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Marketing mix of Amul



Amul is definitely an Amoolya brand. Amoolya in Sanskrit means something which is
invaluable or priceless. With a presence in almost every product which can be made by
milk, Amul has won over hearts along with market share to become a highly valued
brand with an Indian origin. Amul was formed because of a revolt of dairy farmers. And
today, Amul is a brand against which companies want to compete and come on top but
the same is not being allowed by the smart minds in Amul. The reason Amul is such a
strong brand is because of the marketing mix of Amul. Here is an in depth analysis of
the Marketing mix of Amul.
Product in the marketing mix of Amul Amul has a very very strong product
portfolio. Amul product portfolio is comprised mainly of Dairy products. Amul butter,
Amul cheese and Amul ice cream are cash cows for Amul as they have the major market
share in their product category. Amul ice cream is amongst the top 10 ice cream brands
of India.
Amul milk, Amul Paneer and Amul Dahi consumption is on the rise. In fact Amul milk
has 26% of market share in the packaged milk segment. The only disappointing
performance is seen in Amul Chocolates which are a burden for Amul and lot of push is
required for the sales of the same. This is because the chocolate market has established
players like Parle, Dairy milk and others.
The Amul family tree has the following brands Amul Milk, Amul bread spreads, Amul
Cheese, Amul Milk, Amul kool and its variants, Amul pro, Amul ice cream, Amul Paneer,
Amul Dahi, Amul Ghee, Amul Milk powders, Amul Nutramul, Amul mithai range,
Amul mithai mate, Amul chocolates, Amul butter milk. Thus the product portfolio of
Amul considering its dairy origins is astounding. Amul has various competitors based on
different products. In ice cream it is Vadilal, Dinshaws and Havmor. In butter and milk
there is mother dairy, Britannia and others. However, no competitor has such a vast
dairy based product portfolio as Amul. This is the major reason that Amul has a
sustainable competitive advantage over its competitors.
Price in the marketing mix of Amul Amul has a strategy of low cost pricing.
Some may call it penetrative pricing. But penetrative pricing strategy is used when the
market has a high level of competition and a player wants to establish itself in the
market by giving low prices. However, in the case of Amul, when Amul started, there
were no national players and the dairy market was unorganized. During the
introduction stage itself, Amul had a vision to provide their products to end customers
at the best affordable rates. And the same vision is in place even today.
Today also, you will find that Amul butter, milk and cheese are available at affordable
prices keeping in mind the end customers. You may call these products costly, but the
cost has nothing to do with Amuls strategy. Remember that transportation costs as well
as storage and distribution costs are very high in FMCG. Thus, as the cost of
transportation, storage and distribution has increased over the years, so has the cost of
Amul products gone up. But considering their value for the average India consumer,
these products are still priced at an affordable rate.
Place in the marketing mix of Amul Amul has a massive distribution network
because its ice creams, milk, butter and cheese is found practically everywhere. As it is a
FMCG product, Amul follows the methodology of breaking the bulk. The initial factory
output is in bulk. Later on this bulk becomes smaller and smaller and finally one
individual slab of butter or scoop of ice cream is sold at the retail place.
There are two different channels through which Distribution happens in Amul. One is
the procurement channel which is responsible for collection of Milk through dairy co
operatives. The other is the distribution channel which is responsible for distributing
the finalized product to the end customers.
In the procurement channel, the milk is individually delivered from farmers to the co
operatives. The co operatives then collect all this milk and send the bulk to the
manufacturing facility. At the manufacturing facility, the milk is used to manufacture
the finalised products.
In the distribution channel, there are carrying and forwarding agents,
distributors, dealers and retailers involved. There are also Amul shoppes which sell all
products in the Amul product portfolio. The distribution is as follows.
Amul >> Carrying and forwarding agent >> Distributor >> Dealer / Retailer / Amul
Shoppe >> Customer
Amul >> Modern retail
Thus there is a lot of transportation involved for all of Amuls products. However, the
distribution channel of Amul ensures that the products reach every nook and corner of
India.
Promotions in the marketing mix of Amul Amul is responsible for one of the
most unique and longest running outdoor campaign as well as one of the most known
outdoor advertising characters The Amul girl. We would like to take this opportunity
to specially thank Mr Eustace fernandes, the creative brain behind the sweet girl. But we
should know by now that the Amul girl is hardly sweet or cute. She is known to be the
most naughty advertising girl ever. Amul hoardings mainly feature the current news and
are used to take a tongue in cheek viewpoint at current happenings. However, each
advertisement hits the nail on the head.
The promotions of Amul are mainly for butter but for all the other products there is
hardly any promotions. During the launch of products, Amul is known to go ATL and
advertise milk, butter etc. The Smita Patil ad wherein Smita patil is shown as a village
milk collector is one of the most famous ads for Amul. But overall, the main
advertisement is BTL through outdoor, trade promotions, discount schemes and sales
promotions.
The major reason for Amuls absence in hardcore advertising is that Amul does not want
to give away margins in advertising its products. As per Amul, their maximum budget
for advertising is 1% of the turnover. Above and beyond that will directly affect the cost
of the product. And the major reason for Amuls strong presence in the market is its
excellent quality combined with the affordable price. Thus, overall promotions will
always be low for Amul except for the outdoor advertising of Amul butter.
This concludes the marketing mix of Amul. The bottom line is that we love that an
Indian brand like Amul has reached such staggering heights and that we are a part of the
time when such a white revolution took place.




FMCG sector Overview
The fast-moving consumer goods (FMCG) sector is an important contributor to
Indias GDP and it is the fourth largest sector of the Indian economy. Items in this
category are meant for frequent consumption and they usually yield a high return.
The most common in the list are toilet soaps, detergents, shampoos, toothpaste,
shaving products, shoe polish, packaged foodstuff, and household accessories and
extends to certain electronic goods. The Indian FMCG sector, which is the fourth
biggest sector in the Indian economy, has a market size of `2 trillion with rural
India contributing to one third of the sectors revenues.
The Indian FMCG sector is highly fragmented, volume driven and characterized by
low margins. The sector has a strong MNC presence, well established distribution
network and high competition between organized and unorganized players. FMCG
products are branded while players incur heavy advertising, marketing, packaging
and distribution costs. The pricing of the final product also depends on the costs of
raw material used. The growth of the sector has been driven by both the rural and
urban segments. India is becoming one of the most attractive markets for foreign
FMCG players due to easy availability of imported raw materials and cheaper labour
costs.


Indian FMCG Industry

has grown at ~17%CAGR in the last 5 years driven
by rising income
levels, increasing urbanisation, strong rural demand and favourable demographic trends.
sector accounted for 1.9% of the nations total FDI inflows in April 2000- September 2012.
Cumulative FDI inflows into
India from April 2000 to April 2013 in the food processing sector stood at `9,000.3 crore, accounting for
0.96% of overall FDI
inflows while the soaps, cosmetics and toiletries, accounting for 0.32% of overall FDI at `3,115.5 crore.
-third of the sectors revenues.
dian population and accounts
for 50% of the total
FMCG market.
cross $80 bn by 2026 in
towns with population of up to 10 lakh.
the lowest in the world, after China & Indonesia, giving it a competitive
advantage over other
countries.
border inbound merger
and acquisition (M&A) deal so far in FY14 and is the fifth largest India Inbound M&A transaction on
record till date.
-14, which would hit major
industrial conglomerates
like ITC, VST Industries in the short term.


history
The Birth of Amul
It all began when milk became a symbol of protest
Founded in 1946 to stop the exploitation by middlemen
Inspired by the freedom movement
The seeds of this unusual saga were sown more than 65 years back in Anand, a small town in the state of
Gujarat in western India. The exploitative trade practices followed by the local trade cartel triggered off the
cooperative movement. Angered by unfair and manipulative practices followed by the trade, the farmers of
the district approached the great Indian patriot Sardar Vallabhbhai Patel for a solution. He advised them to
get rid of middlemen and form their own co-operative, which would have procurement, processing and
marketing under their control.

In 1946, the farmers of this area went on a milk strike refusing to be cowed down by the cartel. Under the
inspiration of Sardar Patel, and the guidance of leaders like Morarji Desai and Tribhuvandas Patel, they
formed their own cooperative in 1946.

This co-operative, the Kaira District Co-operative Milk Producers Union Ltd. began with just two village dairy
co-operative societies and 247 litres of milk and is today better known as Amul Dairy. Amul grew from
strength to strength thanks to the inspired leadership of Tribhuvandas Patel, the founder Chairman and the
committed professionalism of Dr Verghese Kurien,who was entrusted the task of running the dairy from
1950.

The then Prime Minister of India, Lal Bahadur Shastri decided that the same approach should become the
basis of a National Dairy Development policy. He understood that the success of Amul could be attributed to
four important factors. The farmers owned the dairy, their elected representatives managed the village
societies and the district union, they employed professionals to operate the dairy and manage its business.
Most importantly, the co-operatives were sensitive to the needs of farmers and responsive to their
demands.

At his instance in 1965 the National Dairy Development Board was set up with the basic objective of
replicating the Amul model. Dr. Kurien was chosen to head the institution as its Chairman and asked to
replicate this model throughout the country.
GCMMF

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing
organisation with annual turnover (2013-14) US$ 3.0 billion. Its daily milk procurement is approx 13.18
million lit per day from 17,025 village milk cooperative societies, 17 member unions covering 31 districts,
and 3.23 million milk producer members.

It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL',which aims to
provide remunerative returns to the farmers and also serve the interest of consumers by providing quality
products which are good value for money. Its success has not only been emulated in India but serves as a
model for rest of the World. It is exclusive marketing organisation of 'Amul' and 'Sagar' branded products. It
operates through 53 Sales Offices and has a dealer network of 10000 dealers and 10 lakh retailers, one of
the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee,
butter, cheese, Pizza cheese,Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc.

GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House"status. Many of
our products are available in USA, Gulf Countries,Singapore, The Philippines, Japan, China and Australia.
GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for
the last 13 years. For the year 2009-10, GCMMF has been awarded "Golden Trophy" for its outstanding
export performance and contribution in dairy products sector by APEDA. In 2013-14, GCMMF took giant
strides in expanding its presence in International markets. Amuls presence on Global Dairy Trade (GDT)
platform in which only the top six dairy players of the world sell their products, has earned respect and
recognition across the world. By selling milk powders on GDT, GCMMF could not only realize better prices as
per market demand but it also firmly established Amul in the league of top dairy players in world trade.

For its consistent adherence to quality, customer focus and dependability, GCMMF has received numerous
awards and accolades over the years. It received the Rajiv Gandhi National Quality Award in1999 in Best of
All Category. In 2002 GCMMF bagged India's Most Respected Company Award instituted by Business World.
In 2003, it was awarded the The IMC Ramkrishna Bajaj National Quality Award - 2003 for adopting
noteworthy quality management practices for logistics and procurement. GCMMF is the first and only Indian
organisation to win topmost International Dairy Federation Marketing Award for probiotic ice cream launch in
2007. For the innovations, GCMMF has received AIMA-RK Swamy High Performance brand award 2013 and
CNN-IBN Innovating for better tomorrow award in 2014. For the tree plantation activity GCMMF has received
seven consecutive Good Green Governance award from Srishti during 2007 to 2013.

The Amul brand is not only a product, but also a movement. It is in one way, the representation of the
economic freedom of farmers. It has given farmers the courage to dream. To hope. To live.

GCMMF an overview
Year of Establishment 1973
Members
17 District Cooperative Milk Producers'
Unions
No. of Producer Members 3.23 Million
No. of Village Societies 17,025
Total Milk handling capacity per
day
23.2 Million litres per day
Milk Collection (Total - 2013-14) 4.79 billion litres
Milk collection (Daily Average
2013-14)
13.18 million litres
Cattlefeed manufacturing Capacity 6190 Mts. per day
Sales Turnover -(2013-14) Rs. 18143 Crores (US $ 3.0 Billion)



AWARDS

GCMMF Receives Prestigious CNN-IBN Innovating for a Better
Tomorrow Award

Amul wins AIMA High Performance Brand Award-2013 for brand Amul

Shri R S Sodhi, MD-GCMMF, receives prestigious QIMPRO GOLD
STANDARD Quality Award 2013

GCMMF wins the SAP Award for Customer Excellence (SAPACE) 2013
under the category of "Best Run Award in Finance"

ET-Corporate Citizen Award of the Year 2010-11 to GCMMF

Amul receives Green Globe Foundation Award

Dr. V.Kurien honoured with Life Time Achievement Award

GCMMF receives Srishti's G-Cube Award - 2010

Amul Bags International Dairy Federation Award

Amul Bags Srishti G-cube Award For Good Green Governance - 2009

Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit

Ramkrishna Bajaj National Quality Award - 2003

Qimpro Gold Standard Award - 2003

Amul - The Taste Of India (GCMMF) Receives International CIO 100
Award For Resourcefulness

Rajiv Gandhi National Quality Award - 1999