Case Study: Marketing Management Mayank Verma: MBA-I.B.

 World's Largest Pouched Milk Brand, World's Biggest Vegetarian Cheese Brand, Largest Food Brand And Business In India  Every day Amul collects 447,000 litres of milk from 2.12 million farmers (many illiterate), converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country.  Started in December 1946 in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF(Gujarat Cooperatives Milk Marketing Federations).

 Operation Flood was initiated in1970 to capture a commanding share of the liquid milk market in the metros.  There were 9 private units and around 20 brands in Ahmadabad market.  GCMMF setup Mother Dairy with capacity of 10 lakh LPD with investment of 100 crore.  Business offered low barriers at entry level, modest investment, and simple technology coupled with high and almost immediate returns.

 Highlighting brand strengths effectively was harder since a large segment of the customers was illiterate.  All 20 brands sold at exactly the same price. If the market Leader changed it, all other followed suit swiftly.  At the retailing end, Amul offered margins of only 15 paise per litre compared to 40 paise by private packer.  When Amul launches the pouch design with different early morning symbols, the rival brands took advantage of this and appeared with pouches in similar identical symbols.

 GCMMF’s quality control department revels pouches of almost all other brands contained at most 490ml milk instead of 500ml  Far inferior quality to Amul.  In standard in private brands had just 4.2 percent fat instead of the requisite 4.5 percent.  The SNF (not fat or solids other than fat-content in toned milk) was only 8 percent instead of the standard percent. Thus saving the marketer an additional paise per litre.

 Segmentation- Prevention of Food Adulteration Act 1954 permits four types of milk(double toned, toned, standardized and whole).  Amul introduced its first premium brand product, Amul Gold full cream milk Rs. 11 a litre. And other Amul Shakti (standardized) priced at Rs. 10/L, Amul Taaza (toned milk) priced at Rs. 9/L, Amul Saathi was the double-toned and lowered priced.  GCMMF’s resolve to enter all segments that led it to launch small 200 ml pouch.

 Distribution & Quality Assurance – GCMMF began removing restrictions on crate deposit and geographical limit and giving incentives to the field staff to appoint new retailers.  The milk retailers were in direct contact with GCMMF through a formal agreement and crate deposit.  Printing the date of pack and code number on its pouches for buyer to avoid buying old stock.

 Advertising- Starts with Doordarshan later using a combination of leaflets generating awareness about its contents, press advertisements, radio spots, hoardings and cable TV.  GCMMF began printing the Amul Logo on home-delivery bags, T-shirts, Jeans.  Gifts such as Clocks were given to retailers.  Occasions such as milk van rallies where all vans endorsing the Amul milk brand name.  Amul Maharani contest: in this contest questions about Amul are asked Promotion  AMUL sponsored the Singing Competition AMUL Star Voice of India, Amul music ka maha mukabla Promotion

 Defensive Strategies - The network follows an umbrella branding strategy. Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk.  Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya and Nutramul. The edible oil products are grouped around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while fruit drinks bear the Safal name.  Moving consumers from loose milk to packaged milk and gradually move them up the value chain (tetra pack to beverages) Being exposed to a brand, it is natural for a customer to try more products

Expansion to foreign shores GCMMF had signed an agreement with Wal-Mart to stock its shelves with products under its Amul brand name. Amul processed cheese, pure ghee, Shrikhand, Nutramul, Amul's Mithaee Gulab Jamuns are few of the products marketed in the US markets. 50 per cent of Americans being medically obese, and if Amul is really looking to capture the hearts of the second- and third- generation Indians, offering low-fat versions of its brands, would make a lot of commercial sense. Hence targeting the large Indian community in the US markets with its niche products like mithai, packaged ready to eat foods market it can definitely expand its market to a large extent.

Amul has risen from Indian soil and it remains Indian in every sense. There is ample scope in the low priced segment as also in other categories. There are a significant number of retailers who are currently stocking more than two brands. Amul has the opportunity to capture the more evolved young adults and children who are open to new products provided they meet their expectations.

Thank you ! Mayank Verma: MBA-I.B.