World’s BiggestVegetarianCheese Brand

World’sLargestPouchedMilk Brand

Presented By

-- hARSHAD BAFNA -- RISHABH CHOPRA

~ AMUL, an Introduction & History~ Reasons for Success and its Growth rate~ AMUL- Business Model & Business Strategy~ IndustryAnalysis & 3 C’s of AMUL~ SWOT Analysis & BCG Matrix of Amul~ Market Segmentation- Customer Based & IndustryBased~ AMUL Product Portfolio & its Product Strategy~ Competitive sustainable advantage (CSA) of AMUL` AMUL is going Globally…………….

Introduction & HistoryFormed in 1946, is a dairy cooperative movement in India with 250liters of milk per day with name KAIRA DISTRICT CO-OPERATIVEMILK PRODUCERS’ UNION.A brand name AMUL is managed by Gujarat Co-operative MilkMarketing Federation Ltd. (GCMMF).The brand name Amul means “AMULYA” (suggested by a qualitycontrol expert in Anand). This word derived form the Sanskrit word“AMULYA” which means “PRICELESS”.Amul has spurred the white revolution of India, which has made Indiathe largest producer of milk and milk products in the world and theWhite Revolution has finally created a billion-dollar brand.Today Amul dairy is No. 1 dairy in Asia and No. 2 in the world d, whichis matter of proud for Gujarat and whole India.Amul has more than 150 chilling centers in various villages.Dr. Varghese Kurien, former chairman of the GCMMF – the man behindthe success of Amul.

REASON FOR SUCCESS

SUCCESS!!

Robust Supply Chain

Low Cost Strategy

Diverse product mixAmul Butter, Ghee, Milk Powder, Cheese,Chocolate, Shrikhand, Ice Cream, Amulspray,Milk, Nutramul And Amulya

Strong Distribution network

Technologhy And E-Initiatives

Amul Growth RateAnnual Turnover of 4300 Crore (2006-07)Rs 10000 Crore mark in 2010Five decade to became Rs 2000 Crore entity but the turn over doubled to over Rs 4300 crore within nineyears form 1999-07

Annual Turnover900010000

80007000600050004000300020001000 0

02000

4300

10000

AGR:32%

1946 1999 2007 2008 2009 2010

Every day Amul Collects 7 million liters of milk from 2.6 million formers, converts the milk into branded, packed products and delivers goods to over 5,00,000 retail outlets across the country.Its supply chain one of the most complicated in the world.

Amul — Bussiness MOdel

RAW MILK

Condensed Ghee Butter Cream

Packaged MilkIce creamBeverages

DriedSkimmed MilkPowder

Amul Bussiness StrategyDeveloping demand

Limited purchasing power, modest consumption levelsA low-cost price strategy products

The distribution networkDry and cold warehouseCash transaction throughout the supply chainJI T improves dealers returns on investments (ROI)

Umbrella brandcommon brand for most product categoriesAlum's sub-brands , edible oil products - Dhara, mineral water - Jal Dhara brand while fruit drinks - Safal

Third party service providerscore is milk processing , production of dairy productslogistics of milk collection, distribution of dairy products,sale of products through dealers and retail stores

SWOT analysis of AMULWeakness

Strong dependency on weak infrastructure & completely dependent

on villages for its raw materialsRisks of highly complex supply chain

systemShort self life of its Products

Alliance with third parties who do not belong to the organized sector

StrengthsLargest food brand in India & Asia

High Quality, Low PriceIntroduced TQM

World’s Largest Pouched Milk Brand Annual turnover of

4300Crore(2006-07)Highly Diverse Product Mix

Robust Distribution Network

Opportunities Penetrate international marketsDiversify product portfolio to

entre new products categories and expand existing categories like

processed foods, chocolates etc.Use internet to sell its products

ThreatsCompetitors- Hindustan lever, Nestle,

Britannia and Local playersStiff competitions from MNC’s in

butterGrowing price of milk and milk

productsBan on exports of milk powder

The yield of India cattle still much lower than other dairy countries.

Industry Analysis: Porter’s 5 ForcesThreat of new

entrants Is high because There are no entry

barriers

Bargaining Power of

Suppliers is low because the suppliers Are rural milk

producers

Competitive Rivalry is

High due to Other

brands and Local players

Threats of substitutes is

high because of availability of

Other products

Bargaining Power of

customers is High because

of various competitors

The 3 C’s Model …..

Aggressive moves against Britannia, Nestle, mother Dairy and Kwality

Customer extremely satisfiedMoves from loose milk to Packaged milk.

Largest milk brand in AsiaMarket leader in ghee and butterVery strong supply chain

Amul - BCG Matrix

Amul Ice- Cream

Amul chocolate

Amul butter

Amul chocolate drink

Low

Amul cheese

High

Business growth rate

Low

High

Relative Market Share

Kids

Women

Youth

Calorie Conscious

Health Conscious

Amul Kool, Chocolate, Milk, Nutramul Energy Drink, Amul Kool Milk

Amul Calci +

Nutramul, Amul Shakti Health Food Drink

Utterly Delicious PizzaAmul Pizza CheeseAmul Cheese Spread

Amul Lite, Sagar Skimmes Milk Powder,Amul Lite Slim and Trim Milk

Customer Based market Segmentation

Industry Based Market Segmentation

Ice-cream Manufactures

Restaurant/Food Chains

Coffee shop Chains

Bakery & Confectionaries

Pizza Retailers

Snacks Retailers

Amul Competitors

85%

Amul – Product Portfolio

Category Market Share Market Position

Milk Powder

Chocolate Drink

Cheese

Butter

Sweets

Ice- Cream

Chocolate

24.75% (HUL-28.22%,Mother Diary- 8.66%)

1

1

1

21

1

3

50%

50%

90%10% (Cadbury- 70%)

40%

Mix… Product for every oneo Amul never forget its “primary customer” - Amul collects 7 million liters of milk from 2.6 million formers(many ittiterate)

o Product for youth - Amul launches Chocolate milk under brand name “AMUL KOOL KOKO” targeting the youth

o Product for diabetic people -India’s First pro-Biotic Wellness Ice cream & Sugar Free Delights For Diabetics

oProduct for the healthconscious - Amul Launched “low fat, low cholesterol bread spreads”

oProduct for the pricesensitive India - Low Priced Amul Ice Creams andaffordable ‘sagar’ whitener

oProduct for the urban class - Amul launched emmental,gouda and pizza mozzarella cheese

Mix… Product for every one

Advertisements

AMUL is well known for its innovative hoardings as shown in this slide.

Product strategy of Amul

Product Positioning StrategyProduct Re-Positioning StrategyProduct Overlap StrategyProduct Design StrategyProduct EliminationDiversification StrategyValue Marketing Strategy

Product PositioningPlacing a product in that part of the market where it will receive favorableReception compared to competing products.Positioning of Amul is “TASTE of INDIA”. It has created value for everyone on value chain, be it customer or farmers.USP- Quality with affordability

India’s First Pro- Biotic WellnessIce cream& Sugar Free DelightsFor Diabetics

Low priced Amul Ice creammade Kwality Walls life hell.

Flank Attack Age Wise.. Aug 25 2007Amul launches Chocolate milk under brand name of “AMUL KOOL KOKO”.This is targeted at teenagers and youths.Nov 11, 2007: Amul in multinational Arean WithSnack Launch: “Munch Time”. Flavors: Masala, Mint and Tomato. New Product Activity.

Nov 26,2007: Amul Launches “Fresh Panner”(Free From Any Harmful Chemicals)

Flank Attack---Expanding its Cheese Segment.Current market share 50%

Positioning Continued….

Product Repositioning New CompetitionChange in consumer preferenceWrong original positioning

Amul marketed bottle water product named“JALDHARA” but to less potential in the market it Turned out to be blunder.

Now Amul is all set to launch bottled water

“NARMADA NEER”

Product OverlapsSituation where company decides to

Complete against its own brands. Powdered milk Health and price Conscious.

“SAGAR Vs Amulya”.USP: Sagar is affordable whitener for health conscious one.

Cheese spreads Specific Vs General“Amul Processed Cheese Vs Cheese Spread”USP: Cheese spread is highly accepted spread for regular use. Milk drinks“Nutramul Energy Drink Vs Amul Kool”

Product design Strategy“Whether to offer standard or customized prducts.”Amul has offered a mix of both standard and customized products.Use of Utterly-Butterly Girl:Using since 1967,Entered in the Guinness Book of World Records for being the longest running campaign Ever.

Product reaches the stagewhere continued support is no longer justified whereperformance is falling short of expectations, it isdesirable to pull the productout of the market place.

It eliminated“JALDHARA” a decadeago as Bottled water productdo not have potentialcustomers”.

Seeking unfamiliar products or market or both in the pursuits of growth.Secrets of Amul’s Diversification Philosophy:Progressive addition of higher value products while maintaining the desire growth in existing products.Amul introduced products with consistent value addition but never left the core philosophy of “providing mill at basic & at affordable price”

Product Elimination & Diversification

Amul Products Diversification

Benefits of Diversification &Value Marketing Strategy

High GrowthExpansion ofnetworkAdvantage of eachunderlineobjectives.Commitment to quality.

Providing a product thatworks as claimed, isaccompanied by decentservice, and is delivered ontime.Value for moneyThe generation forawareness.Fostering of Loyalty.

Amul’s CSA lies in its procurement part ,the ability to collect 7million liters of milk from 2.6 million formers, convert them into goods worth Rs 6crore and distribute them to 5,00,000 retailers across country ,is not easy. No other dairy in India has such a sustainable procurement network.

Managing the large scale supply chain of Amul which beginsfrom milk producer and ends with supply to customer from retailer is very critical job. It requires lot of dedication and hard work from all members of the corporation and also distributors and retailers across country.

Intelligent Marketing of Amul

Amul has Competitive sustainable advantage (CSA) over its competitors

o One of the most conservative FMCG entities GCMMF- Spends a mere 1% of its turnover on n promotions.o GCMMF has written and re-written rules of the game.o Amul butter girl is one of the longest run ad campaigns in the country for 41 years.o Intelligent marketing of milk, ice cream and butter milk.o GCMMF (AMUL) Beats Recession, Achieves, A Turnover Of Rs. 6700Crores (June 05, 2009)

Intelligent Marketing

GCMMF has 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 US markets.

50% of Americans being medically obese & if Amul is really looking to capture the hearts of the 2nd and 3rd of Indians, offering low-fat versions of its brands, would make a lot of commercial sense. Hence targeting the large Indian community in the USmarkets with its niche products like Mithai, Packaged ready to eat foots market, it can definitely expand its market to a large extent.

Overseas markets- Mauritius, UAE, Bangladesh, Australia, China, Singapore, Malaysia , Nepal, Pakistan, Hong Kong and a few South African countries.Fresh plans of flooding the markets of Japan & Srilanka.Tie up with Glaxo to sell baby food…

Amul is going globally…..

Amul can try out the following ideas: I) Amul can venture out on new products like Toned milk,Condensed milk that can be used for sweets, Baby food products,

II) There are certain product like Amul basundi, gulab jamoon, chocolates etc which are not as popular as Amul ice cream. Amul must try to understand the cause of this through thorough market research and work on improving these products

III) Though Amul’s hoardings are a huge success, it canpenetrate even better in the rural areas by advertising through themedia via cable channels and newspapers. Sponsoring shows in TV, sports events can be of great help.

What more can Amul do??

WHY AMUL

Personality:Simple, Indian

Physique:Taste, Quality

Relationship: Sociable

Culture:Co-operative, sharing

Self image:Proud Indian, Fun loving

Reflection:Value oriented

THANK YOU

References:Google search engine.www.amul.comwww.indiadairy.comEBSCO online Library .http://marketingpractice.blogspot.comhttp://www.fmcgmarketers.blogspot.comhttp://www.indianfoodindustry.netwww.ibef.org