Amul – The Taste of IndiaAmul – The Taste of India

Group – G2:7 Group Members -

Abhishek Kekre Bharath Kumar B Gulab Nebhani Lalima Dutta Choudhury Tanya Dutta

History of AmulHistory of Amul

Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative movement in India.

It is managed by Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF).

AMUL is based in Anand, Gujarat and has been a sterling example of a co-operative organization's success in the long term. The Amul Pattern has established itself as a uniquely appropriate model for rural development.

Amul has spurred the White Revolution of India. It is also the world's biggest vegetarian cheese brand.

Reasons for SuccessReasons for Success

Robust Supply ChainThe vast and complex supply chain Hierarchical network of cooperatives Stretches from small suppliers to large fragmented markets

Low Cost StrategyAmul adopted a low-cost price strategy to make its productsaffordable and attractive to consumers by guaranteeing them value for money

Diverse Product MixAmul Butter, Milk Powder, Ghee, Amulspray, Cheese, Chocolates, Shrikhand, Ice cream, Nutramul, Milk and Amulya

Strong Distribution NetworkAmul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors. 47 depots with dry and cold warehouses to buffer inventory of the entire range of products.

Technology and e-initiatives New products Process technologyComplementary assets to enhance milk productionE-commerce.

Success!!

GCMMF – Over ViewGCMMF – Over View

GCMMF: Gujarat Cooperative Milk Marketing Federation

GCMMF is India's largest food products marketing organization. It is a state level apex body of milk cooperatives in Gujarat 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.

CRISIL, India's leading Ratings, Research, Risk and Policy Advisory company, has assigned its highest ratings of "AAA/Stable/P1+" to the various bank facilities of GCMMF.

FactsFacts

Members: 13 district cooperative milk producers' Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13,328

Total Milk handling capacity: 11.22 million liters per day

Milk collection (Total - 2008-09):

3.05 billion liters

Milk collection (Daily Average 2008-09):

8.4 million liters

Milk Drying Capacity: 626 Mts. per day

Cattle feed manufacturing Capacity:

3500 Mts. per day

Amul - Business Model Amul - Business Model

RAW MILK

DriedSkimmed Milk

Powder

Packaged Milk

Ice creamBeverages

Condensed

GheeButterCream

pasteurization

Industry Analysis : Porter’s 5 ForcesIndustry Analysis : Porter’s 5 Forces

Bargaining Power of Customers is High because of

Various competitors

Threat of substitutes is high

because ofavailability of Other products

Threat of new entrantsIs high because

There are no entrybarriers

Competitive Rivalry

is High due to

Other brands and

Local players

Bargaining Power of Suppliers is low

because the suppliersAre rural milk

producers

SWOT AnalysisSWOT Analysis

Weaknesses•Risks of highly complex supply chain system•Strong dependency on weak infrastructure•Alliance with third parties who do not belong to the organized sector

Weaknesses•Risks of highly complex supply chain system•Strong dependency on weak infrastructure•Alliance with third parties who do not belong to the organized sector

Opportunities•Penetrate international markets•Diversify product portfolio to enter new product categories and expand existing categories like processed foods, chocolates etc

Opportunities•Penetrate international markets•Diversify product portfolio to enter new product categories and expand existing categories like processed foods, chocolates etc

Threats•Competitors - Hindustan Lever, Nestle and Britannia•Still competition from MNCs in butter•Growing price of milk and milk products•Ban on export of milk powder

Threats•Competitors - Hindustan Lever, Nestle and Britannia•Still competition from MNCs in butter•Growing price of milk and milk products•Ban on export of milk powder

Strengths•Largest food brand in India •High Quality, Low Price•World's Largest Pouched Milk Brand•Annual turnover of US $1504 million •Highly Diverse Product Mix•Robust Distribution Network

Strengths•Largest food brand in India •High Quality, Low Price•World's Largest Pouched Milk Brand•Annual turnover of US $1504 million •Highly Diverse Product Mix•Robust Distribution Network

Customer Based Market SegmentationCustomer Based Market Segmentation

KidsKids

WomenWomen

Calorie ConsciousCalorie Conscious

Health ConsciousHealth Conscious

YouthYouth

Amul Kool Chocolate MilkNutramul Energy DrinkAmul Kool Millk Shaake

Amul Calci +

Utterly Delicious PizzaAmul Emmental CheeseAmul Cheese Spreadsv

Amul LiteSagar Skimmed Milk PowderAmul Lite Slim and Trim Milk

NutramulAmul Shakti Health Food Drink

Industry Based Market SegmentationIndustry Based Market Segmentation

Milk

Butter/Cheese/GheeButter/Cheese/Ghee

Ice-cream Manufacturers

Restaurant/Food Chains

Temples

Bakery & Confectionaries

Pizza Retailers

Snacks Retailers

Coffee Shop Chains

AdvertisementsAdvertisements

AMUL is well known for its innovative hoardings. Find below a few:

AdvertisementsAdvertisements

Mix… Product for every oneMix… Product for every one

Amul never forgot its “primary customer”

- Amul collects 447,000 ltrs of milk from 2.12 million farmers (many illiterate)

Product for youth - Amul launched Chocolate milk under

brand name of ‘Amul Kool Koko’ targeting the

youth

Product for diabetic people - India’s First Pro-Biotic Wellness Ice

cream & Sugar Free Delights For Diabetics

Mix… Product for every oneMix… Product for every one

Product for the health conscious

- Amul Launched “low fat, low cholesterol

bread spreads”

Product for the price sensitive India

- Low Priced Amul Ice Creams and affordable ‘sagar’ whitener

Product for the urban class - Amul launched emmental,

gouda and pizza mozzarella cheese

Product Mix of AmulProduct Mix of Amul

Amul - Product Diversification

Secret Philosophy Progressive addition of higher value productswhile maintaining the desired growth in existingproducts. Amul introduced products with consistent valueaddition but never left the core philosophy of“providing milk at a basic, affordable price”

Seeking unfamiliar products or markets inthe pursuits of growth with both dairy and non-dairy products

Amul - Product AbandonmentAmul - Product Abandonment

10 years back, Amul took a shot at bottled water through ‘Jaldhara’ which was produced by NDDB.

However the venture failed owing to less demand for packaged water in market. The product was abandoned.

Now Amul is all set to re-launch bottled water “NARMADA NEER”

The 3 C’s…The 3 C’s…

•Customers extremely satisfied•Moved from loose milk to •packaged milk•Ready to try more products•Improved socio-economic conditions

•Largest milk brand in Asia•More than 30 dairy brands•Market leader in ghee & butter•Very strong supply chain•Enjoys Fine reputation•Quality with Affordability

•Defending against Mahananda,Vijay, Milma & other co-operative milk brands

•Aggressive moves against Britannia, Nestle, Mother Dairy and Kwality

Amul – BCG MatrixAmul – BCG Matrix

Business growth

Rate

Relative Market Share

High Low

High

Low

Amul Chocolate

Amul Butter

Amul Cheese

Amul Chocolate drink

Amul Ice-cream

Amul – Product PortfolioAmul – Product Portfolio

Category Market Share Market Position

Butter, Ghee 85% 1

Milk Powder 40% 1

Cheese 50% 1

Ice-cream 24.75% 2

Sweets 50% 1

Chocolate Drink 90% 1

Chocolate 10% 3

Struggle - Amul ChocolatesStruggle - Amul Chocolates

.

Introduction Phase

Amul Milk, Amul Fruit and Nut

Low Growth Phase

Decline Sales

New BrandsRejoice,Kite Bite, Nuts about youSugar FreeChoco Zoo

Decline Sales

Inadequate SuccessFailed new brandsExcessive discounts10% Market shareTough competition by Market Leaders – Cadbury (70%), Nestle

What more can Amul do?What more can Amul do?

To improve further 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, choclates 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 can penetrate even better in the rural areas by advertising through the media viz cable channels and newspapers. Sponsoring shows in TV, sports events can be of great help.

Thank You !!