Marketing Management (MG 401)

Project Presentation Group 6 Company: AMUL

AMUL The Brand

Amul (Anand Milk Union Limited) Formed in 1946 Dairy cooperative movement in India. brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.8 million milk producers in Gujarat, India. Sterling example of a co-operative organization's success in the long term. It is one of the best examples of co-operative achievement in the developing economy. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. World's biggest vegetarian cheese brand. Largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006-07). Currently Amul has 2.8 million producer members with milk collection average of 10.16 million litres per day.

AMUL The Brand

"Anyone who has seen ... the dairy cooperatives in the state of Gujarat, especially the highly successful one known as AMUL, will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times over in developing regions everywhere.
Alexander Fraser Laidlaw. Cooperatives and the Poor

SWOT Analysis Strengths

An extremely well managed distribution channel that has stood the test of time as well as expansion. Wide variety of products. Low cost inbound logistics from the basic level of the input production. Well established brand Sense of trust Image of social welfare firm which is targeted to help the farmers in rural region rather than bagging in huge amount of profits. Decentralised milk collection from various sources at the cheap rates and competitive quality. Highly influential and the longest running ad campaign (Utterly Butterly Girl). The pasteurization process is being outsourced for much superior quality in the final products. It captures almost all of the economy based market segments right from A1 to C2.

SWOT Analysis - Weaknesses

All the farmers which provide the milk are deemed as co-owners of the company under the co-operative ANAND. Umbrella branding strategy. Substandard product in the market affects the whole image of the brand. Some of the products are not very popular in their desired markets. It supplies primarily in Gujarat, Maharashtra and Rajasthan because FMCG need to be taken special care in terms of freshness and quality and their transportation to far away areas is difficult. The extreme low class do not buy dairy products from Amul. There have been incidents of slackening of the supply because of the problems faced at the very basic level in the input collection. This results in the huge losses to the company as well as the compromise in the image of the brand name. (This was an input received from mess secretaries in IIT hostels.)

SWOT Analysis Opportunities & Threats

Opportunities: It can expand in the various other parts of the country by either upgrading logistics or by establishing a new plant in other parts with associations with the rural farmers. Strong brand name will help gain an edge over the local producers. It can sell the processed milk products at the prices comparable to that of MNCs. However, the capitalist policies are against the basic ideology of the company which says that it has to provide the best quality milk products at affordable prices to the Indian households.

Threats: Any compromise on the quality will lead to the severe depreciation of its brand value. This can happen either by the farmers in the pre production phase or by the factories in the production cum processing phase. The competition from the multi national companies like Cadburys in chocolate, quality walls in ice creams and Britannia in cheese markets. The regional famous brands like Saras in Rajasthan receive regional political support.

PESTLE Analysis
Political: Political support in Gujarat because most of the rural livings in the state are directly or indirectly related to Anand. So, no one poses any unnecessary threats in their operations there. But in other states, the state governments may try to encourage their own establishments for more and more profits. Economic: Low prices of the local good may cause a shift away from Amul products. Also, the magnitude of sales needs to be very large in order to gain profits due to the lack of expensive products in the range. It is not affected by minor changes in the regional market as it caters to a much larger target market. Socio-cultural: The ad campaign by the company leaves a strong impact on the society as the ads generally based on the contemporary issues. They are not only a source of amusement but also create awareness among its consumers thereby leaving positive impact on all the demographic segments of the society. It has made the farmers of Gujarat self-sufficient and proved crucial in transforming their lives.

PESTLE Analysis
Technological: It uses only pasteurised milk for producing all its goods. Also uses high quality packaging for its products like tetra pack in which milk remains fresh for a longer period of time. It also provides milk with various degrees of fat content depending on the various psychographic sections of the society. It has technologically advanced logistics e.g. refrigerated trucks for purity and freshness parameters. Legal: It is a cooperative firm and follows the same legal procedures as any other firm. Although, there is no major threat in the legal arena, Amul has found itself in the court on both sides. In one case, it won a copyright infringement case against local shops using the name Amul to increase sales. On the other hand, Zydus Cadila Ltd. Brought a stay order on sales on Amuls sugar free products claiming copyright violations. Environment: It is does not cause any kind of externalities in direct or indirect form. Besides, Amul has also launched a mass tree plantation plan under which it has planted around 152.78 lakh trees by year 2009.

Market Segmentation
a. Market - People who buy packaged edible products. b. Target Market - People who buy dairy products. c. Segments: 1. Geographic i) Gujarat ii) Outside Gujarat 2. Demographic i) Income All income classes ii) Psychographic Lifestyle, Living standards. iii) Age Different segmentation for different products - all age groups d. Target Segments: 1. Geographic i) Gujarat ii) Neighbouring states i.e. Rajasthan and Maharashtra 2. Demographic: i) Income groups: A1, A2, B1, B2 ii) Age: Amul Kool - teenagers, All age groups otherwise iii) Psychographic: Health conscious people - double toned milk, Nutramul etc.

The 4 Ps of Marketing
PRODUCT: Variety: A wide range of products - large width of product lines - depth of the product lines is also considerable Quality: Comparable to MNCs - motto of Amul - providing supreme quality at affordable prices Design and Packaging: Average households needs - affordable and good packaging Brand Name: Single brand name - AMUL - considered one of the most trusted - Brand perception - social initiative rather than a profit motivated company Sizes: Available in different sizes - catering to the different needs. Mainly meant for the retail purposes not B2B Services: No direct services retails is most of the market share - has also launched a cyber store Warranties: No warranty provided - company follows routine protocol of consumer complaints in case of any dissatisfaction Returns: major share in returns - AMUL butter - market leader Milk and ice creams contribute tremendously to the returns

The 4 Ps of Marketing
PRICING List price: Mentioned on the product itself decided with motive to achieve minimum price without compromise in quality Discounts and Allowances: No discounts or allowances direct retail based market individual specific - absence of B2B transactions Payment period: Payment Instant in almost all cases Credit Terms: As such there are no credits terms by the company itself but the dealers may see the credit terms at their own level.
PROMOTION Sales Promotion: No specific sales promotion events Advertising: Various ad schemes Has had the most successful ad campaign in the history of the Indian consumer market - signifies the taste of India by promising the best taste and simultaneously pointing out relevant issues Public Relations: Management has people who listen and respond to the complaints posted by the consumers regarding any aspect of the product

The 4 Ps of Marketing
PLACE
Channels: Extensive channel to supply the products to all the retail stores even rural regions

Coverage and Locations: States of Gujarat, Maharashtra and Rajasthan.

Inventory: FMCG inventory is minimal transactions are rapid Transport: huge and advanced system of transportation

New Product
The team has envisioned a horizontal related expansion plan The new product includes. The product - traditional Indian Sweets or Mithai. The brand name of the product will be

Chandravilaas

Cow logo courtesy: DeviantArt

STP Analysis
SEGMENTATION Psychographic: A semi-urban to urban lifestyle - packaged sweets will be costlier than the normal sweets available in the market More hygiene specific Desire brand value in the product - contemporary youth which respect Indian traditions and culture is also a major segment Behavioural: Occasions at which the sweets are used as gift items e.g. Diwali, Holi, Rakshabandhan etc Geographic: Only Rajasthan, Gujarat and the adjoining states due to the transportation constraints and the behavioural preferences

STP Analysis
TARGETING People living in these specific geographic regions with moderate income level The target consumer prefers buying sweets which are hygienically prepared and have brand value associated with them People who have their roots in traditional Indian culture but with decent financial footing prefer traditional sweets over chocolates and other competing goods

POSITIONING Trusted household FMCG brand which has been in the circulation in the market for many years. Initial market wave is expected to be in favour of the launch of new comestible item. Bikaji poses a threat in Rajasthan as it has a headstart in the packaged sweets market. Amul would be positioned as a brand that the new India trusts. It would be the brand of the youth which respects Indian culture and tradition.

Policy and Strategy Decisions

Product Design: The product will be available in packet sizes of 250 grams, 500 grams and 1000 grams. All packets will be gift packed with ribbons and will have a very regal/festive look to them. The aim to project the product in the same festive light that Cadbury has achieved with its celebrations brand.

Pricing strategy: Brands like BIKAJI in Rajasthan prices at 80 INR for 1 kilogram. The price of our product would range from 90 to 100 per kilo gram depending on the geographic location in which we are selling the product. Also it will be dependent on the variety of products.

Policy and Strategy Decisions

Promotion strategy: Initially, a small complimentary pack of sweets of another variety will be given free with a large pack of sweets. This will introduce the whole range of sweets to the consumer more effectively. Major part of promotion would be during the festive season. There will be special packs and assorted ranges priced at various levels. These will be aggressively promoted and advertised. The aim would be that the user is compelled to buy the normal pack of the other mithai too. Distribution strategy: Current supply chain would be used transport and work force channels which distribute the milk products. As such Amul will not require expanding the given level of infrastructure to distribute the new product as both old and new products are equally perishable and require the same amount of quality control Our fort would be that the sweets would be easily accessible as easily as Amuls other milk products.

Thank You!
So long