketing) and values (of quality/ethics).

The Indian dairy industry, following its delicensing, has been attracting a

large number of entrepreneurs. Their success in dairying depends on factors

such as an efficient yet economical procurement network, hygienic and cost-

effective processing facilities and innovativeness in the market place. All that

needs to be done is: to innovate, convert products into commercially

exploitable ideas. All the time keep reminding yourself: Benjamin Franklin

discovered electricity, but it was the man who invented the meter that really

made the money!

Conclusion of SWOT analysis:

The study of this SWOT analysis shows that the strengths and

opportunities far outweigh weaknesses and threats. Strengths and


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opportunities are fundamental and weaknesses and threats are transitory.

Any investment idea can do well only when you have three essential

ingredients:

entrepreneurship (the ability to take risks),

innovative approach (in product lines and marketing)

values (of quality/ethics).

The Indian dairy industry, following its delicensing, has been attracting a

large number of entrepreneurs. Their success in dairying depends on factors

such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place. All that

needs to be done is: to innovate, convert products into commercially

exploitable ideas. All the time keep reminding yourself: Benjamin Franklin

discovered electricity, but it was the man who invented the meter that really

made the money !

ASSIGNMENT PROFILE

MY ASSIGNMENT:-

The project that has been assigned to me under my summer training in

G.C.M.M.F by my guide Mr. MANISH TIRPATHI officer in charge MILK

division, delegated following responsibilities.

I had to visit the shops, restaurants, hotels, grocery shops, sweet shops for

the IDENTIFY THE PROBLEM which decrease the sales of AMUL MILK his

major competitor mother dairy & other competitor.


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I was also assigned the responsibility to promote the Amul milk in the

SOUTH DELHI (KALKA JI ,GOBINDPURI ,OKHLA PHASE-1,2,&3) I also

had to keep an eye on the problems that retailers are facing concessionaires

they expect from Amul, schemes, replacements if required, delivery

problems , and also distributor problem, visit by the salesman in their shops

i.e. coverage by the salesman is satisfactory or not , supply of ordered goods

are on time. I had to check whether there is any packing problem, the stock

that the retailers are maintaining and selling should not be outdated or too

old. I had been given the responsibilities to develop the marketing strategies

of Amul Milk and recommend suggestion for improvement accordingly.

TOPIC: Gap analysis & evaluation of amul distribution

System vis vis mother Dairy in south Delhi

PRODUCT: Amul milk& Butter milk

PLACE: SOUTH DELHI

TRAINEE: Awadhesh Kumar

GUIDE: Mr. Manish tripathi

DURATION: 8th may to 30th June 09

Training as the word suggest is the sharpening of knowledge and skills in a

particular domain by the application of different techniques and tools. It is

basically done with a view of enhancing the various attributes pertaining to

the particular domain. Thus, the summer enter ship is the training as is


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applied in an organization with a view of enhancing the attributes related to a

job in the organization. This tool is usually applied for novices who are

entirely new to a concept or a particular kind of activity. This helps them to

earn firsthand experience regarding the concepts and activities they are

exposed to and thereby enable them to deliver the maximum, in a particular

area.

SCOPE OF THE TRAINING:-

To get the chance of sharpen the skill in the marketing field at the time of

trying for enhancing the sales volume of amul milk and to fight neck to neck

with other competitors in the market. Develop the marketing strategies in

Delhi, to sale Amu milk was also a great scope for us. The project that has

been assigned to me by my guide Mr. Manish tripathi is Officer in charge of

amul milk division in G.C.M.M.F Ltd. South Delhi Depot also allowed us to

work for the company as a member of the company, that help me to feel free

and provide me to get the test of corporate for the first time in the real life.


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MY PERSONAL EXPERIENCE AND LEARNING:-

It was great opportunity for me to do my internship from Gujarat Cooperative

Milk Marketing Federation LTD. (AMUL ). During summer training tenure it

was really an opportunity before me to convert my theoretical knowledge into

practical and to get the practical exposure of real business. One year study

in the management course help me a lot in the real business field. I feel the

real sense of the theory given by various management gurus during working

in the field. Fortunately, the company I work with is a true follower of the

various principles of management and the management pattern of dairy

cooperatives are unimaginable in the company. Coordination with huge

farmers is the key to success of the company and was really a lesson to me.

Pattern of dairy cooperatives have contributed immensely to the fact that

India has progressed from a milk-deficit country to emerge as the largest

milk-producing nation in the world.

Gujarat cooperative Milk Marketing Federation is the biggest cooperative

dairy in India. It all started in December 1946 with a group of farmers keen

to free themselves from intermediaries, gain access to markets and thereby

ensure maximum returns for their efforts. It converts the milk into branded,

packaged products, and delivers goods over 500,000 retail outlets across the

country.

My responsibility in the company was to increase the sales of Amul MILK. I

understood it was easy to work with a reputed brand like Amul. More overcompany personnel imparted me various knowledge regarding its product

and taught me various tricks to penetrate in the market.

The working environment that I was being provided was extraordinary and

helped me a lot in delivering my work properly and with full potency of mine. I


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found all the professionals are very much committed to their work as well as

they were all professionals enough. This helped me a lot in getting a good

deal of exposure. As I had to consult the managers and supervisors, I felt

myself, in the beginning, in a bit problem. But the cooperation of my

superiors at the work culminates confidence in me to deal with my problems

whenever I required. After few days, I was able enough to go in the duty

confidently and do the given work with proficiency I got a project which gave

me the opportunity to meet the various common people as well as people of

corporate world. I could understand the working culture of corporate. Before

this I never visited such big organizations.

a) To chalk out a plan for the next day, to go to the common people,

approaching for the newly launched scheme, listening their problems,

convincing them for adopting our scheme has given me a lot of

convincing and analytical ability.

b) My confidence to communicate people has tremendously gone up.

Today I have that much confidence that I can meet to any big person in

any organization as well as can intermingled with the common people

of any class as a very cordial one.

c) My boss has also helped me a lot to learn about the corporate world.

They also trained me how to approach a shopkeeper or a retailer or a

distributor and the art to convince them.


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FINDING IN MARKET :-

Amul brand has a remarkable reputation in the market. Which give

additional value of any of its product.

Channels of distribution are needed to increase.

Amul sales its milk in lowest price in the market comparing to its

competitors.

When I interviewed people then many of the people can not recall

Amul milk advertisement. It shows Lack of Advertisement oradvertisement is not timely given or advertisement is not givenon right time.

People who have tasted Amul milk are not ready to purchase thesame again due to irregularities and late delivery.

Market share of Amul milk in south Delhi is 34%. Means 34% of total

consumers of take Amul milk.

Penetration of Amul milk need more emphasize in south Delhi, it has

a potential market here.

Mother Dairy is main competitor and strategically better performerthan Amul.

These days number of amul milk consumers increasing in the market

rapidly. Diversified consumers with choice of various flavor can

found in the market.


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Amul milk distribution system is totally controlled by dealers and

distributors. From manufacturer to retailer an unimaginable net

work find to presence.

People who have tasted Amul Milk are ready to purchase the sameagain.

SUGGESTIONS

Amul should give local advertisements apart from the advertisementsgiven at the national level. Local advertisement must mention theexclusive Amul shops of the city.

Advertisement can be done with the help of animations thatattracts children and teenagers because milk are consumed largelyin this segment.

Company should use brand ambassador which attracts each agesegment

Try and change the perception of the people through word of mouthabout Amul in advertisements, because they are the best source toreach Consumer.

If Amul ltd has improve his distribution channel in south Delhi thanhis sales are increase

Though Amul milk advertisements are rarely shown on televisionyet many people could recall it as per the data of research. It showsthat there is only need to give advertisement only to rememorizecustomers. Because Amul is very strong brand name.


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Amul employee required to make healthy relation among retailerand distributer in south Delhi

Company should launch Milk in new attractive packing to changeimage of Amul Milk in consumers mind.

Company should introduce sales promotion schemes.

LIMITATIONS

As I went to the market f

avish project

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