Amul-The Taste of India

Case Study Presented by Kavita Bavkar

Rachana Adkar

History 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 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.

Members 13 districts cooperative milk producer union

No. of Producer Members 2.79 million

No. of Village Societies 13328

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

Facts

Reason to Success

People power Brand umbrella Low-cost price strategy Introducing higher value products The distribution network Managing supply chain Business market Co-ordination

Mix Product for Everyone 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

Product for health conscious

Amul launched “low fat, low cholesterol bread spread’.

Product for the price sensitive India

Low Priced Amul Ice-cream & affordable sugar

whitener.

Product for urban class

Amul launched emmental gouda & pizza

mozzarelia cheese

Amul – Business Model

Raw Milk

Condensed GheeButterCream

Package MilkIce-creamBeverages

DriedSkimmed Milk

Powder

Pasteurization

Amul never forgot its “Primary Customer”

Amul collects447,000 ltrs of milk from 2.12 million farmers

Customer Based Market Segmentation

Kids

Women

Youth

Calories Conscious

Health conscious

Amul kool chocolate milk Nutramul energy drink

Amul milk shake

Amul Calci +

Amul emmental cheeseAmul cheese spread

Amul LiteSagar skimmed powderAmul Lite slim & trim

milk

NutramulAmul shakti health drink

Industry Analysis: Porter’s 5 Forces

Competitive Rivalry is high due to other

brands & Local Players

Threat of new entrants is

high because there is no

entry barriers

Bargaining power of suppliers is

low because the suppliers are

rural milk producers

Threat of substitutes is high because of availability

of other product

Bargaining power of

customer is high because

of various competitors

SWOT Analysis of Company

Strengths

• Largest food brand in India

• High quality, low price• World’s largest pouched

milk brand• Annual turnover of $

1504 million• High diverse product mix

Weaknesses• Risk of highly complex

supply chain• Strong dependency on

weak infrastructure • Alliance with third

parties who do not belong to the organized sector

Opportunities• Penetrate international

market• Diversify product

portfolio to enter new product categories and expand existing categories like processed foods, chocolate etc

Threats• Competitors – Hindustan

Lever, Nestle, Britannia etc

• Still competition from MNCs in butter

• Growing price of milk and milk products

• Ban on export of milk powder

StrengthsParent supportStrong distribution networkHigh demand of Amul Milk ChocolateCan make good utilization of established goodwill of better channelGood margin of profit

WeaknessesNo advertisements &

promotions are made for Amul chocolate.

Raw material supply – volatile prices.

Chocolate – comparatively small business unit.

OpportunitiesLow penetration consumption.Scope of launching new variants & extensions.Growing Population

ThreatsForeign

multinationals.Change is

needed according to

trend and customers

preferences.Amul has

number of competitors like Nestle, Cadbury

etc. Amul chocolate has

not those much good

advertising strategies to win over its

competitors.SWOT Analysis of

Amul Chocolate

The 3 C’s…...

Customer

Company

Competition

•Largest milk brand in asia•More than 30 dairy brands•Market leaders in ghee & butter•Very strong supply chain•Enjoys fine reputation•Quality with affordability

•Defending against Mahananda, vijay & other co-operative milk brands•Aggressive moves against Britannia, Nestle, Mother Dairy & Kwality

•Customer extremely satisfied •Moved from loose milk to package milk•Ready to new products•Improve socio-economic conditions

Amul chocolate Introduction

Introduced chocolate brand in 1974

2003 year To boost sale, Amul

launched three new chocolates in under the brands Fundoo, Bindas, and Almond bar.

As a result Amul introduced festival season pack “Rejoice” came with six chocolates

Amul Chocolate A new tag line: Amul chocolate – For someone you love. In the past year sugar free & choco zoo both have

been appriciated by consumers. Competitors –Cadbury, Nestle

Reasons of failures Lack of e-selling awareness- Amul Cyberstore Poor advertising and less use of hoardings

Competition Scenario The chocolate market in India has only 3 big players,

Cadbury (79%), Nestle (14%) & Amul (5%).

Suggestions- Amul must come up with its own boutiques Form its own shelves in retail shops & take ownership

of maintaining them. Direct school programmes

Amul Chocolate

Introduction Phase

Amul milkAmul fruit & nut

Years

Decline Sales

Low Growth Phase

New BrandsKite Bite

Nutes about youSugar freeChoco Zoo

Decline Sales

Inadequate successFailed new brands Tough Competition by Market Leaders- Cadbury(70%), Nestle

1974 1985 1999 2002 2009

What more can Amul do ? To improve further Amul can try 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 products 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 market research & 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 via cable channel s and newspapers sponsoring shows in TV, sports events can be great help.

Conclusion

As Amul has large number of product variety, they can focus on each criteria on each market segment. The most effective dimension would be a product differentiation among place wise. As of now there is no such company which made product variety in such segment.