A PROJECT REPORT ON

ANALYSIS OF DISTRIBUTION NETWORK OF RETAIL CHANNEL OF AMUL IN PUNE

REGION

SUMMER INTERNSHIP PROJECT

Report submitted to

UNDER THE GUIDANCE

OF:
Ms. Shruti Takalkhede

IN PARTIAL FULFILLMENT OF REQUIREMENT OF DEGREE OF “MASTER OF

BUSINESS ADMINISTRATION”

BALAJI INSTITUTE OF TELECOM AND MANAGEMENT(BITM)

SRI BALAJI UNIVERSITY PUNE (SBUP)

2020-2022
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to my Faculty Mentor/ Research Guide, Ms. Shruti
Takalkhede for her never-ending encouragement and support. I would like to extend my sincere
appreciation to Branch manager: Mr. Kumar Nilabh, Dairy OIC: Mr. Anmol Gogia and others for
sharing their wisdom and experience during research work. My sincere thanks to the TSIs Akshay
Gophan, Tousif Shaikh, Rajashri Bharadwaj, Rohini Hunare, Sanjeev, Rajiv Ranjan for their
unconditional, proactive support and timely permissions for research work.
Finally, I thank God for making this journey an enriching experience for me.

Date: 31st July 2021

Place: Pune
Signature of candidate
Manish Nawani
INDEX

SL. CHAPTER NAME

NO
1 COMPANY INFORMATION

2 ROLE IN COMPANY
3 INDUSTRY SCENARIO
4 MARKET SCENARIO

5 PRODUCTS
6 DATA ANALYSIS OF DISTRIBUTION NETWORK OF AMUL
7 DATA ANALYSIS OF AMUL CART LAUNCH ACTIVITY

8 KEY FINDINGS AND INTERPRTATION OF DISTRIBUTION NETWORK OF AMUL

9 KEY FINDINGS AND INTERPRETATION OF AMUL CART LAUNCH ACTIVITY

10 LEARNING AND LIMITATIONS FROM THE PROJECT

11 RECOMMENDATIONS
 Company Information

Amul cooperative was registered on 19 December 1946 as a response to the exploitation of marginal
milk producers by traders and agents in small cities. The prices of milk were arbitrarily determined at
the time. The government had given Polson an effective monopoly in milk collection from Kaira and
its subsequent supply to Mumbai.
Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai Patel under
the leadership of local farmer leader Tribhuvandas K. Patel. He advised them to form a cooperative
(Kaira District Co-operative Milk Producers' Union) and supply milk directly to the Bombay Milk
Scheme instead of Polson (who did the same but gave them low prices). He sent Morarji Desai to
organise the farmers. In 1946, the milk farmers of the area went on a strike which led to the setting up
of the cooperative to collect and process milk. Milk collection was decentralized, as most producers
were marginal farmers who could deliver, at most, 1–2 liters of milk per day. Cooperatives were
formed for each village, too. By June 1948, the KDCMPUL had started pasteurising milk for the
Bombay Milk Scheme. Then-Prime Minister Lal Bahadur Shastri visited Anand to inaugurate Amul's
cattle feed factory. On October 31, 1964 and spent a night in village and spoke to farmers about their
cooperative and after returning to Delhi he set in motion the creation of an organisation, the National
Dairy Development Board (NDDB), to replicate the Kaira cooperative in other parts of
India. Under the selfless leadership of Tribhuvandas Patel, in 1973, Amul celebrated its 25th
Anniversary with Morarji Desai, Maniben Patel and Verghese Kurien.
The cooperative was further developed and managed by Dr. Verghese Kurien[4] with H. M. Dalaya.
Dalaya's innovation of making skim milk powder from buffalo milk was a technological
breakthrough that revolutionized India's organized dairy industry.
With Kurien's help, the process was expanded on a commercial scale which led to the first modern
dairy of the cooperative at Anand. This cooperative would go on to compete against established
players in the market.

The Amul plant at Anand, Gujarat showing the milk silos

The trio's (T. K. Patel, Kurien and Dalaya's) success at the cooperative's dairy soon spread to Anand's
neighborhood in Gujarat. Within a short span, five unions in other districts
– Mehsana, Banaskantha, Baroda, Sabarkantha and Surat – were set up, following the approach
sometimes described as the Anand pattern.
In 1970, it spearheaded the White Revolution of India. To combine forces and expand the market
while saving on advertising and avoid competing against each other, the Gujarat Co-operative Milk
Marketing Federation Ltd., an apex marketing body of these district cooperatives, was set up in 1973.
The Kaira Union, which had the brand name Amul with it since 1955, transferred it to GCMMF.

In 1999, it was awarded the "Best of all" Rajiv Gandhi National Quality Award.

Technological developments at Amul have subsequently spread to other parts of India.

The GCMMF is the largest food products marketing organisation in India. It is the apex organisation
of the dairy cooperatives of Gujarat. It is the exclusive marketing organisation for products under the
brand name of Amul and Sagar. Over the last five and a half decades, dairy cooperatives in Gujarat
have created an economic network that links more than 31 lakh (3.1 million) village milk products
with crores of consumers in India. In 2007, Gujarat Cooperative Milk Marketing Federation Ltd.,
crossed US$ one Billion in its sales turnover and entered the elite club of food companies having this
distinction from India. In one more major achievement, the dairy cooperatives of Gujarat under the
GCMMF fold crossed milk procurement of 100 lakh kgs. per day mark on 27 December 2007, which
is the highest ever milk procurement achieved by any dairy network in India, be it private or
cooperative and the entire quantity of milk received was accepted without any milk holidays and was
processed successfully into milk and other milk products.
On September 30, 2018, Prime Minister Narendra Modi inaugurated Amul's chocolate plant in Mogar,
Anand near their headquarters. The new plant has been built with an increased capacity of 1,000
tonnes per month against the earlier 250 tonnes a month capacity. GCMMF has invested around ₹300
crores for this project. It is a fully automated production factory with minimal human intervention.
 Role in Company

I was working as a Management summer intern for 2 months (5th May to 10th July) with the
organization. During this two months’ period. I worked in coordination with different
departments and personnel is to execute different activities related to the project like
understanding the project requirement and expectations, collecting the information and data for
specific region of Pune. After understanding the project requirement, I had formulated key
research problem and objectives along with appropriate questionnaire collect necessary vital
information for research. Within this period, I have collected data from different types of
retailers and collected response for the primary research.

During initial few weeks mapping of Amul fresh products was done with the help of Amul’s “Amul
Cart” app. Later after knowing the whole sales territory, data analysis was done to find out the
recommendations and conclusion for the assigned project.
 Market

India ranks first in the world in terms of milk production. At present, the dairy sector has an
estimated consumer demand for milk and milk products at EURO 26 billion, at about 8 percent
growth per annum. About 35 percent of milk produced in India has meant for processing. The
organized sector (large scale dairy plants) processes about 13 million tons annually, while the
unorganized sector processes about 22 million tons per annum. Besides, the raw milk
production, some of the chief bi-products manufactured like: Infant milk food, malted food,
condensed milk and cheese. The southern and western regions collectively contribute for 80
percent of the milk produced in India.

The Indian dairy industry reported market size of USD 48.5 billion in FY 2011. With the
compound annual growth rate of 16% it is anticipated to reach USD 118 billion in 2017. On
the back of a rise in disposable income, coupled with strong demand for dairy products, the
Indian dairy industry is all set to experience high growth rate in next 5 years.

(in US $ Million) 79.015

80
68.731
70
59.791
60

50 45.09

40 33.896
25.463
30
18.06
20 12.91

10

0
2007 2009 2011 2013 2015 2017 2018 2019

Fig: India’s Liquid Milk Market Size

The dairy industry is a sector with highest degree of protection due to the economically
vulnerable position of small milk producers milk also known as white gold-can be used to make
enormous variety of high quality products. A majority (77%) of the milk sold in India is
unorganized and in the form of loose milk sold by milkmen. The organized sector in liquid
milk is highly fragmented with several regional players and co-operatives. Consumers are
shifting from loose liquid milk to branded packaged milk due to safety and quality concerns.

In the development of milk production, dairy cooperatives have a major role. Many small dairy
cooperatives are now full-fledged milk producers. Till about year 2000, India was not on the
radar screen of most international dairy companies, since India was neither a major importer
nor an exporter of dairy products. From 2000 onwards, Indian dairy products, particularly milk
powder, and ghee started making their presence felt in global markets.

Indian Dairy

Organized Dairy Unorganized

Marke

Traditional Sel
Cooperative Private
Dairie Milkme Consumption
Hom

Fig: Indian Dairy Market Structure

 Nevertheless, the Indian dairy sector has started as the producer-owned and professionally-
managed cooperative system. As of March 2001, India's 96,000 local dairy cooperative
societies (DCS) included more than ten million farmers 3 have integrated in a three-tiered
cooperative structure. Though dairy cooperative has found throughout India, the cooperative
movement has been more successful in few States, notable Gujarat. Gujarat’s success can be
attributed to a higher rate of farmer activism and more efficient political institution.
Over the years, States have developed popular dairy brands such as Amul from Gujarat. These
brands have earned high degrees of brand recognition and customer confidence, especially
within in the respective states. The Indian dairy industry faces changes from the international
dairy market.

The Indian dairy market had characters characterized by relatively high cost in milk
production, processing and marketing, and relatively poor quality of milk due to unhygienic
handling, this could potentially pause a significant threat to industry and its farmers.

A majority (77%) of the milk sold in India is unorganized and in the form of loose milk sold by
milkmen. The organized sector in liquid milk is highly fragmented with several regional players and
co-operatives. Consumers are shifting from loose liquid milk to branded packaged milk due to safety
and quality concerns. The organized liquid milk market is growing faster than the unorganized
market. Amul has a strong presence in rural as well as urban parts India and is currently the largest
private player in India.
 PRODUCTS:
Some of the products from Amul’s Product Portfolio:
• Amul Pure Ghee
• Amul Butter
• Amul Shrikhand
• Amul Mithaee Gulabjamun
• Nutramul Brown Beverage
• Amulspray Infant Milk Food
• Amul Cheese
• Amul Malai Paneer
• Amul UHT Milk (Long Life)
• Amul Fresh Cream
• Bulk Packs
• Amul Skimmed Milk Powder
• Amul Full Cream Milk Powder

The products are exported to 18 countries namely, USA, Kuwait, Qatar, UAE, Yemen,
Bahrain, Muscat, Saudi Arabia, Tanzania, Madagascar, Sri Lanka, Singapore, Nepal,
Bangladesh, Nepal Thailand and Australia.
 Data Analysis of Distribution network of Amul

Satisfaction of retailers

Correlations
Does the
Salesman visit
regularly? Satisfaction
Does the Salesman visit Pearson Correlation 1 .695**
regularly? Sig. (2-tailed) .000
N 362 361
Satisfaction Pearson Correlation .695** 1
Sig. (2-tailed) .000
N 361 361
**. Correlation is significant at the 0.01 level (2-tailed).
There is a positive corelation of salesman visit regularly and satisfaction of retailer as the r value is
0.695 and the value of p is 0.000.
So, we would accept the alternate hypothesis.
 Correlations
Is the
Supply/deliveries
regular? Satisfaction
Is the Supply/deliveries Pearson Correlation 1 .704**
regular? Sig. (2-tailed) .000
N 362 361
Satisfaction Pearson Correlation .704** 1
Sig. (2-tailed) .000
N 361 361
**. Correlation is significant at the 0.01 level (2-tailed).
There is a positive corelation of Supply regularly and satisfaction of retailer as the r value is 0.704 and
the value of p is 0.000.
So, we would accept the alternate hypothesis.

Correlations
How is the
service by
distributor? Satisfaction
How is the service by Pearson Correlation 1 .947**
distributor? Sig. (2-tailed) .000
N 362 361
Satisfaction Pearson Correlation .947** 1
Sig. (2-tailed) .000
N 361 361
**. Correlation is significant at the 0.01 level (2-tailed).
There is a positive corelation of service of distributor and satisfaction of retailer as the r value is 0.947
and the value of p is 0.000.

So, we would accept the alternate hypothesis.

 Correlations
How is the
behaviour of
Satisfaction distributor?
Satisfaction Pearson Correlation 1 .929**
Sig. (2-tailed) .000
N 361 361
How is the behaviour of Pearson Correlation .929** 1
distributor? Sig. (2-tailed) .000
N 361 362
**. Correlation is significant at the 0.01 level (2-tailed).
There is a positive corelation of behaviour of distributor and satisfaction of retailer as the r value is
0.929 and the value of p is 0.000.

So, we would accept the alternate hypothesis.

Another task was to see the shift of retailers towards new technology for transparency for those
208 retailers were visited by us and following are the results.
 DATA ANALYSIS OF AMUL CART LAUNCH ACTIVITY

Fig:2.1 composition of data regarding convenience of retailers for order placement

Fig:2.2 composition of data regarding most preferred mode by retailers

Rate your overall experience of Amul Cart

25 Application
20
20
15
RESPONSES

15

10
5 5 5
5

0
(very poor) 1 (poor) 2 (neutral) 3 (good) 4 (very good) 5
RATINGS

Fig:2.3 composition of data regarding overall experience of Amul Cart.

Fig:2.4 composition of data regarding type of educational background of retailers

Correlations
Is the Amul
Cart
application
convenient to
use over
salesman
which type of visits for
education did placing your
you receive? order?
which type of education Pearson
1 .802**
did you receive? Correlation
Sig. (2-tailed) .000
N 50 50
Is the Amul Cart Pearson
.802** 1
application convenient Correlation
to use over salesman Sig. (2-tailed) .000
visits for placing your N
order? 50 50
**. Correlation is significant at the 0.01 level (2-tailed).

Fig:2.5 Correlation between educational background and convenience of

retailers using Amul Cart application over salesman visits.
Key Findings and its Interpretation regarding Distribution network of Amul

• Amul is still the market leader at the respective area because of high demand from
the end customers due to brand name. Also Amul provides good quality products in
low price as compared to other brands.
• Retailers are less interested to sale Amul products because of low profitable margin
and no replacement policy while other brands providing high margin as well as
facilitate the retailers with timely replacement
• It has been observed that retailers facing problem with pouch packaging mostly
leakage while handling so they prefer hard packaging such as tetra pack or cup
especially for Amul (curd & buttermilk) products because they don’t provide any
replacement.

• It has been found that the brand preference for the retailers is depending upon the
margin provided by the company to them, high margin means high demand from
the retailer’s side.
• Also, a good scheme or offer, packaging and availability influence the retailers to
sale the product.
• Promotional activities are very beneficial to penetrate the market because it creates
awareness to the customers and the demand for the product increases. The existing
retailers of Amul have experienced the increase in demand and more sales through
their stores after the promotional campaigns of Amul.
• Amul has a very effective distribution channel but due to high demand and less
supply retailers continuously facing the problem of unavailability of stock.

• For dairy products retailers must have storage facility so if Amul come up with any
scheme on fridge’s then retailers will make up their mind to sale Amul.

Key Findings and its Interpretation regarding Amul Cart launch activity

• Many of the retailers are ready to cope up with new technologies and a digital way of ordering.
• Some of the retailers are not capable of operating electronic gadgets so are not willing to shift
towards the cart.
• The relation of distributor (salesman) and the retailer is most important for the retailers.
• Retailers are happy with the transparency Amul is trying to build.
The discount and scheme part is the most attractive part for the retailers.
 LEARNING AND LIMITATIONS FROM THE PROJECT

LEARNING:
In this summer internship project, I learned about issues faced by retailers towards Amul products.
I gained knowledge about the retail industry and about the distribution channel.
I developed my communication skills while interacting with retailers and solving their problems.
I also learned to compile and manage order data while working under Fresh Division of Amul.
I placed bulk orders on the Milk DMS app for the distributor and helped the retailers while they
placed order through the Amul Cart app.
I got to know about the complex ground work that is done in the background by various departments
and how they all come together to make these simple and easy to use apps a great success.

LIMITATIONS:
1. Time Constraints
2. The research was conducted in a limited area.
3. Due to limited sample size, the findings may not be realistic
4. Unavailability or unwillingness of some retailers at shops also deterred the research work.
 RECOMMENDATIONS:
This industry is most competitive industry; there are large numbers of competitors in this field. In such
condition a small loop may create a big problem. The condition is made tougher by Chitale, which is
recently dominating in this industry, so only a detailed study and fully fledged effort can help in good
sales to capture the market. Five things are necessary to improve the sales in the Pune city:

Service:
It is the critical factor in the success of any brand. There is no doubt that Amul services are good but it
needs little more improvement to completely capture the market.
Advertisement:
This is the most important factor that affects both the sales as well as the consumers’ attention. Amul
has to take aggressive advertising centered specially for its parlors and outlets.
Replacement policy:
Amul is already blamed for poor replacement policy; it has to give certain kind of replacement policy
to make its product more acceptable to the retailers.
Schemes and Offers:
As the retailers are getting various offers on dairy products of other companies like Chitale and iD fresh
foods, Amul should also provide some schemes and offers on their product range from time to time so
that retailers are retained.
Availability:
Some products which are in demand in the market are not always available to order which should be
taken care of by the company to improve sales.