1

To survey, understand and report Ice Cream servicing

issues at Amul Preferred Outlets in Vadodara
And
To prepare a seasonality chart of schemes operated in the
market by other Ice Cream players










By


Manish Maheshwari










June, 2014

2




To survey, understand and report Ice Cream servicing
issues at Amul Preferred Outlets in Vadodara
And
To prepare a seasonality chart of schemes operated in the
market by other Ice Cream players














By


Manish Maheshwari



Under the guidance of


Shri Bharat Patel Dr. Poonam Garg
Branch Manager, Anand Professor
GCMMF Ltd., Anand IMT, Ghaziabad



June, 2014

3




Certificate of Approval


The following Summer Project Report titled "To survey, understand and report Ice Cream servicing
issues at Amul Preferred Outlets in Anand And To prepare a seasonality chart of schemes operated in
the market by other Ice Cream players" is hereby approved as a certified study in management carried
out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of
Post-Graduate Diploma in Management for which it has been submitted. It is understood that by
this approval the undersigned do not necessarily endorse or approve any statement made, opinion
expressed or conclusion drawn therein but approve the Summer Project Report only for the purpose it
is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

Name Signature



1. Faculty Examiner _______________________ ___________________


2. PG Summer Project Coordinator _______________________ ___________________



4




Certificate from Summer Project Guides


This is to certify that Mr. Manish Maheshwari, a student of the Post-Graduate Diploma in
Management, has worked under our guidance and supervision. This Summer Project Report has the
requisite standard and to the best of our knowledge no part of it has been reproduced from any other
summer project, monograph, report or book.







Dr. Poonam Garg Shri Bharat Patel
Professor Branch Manager, Anand
IMT, Ghaziabad GCMMF Ltd., Anand

Date Date



5

Acknowledgement

We have traversed a path that few have dared to. We are continuing on a path that still fewer have
the courage to follow. We must pursue a path that even fewer can dream to pursue. Yet, we must, we
hold in trust the aims and aspirations of millions of our countrymen. Dr. Verghese Kurien

The above quote, by the Milkman of India, Dr. Kurien has been a source of inspiration since the first
day I walked into GCMMF. Thank you, Dr. Kurien Sir. Nothing can seem more apt than starting this
by acknowledging Dr. Kuriens contribution to the nation.

I also wish to express my sincere thanks to Shri S.P. Singh (Head, Ice-cream Division, GCMMF Ltd.)
for granting me, in the form of this project, the opportunity to learn about how a simple dream that
started out to empower the rural people of India, has become such a big brand.

Shri Bharat Patel and Shri Kapil Mathur of the Anand Branch Office of GCMMF Ltd. have mentored
me on this project and helped me understand how this vast machinery of milk procurement,
manufacturing units, refrigerated trucks, maintenance of the brand Amul to be among the best, about
how important it is to maintain relations with people as small as a retailer in the entire supply chain is
so important. I am truly thankful to you, Sirs, for your time and knowledge.

I would also like to thank my Professor-in-charge, Dr. Poonam Garg of IMT Ghaziabad for her
guidance on the project and the preparation of this report.

This acknowledgment is incomplete without the mention of Mr. Akhilesh (GCMMF Ltd. HQ) and
Mr. Keyur Trivedi (GCMMF Ltd. Anand) and Mr. Ashok (GCMMF Ltd. Vadodara). I thank you for
your time and your insight into the ground-level intricacies of sales and marketing of ice-cream,
particularly in the cities of Anand and Vadodara.

Finally, the completion of this project would be impossible without the time and patience of the many
APO owners/operators who were kind enough to respond to my questions and queries and discuss the
issues and matters of the business

6

Abstract
GCMMF Ltd, a widely recognized federation is responsible for marketing the products of Amul. It
has been in business for nearly 20 years, and covers a respectable 40% market share in the Ice-cream
segment, making it the market leader in this segment.

So how does this giant wheel rotate? Which cogs are important and essential to make it running
smoothly? And are there any areas that improvement can be made? My project was based on these
questions and here I have tried my best to put these queries and their possible solutions on paper.

The main objective of this project was to look into the sales, distribution and marketing operations of
Amul Ice-cream in the city of Anand and Vadodra, covering nearly 60 APOs and detect the Pain areas
in ice-cream distribution and servicing here.
Along with this project, there was a secondary project which stated to analyze the competition
(Havmor and Vadilal, in this case) and understand their schemes and offerings as against those of
Amul for the ice-cream consumer.

I was required to visit APOs (Amul Preferred Outlets) and Scooping Parlours in Vadodra and interact
directly with the people in charge with running these outlets. A questionnaire was developed with by
me and my teammate in Anand which we thought would be accurate and easy for the retailers to
answer.

To understand what the competition has to offer, different or more than us, to the retail parlor owner
as well as to the consumer, I went to Havmor and Vadilal stores as a consumer and sometimes as a
representative from Havmor and Vadilal respectively. I learned quite a lot about their strengths and
there by our weakness and where we can improve as a brand.

The following are the main issues that have been found to be the pain areas in the APOs and have
been discussed further in my report
Packaging
Replacement Policy
Communication gap between the retailers and the federation
Promotion Concerns from the Scooping Parlours

These issues and a few more as you read further are the ones, that after extensive questioning and
verification along with brain storming sessions with my colleague, were consistently found to be the
pain areas of almost every APO.

A brand like Amul stands tall over its opponents. It might take over a decade for even the best of the
marketing strategies to become a threat to the market presence that Amul has in the ice-cream
segment. And though this is a matter of great pride and accomplishment, it has also made Amul
complacent in its operations.

7

Table of Contents

I Acknowledgement ..................................................................................................................... 5
II Abstract .................................................................................................................................... 6
III Table of Contents ..................................................................................................................... 7
IV List of Figures ......................................................................................................................... 8
V List of Tables............................................................................................................................ 9
VI Introduction............................................................................................................................10
1.1) Overview.........................................................................................................................10
1.2) Need of study...................................................................................................................13
1.3) Objective .........................................................................................................................13
VII Research Design ....................................................................................................................13
P1
2.1.1) The Research ................................................................................................................14
2.1.2) Data Source Specifications.............................................................................................14
2.1.3) Data Collection Procedure .............................................................................................15
P2
2.2.1) Methodology.................................................................................................................17
2.2.2) Data Collection Procedure .............................................................................................17
XI Results and Findings ...............................................................................................................18
XII P
1
......................................................................................................................................18
XIII P
2
.....................................................................................................................................24
XIV Comparative Analysis ..........................................................................................................26
XV Recommendations .................................................................................................................27
XVI Conclusion ..........................................................................................................................30

8

List of Figures


Figure No. Description Page
1 Market Share (Branded) 5
2 Competition 5
3 Indian Ice-cream Market:
Sales in Value
6
4 Branded v/s Grey Market 6

9

List of Tables


Table No. Description Page
1 List of Parlours visited 12
2 Brief Comparison table of
offerings and pricing by Amul,
Vadilal and Havmor
18

________________________________

10

1) Introduction

Indias place in the sun would come from the partnership between wisdom of its rural people and
skill of its professionals. Dr. Verghese Kurien

The above words are from the Milkman of India, Dr. Kurien, a visionary
of India, who transformed the rural face of India on the back of social-
economic reforms. As the chief architect of Operation Flood, he was
able to convert an initial investment of Rs. 1300 crores into regular
annual income of Rs. 2, 00,000 crores for farmers of India.

1.1) Overview

GCMMF Ltd. (Gujarat Co-operative Milk Marketing Federation) is an organisation that is credited
with the marketing of the brand Amul. After a survey in 1995, Ice-cream manufacturing was started.
Since then, it has become a premium segment for Amul, taking its profits to new heights. Lately Amul
has revamped the old yellow logo and come up with a new stylish blue logo. Amul has expansion and
innovation on its agenda since the last two years and has seen 18000 cr. worth of turnover. It is a
market leader in the icecream segment, with 40% market share in the 3000 cr. Market and is headed
by Shri. S. P. Singh.

There are various reasons behind Amuls Ice-cream being Indias no. 1 selling brand. The superior
technology and the state of the art facilities all accredited with ISO 9001/9002 certificates. It has won
several awards from consumer forum, rated no. 1 by CERC, Ahmedabad. Because Amul has its own
brand of fodder, it ensures quality in the food to the animals also. So even they are healthy and fit and
have superior quality of Milk, translating into superior quality in all other dairy products.

40% market share in the ice-cream segment is appreciable. With the second highest market share at
13%, there is a lot to catch up for the competitors. The following graph divulges us into the market of
ice-cream and who captures how much percentage. The second highest market share is of Kwality
walls and it is far behind at 13%. The USP of Amul is its distribution network, which has formed on
the basis of Milk distribution. It will be very difficult for the other brands to form such a distribution
network with such high penetration in the rural markets of India.


Figure 1
Figure 2
11





Mr. Kapil Mathur, our mentor said to us, Ice-cream is an impulse product. You rarely plan in the
morning that you will have ice-cream today. At some point during the day, you see a poster or a shop
somewhere and you just go and get it. The ice-cream market in India is vast and constantly growing.
When the company entered the market, on an average, one person consumed 100ml of ice-cream in a
year, but this has gone up to 400 ml per person per year now.

The Federation had to grow in both volume and value. How are they doing that? In 2013, Amul was
opening 3 stores a day, and now has more than 7000 stores all over the country. Investing in these
stores, advertising, and creation of new flavours, new SKUs to bring in more variety is the need of the
hour, and Amul has succeeded in it. Yet there is a long way to go and enough room for improvement
as is with every organization this big.

GCMMF in itself has 45 offices all over the country, with 750 employees. They have ice-cream
facilities at Gandhinagar, Vadodara, Anand, Palanpur, Kolkata, Mumbai and Tarapur.

The concept of frozen highway was explained in good detail. Frozen highway is a term used to
describe an intricate and detailed network of manufacturing facilities, distributors, cold storages and
most important, refrigerated trucks for transport of dairy products. Two times a week, is the normal
order given by a retailer, and to cater to this large demand, Amul needed to have such a network in
place. It is very important to have such a network, especially during the summer season, when the
frequency of order increases.

At first, Amul had the ordinary method of supplying and selling our products through the retailers and
grocery stores like any other FMCG product. But, retailers, it found, had no loyalty to a particular
product or brand. They would keep and sell and promote what gives them most profit or incentives.

So, in 2004, Amul brought in the concept of APOs (Amul Preferred Outlets). The concept was
basically, owning a franchise, selling only Amul products and services. For a standard deposit of
25,000, Amul provides them with flex-boards, a supply chain, preference in supply for new and old
products, special schemes and offers to pass on to the consumer.
Figure 3
Figure 4
Figure 3
12

Extending this model further, Amul came up with something known as scooping parlours to counter
the Havmor eateries and ice-cream parlour model. Here the amount of deposit increased a bit and the
amount of investment also increased by a 1-2 lacs so
as to follow the company norms to have
standardization across all scooping parlours. All of
them had to have a new scooping fridge, orange
colour painted walls, Chairs and tables designed by
Amul, banners and posters as advised. The advantage
of a scooping parlour was they had higher profit
margin than normal parlour, as high as 80% in the
scoops. As of now, there are about 1,000 Scooping
Parlours all over the country.



According to the Annual Report of GCMMF Ltd. of 2012-13, the number of APOs in the country is
7,000 which they hope to take up to 10,000 by 2015.

As with any business, this 10 year-old endeavour, though vast and very strongly established, has a few
chinks in its armour, and the job assigned to me is to find these and advise possible solutions to the
issues found.

13

1.2) Need If the Study
Amul posted a Rs. 18,143 Cr turnover in the FY14, a 32% jump from the previous year and a 23%
CAGR over the last 6 years. Such a large organization looks a big magnificent engine at work, but
when closely examined, it too might have several problems at the grass root levels, as is common with
every organization this big. Amul is unique in its own way by maintaining a consistency in the quality
of the product and never compromising with the low cost pricing strategy they had adopted from the
start.
Over the last couple of years, Amul has implemented the mantra of expansion. Such rapid growth
does not come without its own package of shortfalls. Especially the ice-cream segment has been a
focus for the company. The entire ice-cream market valued at around Rs. 3047 crores and Amul has
captured a considerable market share of 40% in this sector. The other focus of expansion has been
Amul preferred outlets. In FY13, Amul had been opening 3 APOs a day each, and had a tally of 7000
parlours. These were special retail outlets where one can find only Amul products for sale. These
APOs have become the backbone for the retail segment of the company and require constant attention
as these people are in direct touch with the consumer.
We, me and one more student, Jubin Goel, were given the task of weeding out the problems at the
grass root levels by getting in touch with the retail owners of these APOs and finding out the pain
areas that they and hence the company faces and try and resolve them. The sample size of 60 APOs
was scattered over the main HQ city, Anand, and the neighbouring city of Vadodra.

1.3) Objectives
P1- To understand APO servicing pain areas by meeting with the retailers of the APOs and meet
with the distributor sales team as to understand the problems they tackle with these parlours.
P2- Meet the outlets of competitors and understand their offerings to the customer and servicing
standards as compared to Amul parlours.
Under the guidance of Shri Bharat Patel, Branch manager, Anand, GCMMF Ltd., we started out the
project and by mutual consent, we divided up the parlours among ourselves so as to improve
efficiency and the results obtained are conclusive and unbiased.


14

2) Research Design
P1
2.1.1) The Research
Our research into the project started at a basic level, by studying about the company. A 120 slide
induction presentation at the start of the project gave us a deep insight into the business model of the
company and its various products it offers to the end consumer along with the marketing strategies
employed by GCMMF, Amuls marketing body. It also explained the current market scenario, the
market segmentation and the market share held in the ice-cream faction, Sales and servicing and the
plan and vision of the company. The company has set out a target of turnover of Rs. 21,600 cr.
We met our project guide and mentor Shri. Bharat Patel, and Mr. Kapil Mathur Sir, who helped us
understand the basic mind-set of a retailer, of how he thinks, how he sells, how his attitude affects the
sales of the company. The common hurdles faced at all the three levels, that is, the retailer level, the
distributor level and the manufacturing level were all explained in detail. The companys distribution
network was explained at how a certain product reaches the end consumer.
2.1.2) Data Source Specifications
Here are the list of the Amul Preferred Outlets and Scooping Parlours Visited by me:-

Name of Parlour Retailer Location
Niks Scooping Parlour Jignesh Bumia Vadodra
Hari Om Scooping Parlour Arvind Bhai Vadodra
Narmada Amul Parlour RamBhai Patel Vadodra
Maa Santoshi Amul Parlour Nitinbhai Shah Vadodra
Jay Jalaram Amul Parlour Ankit D. Patel Vadodra
Gayatri Parlour Rahul Bhai Vadodra
Kunal Parlour Mr. Vinesh Bhai Vadodra
Shiv Parlour Rekha Madam Vadodra
Ananya Amul Scooping Parlour Saurabh Bhai Vadodra
Shreenathji Amul Scooping
Parlour
Ms. Priya Vadodra
Rashi Amul Parlour Rajeshbhai Vadodra
Auro Kool Parlour Shailesh Sir Vadodra
Arihant Amul Scooping Parlour Paresh Sir Vadodra
Govardhan Parlour Mr. Ashok Vadodra
Patel Amul Parlour Rai Himanshu Vadodra
Jyoti Hardware Scooping Parlour Dinesh Patel Vadodra
Jyoti Hardware Amul Parlour Dinesh Patel Vadodra
Mittal Amul Parlour Ajay Agarwal Vadodra
Maa Amul Parlour Arvind Bhai Vadodra
Cream and dream Scooping
Parlour
Paritosh Pathak Vadodra
15

Param Amul Parlour Arvindbhai Patel Vadodra
Harshraj Amul Parlour Harshad Chawla Vadodra
Patel Amul Parlour Brijesh Sir Vadodra
Riddhi Amul Parlour Vadodra
Uma Amul Parlour Vijay Patel Vadodra
Riya Amul Parlour Vijay Sharma Vadodra
Maruti Enterprise Shrikant Vadodra
Vraj Amul Parlour Upma Shah Vadodra
Kiran Amul Parlour Vipul Patel Vadodra
Nishi Corner Mahaveer Jhala Vadodra
Sahakaari Grahak Bhandar Mukesh Bhai Vadodra

2.1.3) Data Collection Procedure
All of these were very insightful details and we have used our skill and perceptions to find out the
maximum pain areas that the company can resolve. The conversations with the retail outlet owners
also were quite interesting as they had some key matters to discuss. The following sample with the
APO owner is the sample questionnaire.
Sample Questionnaire
Can I know the name of the Parlour Sir?
Taru Enterprises

The name of the person who handles the day-to-day activities?
Jalpesh Patel

Since how long has the parlour been in business?
4 years

Which is the best-selling flavour in ice-creams for your parlour?
Vanilla

Which is the best-selling SKU in ice cream?
Cups and family packs both have good sales here

What are the demographics, age-wise distribution of customers?
All kind of customers visit our store, but women generally are the common customers for
milk and butter.

Seasonality factor in flavours?
None as such, Mango flavour goes more in summers, and Vanilla is an all-weather favourite.

How long did it take for recovery of the investment you put in?
Two years approximately


16

Do you keep safety stock?
Yes, of course. The person who keeps good inventory in the summers is a winner, because
we know certain products will take time to come by again.

Who is your distributor sir?
Sampreet enterprises

What is the lead time?
Usually when we place the order in the morning, the products get delivered by the afternoon.
So 6-7 hours of lead time.

Do you have any issues with the distributor?
The products are delivered on time. Time is not an issue ever. But we never get what we
ordered for. We always have to settle down for products which are available with the
distributor.

Sir its the summer season. So the plants are working at full capacity and we are doing our
best to provide the products you demand.
Yes, we understand its summer, but thats when the sale is the maximum and if during that
period we are not supplied with our demands, what use?

Do you have any complaints regarding the products?
There are plenty of them. The major problem is related to packaging. Several times we get
ice cream cones which are not properly packaged, they use way too much paper, and
sometimes cones are damaged during transportation. Sometimes you get empty wrappers and
torn wrappers in candy bars like mango dolly and Chocobar.

These products which are damaged can be replaced under the companys replacement policy.
Have you filled out the PCF forms?
The replacement policy is very obscure. They come once in two three months and do not
replace half the products also. We do not were to go other than that.

Any suggestions on your part as in for advertising and marketing?
The schemes you launch every month are not conveyed to the customer. You should focus on
increasing the marketing parameters.

Ok sir, thank you, which will be all. Thank you for your cooperative and we will try and get
these problems resolved at the earliest.
Ok, thank you and good luck.

This is the sample questionnaire and responses that we got through the retailers. There are
other responses not included here which will be part of the results and conclusion. The
research methodology is exploratory because we need to find out the problems at the grass
root levels which the company is not aware about.


17

P2
2.2.1) Methodology
In order to remain market leader, one needs to improve their products and as well as look out for
competition. Amul has a whole does not face much threat from any other company and currently is a
market leader in all leading dairy products. However, they face stiff competition from Vadilal and
Havmor in the ice-cream segment and some competition from Mother Dairy in the Dairy segment in
the north.
2.2.2) Data Collection Procedure
We were given the task of watching out the different schemes and offers these companies had to offer
to the customer and where they have the scope to build up the market. We visited several Vadilal
Hapinezz stores and Havmor eateries to find out, sometimes as customers, sometimes as
representatives from their respective company. Some of them in Anand while others in Vadodra.

18

Results and Findings
P1-
I have identified the following pain areas that the cooperative needs to work upon immediately. They
are divided into different segment and will describe in detail as we progress through each segment.
Product
Packaging There are several concerns here to take care of. They are as follows:

Damaged products:

There have been several instances all over the APOs where the retailers get damaged
products; especially in Cones and Candy bars like Mango dolly and Chocobar. In a
batch of 20 cones, if two or three cones are damaged, then the entire margin of that
packet is lost for the retailer. A retailer on his tries his best that the consumer does not
get a damaged product, but sometimes during peak hours, one or two slip by and this
can cause serious problems for the image of the company as quality products
provider.

Furthermore, if the retailer stops gaining money on products and if he sometimes has
to shell out from his own pocket, this is act as a demotivating factor and serve as
negative attitude which will in turn harm the sales and at the end, profit for the
company.

The damage of the product is not related to ice cream only. The retailers who keep
milk also complain about leakage. A person earns a margin of 48 ps. per 500gm of
milk which is sells for Rs. 22/23 depending on the SKU. Now if he get one leaked
pouch in a crate, the entire margin of the whole crate is down the drains. Moreover all
the milk pouches would have milk coated on the outer side of the pouches, which will
we a hassle for the customer and provides a bad image in the mind of the customer. If
the retailer takes the time to wash these pouches, it is problematic for him to wash
each and every pouch.

Moreover the hygiene is affected which in turns affects the quality of the product and
this is where Amul faces the worst threat: providing bad quality products to their
loyal customers and jeopardize the trust of a consumer.

19

Overpackaging:

There have been several instances when the cones have been packaged with too much
paper. The paper required to wrap around a cone is required less but a paper of larger
size is used and it makes the cone look deformed although it is not. Several retailers have
told that customer in this case returns back the product despite assurance from them.
Perception of a certain product is a huge factor for a customer to buy a product more so
in case of impulse products like icecream.

Colour of the new packaging:

The family packs have got a new cover, white cover with the new blue logo of Amul.
The previous packages where ones which for example, had green coloured cover for
Kesar pista, brown coloured cover for Chocolate, white coloured cover for vanilla. Now
the new packets have all the same colour and just a strip of colour is seen which cannot
be recognized easily. When a retailer stacks them up, he has to read the flavour before
handing out the product, and reading every flavour before you get the product you desire
can take up a lot of time, which can be tough during peak hours.

Packaging in a crate:

The retailers have several places informed that the packaging of cones when they came
in a unit of 8 where lesser damaged than now when they come in a packet of 20 where 10
cones are stacked over 10 cones. Even the mango dolly packets are not stashed
symmetrically and just filled up in the box. As a result, while transportation, they tend to
get deformed or lose their shape, thus reducing the value and quality of the product.



Expiry date too close:

Retailers often complain that they get supplied with old products while reliance mart and big
bazar get fresh products which are just two or three days old. The volume at which these
products are ordered by the supermarkets often justify them giving priority, but providing the
preferred outlets with products dating three months old is not fair either. These products
20

often surpass expiry dates before they are sold out and then the retailer cannot sell them.
These products need to be taken back by filling in a PCF form but the frequency of PCF
forms is very inconsistent.

Often they are just lying there gathering dust on the shelves of APO. If an expired product
gets sold by mistake, it can spell trouble for the company and the outlet also. So it is of
utmost importance to give preference to the outlets.

Quality of the product:

We asked retailers if there were customer related complaints. The customers often brought
back 1 kg or 500 gm SKU of Shikhand with complaints of the product going stale. One
parlour complained that a customer brought back a batch of chocobars because he found
wooden sticks in the candy. There has been a large amount of quality mismanagement it
seems because of rapid expansion, which needs to be fixed immediately. The quality of the
competitors like Havmor is also considered superior by the customer, so if Amul drops its
quality, their market share will rise. Though these do not compete in Dairy, Amul faces
tough competition from Mother Dairy.

There have been instances in cone as well. The waffle in a cone is supposed to be solid, but
when one eats the cone, it turns out to be so soft that the value addition for the cone is
negated. This issue is consistent with all the cones and needs to be addressed.

Flavours once started are not continued:

The retailers have complained that Amul launches new flavours every month. Like recently,
it started Pan Nawabi, but it is not able to provide the retailers these new flavours
consistently. As a result, though there is a demand for a product in the market, they are not
supplying the product. This results in a bad reputation for the cooperative and provides an
opportunity for the competition to move one step ahead and capture that market created by
the demand. The customers have often complained to the retailers against it and the company
needs to get an algorithm set to predict the demand for the product.





21

Services:
Replacement policy

This is one of the major concerns for the company. Out of 30 retailers, 25 have told that the
replacement policy is in shambles. The policy is such that the products that are provided
damaged or get expired during the cycle, can get replaced. But for that, you have to fill out a
Product Complaint Form which is provided by an Amul representative. The representative
has to be informed first through a call or message that a complaint needs to be filled out.

The retailers have complained that the representatives do not come immediately and need to
be called several times in order to get a PCF form. They hardly visit, once two or three
months. Even after the PCF form is filled out, it takes months for Amul to issue a credit note,
which they can use to procure products of the same amount from their respective distributors.
And when they are refunded, they are refunded less than half the amount they filled in for.
The amount of damaged goods which a normal APO owner is supplied with is quite high. If
there is no change in the replacement policy, it will leave the retailer disgruntled against the
brand.

For milk, everyone has a complaint. The replacement policy is even more muddles here. The
milk pouch if torn from the horizontal seam and not the vertical seam will not be replaced.
Even if there is damage in the vertical seam, the pouch will get replaced for more than three
damaged pouches. The policy needs to be revised because main customers for Amul are for
milk, on which it has created its brand value.

Provision for Material related to advertising:

Amul provides several places with many materials for branding. These include flex boards,
pamphlets, stickers, new sign board carrying the new Amul logo, light boards and much
more. There have been various retailers complaining that a provisional store in front of them
has got all the sign boards with the new logo and it still has not received any.

One APO in Vadodra did not even get the paint job and the basic stickers that are required of
every APO. So this is proven that there is a lack of communication with the Cooperative. The
most selling APO of Vadodra, have asked to get umbrellas for three to four months, but still,
have not received them even as they are lying with the company to provide. If you treat your
most sales creating APO this way, it sends out a wrong message to other potential APO
owners and to customers as well.

APOs have been asked to keep only products related to Amul. So they need to be given
preference over other stores because they represent Amul directly. Prioritising the supply of
branding material will go a long way in building trust between the parlours and the
cooperative Amul.

22



Communication Gap:

There has been a big communication gap between a retailer and Amul. Amul has used this
concept of franchising by opening up preferred outlets all over the country but you need to be
in touch with these outlets in order to maintain touch with your core end consumers.

The retailers have complained about not being heard and their grievances not being
addressed by the cooperative. They say they have no fixed place to go and note down their
complaints and end up calling the representatives again and again. A smooth system for
addressing grievance should be put in place.

Human resource training:

There is lack of proper skill while handling a parlour, starting from dealing with the
customer, to stacking the place with the products. Many parlours visited by me did not have
proper display. It is of utmost importance that the products that are being sold should be put
up in a neat and clean display so as to catch the customers eye. Though there have been
programmes to incentivise the retailers who keep up good displays, it is too little and too
infrequent.

The retailers can be trained to make sundaes out of different icecream flavours. This was an
interesting concept and also these programmes frequency needs to be increased so as to
create variety. Variety is a catalyst to sell any impulse product. Ice-creams form a part of
these products. The retailers can be trained in general too to talk with consumers.

Concerns regarding distributors:

There have been several instances of a distributor bull-dozing a smaller retailer. For e.g., not
providing the APO owner with new flavours, not providing the retailer with the products he
23

asked for, not providing the delivery on time, etc. These are small but substantial issues for
the retailer. An APO outlet, how small, should be given preference, that is how every retailer
feels.

There was a parlour owned by Tribhuvandas foundation where the operators of the APO
found discrepancies in the billing from the distributor end. These voices have been unable to
reach the right people in the cooperative and there needs to be setup a transparent system in
place to address this issue.

Pricing:
Pricing has been a concern for some retailers. Products that were like the 10Rs/- Chocolate
cone are not selling anymore because the company increased the price to Rs. 12. Coins have
always been a problem in India. Products like butter come at Rs. 36 and it is very hard for the
retailer to give 4 Rs. coins every time. Products have seen an increase in their value by 2 Rs.
like Frostic, Chocobar, Tricones, etc. Some retailers have voiced out their concerns to solve
this problem and round off to Rs. 5.

Promotion:
I have visited 8-9 Scooping parlours of Amul over Vadodra. The problem here is that the
customers do not even know that there is any scheme going on. There is a scheme on every
15
th
of the month- the scooping 100ml cup will cost you Rs. 15 for a particular flavour of that
month. Now all the promotion for this scheme is done by putting up posters on the glass doors
of these parlours. No TV ads, No news ads. The retailers have complained that the customer
doesnt know that there is such a scheme.

Even for new flavours that are launched every month, the promotional activity is too less. In
order to compete against competition such as Havmor and Vadilal, which have tons of options
to provide customers, Amul too, needs to bring in more variety and flavours, and most
importantly promote them.

Secondly, are the offers made available by Amul reaching the end consumer? If not, how do
they find out? There is no system in place to know if the promotional activity done by Amul
is being supported by the APO. We visited this parlour in Anand, which had a Rs. 15 scheme
for the day sticker put up on its glass door. We went in to try it, but he said that Amul has still
not provided us with the subsidized ice-cream, to provide to the customers. There is a visible
lack of communication between the chief engine and the machinery, without which a car will
not move forward.


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P2-

Analysis of Competition:-

Havmor:

Havmor has its eateries spread out all over the city. They have a business model where an
icecream parlour along with a restaurant where customers can have various types of snacks.
What we noticed in the eateries was how professional they functioned. Waiters were provided
with a uniform which the person sitting at the parlour outside would be wearing the same.
This gave a professional outlook to the brand.

Another advantage Havmor had over Amul was the number of SKUs it provided in the ice-
cream segment. It provided way more variety than Amul. A segment depending on impulse
purchases needs to have variety. Havmor has 14 flavours in cone as compared to 3 in Amul.
And 25 party pack flavours as compared to 11 of Amul. The price was very similar and the
quality perception for ice-cream is high as compared to Amul.



They have also come up with some new flavours for the season- caramel biscotti and fresh
mango. They are the new flavours that Havmor is promoting this season and it has stuck to its
policy of providing variety to the customer. They have no such scheme in place currently.

The packaging was another highlight. While Amul stashed away 20 pieces of mango dolly
ice-creams in a box, Havmor places them neat and clean and hence, the damage is reduced.
The defect rate decreases and so, the replacement rate is much lesser, keeping the retailer
satisfied as well.

25



The above images show the proper stacking of the candy-bars into boxes.

Vadilal:

Vadilal has also a small albeit significant market share in the ice-cream segment. They
operate out of parlours named Hapinezz parlours. They too offer a wide variety of products to
the customers and the prices they offer are very competitive. The party packs of 700 +700 ml
are the lesser priced as compared to 750 + 750 ml of Amul. Moreover they offer as much as
19 flavours in the family pack as compared to 11 in Amuls.

However they lack in promotional activities. Even the parlours are not well maintained. There
are not stickers or banners. Not even inside the parlours. The banners on provisional stores are
less and infrequent.

Vadilal has no particular schemes going on right now. Their main USP is their number of
SKUs. Right from a 5-6 Rs. licks to Vadilal premium segment ice-cream, Gourmet, it offers
the consumer a wide variety. Whereas Amul has only two flavours licks priced at Rs. 10 and
the premium ice-cream, Amul Crme offers only 2 flavours as compared to Gourmets 9.

Vadilal even tries to rope in retailers by offering them those free deep-freezers, by going
around Amul and trying to rope in disgruntled retailers by promise of better special service.

Packaging in Vadilal was of superior quality with nearly zero defects. The retailers
emphasized that the products were packed perfectly, be it a cone or a candy and they would
never receive a damaged product as compared to the frequent damaged products received
from Amul.








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Comparative Analysis
Category Amul Vadilal Havmor
Flavour/
Variants
Flavour/
Variants
Pricing
Stance
Flavour/
Variants
Pricing Stance
Tricone 3 flavours 6 flavours Costlier 10 flavours/
variants
Competitive
Sundae 7 flavours 10 flavours Competitive 6 flavours Competitive
Fruit and Milk
Candy
2 flavours 5 flavours Competitive 3 flavours Competitive
Fruit Candy 2 flavours 4 flavours Costlier* 4 flavours/
variants
Competitive
Low-end Ice Candy 2 flavours 2 flavours Competitive 1 flavour Competitive
Party Pack (1+1) 11 flavours 19 flavours Competitive 25 flavours Competitive
Chocobar 6 variants 2 variants Competitive 6 flavours/
variants
Costlier
2 litre Pack 6 flavours 4 flavours Cheaper** 6 flavours*** Competitive
Kulfi 2 flavours 8 flavours Competitive 3 flavours Costlier
Premium 2 flavours 9 flavours Competitive 4 flavours Costlier
Sugar-free cups 2 flavours 3 flavours Costlier 2 flavours Costlier
Sugar-free Party
Pack
2 flavours 1 flavour Costlier 3 flavours Costlier

* Vadilal Falala is costlier but also offers actual fruit pieces in the ice-cream, making it a superior
offering.
** Vadilal 2 litre packs are Frozen Dessert.
*** Havmor has 1200ml packs instead if the usual 2000ml packs by Amul and Vadilal.

27

Recommendations

Reduce the defect rate-

The defect rate currently for Amul is quite high. The cooperative needs to find out the reason
behind damaged products and bring in corrective measures as soon as possible. The Candy
Bars have sometimes found to be empty or the wrapper town open, especially for Mango
Dolly and Chocobar. The problem has been consistent for every APO, so there has to be some
fault in the machinery that produces these ice-creams.

Several retailers have informed that the cones have got more damaged since the new
packaging started, where 10 cones were stacked over one another. This is unlike Vadilal,
where there is a pack of 10 cones only in a single box. The box should contain maximum of
10 ice-creams so as to reduce the breakage and leakage in cones.

Bringing down the defect rate will bring several problems to a halt. The retailers will be much
more satisfied and will not have to wait for the PCF form every now and then to register in
damaged products. The customer perception will also be enhanced if they do not receive such
damaged goods, improving the sales of Amul.


Proper packaging:

The Cones and candy bars require special attention to packaging, because thats where they
lack the most. The most selling product of Amul, that is milk, also has issues with packaging.
The paper rolled over smaller cones is not according to its size and needs to be cut properly.
This will not only give it a better look but also save precious wrapping material, bring down
the costs. The better look will help in selling the product more so now because the product
which looks and feels good sells automatically.

Candy bars too need to be packaged properly. There have been instances when the cap of a
Shikhand 1 Kg. SKU is broken. The customer will not take such a product because it will be
damaged, and such an expensive product cannot be easily disposed by the retailer as it is quite
expensive. The packaging of cones into boxes should also be improved so that they are not
broken in transportation. I recommend using boxes of with lesser units of cones.

Colour of Family packs:

The customers have grown accustomed to the colour perception for recognizing the flavours
of family pack; even the retailers for that matter. Standardization is important, but you need
to recognize different SKUs immediately. I recommend adding a bit more colour in the front
of the pack to enhance this effect. After all, the things that are seen the best, are bought the
most.




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Avoid giving out products too close to the expiry date:

A system should be set up in place, first identifying the APO with the most sales. Once the lit
is identified, the products with a lesser expiry period left should be given to the APO with the
most sales because it can move the products quickly. The APO which do not have enough
sales should be given a slightly younger batch. This will have two advantages- firstly, there is
more shelf life left for the product to sell and secondly, it will increase the sale of the
product.

I am not telling you to give out extremely old products to the most selling APOs; they should
be given two months or two older. The retailers will complain but they also know that the
products will move fast. This way Amul can reduce the cost of taking back expired products
and increase its sales.

Tough quality Management Team-

Amul needs to get a tough quality management team in place. The record amount of sales in
Amul, it is bound to have some defective products. The team needs to see that the defect rate
is fixed. Also the team needs to be in touch with the APOs to take swift action because they
will be able to help them know which product is damaged and can be fixed. To maintain the
quality, all the people in the supply chain need to be trained well to understand how to
transport and maintain the products.

Efficient replacement policy:

There was an APO in Vadodra whose distributor directly replaced the product without
having to fill the PCF form. This was a very efficient system because the retailer does not
have to wait for 2-3 months to get their products replaced. Amul can set up a pilot project
involving distributors to directly replace the products without the retailers having to go
around this much.

The distributors have large warehouses and can stock these damaged goods, the retailer does
not have refrigerated space to stock these products and end up throwing them. Amul can later
replace these products of the distributors. This is an urgent requirement for Amul to correct
because I have faced many disgruntled retailers. Either ways, they need to fix the quality and
packaging of products. If the defect rate drops, the replacement policy wont be such a big
issue.

Maintenance of Amul parlours:

Amul parlours offer a franchise when they offer the retailers to open up these outlets. A
franchise will look successful if only it is well maintained. Parlours should be given priority
for advertising, maintenance, new flavours of ice-creams and other promotional activity and
Amul should carry them along, treating them all specially and equally.

It takes months to get a tube-light in light board, another shop has been open for a year yet
there have been no posters or stickers and no flex boards provided. The advantage of giving
29

them priority is that it will spread out a positive word regarding the quality of the franchise
and help in opening up more of them across the country.

Communication:

This is another major issue that needs to be tackled immediately. Many of them have
complained about a communication gap with Amul. Although they own the outlet, yet they
are not able to contact people managing them. Living in a world of technology as
sophisticated as we have right now, it is bizarre that the retailers have such a complaint.

Technology should be used to the fullest. I have a recommendation of a project. Amul may
start it as a pilot project. A system should be set up where the retailers can get in direct touch
with the cooperative. Charging a few bucks more than Amul is charging currently for an
APO, the retailers can be provided with Sim-card equipped tablets. These tablets will have
software which will have the facility to place an order online, by looking up at the stock
available with the distributor currently. The copy of the order desired will also be sent to the
cooperative to get a clear picture of the demand. The use of technology will not only help the
retailer, it will also benefit Amul in identifying a pattern in the demand and supply and where
the brand is lacking and which products does it need to supply more. Moreover it will be a
communication channel through which retailers can directly talk with the chief leadership at
Amul and let them know their grievances if any. Swift and quick action is required for every
big organization to be successful and Amul is a huge cooperative.

Human Resource Training:

In every organization, Human resources are the most valuable assets. After all, it is people
who run a successful organization. The outlet I have visited, there have been more than half
outlets, where I have advised them how to keep up their displays and how to stack ice-creams
in fridges. There was an APO where they used to make different sundaes from different
flavours of Amul icecream.

There can be training sessions, where the retailers can be showed hot to maintain the
products, how to communicate upwards as well as downwards, how to keep up neat and clean
displays in order to make their parlour look hygienic and sophisticated. A hygienic parlour
will drive the sale up for any day because customers trust their products. Moreover these
training sessions will be a very good excuse to bond with the fellow retailers and it will foster
brotherhood which should be the aim for any organization as big as Amul.

Promotional activity:

Amul will have to increase the amount of promotional activity. There are new flavours in the
market which the retailers have stocked up yet the consumer doesnt have a clue about it.
Several have complained of a lack of advertising. Even the menu pamphlets do not carry all
the SKUs that are available. In this scenario, a variety is not being able to be offered to the
customer, which will lead to a decrease in market share of Amul as competition will grab the
opportunity. Havmor and Vadilal have been marketing the new flavours extensively, with
posters put up at every outlet. The scheme at scooping parlours of Rs. 15 for a particular
flavour on every 15
th
of every month goes to the customers through the retailers only. Mind-
30

blowing promotional activity such as this should get more advertising as people will come
and it being a summer season, promotions should increase during this period.


Conclusion

Every big organization, no matter how big, has some or the other pain-areas in each area. The
best thing about Amul is its ability to evolve and move forward by taking everyone along. A
brand this great cannot have become such on its own, but on the unwavering loyalty of its
employees and customers and on Amuls part to cater to each and every need of them.

We were tasked with finding out the chinks in the armour, and there have been quite a few.
There has been a lot to learn here, for the Brand Amul as well as for me. Working at the
grass root levels and understanding the common concerns and a thinking pattern of the
lowest member in a supply chain was enlightening.

I thank all those people who assisted me on this front and the wonderful journey so far and
yet more to come ahead.