gujarat co-operative milk marketing federation ltd

8/2/2019 Gujarat Co-operative Milk Marketing Federation Ltd

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GUJARAT CO-OPERATIVE MILK M ARKETING FEDERATION LTD.

(GCMMF)

A Case Study……..



Every morning, across India, millions wake up

to the taste of Amul, the flagship brandname for a variety of dairy products marketed

by the Gujarat Co-operative Milk Marketing

Federation (GCMMF).



Background for GCMMF

• In the 1940s, farmers in Gujarat had to sell their milk either to privatemilk contractors or to the single private dairy - Polson's Dairy.

• Polson's used to collect, chill and supply milk to the Bombay Milk

Scheme(Distributer in Bombay).

• Polson's Dairy used its monopoly position and paid them very lowprices.

• In 1945, Nationalist leader Sardar Vallabhbhai Patel, TribhuvandasPatel, a farmer and social worker in Khaira District, beganorganizing dairy farmers into cooperatives, which sell directly to theBombay Milk Scheme.



• In 1946, the milk producers formed KhairaDistrict Cooperative Milk Producers' Union Ltd

(KDCMPUL) to deal directly with the finalbuyer.

• KDCMPUL functioned at the district level and Village

Cooperative Societies(VCS) at the village level

• By June 1948, KDCMPUL started pasteurizing milk so

that it could be supplied to Bombay

• The milk collection in Khaira increased from 250 to5,000 liters a day.



• In 1949, a dairy engineer, named Dr. Verghese Kurien

from Dairy Research Institute at Anand joined the

KDCMPUL.

• Firstly, the main activity was collection and processing of

the milk brought everyday by the member farmers to the

local office of the co-operative.

• But it was soon realized that it was not enough to act as

the collection and selling agents for the farmers. A

variety of support services were given to the farmers.

• But all these were strictly on payment basis: none of the

services were Free.



• By now the corporative revolution moved out

from Khaira to all over Gujarat by following

Anand Pattern.• KDCMPUL is marketed their products under

the brand name of Amul (Priceless in Sanskrit)

•1954- ------Built first processing plant to makemilk powder and butter.

• 1958-------- Cheese and Baby food products

were added to the product line.



Sardar Vallabhbhai Patel

Tribhuvandas Patel Dr. Verghese Kurien

GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD.

(GCMMF)

The district level milk unions became its shareholders.

250 litres per day in 1946 -------------- 4 million litres per day

by 1999 with 12 dairy plants all over the State of Gujarat.



The Anand Pattern

• Three tiered structured……

Milk Producers[All milk producers in a village, 2.1 million in Gujarat, 9.31 million in India ]

Village Co-operative Societies[All villages in a district, 72,774 villages in India ]

District Milk Processing Unions

[Every district in the state ,12 district unions in Gujarat, 170 unions all overIndia]

State Marketing Federation

[All dairies in the State (GCMMF in Gujarat),22 State Federations in India]



MD

GM(Mktng)

Mktng of dairy products,liquid milk, ice-cream

AGM

Manager

Commercial, export &liquid milk

GM (HRD)

Admin, Legal matters,New Opp, Edible oil

AGM

Manager

GM (Qlty)

Assuring quality

AGM

Manager



India

ZonalMgr 1

ZonalMgr 2

ZonalMgr 3

ZonalMgr 4

ZonalMgr 5

BM

Sales officers/field sales persons

BM

Sales

officers/

field

sales

persons

BM

Sales

officers/

field

sales

persons

*There were 48 sales offices spread over the country(two were in Gujarat) and one overseas office, at Dubai



Objectives & philosophy

• Main objective, “carrying out activities for the economic development of

agriculturists by efficiently organizing marketing of milk and dairy produce,veterinary medicines, vaccines and other animal health products,

agricultural produce in raw and/or processed form and other allied

produce”. This was to be done through:

Common branding

Centralized marketing

Centralized quality control

Purchases and

Pooling of milk efficiently

• GCMMF had declared, as its business philosophy, the following:

To serve the interests of milk producers

To provide quality products that offer the best value to consumers for

money spent.



Diversification



Diversification

• Non milk product diversification Edible oil (DHARA)

[60% of groundnut produced by Gujrat]

GCMMF marketed this oil on behalf of NDDB

Dhara, Shudh Dhara

Fruit Product (SAFAL)

GCMMF undertook distribution of fruit based product on behalf

of NDDB.[Mango drink,Tomato ketchup,Mixed fruit jam]



• of 4.6 million liters of milk/day about 2.2 million liters were

sold as liquid milk and the rest as milk products.

Liquid Milk

15%

Edible Oil

17%

Butter

22%

Ice Cream13%

Rest

33%

% of GCMMF’s total income (Rs.18 billion )

(5.85 bn)

(2.75 bn)

(2.4 bn)(4.0 bn)

The share of processed fruits and vegetable items was still quite small

(3.0 bn)



Market Share

• The nature of competition

varied among the different

products

• Amul brand was the market

leader in each and every one

of its products (except ice

creams, chocolate and

chocolate-based beverages)



GCMMF: PRODUCT PORTFOLIO

Category Market Position

Liquid Milk 1

Butter 1

Milk Powder 1

Cheese 1

Sweets 1

Ice Creams 2

Chocolates 3

Chocolate Drinks 4



SWOT Analysis………..

• The biggest strength of GCMMF was the trust it had created

in the minds of its consumers regarding the quality of its

products.

• Main objective

Common branding

Centralized marketing

Centralized quality control

Purchases and

Pooling of milk efficiently




• The profit margin in milk was generally low, due to the need

to keep down the price of this essential commodity.

• NDDB and GCMMF had, as one of their important objectives

promotion of milk consumption, especially by the poorer

people.

• Edible oils were also low margin items, their sales prices being

controlled rigidly by the government and input prices being

essentially set by the oil traders.

O




• The milk consumption in India in 1999 at about 225 grams per day was still

way below that in developed countries and even less than in many

developing countries.

•

It was expected that by the year 2011-12, the milk production in Indiawould reach 180.76 million tons.

• The variation in availability between rural and urban areas was strikingly

high: 121 grams vs. 400 grams per day.

• Opportunities abounded in the market, both domestic as well as export.

– GCMMF had been making major efforts to make its brand known in many countries,

including U.S.A., where it had entered into an alliance with Kanan Dairy .

– It had established offices and agencies in New Zealand, Gulf, Sri Lanka and Australia.




• Consumers were generally not very particular about the brand of liquid

milk.

• There was also competition from newly emerging private dairies that had

started supplying milk to the consumers as well as sweet makers.

• For butter and cheese, Britannia had introduced new forms of cheese such

as cheddar cheese slices, and supported its products with extensive

advertising campaigns.

• Other food companies such as Hindustan Unilever Ltd. (HUL), and Nestlé

had also entered into the business of ready made or near ready sweets .

These were advertised and heavily promoted through campaigns such as

through mail orders to housewives.



Advertisement and Promotion

•

GCMMF had shown itself to be remarkably savvy inits advertisement and promotion campaigns.

• A campaign titled “The Taste of India” for all its

products, featuring Indian recipes and life style.

• It had coined truly memorable slogans such as the

one for butter: “Utterly Butterly Delicious Amul”; foredible oils: “Dhara, Shudh Dhara”, emphasizing its

purity



• It was the first Indian company to put up advertisement

hoardings (bill boards) [started in 1967] based on a topical

and current news item that almost brought traffic to a stop.

• The hoardings,were changed weekly and every week it had a

current and a new theme



• GCMMF sponsored television programmes as

well.

• GCMMF had sponsored two well-received

feature films



GCMMF and Its Programme for

Management of Change

• They realized that, they had to become more

customer centered rather than merely being

farmer or supplier centered.

• This required paying close attention to the

customer needs and quality.

• Hence it launched a “Total Quality Management”



“I am confident –in the next twenty

five years we will transform the lives of

millions more, opening for them the

door to an India ,that is the land of ourdreams.”

Dr. Verghese Kurien

Chairman, GCMMF



Thank You…..

gujarat co-operative milk marketing federation ltd

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