2013

A Marketing Audit Report on AMUL

Mayank Kumar 1302-084 Prashant Gupta 1302-105 Ravi Kumar 1302 - 120 Kirti Shankar 1302-074 Komuravelly Sainath 1302-075 Rajeev Tibarewal 1302-116 Rahul Gupta 1302-113

IMT Ghaziabad (DCP Batch 2013-15)

Executive Summary
In this particular research, we have put an effort to understand the product and the marketing policy and activities of Amul and buying behaviour of the consumers with respect to Amul products. We discuss its mission, objectives and analyse the marketing strategies of the organization. Marketing policy includes interest-creating activities such as advertising, personal selling, publicity and direct marketing. Amuls marketing activities include mainly hoardings and television advertisements and also a little on the internet. Moreover we also do a SWOT analysis and discuss our findings. A market research is also included which discusses how people perceive Amul as a brand and what has made Amul such a successful brand. Finally we conclude and recommend some suggestions which can help Amul continue in such a fruitful manner and enjoy success in the long run.

Table of Contents
INTRODUCTION TO THE ORGANISATION .................................................................................... 3 Situational Analysis ................................................................................................................................. 4 Market Summary ................................................................................................................................ 4 SWOT Analysis..................................................................................................................................... 5 Competitors: ....................................................................................................................................... 5 Product offering: ................................................................................................................................. 6 Keys to success:................................................................................................................................... 7 Marketing Strategy.................................................................................................................................. 8 The Amul Model ................................................................................................................................. 8 Mission................................................................................................................................................ 9 Marketing Objectives .......................................................................................................................... 9 Financial Objectives............................................................................................................................ 9 Market Segmentation ........................................................................................................................ 10 Market Targeting .............................................................................................................................. 10 Market Positioning ............................................................................................................................ 10 Strategy Summary ............................................................................................................................. 11 Marketing Mix ....................................................................................................................................... 12 Product .............................................................................................................................................. 12 Amul Pricing Strategies ..................................................................................................................... 14 Amul Promotional Strategies ............................................................................................................ 15 Place: A Global Distributor ................................................................................................................ 16 MARKETING REASEARCH .............................................................................................................. 18 RESEARCH OBJECTIVE ............................................................................................................... 18 RESEARCH DESIGN ...................................................................................................................... 18 RESEARCH INSTRUMENT ........................................................................................................... 18 SOURCES OF INFORMATION...................................................................................................... 19 LIMITATIONS ................................................................................................................................. 19 MARKET FINDINGS ...................................................................................................................... 19 RECOMMENDATIONS: ................................................................................................................. 23 CONCLUSION AND RECOMMENDATIONS .................................................................................. 24 REFERENCES ..................................................................................................................................... 25

INTRODUCTION TO THE ORGANISATION

AMUL Anand Milk Union Limited: is a brand managed by Gujarat Co-operative Milk Marketing Federation Limited or GCMMF. The name AMUL is derived from a Sanskrit work Amulya which means priceless. It is a cooperative body jointly owned by around 3 million milk producers of the Indian state of Gujarat and is based out of Anand. Amul is credited with bringing in the White Revolution in India which made India one of the largest milk producing nations in the world. The success of Amul is given to Dr. Verghese Kurien who is also called as the Milk-Man of India. Products under the brand Amul include milk, milk powder, butter, ghee, cheese, curd, chocolate, ice cream, paneer, Nutramool, Amul Pro, sports drink (Stamina), flavoured milk, basundi, gulab jamuns and others. In the 1940s, the milk producers were exploited by the traders and agents of the Polson dairy. Polson dairy was the only dairy then in the city of Anand. Also the milk producers had to travel long distances for delivery of milk. Because of this, milk would often get spoilt, especially during summer months. The marketing and distribution system of milk was controlled by private traders and middlemen. These people decided the price of the milk and the off take for the producers. Due to the perishable nature of milk, producers had to settle on whatever price that was offered by the middlemen. The Kaira District Co-operative Milk Producers Union Limited was registered on 1 December 1946 as a response to such exploitation under the inspiration of Sardar Vallabhbhai Patel, Morarji Desai and local farmer leader Tribhuvan K. Patel. The collection of milk was decentralized. Similarly, such cooperatives were formed in each village. Under the management of Dr. Verghese Kurien, along with H.M. Dalaya, the cooperative grew even further. The success of the dairy plant of Anand led to set up, five such unions came up in other districts of Mehsana, Banaskantha, Baroda (now Vadodra), Sabarkantha and Surat. In 1973, an apex body was set up called Gujarat Co-operative Milk Marketing Federation Limited (GCMMF). The main objective of GCMMF was to combine forces, expand the market, save on advertising and reduce competitions with each other. The Amul brand was transferred from the Kaira Union to GCMMF. It was reported in June 2013 that Amul Dairy has signed a tripartite agreement to start a milk dairy plant in Waterloo, New York.

Situational Analysis
Market Summary The world dairy industry is undergoing drastic changes in recent times and it is an all-time important component of world food system. Currently the market is facing several forces like regulatory environment for production and trade, technology etc. The consumption trends of the consumers are also changing. The global dairy industry will take a new form within 10 years and we may hardly find traces of traditional procedures. With 103 crores of population India is one of the largest consumer markets for Amul. In India Milk products are the basic source of nutrition. And it has become Worlds No.1 Milk producing country by March 2000 with forecasted sales of 78 million tonnes. So Amul has a lot of scope in Indian market for production and sales. The future growth of Indian market size is estimated as follows

SWOT Analysis

Competitors: Amul has a wide range of products in its basket like butter, cheese, baby food, ice creams, pizza, curd, paneer etc., It also has competitors like Britannia, Nestle, Heinz, HUL, Dominos, Mother dairy, Cadbury etc. It is leading in milk products but is performing badly in fields like pizza, chocolates etc.

And the trends in competition are as follows a) Mother dairy is strong in NCR region with co-operative roots. b) Parag dairy is a fast growing competitor with a growth rate of 10% c) Nestle is an old player and has future plans in dairy segment. d) HUL is a big player and is financially very strong. e) Britannia is strong in cheese market. Product offering:

As mentioned above Amul offers a wide range of products like milk, butter, ice cream, pizzas etc. The market share of different products is of Amul is given as follows

The products portfolio of Amul is shown in the below figure.

Keys to success: The main reasons for Amuls success are its quality of products and marketing strategy. The key features of its marketing strategy are

i. ii.

Simplicity: Amul always markets its products with simple and clear ideas and events. Consistent: Its baseline, Utterly Butterly delecious which is unchanged for more than 40 years is a success feature.

iii. iv.

Humor: It always adds humor in its advertising. Evergreen: The advertising of Amul is always evergreen by incorporating current socio-economic, cultural, sports, political and almost every realm of life in India.

Marketing Strategy
Amul has a business model which focuses on providing value for money products to its consumers, while protecting the milk-producing farmers who were its suppliers as well as its owners. Milk, being a perishable item could have incurred losses for farmers if not sold. Thus Amuls marketing strategy needed to be very effective. Amul has used backward integration for its expansion. It has acquired its suppliers and thus produces everything within its company to gain more control and thus gain more profits. The Amul Model The Amul Model of dairy development is a three tier structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. Establishment of a direct linkage between milk producers and consumers by eliminating middlemen Milk Producers (farmers) control procurement, processing and marketing Professional management

The Amul model has helped India to emerge as the largest milk producer in the world. More than 15 million milk producers pour their milk in 1,44,246 dairy cooperative societies across the country. Their milk is processed in 177 District Co-operative Unions and marketed by 22 State Marketing Federations, which ensures a better life for millions of people. The Amul model has been adopted by various other manufacturing companies across the country. Mission GCMMF endeavour to satisfy the taste and nutrition requirements of the customers, of the world through excellence in marketing by their committed team. Through co-operative networking, they are committed to offer quality products that provide best value for money Marketing Objectives Amuls marketing strategy is driven by its 2 objectives Long-term, sustainable growth to its member farmers i.e. its suppliers Value proposition to a large consumer base by providing dairy products at a low price Financial Objectives Cost Leadership Retention of surplus for growth and development

 Depend on internally generated resources Market Segmentation Amul has mainly segmented the market according to age. It has mainly classified the market into Kids Young-aged people Middle-aged people Also, Amul has segmented the market according to social status where it has segmented the market into Village family Urban family Also Amul has entered the B2B activity through industrial segmentation wherein it has segmented its market into different retailers like pizza, snacks etc., shopkeepers, restaurants etc. Market Targeting After segmenting the market into various categories, Amul has targeted each one of them by producing different products for different segments. Kids Amul Ice-cream, Amul Kool Flavoured Milk, etc. Young - Nutramool Energy drinks, Amul Kool Caf/Koko, Amul Lite, Amul Stamina, variants of Amul Cheese etc. Middle-aged Amul Packaged Milk, Amul Masti, Amul Butter Milk, Amul Cheese, Amul Butter, Amul Ghee etc. Also, Amul has adopted different promotion strategies for different segments. For example to target the village people Amul has mainly relied on print media whereas for its urban products such as Amul Butter, Amul Kool and Amul Ice-cream it has also promoted through television and the internet. Market Positioning Market positioning requires a product to be positioned in the right segment through which it may get maximum profits through customer satisfaction. Amul has placed its products

perfectly through intelligent marketing and promotion techniques. The Amul moppet has been the mascot of Amul since 1967, sporting a young girl in red dotted frock. Taking on the role of a social observer, Amul hoardings have played a significant part in paving the way for a novel, no-holes-barred and tongue- in-the-cheek Indian, who mocks, celebrates and comprehends contemporary issues and history in a brand new way. Amul has had 4 decades of success through topical campaigns. And to achieve this Amul spends a mere 1% of their turnover for advertising and promotional activities. Amul mainly positioned itself in the market by adding the tagline The Taste of India through which it created value for the consumer. Amul didnt just focus on the consumer but on the entire value chain and created value for both the supplier and the customers. It knew that the continual growth of its suppliers was necessary for its continual development and hence the low cost pricing strategy worked very well on both the sides the supplier as well as the consumer. It also launched products like Amul Kool and Amul Butter Milk as a healthy substitute for cold drinks and positioned itself in that market too by stating itself as a refreshing and healthy drink. It adapted to changing market scenarios and changing thoughts of people and accordingly and developed its products, for example, Amul Lite Butter and Cheese as young people were looking for a healthy substitute. In the Ice-cream market again the low price strategy worked and Amul gained a large percentage of the market share. Thus, the main strategy for Amul to establish itself in the market and creating its brand was low pricing and creating USP by achieving quality with affordability. Also the promotion technique of Amul where it included taglines such as Utterly-Butterly Delicious showed the customers the value their products offer and created a brand for them. Strategy Summary Thus basically the marketing strategy of Amul basically comprised of providing people with quality with affordability and attracting consumers through witty and topical advertisements. The advertisements were designed as a series of hoardings with designs relating to day-to-day issues. The brand recall for the Amul girl is quite phenomenal across the entire country today. And the biggest reason for this is the nature of the ads. The Amul advertisements have witty one-liners that capture the relevant events that have caught the attention of the nation.

Amul also added continuous value to its products thereby adapting to changing market scenarios.

Marketing Mix
Product
Amul Butter : Utterly Butterly Delicious Amul Butter was the first product to be launched by AMUL in 1945. And Since for last 4 decades, it has been a market leader in the segment of butter. Ingredients of Amul Butter: 1. Butter 2. Common salt 3. Permitted natural colour Annatto: Also known as roucou or achiote . It is derived for the seeds of the achiote trees of tropical and subtropical regions. Seeds after being sourced produce a cartenoid- based yellow to orange food coloring and flavour. It is the reason behind salty smell and sweet taste of butter. Composition 1. Milk fat : Milk fat accounts for minimum of 80% of the total composition of Amul Butter 2. Moisture accounts for 16% 3. The amount of salt should not exceed 3%

4. The maximum percentage a curd should have is 1%. Nutritional Information Nutritional Information* Amount per 100 g Energy, kcal Energy from Fat, kcal Total Fat, g Saturated fat, g Cholesterol, mg Sodium, mg Total Carbohydrate, g Sugar, g Protein, g Vitamin A, mcg 722 720 80 51 180 836 0 0 0.5 65

Product Features Amul is synonymous with Butter in India For approximately six decades , several generation of Indian consumers have grown up with the taste of Amul Butter It has become must to be served in the breakfast for Indian Customers Even the mascot, Utterly cute Amul Butter Girl , has been a part of Indian Consumer since 1950 Amul Butter tropical is recognized as one of the longest running advertisement campaign in the world. It is made from fresh cream by modern continuous butter making machines. Product Specification Amul butter meets the AGMARK standard and BIS Specifications No. IS: 13690:1992

Product Application Spread: On Bread, Parantha, Roti, Nans, Sandwiches Topping: Pav Bhaji, Dals, Soups, Salads, Dal, Rice As Ingredient: Biscuits, Cakes, Breads Cooking Medium: Butter Paneer Masala, Butter Corn Masala and thousands of delightful recipes.

Amul Pricing Strategies

In the initial stages when Amul was formed, consumers had limited purchasing power. Even the consumption levels of milk and other dairy products were reserved. Owing to these attitudes shown by the consumers, Amul adopted a low cost price strategy to make its products affordable to the consumers. Thus providing a guarantee to the customers that the product they are getting is value for money. At a lower price as compared to others, Amul products provide them the quality as well. Some of the competitors of Amul are Hindustan Lever, Nestle and Britannia. Despite having such competitors in the market , GCMMF ensures that the product mix and the sequence in which products are introduced by Amul is consistent with the core philosophy of providing butter at a basic, affordable price to appeal to common masses, thus creating a brand image for AMUL Butter in the household sector of the society. It can be said that Amul adopted market oriented pricing strategy The pricing strategy of Amul is to target each income group of the society. The cheaper price of Amul Butter is meant for targeting the customers with low income. Besides low income group , Amul also targets medium as well as the premium segment by providing different flavours at different prices. Amul Butter 100 gm 500 gm Price Rs 32 Rs 147

Amul Promotional Strategies

The butter , launched in 1945, initially had a dull , boring image mainly due to the existence of advertising agencies that preferred to follow routing corporate ads . These agencies usually stick to these methods that were monotonous in nature and did not create any kind of interests in the mind of the customers. Neither the brand image was created. A brand-Amul- A Taste of India Revolution came in the year of 1966 when a man named Sylvester daCunha, from the ad agency of ASP , took over the Amul Account. And in 1967 it began , innocently enough. In India , one cannot fool the customers in regards to food. Food was taken too seriously by the customers. It was then daCunha decided to change the theme of promotion. The moppet that put Amul on Indias breakfast table : The Billboard Campaign When daCunha took over, the whole country saw the birth of a campaign whose charm has endured fickle public opinions, gimmickry and all else. The Amul moppet, the little girl , has created a place in hearts and minds of millions and millions of Indians. It has existed for 36 years and is still increasing the numbers. She is sometimes referred to as Friday to Friday star because since 1967 this little girl appears at billboards, strategically placed all over India, focussing on the item of the week. Some characteristics of the moppet: Round eyed Bubbly cheeked Winking at people Dressed in little polka dotted dress and a red and white bow, holding favourite packet of butter

People travelling often stops, looks and chuckles at the Amul hoarding and the product wrappers with equally recognisable tagline Utterly Butterly Delicious Amul. Even the way in which the moppet is shown to the public is of great applaud for the promotional department.

No limits and Boundaries From the political scene to entertainment, from local news to international, from sports to superstars, she has a line for everyone. Often stated by people she plays the role of a social observer with evocative humour.

Use of Hing-Lish The creativity of promotional department can also be seen in the way it uses various hinglish words( Combination of Hindi and English) punchlines, that attracts a huge crowd. Amul has won various awards due to these promotional activities.

Advertising Strategies

Consumer Advertising Targeting middle class sector Emphasizing more on Brand

Media Platforms: Broadcast media: Television Print Media: Newspapers, General Magazines Internet: Independent Websites Social Websites: Twitter, Facebook etc.

Place: A Global Distributor

GCMMF is Indias largest exporter of Dairy Products. It has been accorded a Trading House status. It has also received the APEDA Award from the Government of India for Excellence in Dairy Product Exports for the last 13 years. Availability(Segments/Markets) It is available in India as well as other countries such as UAE / Bahrain / Kuwait/ Oman / Hong Kong / Shi Lanka / USA / Malaysia / Singapore / Qatar/ New Zealand Also Amul Butter is available in segments like Kirana Store / Modern Format store / Amul Parlors / Hotel & Restaurant segment / Railway and Flight Kitchen etc

 It holds the market share of 86% and is available in over 700,000 retail outlets across India. It has more than 5000 distributors and 48 sales office. Distribution Channel GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping.

Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations.

Distribution Structure for dairy Products

Member Union (Manufacturer)

Company Depot

Distributor

Retailer

Customers

Distribution Structure for Ice-Cream

Member Union (Manufacturer)

Company Hub

Company Depot

Distributor

Retailer

Customers

MARKETING REASEARCH
RESEARCH OBJECTIVE To find out the retail penetration of Amul products To study the presence of all competitors of Amul. To know the satisfaction level of customers. To know the satisfaction level of retailers. RESEARCH DESIGN Research was designed keeping the high demand of Amul products and their various aspects. RESEARCH INSTRUMENT Data collection method was surveys, which is usually incorporated for collecting information. The method used were appropriate as they give a fair idea about the objective quantitatively. Questions were simple and to the point.

SOURCES OF INFORMATION The research was conducted on internet. The survey was forwarded to whoever was available at the time. LIMITATIONS Some people were not comfortable disclosing their eating habits. Non co-operative approach of the customers. MARKET FINDINGS We have conducted an online survey of Amul as a brand and about its products. We have posted some of these questions to which the users have responded as following.

Do you buy Amul products?

100 80 60 40 20 0 Yes No

Interpretation: We have found that a large proportion of users buy Amul products, which shows that the company has strong consumer base.

Do you buy high value products of Amul?

60 50 40 30 20 10 0 Yes No Maybe

Interpretation: From the responses of the above question we find that consumers are well aware about the products of Amul and the price factor does not impact the buying decision of the consumers.

Which Amul milk do you buy?

70 60 50 40 30 20 10 0 Amul Butter Milk Amul Fresh Milk Amul Lite Slim Milk

Interpretation: The finding of this question show that customers buy Amul butter milk more than other two milk products.

Are Amul milk product beneficial for children?

50 45 40 35 30 25 20 15 10 5 0 Yes No Maybe

Interpretation: The finding of this question shows that consumers recognize the nutritious value of the milk products.

You buy Amul products because:

60 50 40 30 20 10 0 Advertisements are good Product Quality Price & Availability Just like that

Interpretation: We have found that the Product quality is most preferred by consumers than price, availability and advertisements.

Do you find Amul ads appealing & relevant?

80 70 60 50 40 30 20 10 0 Yes No

Interpretation: From the above figure we can conclude that Amul adds are appealing and more relevant to the consumers.

How do you find availability of Amul products?

100 80 60 40 20 0 Good Bad

Interpretation: We can conclude from the above findings that Amul products are successful in reaching their customers.

Which beverage do you prefer?

70 60 50 40 30 20 10 0 Amul Cool Amul Caf Amul Lassi Amul Butter Milk

Interpretation: From the above figures we conclude that Amul buttermilk is the most preferred beverage from other beverages of Amul.

Amul is taste of India Recently a survey was conducted by Asias leading research organization Synovate, Hongkong. From the survey results it was proved that it has been a leading firm in Indian market. Survey was conducted in 9 different countries covering 12 major products and service. They took the sample of people aging from 15 to 64 years of age.

RECOMMENDATIONS: Amul should focus on creating the brand value of other products which have less competitive advantage over other products. It should also focus on increasing the number of advertisements show per hour and to increase its reach both in urban and rural markets.

CONCLUSION AND RECOMMENDATIONS

We can conclude that Amul has been very successful in the Indian consumer market for dairy products. The company has been able to deliver value to its consumers through changing times and as per requirements of the consumers (changing lifestyle and increased health awareness). The diverse product mix of Amul has been well targeted to consumers of various age groups as depicted in Amuls advertisements. By associating itself with famous television shows such as Master Chef India, Voice of India etc. and also sponsoring other major events which draws audience, Amul has created long lasting image in minds of consumers. The Indian consumer market being one of the largest in the world gives a lot of opportunities for growth of Amul. The following are our recommendations which may allow Amul to cash in these opportunities: 1. Amul has already established itself as a brand in dairy products industry. The only requirement is to cash in this image by promotional schemes which are well communicated to desired target markets. 2. There have been some complaints in the past from consumers about the product replacement policy of Amul. The company needs to improve upon this in order to overcome any negative impact on the companys image. 3. The company needs to improve upon the shelf space and providing fresh stock for increased benefits to its retailers. Hence, Amul needs to improve in its logistics and inventory management for better reach to its retailers in urban as well as rural areas. 4. Amul can concentrate on semi urban and rural markets now as due to increase in industrialization, milk production is decreasing in these markets.

REFERENCES
1. https://www.scribd.com 2. Marketing Management, 14th edition, Philip Kotler and Kevin Lane Keller, Pearson 3. http://www.business-standard.com 4. http://en.wikipedia.org 5. http://www.amul.com