DETAILED ANALYSIS OF RETAILER PENETRATION OF AMUL POUCH MILK IN DELHI

PREPARED BY SUBMITTED TO

Aditi Khanna Ms Arti Malik

Faculty

ENROLLMENT NO- 02021201809 Department of Business Administration

MAHARAJA SURAJMAL INSTITUTE

(AFFLIATED TO GURU GOBIND SINGH INDRAPRASTHA NIVERSITY)

C-4 Janakpuri, New Delhi, 110058

ACKNOWLEDGEMENT

Project Work is never the accomplishment of an individual rather it is an

amalgamation of the efforts, idea and cooperation of a number of entities.

I acknowledge with gratitude and appreciation, my indebtedness to my mentor &

guide, Ms. Arti Malik for allowing me to work on the topic ANALYSIS OF

RETAILER PENETRATION OF AMUL POUCH MILK IN DELHI. I also

thank her for the ideas and basic concepts she delivered and shared with me, as

they helped me a lot in accomplishing this project of mine.

Professor Arti malikDepartment of Business AdministrationMaharaja Surajmal Institute

STUDENT DECLARATION

This is to certify that I have completed the Minor Project Report titled “ ANALYSIS

OF RETAILER PENETRATION OF AMUL POUCH MILK IN DELHI”

under the guidance of “Ms. Arti Malik” at Maharaja Surajmal Institute, New Delhi.

This is an original piece of work & I have not submitted it earlier elsewhere.

Date: Signature:

Name: AditiKhanna

Enrollment no: 02021201809

Executive summary

AMUL is a co-operative sector. It is the institution of the farmers, for the farmers and from the

farmers. The AMUL gives pleasure to the farmer to charge the own price, which was not

possible in earlier years.This union was born on 14th December 1946. The union provides

facilities to its members like more return, satisfactory price, insemination, first aid, group

Insurance, cattle food at confessional price etc.

I have done detailed analysis of Retailer penetration of AMUL pouch milk in Delhi.

OBJECTIVES-

Objective of the study was to know the relationship of sales with the retailer, to know awareness

of people towards Amul milk, to know the preference of Amul milk with comparison to other

competitive brands.

CONCLUSIONS-

Amul must come up with new promotional activities such that people become more aware

about Amul milk .In comparison to Amul milk, the other players such as Parag, and Verifresh

provide a better availability and give competition to the hilt due to local brand. People are

mostly satisfied with the overall quality of Amul milk, but for the existence in the local market

Amul must use aggressive selling techniques.

SUGGESTIONS-

In order to maintain and increase the sales in Delhi, the following recommendations regarding

Amul milk; particularly regarding advertisement, distribution, promotional policies, etc, are

suggested.

S.NO TOPIC PAGE NO

CHAPTER 1

CHAPTER 2

CHAPTER 3

CHAPTER 4

CHAPTER 5

CHAPTER 6

CHAPTER 7

INTRODUCTION AND HISTORY OF THE COMPANY-

Symbol and meaning History Three tire model SWOT analysis Marketing Management Plants Manufacturing process

RESEARCH METHODOLOGY Research problem Research objective Data collection techniques Research design Sampling

ANALYSIS & INTERPRETATION

FINDINGS

SUGGESTIONS

CONCLUSIONS

LIMITATIONS

ANNEXURE:

Bibliography Questionnaire

CHAPTER- 1INTRODUCTION AND HISTORY OF THE

COMPANY

Symbol of Amul is a ring of four hands, which are coordinated each other .The actual meaning of this symbol is coordination of hand of different people by whom this union is now at top.

First hand is for the farmers (producers), without whom the organization would do not

existed. Farmers are the inspiration of the AMUL – the taste of India.

Second hand is for the representatives of processors by whom the raw milk processed

into different finished products.

Third hand is for marketers without whom the product would have not be able to reached

to the customer.

Fourth hand is for customers without whom the organization could not carry on because

they are the people who consume the product. The union of Amul would not have been the

second biggest successful company in the world without the coordination of the above four

hand.

The Amul – Meaning

AMUL means “ priceless “ in Sanskrit . A quality control expert in Anand suggested the brand

name “AMUL” from the Sanskrit word “Amoolya” variants, all meaning “priceless” are found

in several Indian languages.

MOTTO AND VISION

MOTTOThe main motto of AMUL is to help farmers. Farmers were the foundation stone of AMUL. The

system works only for farmers and for consumers, not for profit. The main of AMUL is to

provide quality products to the consumers at minimum cost. The goal of AMUL is to provide

maximum profit in terms of money to the farmers.

VISION

Vision of AMUL is to provide and vanish the problems of farmers (milk producers). The AMUL

apparition was to run the organization with co-operative of four main parties, the farmers, the

representatives, the marketers, and the consumers.

HISTORY

In

early 1940’s a farmer in Kaira district, as elsewhere in India, derived his income almost entirely from

seasonal crops. The income from milk was paltry and could not be depended upon. The main buyers were

milk traders of Polson Ltd.-a privately owned company that enjoyed monopoly for supply of milk from

Kaira to the Government Milk Scheme Bombay. The system leads to exploitation of poor and illiterate

farmers by the private traders.However, when the exploitation became intolerable, the farmers were

frustrated. They collectively appealed to SardarVallabhbhai Patel, who was a leading activist in the

freedom movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a

cooperative union, instated of supplying milk to private traders. Sardar Patel sent the farmer to

ShriMorarjiDasai in order to gain his Co-operation and help. ShriDasai held a meeting at ‘Samrkha’

village near Anand, on January 4, 1946. He advised the farmers to from a society for collection of the

milk.These village societies would collect the milk themselves and also decided prices for that which

would be profitable for them. The district union was also from to collect the milk from such village

cooperative societies and to sell them. It was also resolved that the government should asked to buy milk

from the union.

However, the government did not seem to help farmer by any means. It gave the negative response by

turning down the demand for the milk. To respond to this action of government, farmer of Kaira district

went on a milk strike. For 15 days not a single drop of milk was sold to the traders. As a result the

Bombay milk scheme was severely affected. The milk commissioner of Bombay then visited Anand to

assess the situation. Finely he decided to fulfill the farmers demand.

Thus their cooperative unions were forced at village and district level to collect and sell milk on a

cooperative basis, without the intervention of government. Mr. VergheseKurien had main interest in

establishing union who was supported by ShriTribhuvandas Patel who convinced farmers in forming the

cooperative unions at thevillage level. ‘The Kaira District Co-operative Milk Producers’ Union’ was thus

established in Anand and was registered formally under section 10 of Bombay Act VII of 1925 on

December 14, 1946. Since then farmers are selling all the milk in Anand through cooperative union. In

1955 it was commonly decided the sell milk under the brand name ‘Amul’

At the initial stage only 250 liters of milk was collected everyday. But with the growing awareness of the

benefits of the co-operative-ness the collection of milk increased. Today Amul collect 50, 00,000 liters of

milk everyday. As the milk is perishable commodity it became difficult to preserve milk for a longer

period. Besides when the milk was to be collected from the far places there was a fear of spoiling of milk.

To over come this problem the union thought to develop the chilling unit at various junctions, which

would collect the milk and could chill so as preserve it a for a longer period. Thus, today Amul has more

than 168 chilling centers in various villages. Milk is collected from almost 1097 societies.      

With the financial help from UNICEF, assistance from the government of New Zealand under the

Colombo plan, of Rs. 50 million for factory to manufactory milk powder and butter. Dr. Rajendara

Prasad, the president of India laid the foundation on November 50, 1954. ShriPandit Jawaharlal Nehru,

the prim minister of India declared it open at Amul dairy on November 20, 1955.

A plant to manufacture balanced cattle feed was formally commissioned on October 31, 1964 by

ShriLalbahadurShastri, the Prime Minister of India. At the request of the government of India, a new

dairy with a capacity to manufacture 40 tons of milk powder and 20 tons of butter a day was completed in

1963. This was meant to meet the requirement of India’s defense forces. The dairy was declared open by

ShriMorarji Desai in April, 1965. in 1974, the Kaira Union setup a plant to manufacture high-protein

weaning food, chocolate and malted food at Mogar, about 8 km south of Anand.

 In September, 1981, the second cattle feed plant at ‘Kanjari’ were started. The succesion of the co-

generation project on September 11, 1985, marked a milestone on the energy front when two gas turbine

generators of 1.5 MW each based on natural gas, were commissioned. On October 31, 1992, Dr. V.

Kurien chairman, National Dairy Development Board, laid the foundation of Kaira Union’s third dairy

with a processing capacity of 6.5 lakh liters of milk a day. Work on the third dairy and cheese plant at

‘Khatraj’ with capacity for 20 Metric Ton of cheese per day, began in February, 1994. Also in 1994,

Kaira Union put up bread spread plant at ‘Mogar’ with the assistance from National Dairy Development

Board.

The Three-tier "Amul Model"

The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is further federated into a Milk Federation at the State level. The above three-tier structure was set-up in order to delegate the various functions, milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that economies of scale is achieved. As the above structure was first evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Programme, it is known as the ‘Amul Model’ or ‘Anand Pattern’ of Dairy Cooperatives.

Responsible for Marketing of Milk & Milk Products Responsible for Procurement & Processing of Milk Responsible for Collection of Milk Responsible for Milk Production

VILLAGE DAIRY COOPERATIVE SOCIETY (VDCS)

The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy Cooperative is the primary society under the three-tier structure. It has membership of milk producers of the village and is governed by an elected Management Committee consisting of 9 to 12 elected representatives of the milk producers based on the principle of one member, one vote. The village society further appoints a Secretary (a paid employee and member secretary of the Management Committee) for management of the day-to-day functions. It also employs various people for assisting the Secretary in accomplishing his / her daily duties. The main functions of the VDCS are as follows:

Collection of surplus milk from the milk producers of the village & payment based on quality & quantity

Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc.

Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk Union.

District Cooperative Milk Producers’ Union (Milk Union)

The Village Societies of a District (ranging from 75 to 1653 per Milk Union in Gujarat) having surplus milk after local sales come together and form a District Milk Union. The Milk Union is the second tier under the three-tier structure. It has membership of Village Dairy Societies of the District and is governed by a Board of Directors consisting of 9 to 18 elected representatives of the Village Societies. The Milk Union further appoints a professional Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his / her daily duties. The main functions of the Milk Union are as follows:

Procurement of milk from the Village Dairy Societies of the District Arranging transportation of raw milk from the VDCS to the Milk Union. Providing input services to the producers like Veterinary Care, Artificial Insemination

services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, etc. Conducting training on Cooperative Development, Animal Husbandry & Dairying for

milk producers and conducting specialised skill development & Leadership Development training for VDCS staff & Management Committee members.

Providing management support to the VDCS along with regular supervision of its activities.

Establish Chilling Centres& Dairy Plants for processing the milk received from the villages.

Selling liquid milk & milk products within the District Process milk into various milk & milk products as per the requirement of State Marketing

Federation. Decide on the prices of milk to be paid to milk producers as well on the prices of support

services provided to members.

State Cooperative Milk Federation (Federation)

The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the apex tier under the three-tier structure. It has membership of all the cooperative Milk Unions of the State and is governed by a Board of Directors consisting of one elected representative of each Milk Union. The State Federation further appoints a Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his daily duties. The main functions of the Federation are as follows:

Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. Arranging transportation of milk & milk products from the Milk Unions to the market. Creating & maintaining a brand for marketing of milk & milk products (brand building). Providing support services to the Milk Unions & members like Technical Inputs,

management support & advisory services. Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions. Establish feeder-balancing Dairy Plants for processing the surplus milk of the Milk

Unions. Arranging for common purchase of raw materials used in manufacture / packaging of

milk products. Decide on the prices of milk & milk products to be paid to Milk Unions. Decide on the products to be manufactured at various Milk Unions (product-mix) and

capacity required for the same. Conduct long-term Milk Production, Procurement & Processing as well as Marketing

Planning. Arranging Finance for the Milk Unions and providing them technical know-how. Designing &Providing training on Cooperative Development, Technical & Marketing

functions. Conflict Resolution & keeping the entire structure intact.

We move to the year 2008. The dairy industry in India and particularly in the State of Gujarat looks very different. India for one has emerged as the largest milk producing country in the World. Gujarat has emerged as the most successful State in terms of milk and milk product production through its cooperative dairy movement. The Kaira District Cooperative Milk Producers’ Union Limited, Anand has become the focal point of dairy development in the entire region and AMUL has emerged as one of the most recognized brands in India, ahead of many international brands.

Today, we have around 176 cooperative dairy Unions formed by 1,25,000[quantify] dairy cooperative societies having a total membership of around 13 million farmers on the same pattern, who are processing and marketing milk and milk products profitably, be it Amul in Gujarat or Verka in Punjab, Vijaya in Andhra Pradesh or a Nandini in Karnataka. This entire process has created more than 190 dairy processing plants spread all over India with large investments by these farmers’ institutions. These cooperatives today collect approximately 23 million kgs. of milk per day and pay an aggregate amount of more than Rs.125 billion to the milk producers in a year.

FACTS

Members: 13 district cooperative milk producers' Union

No. of Producer Members: 2.9 million

No. of Village Societies: 15,322

Total Milk handling capacity: 13.07 million litres per day

Milk collection (Total - 2009-10): 3.32 billion litres

Milk collection (Daily Average 2009-10):

9.10 million litres

Milk Drying Capacity: 647 Mts. per day

Cattlefeed manufacturing Capacity: 3740 Mts per day

Sales Turnover Rs (million) US $ (in million)

1994-95 11140 355

1995-96 13790 400

1996-97 15540 450

1997-98 18840 455

1998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

2003-04 28941 616

2004-05 29225 672

2005-06 37736 850

2006-07 42778 1050

2007-08 52554 1325

2008-09 67113 1504

2009-10 80053 1700

SWOT Analysis

Strengths

Demand profile: Absolutely optimistic. Milk being a necessity product, the demand will

stay and the sales at GCMMF are bound to increase over a period of time.

Margins: Quite reasonable, even on packed liquid milk. The margins are enough to limit

the entry of potential entrants.

Flexibility of product mix: Tremendous. With balancing equipment, GCMMF has kept

adding a wide array of products to its product line.

Availability of raw material: Abundant. Presently, more than 80 per cent of milk

produced is flowing into the unorganized sector, which requires proper channelization. Amul&

GCMMF have leveraged this and has got itself a strong base of suppliers who provide them milk

throughout the year. Large number of dairy plants in public and cooperative sectors besides

several others coming up in the private sector would result in competition. Because of this

the end consumer would benefit and a good product mix would emerge.

Technical manpower: Professionally trained, technical human resource pool, built over

last 30 years is the strength that GCMMF has. The employees of GCCMF are highly recognized

in the industry and have earned name for themselves as well as the federation.

Enhanced Milk Production: Increase in the milk production with consequently

increased availability of milk processing has led to increase in consumption and faster access

to the consumers through effective distribution. The technology is brought from Denmark

and the production of milk has benefited from that.

Transportation: The transportation facilities and the easy availability of the special

trucks have provided a boost. Cold refrigerated trucks are there in place and the warehouses

also have the cold storage facilities that facilitate the transportation.

Vast resources: Country has vast natural resources which offer immense potential

growth and development for dairying. Moreover the financial resources available with the

federation are immense and the reputation is such that in case of any further requirements, it

can approach any institution and raise any form of capital.

Increasing purchase power and changing tastes of the consumers: The purchasing

power of the residents is increasing. As a result a lot of products are being consumed.

Moreover, the consuming habits are changing. As a result, the demand for products such as

butter and cheese is increasing at a very rapid rate.

Weaknesses

Perishability: Pasteurization has overcome this weakness partially. UHT gives milk

long life. Still perishability is there at the milk vendors end. This does result in loss of

some production. But Amul Dairy is taking steps to store milk at the vendors end.

Surely, many new processes will follow to improve milk quality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk yield. A lot

depends upon the monsoon in the country. This is because of the quality of cattle feed that

would be available will not have the required nutritional content. Steps are taken to provide

awareness regarding these and the penetration of quality feed is being increased. Moreover,

increased awareness of developments like embryo transplant, artificial insemination and properly

managed animal husbandry practices, coupled with higher income to rural milk producers should

automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate transportation facility make

milk procurement problematic. All these factors lead to perishability of the procured milk. But

with the overall economic improvement in India, these problems would also get solved.

Erratic power supply: The erratic power supply would cause harm in the processing of

milk.

Underdeveloped systems: There still exist underdeveloped raw milk collection

systems in some parts of the country. However steps are being taken such as setting up of

cold storage points at key collection centers to combat the situation.

Lack of proper implementation: Dairy development programmes have not been fully

implemented as per the needs of the region in different agro-climatic zones.

Infrastructure: The infrastructure that is available is not up to the current world

standards. Also lack of infrastructure for offering dairy business management programmes to the

trained personnel is creating a hindrance.

Opportunities

"Failure is never final, and success never ending”. DrKurien bears out this statement

perfectly. He entered the industry when there were only threats. He met failure head-on,

and now he clearly is an example of ‘never ending success’! If dairy entrepreneurs are

looking for opportunities in India, the following areas must be tapped:

Competition: With so many newcomers entering this industry, competition is becoming

tougher day by day. But then competition has to be faced as a ground reality. The market is large

enough for many to carve out their niche. Moreover due to competition, there is a chance to

better serve the market with innovative products.

Value addition: There is a phenomenal scope for innovations in product development,

packaging and presentation. Given below are potential areas of value addition:

o Steps should be taken to introduce value-added products like shrikhand, ice

creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater

presence and flexibility in the market place along with opportunities in the field of

brand building.

o Addition of cultured products like yoghurt and cheese lend further strength - both

in terms of utilization of resources and presence in the market place.

o Yet another aspect can be the addition of infant foods, geriatric foods and

nutritional.

Export potential: Efforts to exploit export potential are already on. Amul is exporting to

Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty,

opportunities will increase tremendously for the export of agri-products in general and dairy

products in particular. There is a strong basis of cost efficiency, which GCMMF can leverage in

the world market.

Markets: The market for the traditional as wells as processed dairy products is expanding

both at the domestic and international front.

IT support: Software is now available for project formulation for dairy enterprise. It has

also computerized its production processes. Mother Dairy was the first fully computerized dairy

in India. In its Anand plant all products are processed computerized, which does not have any

hand touch during any stage of process.

Threats

Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of

place in the industry. Organized dissemination of information about the harm that they are doing

to producers and consumers should see a steady decline in their importance.

Infestation: There are increasing incidents of chemical contaminants as well as residual

antibiotics in milk.

Quality: The quality of the milk is found to be poor as compared to the international

standards. One of the reasons for these according to the EU and America is the method of

milching the milk. In these nations the milk is hands by the farmers owning the cattle do milched

with the help of machines, while in India.

Exploitation: The liberalization of the Dairy Industry is likely to be exploited by the

multinationals. They will be interested manufacturing the milk products, which yield high

profits. It will create milk shortage in the country adversely affecting the consumers.

Subsidy by Western Nations: There have been incidences wherein the Western nations

subsidizing the dairy products by a few means like transportation. Because of such reasons the

final price of the product goes below the prices prevailing in the Indian Market. Hence it proves

a threat to GCMMF’s and other Indian dairy products.

Creation of Non Tariff Barriers by Developed Nations: The Developed Nations have

created Non Tariff Barriers related to Quality of the milk specifically. They want that the milk be

processed with potable Air and Water. They also want that the milching of cattle be done with

the help of machines. However this type if system is yet to evolve in India. Because of these

reasons they are reducing the market potential of Indian made products, where GCMMF holds a

lions share.

The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh

‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and

threats are transitory. Any investment idea can do well only when you have three essential

ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines

and marketing) and values (of quality/ethics).

MARKETING MANAGEMENT

Every organization that produces one or more products requires marketing of the products sell them in

the market. It is only through marketing that people know about a company's products. Hence marketing

is considered as a key activity of organization. The organization requires sound marketing structure to

carry on its marketing activities.

However the concept of marketing is not confined only to selling of goods and services to customers.

Instead the company tries to create and maintain the customer base through marketing. The marketing

thus focus on the customer needs and wants in the market and emphasis on producing and selling only

those goods, which have higher demand in market. The company mainly markets its products through

advertising. Marketing uses various sales promotional tools to boost the sales of the company. The

marketing department thus should have sound distribution channel and promotional system to make the

marketing activities sound.

Concept

The marketing concept holds the key to achieving its organizational goals consists of the company

being more effective than competitors in creating , delivering and communicating customer value

to its chosen target markets . marketing starts with the determination of consumer wants and ends

with the satisfaction of those wants. The concept says that any business should be organization

around the marketing function, aningticipating and stimulating and meeting customers need . The

marketing concept rests on four pillars and they Are

1. Target market

2. Customer needs

3. Integrated marketing

4. Profitability

AMUL has also its own marketing concept .AMUL targets all type of customers like babies ,

children , young customers and old age customers etc . Amul try best for satisfying needs by

providing good quality products.

Marketing Mix

The marketing mix , which is set of four elements or four “ P” of marketing are as follow

1. Product

2. Price

3. Place

4. Promotion

Same as four “P” there is also four “ C” of marketing.

1. Customer solution

2. Cost

3. Convenience

4. Communication

PRODUCT :

A product is anything that satisfies a needs or wants and can be offered to the market for

exchange. A product can be a goods , services without product there is no marketing . This

includes product variety ,product design , packaging , quality , brand name, size etc.

AMUL produces and sell i.e. Milk , It has to plan Its product very carefully so that the

consumer gets only good quality products. There are various products marketed by GCMMF

List of products marketed

Bread spread

Amul butter

Amul Lite Low bread spread

Amul cooking butter

Cheese range

AmulMalaipanner( cottage cheese)

Amul pasteurized processed cheese

Amul pizza cheese

AmulEmmiatial cheese

UHI MilkRange

Amulshakti 3% fat milk

AmulTaaza 1.5% fat milk

Amul Gold 4.5% fat milk

Amul fresh Toned milk

Amul snowcap soft milk.

Pure ghee

Amul pure ghee

Amul cow ghee

Sagar pure ghee

Infant milk Range

Amul infant milk formula (0.6 millions)

Amul infant milk formular

Amul spray infant milk food

Milk powder

Amul full cream milk powder .

Curd products

Yogi sweetened flavored dahi

AmulLassee

AmulmastiDahi

Price :-

The prices of products of Amul are also decided by the GCMMF. The GCMMF conducts the

market survey to check the validity and feasibility of prices in the market and accordingly

decides the prices of Amul products.

The price of the products of Amul are also decided by the Gcmmf .The Gcmmf conducts the

market survey to check the validity and feasibility of prices in the market and accordingly

decides the price of Amul products . However , the price is inclusive of several elements like:

Cost of milk

Labour cost

Processing cost

Packaging cost

Advertising cost

Transportation cost

Sales promotion cost

Taxes etc.

The GCMMF considers all this cost .aspects and set them up in pricing structure to decide the

selling price of milk and milk products.

Promotion

IT includes a variety of techniques including advertisement , sale promotion, public relations

and personal selling that are used to communicate with customers and potential customers .

Television is the best media for advertising in the local areas . Hoardings designed on the

creative basis attract the customers more .

PlacePlace refers to marketing activities that make products available to consumers at the right time

in a convenient location . place refers as distribution Channels .IT is the process of moving

products from the producer the consumer.

Amul has developed federation and Amul parlours located in several parts of country .Amul

have managed to create more than 2300. Amul have identified certain potential locations such as

Railway , Airports , universities , and shopping malls . The GCMMF handles the workers

relating to Managing of stocks and distributors to in the country. Thus GCMMF looks offer the

disbursement of products to the various Marketing channels.

The major export products :-The products of Amul is being exported in

the 40 countries of the world . Many of the products are now available in the U.S.A , Gulf

countries and Singapore. Amul products are being exported to the Singapore since last three

decades .undoubtedly ,Amul is the preferred taste of Indians in the Gulf countries.

Consumer packs:-

Amul pure Ghee

Amul Butter

AmulShrikhand

AmulMithaeeGulabjamun

Nutramul Brown Beverages

Amul cheese

Amulmalaipanner

Amul Gold Milk

Amul UHT Milk ( Long Life)

AmulTaaza Double Toned Milk

Amul Life slim and trim Milk

Amul fresh cream

BULK PACKS

Amul Skimmed Milk powder

Amul Full Cream Milk powder

The followingAmul products are available in the Gulf Markets:-

Amul / Sagar pure Ghee

Amul cheese Tin and Slices

AmulShrikhand

Amul Butter

Amul Gold milk

Amul – cool chocolate Milk.

Competitors

Amul has to defend against Mahananda, Vijaya, Milma, and other cooperative milk

brands

Aggressive moves against Britannia, Nestle, Mother Dairy, Kwality

Amul has a competitive sustainable advantage. This lies in the procurement part. Its

ability to collect 7 million liters of milk from 2.6 million farmers and onvert it into

Rs. 6 crore worth products and distribute them to 5 lakhs retailers is a tough job.The various

competitors of Amulproduct –wise is given as under

PLANTS

First plant is at ANAND , which engaged in the manufacturing of milk, butter,

ghee, milk powder, flavored milk and butter milk. It is establish in 1973.

Second plant is at MOGAR , which engaged in manufacturing chocolate, Nutramul, Amul Ganthia and Amul Bite. This plant establish in 1973. It is situated on Anand – Vadodara Highway No. 8.

Third plant is at Kanjari , which produces cattle feed. Old plant establish in 1964 & new plant in 1980.

Fourth plant is at Khatraj , which engaged in producing cheese.

MANUFACTURING PROCESS FOR MILK

MILK PROCUREMENT

Total milk procurement by our Member Unions during the year 2006-07 averaged 67.25 lakh

kilograms (6.7 million kg) per day, representing a growth of 4.5 per cent over 64.38 lakh

kilograms (6.4 million kg) per day achieved during 2005-06. The highest procurement as usual

was recorded during January 2007 at 84.09 lakh kilograms (8.4 million kg) per day. This

increase in milk procurement is very impressive, keeping in mind the massive loss suffered by

our farmers due to

floods during the monsoon season, specially in Surat district.

MILK PROCESSING

1 Homogenization: -Milk must then be homogenized. Without homogenization, the milk fat

would separate from the milk and rise to the top. Milk fat is what gives milk its rich and creamy

taste. In this process Milk is transferred to a piece of equipment called a homogenizer. In this

machine the milk fat is forced, under high pressure through tiny holes.

2 .Pasteurization:-Pasteurization is the process that purifies milk and helps it stay fresher,

longer. Milk is pasteurized by heating it to 72°C for 16 seconds then

quickly cooling it to 4°C. Pasteurization is named after Louis Pasteur, the famous scientist.

3 .Adding Vitamins; -Before homogenization, vitamin D is added to all milk. Vitamin D

combined with the calcium that naturally exists in milk help gives us strong bones and teeth.

Dairies also add Vitamin A to skim, 1% and 2% milk. Vitamin A is good for our eyesight.

4.Packaging Milk: -Milk is now ready to be packaged. Milk is pumped through automatic

filling machines direct into bags, cartons and jugs. The machines are carefully sanitized and

packages are filled and sealed without human hands. During the entire time that milk is at the

dairy, it is kept at 1° - 2°C. This prevents the development of extra bacteria and keeps the milk

it’s freshest.

5.Storing:-Milk is delivered to grocery stores, convenience stores and restaurants in refrigerated

trucks that keep milk cooled to 1° - 4°C. The stores take their milk and immediately place it in

their refrigerated storage area. Because fresh milk is so important to our diets, dairies, and our

health.

MILK PROCESSING BLOCK

Supply chain management of AMUL

SUPPLIERS

GCMMF’S SUPPLY CHAIN

Processing :

After the union received the milk, it was tested and if it was found to be of good quality, it was

sent for processing. If the milk was found to have high acidity, it was used to make buttermilk.

Raw milk was sent through a filter and clarifier and was pasteurized. For pasteurization, milk

was treated at high temperatures for a specified.

This helped in destroying the pathogens and in maintaining the quality. After pasteurization, the

milk was sent through a separation machine. Here the cream was separated and skimmed milk

was obtained. According to the demand, the unions packed the milk after it was pasteurized and

sent for distribution. The cream was marketed as Amul Fresh cream .

Distribution GCMMF coordinated with various unions to get a regular supply of milk and dairy products. The

processed milk and dairy products were procured from district dairy unions and distributed

through third party distributors. To ensure quality and timely deliveries, GCMMF and the district

unions had several mechanisms in place. The VCS constantly monitored the deliveries of the

milk collected and ensured that the milk was picked up on time. The unions monitored the

supplies of milk and the distribution of finished products.

WARE HOUSING: Amul products are available in over 500,000 retail outlets across India

through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses

to buffer inventory of the entire range of products. GCMMF transacts on an advance demand

draft basis from its wholesale dealers instead of the cheque system adopted by other major

FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash

transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry

inventory that is just adequate to take care of the transit time from the branch warehouse to their

premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All

GCMMF branches engage in route scheduling and have dedicated vehicle operation .

SUPPLY CHAIN EXPLANATION WITH DIAGRAME

DEFINITION OF VALUE CHAIN

As per the above diagram there are the first components is raw material:

In our company the raw materials are milk, powder for ice creams manufacturing, different types

of flavors for ice creams, packaging material, sugar etc. required by the company for

manufacturing. In this step GCMMF play a very important role it procures milk from villages

and for this it develops three types of system and that is societies at villge level, district level and

state level.

Second component is suppliers are the farmers and other raw material for manufacturing the ice

creams are provided by MAHAN PROTEINS LTD., IDEAL ICE CREAMS and BHARAT

ESSENCE.

This component is manufacturing process which is describe above. In milk process there are

mainly five steps are required and i.e. homogenization, pasteurization, adding vitamins,

packaging, storing. In this process there are also requirement of warehouse for storing the

product which already made and also for the raw material.

The next step is the distribution channel in which GCMMF plays very important role in that. It

handle all the marketing for AMUL products. GCMMF's products were marketed through 50

sales offices located across India to 4,000 stockists. These stockists supplied the products to

more than 500,000 retail outlets.

The next step is the customers in this category there are restaurants includes. Also the retail

shopsand whole sellers are included. The last step is the consumer in the actual hose holds.

INTRODUCTION TODETAILED ANALYSIS OF

RETAILER PENETRATION OF

AMUL POUCH MILK IN DELHI

CHAPTER-2

RESEARCH METHODOLOGY

1. RESEARCH PROBLEM

Increase the awareness level of AMUL .

Seek the general perception of retailer towards AMUL MILK.

To find the performance of AMUL MILK vis-à-vis other Brands.

To know the retailer psychology and their behaviour towards AMUL MILK .

2. RESEARCH OBJECTIVES & RELATED SUB OBJECTIVES

To know the relationship of sales with the retailer.

To know awareness of people towards Amul milk.

To know in which area of segment Amul milk are mostly like/preferred.

To know which area is not responding the Amul sale up to the mark.

To know the preference of Amul milk with comparison to other competitive brands.

To know the factors which affects buyer’s buying behaviour to purchase milk.

3. INFORMATION REQUIREMENT

First, I had to know about all the competitors present in the Amul milk

Segment (Reputed and well established brands as well as Local brands).

Before going for the survey I had to know the comparative packs and

Prices of all the competitors existing in the market.

Since milk is a product that basic need of every people and family. It is most perishable item in

FMCG .So know about the basic information regarding to milk. Hence I had to trace the market

and segment it, which mainly deals with various type of retailer which may be big or small.

4. DATA COLLECTION TECHNIQUES-

SOURCES OF DATA

PRIMARY DATA

To collect primary data from Retailer’s Questionnaires were used. Questionnaire was prepared

very carefully so that it may prove to be effective in collecting the right information.

SECONDARY DATA

Secondary data collected from different website. This secondary data formed the conceptual

background for the project. This secondary data was compared with the primary data collected in

area.

RESEARCH INSTRUMENT

The research instrument used in the project was Questionnaire to collect primary information, it

provided flexibility by using more close ended and few open ended questions.

METHOD OF DATA COLLECTION

Information was collected by personally contacting retailers through interviews.

ANALYSIS AND STATISTICAL TECHNIQUE USED

Types of data analysis techniques used in the project:

Tabular analysis.

Graphical analysis.

Percentage analysis.

5. CHOICE OF RESEARCH DESIGN-

Descriptive Research is the research method used because descriptive studies embrace a large proportion

of market research. The purpose is to provide an accurate snapshot of some aspect of the market

environment. Descriptive research is more rigid than exploratory research and seeks to describe users of

a product, determine the proportion of the population that uses a product, or predict future demand for a

product. As opposed to exploratory research, descriptive research should define questions, people

surveyed, and the method of analysis prior to beginning data collection. In other words, who, what,

where, when, why, and how aspects of there search should be defined.

6. RESEARCH INSTRUMENT USED -

If one wants to know what type of dentifrice people use, what they think of, television

commercials, or why they buy particular brands of cars, the natural procedure is to ask them.

Thus, the questionnaire method has come to be the more widely used. Some interviews are

conducted in person, others by telephone, and others by mail. A questionnaire consists of list of

questions to be asked from the respondents and the space provided to record the answer /

responses. Questionnaire can be used for the personal interviews, focus groups, mails and

telephonic interviews. The choice among these alternatives is largely determined by the type of

information to be obtained and by the type of respondents from whom it is to be obtained.

The common factor in all varieties of the questionnaire method is this reliance on verbal

responses to question, written or oral.

Questionnaire in the project consists of:

Multiple choice questions

Dicthomus

MULTIPLE CHOICE QUESTIONS- Questions of this type offer the respondents an

alternative to choose the right answer among others. It is faster, time saving and less biased. It

also simplifies the tabulating process.

OPEN END QUESTIONS- In this type respondents are free to answer in their own words and

express the ideas they think are relevant, such questions are good as first questions or opening

questions. They introduce the subject and obtain general reaction.

DICTHOMUS- These are the questions which are Boolean in nature. These answers are

straightforward and respondents have to answer them in a straight way. That means the answer

can only be either ‘Yes” or ‘No’.

7. SAMPLING TECHNIQUE USED & SAMPLE SIZE-

SAMPLING TECHNIQUE USED

In this project the technique of sampling used was Judgment sampling. Judgment sampling involves the

choice of subjects who are most advantageously placed or in the best position to provide the information

required.

SAMPLE UNIT

In this project case sample were the retailers in Delhi & the aim was to know

the penetration level of Amul milk and the competitors present in the market.

SAMPLE SIZE: 100 Retailers

8. FIELD WORK-METHOD USED FOR DATA COLLECTION

Questionnaire was prepared keeping the objective of research in mind.

Questions were asked to respondents as regards to there willingness to purchase amul milk.

The help of questionnaires conducted direct interviews, in order to get accurate information.

In order to get correct information I had to approach retailer in entire Delhi.

1. East Delhi

2. West Delhi

3. South Dehli

4. North Delhi

It is really a Herculean task to understand Retailer behavior.

People were not willing to answer, when they were contacted between 11:00 am to 8:00 pm, the

time when most of the people have not open the shop in early morning.

9. LIST OF RETAILER IN SAMPLE AREA

Annapurna Provision Store.

Shivam General Store.

Prabhat Provision Store.

Shukla Provision Store.

Mahesh General Store.

Aman Store.

Maa Annapurna General Store.

Gopalji General Store.

Prakash General Store.

Bajpai Provision Store.

Anand General Store.

MaaVeshnav Provision Store.

Virendra General Store.

Suneel Provision Store.

Piyush Provision Store.

CHAPTER-3

DATA ANALYSIS AND INTERPRETATION

What is your average sale per month?

Rs 0-1000; Series1; 45;

45%Rs 1000-2000;

Series1; 30; 30%

Rs 2000-3000; Series1; 20; 20%

More Than Rs 3000; Series1; 5; 5%

Rs 0-1000Rs 1000-2000Rs 2000-3000More Than Rs 3000

INFRENCE-

It was found that 45% retailers are selling (0-1,000) Rs. Milk ,30% retailers are selling (1,000-

2,000) Rs. Milk, 20% retailers are selling (2,000-3,000) Rs.milk and 5% are selling more than

3,000 Rs. milk per day.

Which brands of Milk have in your shop?

Amul ; Series1; 40; 40%

Parag; Series1; 15; 15%Verifresh; Series1; 3; 3%

more than one; Series1; 42; 42%

Amul ParagVerifreshmore than one

INFRENCE-

It was found that 40% retailers are selling only Amul milk , 15% only Parag ,3% only verifresh

and 42% are selling more than one brand of milk.

Those retailers who were not selling pouch milk when we asked that you are interested in selling

Amul pouch milk.

yes; Series1; 14; 64%

No; Series1; 8; 36% yes

No

INFRENCE-

It was found that 64% retailers are ready to sell Amul milk and 36% are not ready to sell Amul

milk.

Customer opinion about Amul Milk?

Good; Series1; 38; 38%Very Good;

Series1; 54; 54%

Excellent; Series1; 8; 8%

GoodVery GoodExcellent

INFERENCE-

It was found that customer’s opinion for Amul milk is 38%good , 54% very

good and 8% excellent.

Which brand provides best distribution service in milk?

PARAG; Se-ries1; 48; 48%AMUL; Se-

ries1; 40; 40%

VERIFRESH; Series1; 12; 12%

Distribution Service

INFRENCE-

It was found that 40% retailer are satisfy with the distribution of Amul milk,48% are satisfy with

the distribution of Parag and 12% are satisfy with the distribution of verifresh .

Who are best competitor of Amul milk?

Parag; Series1; 86; 86%

Verifresh; Se-ries1; 14; 14%

ParagVerifresh

INFRENCE-

It was found that Amul is facing 86% competition from Parag and 14% from Verifresh .

To whom do you like to deal?

Distributor; Series1; 65; 65%

company; Se-ries1; 35; 35%

Distributorcompany

INFRENCE-

It was found that 65% are like to deal with distributor and rest of them like to deal with

company.

Which time is preferred for the order?

MORNING; Series1; 68; 68%

EVENING; Series1; 32; 32%

Prefered time

MORNING EVENING

INFRENCE-

It was found that 32% retailer preferred afternoon and 68% morning for making the order.

Is there any problem regarding the Amul milk?

Yes; Series1; 34; 34%

No; Series1; 66; 66%

YesNo

INFRENCE-

It was found that 66% retailer had not a problem regarding Amul milk and rest of them had

problem.

What do you prefer to pouch milk?

Quality; Series1; 15; 15%

Price; Series1; 35; 35%

Test; Series1; 10; 10%

Availability; Series1; 40;

40%

QualityPriceTestAvailability

INFRENCE-

It was found that 42% consumer prefer to availability, 28% quality, 22% price and 8% taste in

pouch milk.

CHAPTER-4

FINDINGS

During the survey it was found that still there are 83% people uses loose milk.

Amul is not providing the leakage facilities to the ADA so that retailer is not satisfied with the

ADA due to profit margin.

Retailer margin is less in comparison to there competitor brand Parag.

More leakage problem is happen in brand of amul milk due to excess capacity of milk(12lit

/crates) while Parag is providing 10 lit /crates

In its advertisement is not using any brand ambassador which attracts all age group people.

There is lack of Sales Promotional Activities i.e. wall painting, ice-box, Boards, etc.

I find the main thing is that “Amul” brand name has very good image in consumer’s mind and

they consider it as Pure & Good Product.

People who have tasted Amul milk are not ready to purchase any other milk brand.

CHAPTER-5

SUGGESTIONS

In order to maintain and increase the sales in Delhi, the following recommendations regarding

Amul milk; particularly regarding advertisement, distribution, promotional policies, etc, are

hereby suggested:

Amul should provide the ice box for those retailer they don’t have fridge but they have good

demand of milk , due to ice box there sale is less

First and foremost Amul should take proper action in order to improve the service of distribution

networks therefore retailer get the supply on time(not before the time and not after the time).

Though Amul milk advertisements are rarely shown on television yet many people could recall it

as per the data of research. It shows that there is only need to give advertisement only to

rememorize customers. Because Amul has very strong brand name.

Company should work in the packaging of milk therefore short out the leakage problem.

Company should provide only 10 lit/crate milk therefore short out the leakage problem.

Company should reduce Rs1.00 in 1 Lit packaging therefore consumer will purchase the 1lit

milk pack in comparison to competitor brand

CHAPTER-6

CONCLUSION

As we know that Amul (G.C.M.M.F.) is very big organization and market leader in dairy

products. It has maximum market share in Milk, Butter and Cheese, which are its main/core

products. As we know Amul is a co-operative organisaion but milk industry is a profitable

industry we can’t ignore it. With the help of research, company can find out its week points in

milk segment and can increase its market share through rectify mistakes. People have believed in

Amul’s product and they will accept its fresh milk also if effective actions were taken.

The survey resulted into following conclusions :

Amul must come up with new promotional activities such that people become more aware

about Amulmilk .

In comparison to Amul milk, the other players such as Parag, and Verifresh provide a better

availability and give competition to the hilt due to local brand .

People are mostly satisfied with the overall quality of Amul milk, but for the existence in the

local market Amul must use aggressive selling techniques

CHAPTER-7

LIMITATIONS

•Time period of the project was 8 weeks, which may not be enough to

understand the whole market.

•Sample size (269) of project was too small as compare to total area covered.

•Respondent hesitate to give true response to question.

ANNEXURE-QUESTIONNAIRE

Name of Retailer:

………………………………………………………………………

Name of retail shop

………………………………………………………………………………………………

Address:

………………………………………………………………………………………………………

………………………………………………………

ContactNo:

…………………………………………………………………………………

1. What are your average sales per day?

(a) 0-1000Rs.

(b) 1000-2000 Rs.

(c) 2000-3000Rs.

(d) More than 3000 Rs.

2. Which brands of Milk have you in your shop?

(a) Amul

(b) Parag

(c) Verifresh

(d) Any other

3. Which brand is preferred by customer?

(a) Amul (b) Parag

(c) Verifresh (d) Others

4. Customers opinion about Amul Milk?

(a) Good (b) Very good (c) Excellent

5.Those retailers who were not selling pouch milk when we asked that are you interested in

selling Amul pouch milk?

(a)Yes (b) No

6. Average customer demand of different brands of Milk?

(a) Amul (b) Parag (c) Verifresh (d) Others

7. Distribution of Amul Milk?

(a) Good (b) Very Good (c) Bad

8. Who are best competitors of Amul milk?

(a) Parag (b) Verifresh

9. Which brand provides best distribution service?

(a) Amul (b) Parag (c) Verifresh

10. To whom do you like to deal?

(a) Distributors (b) Company

11. Which time do you prefer for order?

(a) Morning (b) Evening

12. Is there any problem regarding the Amul milk?

(a) Yes (b) No

13. What do you prefer to pouch milk?

(a)Quantity (b) Price (c)Taste (d) Availability

Bibliography

WEB SITES SERVED: WWW. GOOGLE.COM. WWW.AMUL.COM . WWW.WIKIPEDIA.COM.

BOOKS REFERED: BOOKLET OF AMUL BY KHAIRA UNION DISTRICT. NARESH K MALHOTRA. MARKETING RESEARCH- AN APPLIED

ORIENTATION, 4TH EDITION. ABRAHAM KOSHY, MILESHWAR JHA- MARKETING MANAGEMENT CR KOTHARI- RESEARCH MANAGEMENT