amul sales and distribution

Amul Sales &

Distribution Study

Presented by:Abhilasha Gupta (33)Aniket Sengar (47)Ekta Nandrayog (32)Niharika Singh (57)Saurabh Sheth (53)Shelani Agarwal (03)

Overview

• The Brand ‘Amul’ is owned by The Gujarat Cooperative Milk Marketing Federation.

• GCMMF is Largest Food Products Marketing organization of India, with a revenue of $1.5 Billion.

• It links 2.8 Million Village Milk producers and 13,141 Cooperative Societies across 13 Districts to milk and dairy consumers across India.

• White revolution of India was an initiative under the Umbrella of Amul.

• Amul sells its products around the world in 40 countries.

Key Elements of Business Model

• Operations that are low cost, high quality and high efficiency (Competitive Edge).

• Strict margins at retail and distribution ends, utilizing economies of scale to remain competitive.

• High Sharing of profits with Farmers, to develop long-term relationships with them.

DDairy

Products

Butter

Cheese

VHT

Kool

I

Ice Cream

Frozen Paneer

L

Liquid Milk

Product Classification

DIL

ProductPortfolio

The Supply Chain

Dairy cooperative society at village level

Milk union at district level

Milk federation at state level

• Collection of surplus milk & payment based on quality & quantity.

• Providing support services to the members.

• Selling liquid milk for local consumers of the village.

• Supplying milk to the District Milk Union

Village Dairy Cooperative Society(VDCS)

• Procurement of milk from the VDCS• Providing input services to the producers.• Conducting training on Cooperative development• Providing management support & regular supervision to the

VDCS.• Establish Chilling Centers & Dairy Plants for processing the milk.• Selling liquid milk & milk products within the District.• Process milk into various milk & milk products.• Decide on the prices of milk to be paid to

milk producers.

Member Unions or Depots

• Marketing of milk & milk products• Establish distribution network • Arranging transportation from the Milk Unions to the market.• Creating & maintaining a brand• Providing Technical Inputs, management support & advisory

services.• Decide on the products to be manufactured at various Milk Unions

(product-mix)• Conduct long-term Milk Production, Procurement, Processing &

Marketing Planning• Conflict Resolution & keeping the entire structure intact

Corporate Office Functions

• An average of 1,000 Farmers sell milk at a Local Cooperative society.

• Each Farmer has plastic cards for identification.• The Identification Number is fed into a computer.• The milk is then weighed and the fat content of the milk is

measured by an electronic fat testing machine. • The Computer then calculates the amount due to a farmer on

the basis of the fat content in the milk.• The value of the milk is then printed out on a slip and handed

over to farmer who collects the payment at adjacent window.

Procurement Network

• Regarding Rural market: No different policy for Rural Market.• Differential Prices: Most of the Amul product has lower prices

in state of Gujarat due to less transportation cost.• Unused Milk: Milk, once, supplied to retailer is not taken back.

Retailer uses the unused milk after “Best before” date for making other dairy products such as Paneer, etc.

Policies

Margins

Sales Forecasting• Retailer Forecasting.

• Backend Data.

• Festivals and Special Occasions.

• Seasonal demand.

Distribution Channel – From the manufacturing units to the retailers.

• Amul products are available in over 800,000 retail outlets across India through its network of over 5,000 distributors.

• First Leg – From manufacturing units to Depots: Amul has 65 depots across major cities of India.

• Second Leg – From Depot to Wholesale Dealers: Amul has a network of over 5000 distributors . The margins offered to the distributors range between 3-5%.On every crate there is a margin of Rs 5.5 .No volume discounts to distributors, prices are fixed. Wholesaler incentives – yearly set group targets, on achieving which they get some amount on every additional kg sold.

•  Third Leg - This is the flow of good from WD’s to retailers, a beat plan is prepared and transportation is done on auto-rickshaws, rickshaws and bicycles.

Distribution and Dealers

Distributors : Rohit and Co. (Ghatkopar , Tilak Nagar, Vidyavihar)Day Schedule

• Different schedules for both Tetra pack and pouch milk

Profit

Margins and Expenses

• Sales (in value and volume), Gross Profit, Net Profit• Expenses – Staff , Rent (warehouse + delivery

vans) , Electricity Bills

Man Power and

storage

facility

• Staff and Roles• Cold Storage and warehouses : FIFO

Training and

Motivation

• 1 day long “Product Launch Conference”• Motivation : Amul-The Brand

Communication & Advertising• Corporate campaign: The Taste of India• Amul butter girl is one of the longest run ad campaigns

in the country (44 years!!!)• Umbrella Branding• Institutional Advertising• Promotion budget• Mere 1% of its turnover

Communication & Advertisements• Controversial issues and Social Messages• Amul Greetings• Newsletter and publication• Competitions , Recipes, Cricket Rankings

Media

• Hoardings/billboardOutdoor

• TelevisionBroadcast

• CinemaNon-

broadcast• Newspaper• General interest magazinePrint

• Independent website• Social Networking SitesInternet

BILLBOARD ADS

Special Thanks To• Mr. Arindam Chatterjee, Depot Manager,

GCMMF, Mumbai.• Mr. Girish Bhatol, Executive (Sales), GCMMF,

Mumbai• M/s. Rohit and Co., Distributor (Amul

Products), Vidyavihar and Ghatkopar Region.

Thank you for your Patience