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A Project Report ON "Marketing Analysis and Self Development of Amul Milk"
A Project Report ON "Marketing Analysis and Self Development of Amul Milk"
A Project Report ON "Marketing Analysis and Self Development of Amul Milk"
PROJECT REPORT
ON
Submitted By
AMANCHETANMANDOT
DATE -20/11/2023
CERTIFICATE
This is to certify that Mr. / Miss AMAN CHETAN MANDOT who is a Bonafide
student of Smt. Kashibai Navale College of Commerce, Erandwane, Pune has worked
on Project titled “MARKET ANALYSIS & SALES DEVELOPMENT OF
AMUL MILK” and has Successfully completed the project work in partial fulfillment
of award of degree of Bachelor of Business Administration (BBA).
This report is the record of student’s own efforts under our supervision and
guidelines.
I am deeply indebted to many people for the successful completion of this project. I
would like to take this opportunity and go on record to thank them for their help and
support. I am thankful to the Smt. Kashibai Navale College of Commerce for all the
support provided for this project. I express my deep sense of gratitude and sincere
feeling of obligation to my Project Guide Prof. KARAN RANDIVE who helped
me in overcoming many difficulties and who imparted me the necessary conceptual
knowledge
PREFACE
Supply chain management (SCM) is a business practice that aims to improve the way
a business sources its raw materials, and delivers it to end users. For any product or
service offered by any business, there are usually a number of different business entities
involved in the various stages of the supply chain, including manufacturers,
wholesalers, distributors and retailers; the last group supply chain is consumers. SCM
is important for modern businesses because it coordinates and synchronizes activities
of partner businesses, giving efficiency.
CONTENTS
• PREFACE
• COMPANY PROFILE
• GCMMF
• PRODUCT MIX OF AMUL
AMUL means "priceless" in Sanskrit. A quality control expert in Anand suggested the
brand name “Amul,” from the Sanskrit “Amoolya,” Variants, all meaning "priceless",
are found in several Indian languages. Amul products have been in use in millions of
homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul
Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk
and Amulya have made Amul a leading food brand in India. (Turnover: Rs. 25 billion
in 2002). Today Amul is a symbol of many things. Of high-quality products sold at
reasonable prices, of the genesis of a vast co-operative network, of the triumph of
indigenous technology, of the marketing savvy of a farmers' organization and have a
proven model for dairy development.
AMUL IN ABROAD
Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA,
Bangladesh, Australia, China, Singapore, Hong Kong and a few South African
countries. Its bid to enter Japanese market in 1994 did not succeed, but now it has fresh
plans entering the Japanese markets [6]. Other potential markets being considered
include Sri Lanka.
GCMMF
The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the
largest food products marketing organization of India. It is the apex organization of the
Dairy Cooperatives of Gujarat. This State has been a pioneer in organizing dairy
cooperatives and our success has not only been emulated in India but serves as a model
for rest of the World. Over the last five and a half decades, Dairy Cooperatives in
Gujarat have created an economic network that links more than 2.8 million village milk
producers with millions of consumers in India and abroad through a cooperative system
that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level,
affiliated to 13 District Cooperative Milk Producers' Unions at the District level and
GCMMF at the State level. These cooperatives collect on an average 7.5 million litres
of milk per day from their producer members, more than 70% of whom are small,
marginal farmers and landless labourers and include a sizeable population of tribal folk
and people belonging to the scheduled castes. The turnover of GCMMF (AMUL)
during 2008-09 was Rs. 67.11 billion. It markets the products, produced by the district
milk unions in 30 dairy plants, under the renowned AMUL brand name. The combined
processing capacity of these plants is 11.6 million litres per day, with four dairy plants
having processing capacity in excess of 1 million Litres per day. The farmers of Gujarat
own the largest state of the art dairy plant in Asia – Mother Dairy, Gandhinagar, Gujarat
– which can handle 2.5 million litres of milk per day and process 100 MTs of milk
powder daily. During the last year,
3.1 billion litres of milk was collected by Member Unions of GCMMF. Huge capacities
for milk drying, product manufacture and cattle feed. Ever since the movement was
launched fifty-five years ago, Gujarat's Dairy Cooperatives have brought about a
significant social and economic change to our rural people. The Dairy Cooperatives
have helped in ending the exploitation of farmers and demonstrated that when our rural
producers benefit, the community and nation benefits as well.
GCMMF: An overview
The birth of Amul at Anand provided the impetus to the cooperative dairy movement
in the country. The Kaira District Cooperative Milk Producers' Union Limited was
registered on December 14, 1946 as a response to exploitation of marginal milk
producers by traders or agents of existing dairies in the small town named Anand (in
Kaira District of Gujarat). Milk Producers had to travel long distances to deliver milk
to the only dairy, the Polson Dairy in Anand . Angered by the unfair and manipulative
trade practices, the farmers of Kaira District approached Sardar Vallabhbhai Patel (who
later became the first Deputy Prime Minister and Home Minister of free India) under
the leadership of the local farmer leader Tribhuvandas Patel. Sardar Patel advised the
farmers to form a Cooperative and supply milk directly to the Bombay Milk Scheme
instead of selling it to Polson (who did the same but gave low prices to the producers).
He sent Morarji Desai (who later became Prime Minister of India) to organize the
farmers. In 1946, the farmers of the area went on a milk strike refusing to be further
oppressed. Thus the Kaira District Cooperative was established to collect and process
milk in the District of Kaira in 1946. Milk collection was also decentralized, as most
producers . were marginal farmers who were in a position to deliver 1-2 litres of milk
per day. Village level cooperatives were established to organize the marginal milk
producers in each of these villages. The Cooperative was further developed & managed
by Dr. V Kurien along with Shri H M Dalaya . in 1973, the Gujarat Co-operative Milk
Marketing Federation was established. The Kaira District Co-operative Milk Producers'
Union Ltd. which had established the brand name AMUL in 1955 decided to hand over
the brand name to GCMMF (AMUL). With the creation of GCMMF (AMUL),
we[who?] managed to eliminate competition between Gujarat's cooperatives while
competing with the private sector as a combined stronger force. GCMMF (AMUL) has
ensured remunerative returns to the farmers while providing consumers with products
under the brand name AMUL.
PRODUCT MIX OF AMUL
Breadspreads:
• Amul Butter
• Amul Lite Low Fat Breadspread Cheese Range:
Curd Products:
• Amul Masti Dahi (fresh curd)
• Amul Butter Milk Amul Icecreams:
• Cassatta
• Tricone Cones (Butterscotch, Chocolate)
• Megabite Almond Cone
• Frostik - 3 layer chocolate Bar
• Fundoo Range - exclusively for kids
• SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango,
1. First plant is at ANAND, which engaged in the manufacturing of milk, butter, ghee,
milk powder, flavored milk and buttermilk.
The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy
Cooperative Society at the village level affiliated to a Milk Union at the District level
which in turn is further federated into a Milk Federation at the State level. The above
three-tier structure was set-up in order to delegate the various functions, milk collection
is done at the Village Dairy Society, Milk Procurement & Processing at the District
Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This
helps in eliminating not only internal competition but also ensuring that economies of
scale is achieved. As the above structure was first evolved at Amul in Gujarat and
thereafter replicated all over the country under the Operation Flood
Programme, it is known as the ‘Amul Model' or ‘Anand Pattern' of Dairy
Cooperatives.
Responsible for Marketing of Milk & Milk Products Responsible for Procurement &
Processing of Milk Responsible for Collection of Milk Responsible for Milk
Production.
MU…1 MU...n
VCS…1 VCS…n
THE ANAND PATTERN
Distribution channel
Manufacturing
Depot...1 Depot...n
WD…1 WD…n
Downstream flow
Downstream Channel, it is the distribution part of the supply chain, from the
manufacturing units to the retailers.
• First leg of transport is from the manufacturing unit to the company depots. This is
done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the
company there for is some time the quantity ordered is lesser then club loading is
done which means that the product ordered is supplied with some other products.
• Frozen food the temperature of these trucks is kept below -18˚C
• Second leg is from the depot to the WD's, this transport is carried out in insulated
3 and 5 MT TATA 407’s here a permanent dispatch plan (PDP) is prepared where
the distributor plans out the quantity of various products to be ordered on a particular
date.
• Third leg this is the flow of good from WD's to retailers, a beat plan is prepared and
transportation is done on auto-rickshaws, rickshaws and bicycles.
Amul products are available in over 500,000 retail outlets across India through its
network of over 3,500 distributors. There are 47 depots with dry and cold warehouses
to buffer inventory of the entire range of products.
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. All GCMMF branches engage in route
scheduling and have dedicated vehicle operations Depots with dry and cold
warehouses to buffer inventory of the entire range of products
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.
• If product crosses the shelf life, the retailer bears the costs.
• If the product gets spoilt during the transportation or if there is any customer
complaint, Amul bears costs.
• Unsold goods are not returned to the manufacturer.
• No reverse logistics.
SCM AND MARKET LOGISTICS
THE BUSINESS MODEL
The strategy, design and practices in AMUL's network are strongly driven by the
objective of establishing and operating an efficient supply chain from milk production
and procurement to product delivery to customers. Management of this network is built
around two key elements –
1. Coordination of the diverse elements of the network and
• First, for the short term, the procurement prices were set so as to provide fair and
reasonable return.
• Second, aware of the liquidity problems, cash payments for the milk supply was
made with minimum of delay.
For the long-term, the Unions followed a multipronged strategy of education and
support. Only part of the surplus generated by the Unions is paid to the members in the
form of dividends. A substantial part of this surplus is used for activities that promote
growth of milk supply and improve yields. These include provision of veterinary
services, support for cold storage facilities at the village societies etc. In parallel, the
Unions have put in place a number of initiatives to help educate the members.
Managing Third Party Service Providers:
Well before the ideas of core competence and the role of third parties in managing the
supply chain were recognized and became fashionable, these concepts were practiced
by GCMMF and AMUL. From the beginning, it was recognized that the core activity
for the Unions lay in processing of milk and production of dairy products. Accordingly,
the Unions focused efforts on these activities and related technology development.
Marketing efforts (including brand development) were assumed by GCMMF. All other
activities were entrusted to third party service providers. These include logistics of milk
collection, distribution of dairy products, sale of products through dealers and retail
stores, some veterinary services etc.
There appear to be two critical mechanisms of coordination that ensure that decision
making is coherent and that the farmers gain the most from this effort.
These mechanisms are:
• Inter-locking Control: - The objective for developing such an inter-locking
control mechanism is to ensure that the interest of the farmer is always kept at
the top of the agenda through its representatives who constitute the Boards of
different entities that comprise the supply chain. This form of direct
representation also ensures that professional managers and farmers work
together as a team to strengthen the cooperative. This helps in coordinating
decisions across different entities as well as speeding both the flow of
information to the respective constituents and decisions.
• Coordination Agency: Unique Role of Federation:- In addition to being the
marketing and distribution arm of the Unions, GCMMF plays the role of a
coordinator to the entire network within the State – coordinating procurement
requirements with other Federations (in other states), determining the best
production allocation for its product mix from amongst its Unions, managing
inter-dairy movements, etc. It works with two very clear objectives:
1. To ensure that all milk that the farmers produce gets sold in the market
either as milk or as value added products and
2. To ensure that milk is made available to increasingly large sections of the
society at affordable prices.
were installed in the first phase to automate milk producers logistics. Amul also
connected its zonal
offices, regional offices and member's dairies through VSATs for seamless exchange
of
information. Amul is also using Geographic Information Systems (GIS) for business
planning and
optimization of collection processes. Indian Institute of Management –
Ahmedabad supplemented
Amul's IT strategy by providing an application software – Dairy Information System
Kiosk(DISK)
to facilitate data analysis and decision support in improving milk collection. There are
plans to
introduce features like Internet banking services and ATMs which will enable the milk
societies to
credit payments directly to the seller's bank account. Distributors can place their orders
on the
website www.amul2b.com especially meant for accepting orders from stockists and
promoting
Amul's products via e-commerce
TQM (Total quality management) at the grassroots has been a strong movement to
develop leadership, operational and strategic capabilities in the entire network –
farmers, village cooperatives, dairy plants, distributors and wholesalers and retailers.
Key elements of this TQM movement have been:
• Friday Departmental Meetings : Each Friday, at a prescribed time, everyone
in the network (from the farmers to the carry & forwarding agents) joins their
respective departmental meeting to discuss quality initiatives and share policy
related information.
• Training for Transformational Leadership so that individuals are able to
control their thoughts, feelings and behavior and take more responsibility in
one's life and surrounding environment.
• Application of Hoshin Kanri principles to bring about a bottom-up setting of
objectives – aligning policies for effective management of Unions & village
societies on hand with those of channel member on the other hand. ISO/HACCP
certification was obtained for all the Unions and each village society is in the
process of obtaining the same.
• Training for farmers and their families emphasizing the need for good health
care for not only cattle during its pregnancy and feeding but also for expecting
and feeding mothers and the whole family. This effort has brought about a
significant social change towards such issues in villages that have cooperative
milk societies.
• Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000)
to evaluate customer perceptions and distribution efficacy of their network. This
is being done by wholesalers in their respective territories at their own cost. This
information is used for policy deployment exercise.
THE NETWORK
Milk is procured from the villages and collected at Village Cooperative Societies
(VCS), from there the milk is taken to manufacturing units where the milk is processed
into various products.
The products are then transporters to the company Depots located in various parts of
the country. The products are then sent to Wholesale Distributors (WD) and from there
to the retailers.
The fact sheet
With products being highly perishable, the supply chain ought to have to maintain correct
temperature, humidity etc and the chain should move fast.
To reach out its consumers more directly and let them the total brand experience,
Amul has come up with Amul parlors. These are called “Utterly delicious parlors”.
They have come up in major cities like Ahmadabad, Bangalore, Baroda, Delhi,
Mumbai, Hyderabad and Surat already, and many more starting up real soon. Till date
there are about 400 Amul parlors across the country. These parlors are set at prominent
locations such as campuses of Infosys, Wipro, IIM-A, IIT-B, temples, Metros etc.
Amul has franchisee plans in regards of the Amul parlors. This might start pretty soon,
since the talk is almost at the end.
Facts
– 2300 Amul Parlors in 2007-08
– Goal of setting up 10,000 outlets by
March 2010
Selection, Motivation & Evaluation of Channel Members
Selection:
The company takes into consideration a host of factors while selecting the channel
members. This is because GCMMF believes that selection of channel members is a long
run decision & the rest of the decision regarding the supply chain depends upon the
efficiency & coverage by the channel members. The following are the host of factors
considered by the company in selecting the channel members:
• Proof of solvency which requires name & address of the channel member's bankers
• Safety of the inventory, which means that the distributor/ dealer should get the stock
of the company insured.
• Inventory or the perishable goods kept by the distributor/ dealer should be in good
condition which means a detail of storage space & Refrigeration facility is to be
provided. Refrigeration system should have deep freezers, cold room & walk in
coolers.
• Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador,
3 Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the
vehicle needs to be furnished to the company.
• GCMMF acknowledges the fact that it needs to be sensitive to the market demands.
For this it requires that a number of salesmen needs to be present on the field. The
salesmen too are divided into various categories like the Field salesmen & Counter
salesmen. Also the details of Clerical Staff & Mazdoors are to be provided. The
technical competence of the salesmen needs to be mentioned
• Details of the product kept of other companies have to be provided. The annual sales
of these products too have to be mentioned. Also details of complementary products
& product lines need to be mentioned.
• Dealers of the company must carry a good reputation. This is due to the fact that the
company believes reputation of the dealer affects the clientele.
• The company also requires the dealers to furnish any Advertising & Sales initiative
undertaken by them on behalf of the company.
• One of the main factors, which keep the distributors motivated, is the margin.
Usually the margins offered by the company are 8% & it is raised to 8.5%. Volume
wise this comes out to be a big figure since Amul's product has a good demand in
the market. However compared to the other companies the margins are still lower
since the new players in the market offer a much higher margin. But the very fact
that Amul's products have good demand in the market motivates the distributors to
stock it.
• Amul being a cooperative cannot afford to give heavy monetary incentives. Amul's
products are considered to be value for money since the company does not believe
in charging high margins. In fact all monetary incentives are just the short run means
to promote the company's product. In order to keep the Channel members motivated
in the long run, Amul builds on the concept of “Trade Marketing” which makes
the dealers & the distributors believe that the company's products are worthy of
being pushed in the market.
• Vision and mission statement: the company cascades down the vision to the various
channel members, this is done through various events organized by the company at
different locations where the values of the company are made clear and enforced to
the channel members. Also the fact that Amul being a cooperative society cannot
afford to spend exorbitantly on such events therefore it has a very traditional way
of organizing these get together which leaves an impact on the members.
• Amul yatras: this includes taking the channel members on a guided tour of the
manufacturing and procuring facilities in Gujarat. So that the channel members can
have an experience of the working of the company and can pick up some quality
measures that can help them to synchronize and improve their own functioning at
various levels. This in turn help the company to co ordinate the entire value chain,
as the channel members understand the various constraints and liberties the
company goes through. The company has already got the Rajiv Gandhi award for
quality.
The Retailers
• Trade schemes: these are undertaken by the company only for the hard selling items
e.g. Ice creams, flavored milk etc. for these the company raises the margins by 2%,
also schemes like good packaging incase of butter and cheese is undertaken by the
company. However this is only a short-term initiative to push the products of the
company.
• Glow boards: the company puts up glow boards at the retailer and pays the major
portion of the cost.
• Schedule of the salesmen: they provide the retails with this schedule so the retailers
can pre estimate the quantities of the various products needed.
• Infrastructure facilitation: the company facilitates the retailers to buy freezers and
fridges by formulating an easy payment program and a commitment to buy back the
equipment at a reasonable price when the value of the equipment has depreciated.
Evaluation of channel members
• Beat plan: this plan is generated for the various product categories i.e. diary dry,
diary wet, Dhara and ice cream. A weekly schedule is prepared for various
markets and the retailers the turnover for each of the product is calculated for the
wholesale dealers.
• Target versus achievement: the performance and the targets are compared and
therefore the gaps are identified which help in evaluating the WD and planning
for the next year as well. This is done for each of the product category.
• Another criterion
Conflicts
• Stocking issues: The company doesn't want the retailers to stock the competing
brand in the company leased fridges, which at times s hard to manage as retailers
tend to do it often.
• Credit policy: Compared to the market, the company's credit period is less that
specially incase of institutional sales is very important.
• Packaging: The channel members for easy storing demand a better quality of
packaging.
• Margins: The Company provides least margins to all the channel members.
For e.g. The retailer’s margin in case of butter is 8% as compared to
Britannia’s 12%
Co-operation among channel members
• Amul quality circles: The members of the local channel meet together every
month to share issues and the achievements of the channel members. This is an
ongoing activity facilitated by the company offices in different locations; this
enables the channel members to learn together and reduces the horizontal
conflicts among the WDs.
• Pilot salesmen scheme: To reduce the financial burden of the distributors this
scheme is run whereby half the cost of the salesmen is born by the company and
the rest half by the distributor
• Scheduling of sales: The WD's provides Schedule of the distributor's sales men
to the retailers so that the retailers can plan out and place the orders in advance.
PRICE- Rs. 16
NUTRITIONAL INFORMATION
Energy 87 kcal
Packed at- kwality dairy (India), Softa Village, Tehsil- Palwal ,Dist-Faridabad
(Hariyana)
Total no of distributiors of Amul gold pasteurized full cream milk in Mohan baba nagar
(Badarpur Boder Delhi)- 1
Total no of dealers of Amul gold pasteurized full cream milk in Mohan baba nagar and
Molar Band (Badarpur Boder Delhi)- 5
Total volume purchased by each dealers- 160-180 liters (i.e. total no of packets of amul
gold milk purchased by each dealer)- 320-360
AT BADARPUR BODER
MANUFACTURED UNIT
DISTRIBUTORS
DEALERS
RETAILERS
CUSTOMERS
STOCK REPLENISHMENT CYCLE
Since milk is a fast moving consumer goods daily used by each household in India. So
Amul gold pasteurised full cream milk is supplied by distributer everyday to dealers
and retailers. Stock is purchased within 24 hours (early in the morning).
TRANSPORATION METHODS
They manage the procurement of milk that comes via trucks & tankers from the VS's
to manufacturing unit and then to distributers and dealers .They negotiate annual
contracts with truckers, ensure availability of trucks for procurement, establish truck
routes, monitor truck movement and prevent stealing of milk while it is being
transported.
COMPETITOR ANALYSIS
The main competitor of Amul is Mother dairy in Delhi. Most of the market share is
captured by mother dairy products (55% (approx) market of pasteurized full cream milk
is covered by Mother dairy
Amul 30
Mother dairy 55
others 15
market share
• Amul should go in for exclusive outlets in at least all the shopping malls
coming up these days and any location where footfalls are large in number. The
advantages of this channel will be:
• The company should start a home delivery where a particular household will
order full range of products required by it over a period of time. For this the
company could provide a deliveryman with cycle to reach the different houses.
• In order to motivate the channel members it is also very essential for the
company to increase the margins for the hard selling items e.g. Amul dahi
where it faces competition from Nestle & Mother dairy.
In order to remain sensitive to market demand, it is essential for the company to place
additional salesmen on the field since the brand as such commands a high demand in
the market but fails to match it with the supply.
DECLARATION
I, Mr. Aman Chetan Mandot hereby declare that this project is a record of authentic
work carried out by me during the academic year 2023-24 and has not been submitted
to any other University or Institute towards the award of any degree.