Q.1 Develop marketing plan for the improvement in the performance of the company.

Solution- Year 1999 & Year 2000 – Break Even

• Year 2001, 2002 – Increased market share through product diversification

ASSUMPTIONS

• Amul is the only brand of Gujarat Co-operative Milk Factory (GCMF)

• Break Even in the terms of quantity(LPD) of milk sold and not the price

• Quality Control Department ensures that Amul’s product conform to the statuary obligations

• Omitted the sale of milk to institutions due to lack of data

• The given milk consumption is for Ahmedabad - Gandhinagar region

• Every Household consumes only 500ml milk/ day (0.5 LPD)

• Amul is selling the 1 Lakh LPD in the toned- standardized segment mostly in the 10-40k income group

Milk Consumption Forecast

The provided and forecasted milk consumption (LPD):-

Increase in Population based on growth rate (2.5%) :-

Present Population (1999) - 4500000

Year Population No. of Households(~ Population/5)

2000 4612500 922500

2001 4727813 945563

2002 4846008 969202

2003 4967158 993432

2004 5091337 1018267

STP

1. Year 1999-2000:-

Currently Amul is selling 1 Lakh LPD

Present Situation Analysis:-

• Total population :- 4612500

• Total households :- 922500

• Total available milk market :- 10.78 Lakh LPD

• Total available packed milk market :- 4.312 Lakh LPD (40 % of total milk market)

• Total available packed milk market for households :- 3.75 Lakh LPD (87 % of available packed milk)

Product Portfolio :- Toned + Standardized

• Income group 10 – 20k

• Income group 20 – 30k Target market (57 % of total household) = 525825

• Income group 30 – 40k

The Target Market Analysis :-

• Total available target market(57 % total population) :- 525825 Households

• Total milk Amul is selling currently to the target market :- 100000 LPD

• Total number of Households Amul is selling 1 Lakh LPD to :- 200000

• Distribution of Sales among our targeted group :- 80 % of 1 Lakh LPD = 80000 LPD

• 20000 LPD is consumed by other income group (<10k , >40k)

• 160000 Households (out of 525825) are already our customers, 40000(out of remaining 396675) are
not in our target group

• We need to increase consumption by 1.3 Lakh LPD (To be achieved in 2 year time)

• Increase the consumption by 0.65 Lakh LPD in year 1999-2000

• Total non customers :- 396675 + 365825

• Number of Households to be added as new customers :- 130000 (out of 762500)

• Customer acquisition/conversion % :- 17.04

2. Year 2000 – 2001 :-

Currently Amul is selling 1.65 Lakh LPD

Present Situation Analysis:-

• Total population :- 4727813

• Total households :- 945563

• Total available milk market :- 11.52 Lakh LPD

• Total available packed milk market :- 4.608 Lakh LPD (40 % of total milk market)

• Total available packed milk market for households :- 4 Lakh LPD (87 % of available packed milk)

Product Portfolio :- Toned + Standardized

• Income group 10 – 20k

• Income group 20 – 30k Target market (57 % of total household) = 538970

• Income group 30 – 40k

The Target Market Analysis :-

 • Total available target market(57 % total population) :- 538970 Households

• Total milk Amul is selling currently to the target market :- 165000 LPD

• Total number of Households Amul is selling 1. 65 Lakh LPD to :- 330000

• Distribution of Sales among our targeted group :- 80 % of 1.65 Lakh LPD = 132000 LPD

• 33000 LPD is consumed by other income group (<10k , >40k)

• 330000 Households (out of 538970 ) are already our customers, 66000(out of remaining 406593) are
not in our target group

• We need to increase consumption further by 0.80 Lakh LPD (To surpass total 1.63 Lakh LPD in 2 years
required to break even)

• Increase the consumption by 0.8 Lakh LPD in year 2000-2001

• Distribute 80000 LPD amongst new 160000 Households

• Total non customers :- 208970 + 406593

• Number of Households to be added as new customers :- 160000 ( out of 615563))

• Customer acquisition/conversion % :- 25.99

3. Year 2001 - 2002:-

Currently Amul is selling 2.45 Lakh LPD

Here we shall introduce a new product in the portfolio to increase the market share

Present Situation Analysis:-

• Total population :- 4846008

• Total households :- 969202

• Total available milk market :- 12.26 Lakh LPD

• Total available packed milk market :- 4.904 Lakh LPD (40 % of total milk market)

• Total available packed milk market for households :- 4.266 Lakh LPD (87 % of available packed milk)

Product Portfolio :- Double-Toned + Toned

• Income group <10k

• Income group 10 – 20k Target market (80 % of total household) = 775362

• Income group 20 – 30k

The Target Market Analysis :-

• Total available target market(57 % total population) :- 775362 Households

• Total milk Amul is selling currently to the target market :- 245000 LPD

• Total number of Households Amul is selling 2.45 Lakh LPD to :- 490000

• Distribution of Sales among our targeted group :- 90 % of 2.45 Lakh LPD = 220500 LPD

• 24500 LPD is consumed by other income group (30-40k , >40k)

• 490000 Households(out of 775362) are already our customers and 49000(out of remaining 196840) are
not in our target group

• Now we still have 285362 Households which are in our target group and are not our customers

• In other words, there is a potential to sell additional 142681 LPD in our target group

• Increase the consumption by 100000 LPD in 2001-2002

• Distribute 100000 LPD amongst new 200000 Households

• Total non customers :- 285362+ 196840

• Number of Households to be added as new customers :- 200000 ( out of 482202))

• Customer acquisition/conversion % :- 41.4

4. Year 2002 - 2003:-

Currently Amul is selling 3.45 Lakh LPD

Here we shall introduce a new product in the portfolio to increase the market share

Present Situation Analysis:-

• Total population :- 4967158

• Total households :- 993432

• Total available milk market :- 13 Lakh LPD

• Total available packed milk market :- 5.2 Lakh LPD (40 % of total milk market)

• Total available packed milk market for households :- 4.524 Lakh LPD (87 % of available packed milk)

Product Portfolio :- Double-Toned + Toned

• Income group < 10k

• Income group 10 – 20k Target market (80 % of total household) = 794746

 • Income group 20 – 30k

The Target Market Analysis :-

• Total available target market(57 % total population) :- 794746 Households

• Total milk Amul is selling currently to the target market :- 345000 LPD

• Total number of Households Amul is selling 3.45 Lakh LPD to :- 690000

• Distribution of Sales among our targeted group :- 90 % of 3.45 Lakh LPD = 310500 LPD

• 34500 LPD is consumed by other income group (30-40k , >40k)

• 690000 Households(out of 794746) are already our customers and 69000(out of remaining 198686) are
not in our target group

• Now we have 104746 Households which are in our target group and are not our customers

• In other words, there is a potential to sell additional 52373 LPD in our target group

• Increase the consumption by 50000 LPD in 2002-2003 meanwhile looking for a different segment as
this market has matured

• Distribute 50000 LPD amongst new 100000 Households

• Total non customers :- 104746 + 198686

• Number of Households to be added as new customers :- 100000 ( out of 303432))

• Customer acquisition/conversion % :- 33

Year wise Sales in LPD

Year Milk Sales (in LPD)

1998 - 1999 1

1999 - 2000 1.65

2000 – 2001 2.45

2001 – 2002 3.45

2002 - 2003 3.95

1. Refrigerators- Provide a refrigerator with Brand Name i.e. AMUL on it, which will save the fixed cost for
retailers and also promote the brand in front of consumers

2. Quality (Negative Marketing) - AMUL can highlight how quality standards of AMUL are better than its
competitors.

3. Hoardings- Promotional Posters

4. Ad Campaigns (Loose Milk Vs Packed Milk)

5. Digital Marketing

6. Product diversification