Capstone Research Project(avinash Arreja Pgdm 3494 ) (2).docx

Institute For Technology And Management

CAPSTONE RESEARCH PROJECT II Title of the Project :Comparitive Study of Amul Dairy Product & Market Analysis Of Amul Chocolates.

GUIDED BY :

SUBMITTED BY:

Prof. Manisha Sachdev

Avinash Arreja

Prof. Rachana Mane

PGDM ID- PGDM 3494

SUBMITTED TO Departement of Marketing Management ITM Business School 2017-2019

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INDEX CONTENT Introduction Overview Literature Review History & Evolution Domestic & Foreign Competition Sectoral Growth Government policies & regulations

PAGE NO. 3 4 6 5 7 9 10

PESTEL analysis

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Porter’s Five Force Model

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Major Players in market

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Cluster Mapping

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Introduction

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History and Evolution

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Product Portfolio Sales Growth History Market shares, competitors market share. Total Man Power, organizational structure. BCG (Product Portfolio) Matrix SWOT analysis Matrix Porter’s five force model for competition’ Strength & weakness on its ‘Value Chain’ Competitors Business strategy The Research Problem Questionnaire Analysis Conclusion Reference

25 27 29 31 32 33 34 38 39 40 41 44 53 54

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INTRODUCTION Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as packaged foods, beverages, toiletries, over-the-counter drugs and many other consumables. In contrast, durable goods or major appliances such as kitchen appliances are generally replaced over a period of several years. Many fast-moving consumer goods have a short shelf life, either as a result of high consumer demand or because the product deteriorates rapidly. Some FMCGs, such as meat, fruits and vegetables, dairy products, and baked goods, are highly perishable. Other goods, such as pre-packaged foods, soft drinks, chocolate, candies, toiletries, and cleaning products, have high turnover rates. The sales are sometimes influenced by holidays and seasons. Packaging is critical for FMCGs. The logistics and distribution systems often require secondary and tertiary packaging to maximize efficiency. The unit pack or primary package is critical for product protection and shelf life and also provides information and sales incentives to consumers. Though the profit margin made on FMCG products is relatively small (more so for retailers than the producers/suppliers), they are generally sold in large quantities; thus, the cumulative profit on such products can be substantial. FMCG is a classic case of low margin and high-volume business.

Characteristics of FMCG products: From the consumer's perspective     

Frequent purchase Low involvement (little or no effort to choose the item) Low price Short shelf life Rapid consumption

From the marketer's perspective    

High volumes Low contribution margins Extensive distribution networks High stock turnover

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OVERVIEW 

The Indian FMCG industry represents nearly 2.5% of the country’s GDP.

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The industry has tripled in size in past 10 years and has grown at ~17%CAGR in the last 5 years driven by rising income levels, increasing urbanisation, strong rural demand and favourable demographic trends.

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The sector accounted for 1.9% of the nation’s total FDI inflows in April 2000September 2012. Cumulative FDI inflows into India from April 2000 to April 2013 in the food processing sector stood at `9,000.3 crore, accounting for 0.96% of overall FDI inflows while the soaps, cosmetics and toiletries, accounting for 0.32% of overall FDI at `3,115.5 crore.

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Food products and personal care together make up two-third of the sector’s revenues.

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Rural India accounts for more than 700 mn consumers or 70% of the Indian population and accounts for 50% of the total FMCG market.

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With changing lifestyle and increasing consumer demand, the Indian FMCG market is expected to cross $80 bn by 2026 in towns with population of up to 10 lakhs.

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India's labor cost is amongst the lowest in the world, after China & Indonesia, giving it a competitive advantage over other countries.

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Unilever Plc's $5.4 billion bid for a 23% stake in Hindustan Unilever is the largest Asia Pacific cross border inbound merger and acquisition (M&A) deal so far in FY’14 and is the fifth largest India Inbound M&A transaction on record till date.

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Excise duty on cigarette has been increased in the Union Budget for 2013-14, which would hit major industrial conglomerates like ITC, VST Industries in the short term.

Opportunities in FMCG Sector: 

Untapped rural market

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India is one of the world’s biggest producers of a number of FMCG products but the country’s exports account for a very small proportion of the overall output.

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Food-processing Industry: With 200 mn people expected to shift to processed and packaged food, India needs around USD 30 bn of investment in the food processing industry.

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Key Concerns for the sector: 

High inflation

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Rising cost of inputs

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Emergence of private labels

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Counterfeits and pass-offs

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Rupee depreciation may hit margins of companies

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Infrastructure bottlenecks

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Objective of the Report 1. To know awareness of people towards Amul Products 2. To know the preference of Amul Products with comparison to other brands 3. To know the factors which affect consumer buying behaviour with Amul Chocolates 4. Swot Analysis of Amul 5. To study various factors such as quality, price, easy availability, etc

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LITERATURE REVIEW FMCG scenario

The term FMCG (fast moving consumer goods), although popular and frequently used does not have a standard definition and is generally used in India to refer to products of everyday use. Conceptually, however, the term refers to relatively fast-moving items that are used directly by the consumer. The Indian FMCG sector has a market size of US$ 13.1 billion and is the fourth largest sector in the Indian economy. A wellestablished distribution network, mature logistics, intense competition between the organized and unorganized segments, National brands and private labels/local brands characterize the sector. It has been estimated that FMCG sector sales in India is likely to increase from Rs. 92,100 cores in 2011-12, to over Rs.1,30,000 cores in 2015. With the presence of 12.2% of the world population in the villages of India, the Indian rural. FMCG market is formidable indeed. The Indian rural market has more than 700 Million Consumers (70% of the Indian population) and accounts for 50% of the total FMCG market. The Personal care category in India was valued at Rs. 54.6 billion. An average Indian spends 8% of his income on personal care products. Personal care mainly consists of Hair Care Skin Care, Oral Care, Personal Wash (Soaps), Cosmetic and Toiletries, Feminine Hygiene. The sales of FMCG Personal care segment is growing by leaps and bounds in Kerala, with the most literate and trans-culture embracing consumers in India. Kerala has been witnessing a social transformation over the past decade to form a modern consumerist state with little focus on farming sector, increased interest in I.T related parks, educational services, medical facilities and tourism, higher income with huge remittances from the NRI’s and increased living standards even in the rural areas providing better growth prospects and demand for the FMCG sector. The per capita consumption of FMCG products is on the rise, thanks to the consumer acculturation. The deeper market penetration and positioning of FMCG brands catering.

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DOMESTIC FMCG:

Domestic FMCG firms log more revenue than MNCs in FY16: Report Country's seven leading FMCG companies have fared better than their multinational peers in terms of revenue growth in India during 2015-16 fiscal, says a report. As per an Assocham-TechSci Research report, the combined revenue of select seven Indian FMCG companies during 2015-16 stood at $ 11,066.46 million (over Rs 73,835 crore), while that of select seven MNCs was at $ 9,436.66 million (over Rs 62,961 crore). Among the domestic FMCG majors, ITC Ltd reported a revenue of $ 5,944.79 million, while Britannia Industries Ltd's revenue was at $ 1,222.75 million, the report said. Dabur India's revenue stood at $ 884.62 million and Godrej Consumer Products Ltd reported a revenue of $ 740.24 million. Marico's revenue was at $ 761.14 million while that of Amul was $ 743.69 million. "The performance of Patanjali Ayurved has been unmatched and leaves behind all its competitors in the segment with record growth of 146.31 per cent in the revenue on year-on-year basis. Patanjali Ayurved achieved the revenue of $ 769.23 million during 2015-16," the report said. On the other hand, revenues of multinational companies such as Hindustan Unilever Ltd stood at $ 4,921.10 million, while Procter & Gamble Hygiene & Health Care Ltd reported revenue of $ 382.20 million. GlaxoSmithKline Consumer Healthcare Ltd's revenue was at $ 662.88 million, while revenues of Colgate-Palmolive (India ) Ltd's and Gillette stood at $ 640.35 million and $ 321.62 million, respectively. As per the study, Nestle's revenue was at $ 1,257.74 million and PepsiCo India reported a revenue of $ 1,250.77 million.

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Foreign competitors: FMCG is an industry where the competition goes on for years. There are so many tactics to fight competition in FMCG, that the companies do not back off and from time to time they keep introducing new measures to ward off competitors. Furthermore, this industry is pockmarked with unorganised competition wherein small and medium manufacturers also give tough competition to established companies. Here we discuss the top 6 FMCG rivals of all time, companies which have been in competition with each other for years.

HUL vs P&G (Detergents, shampoos, soaps): The HUL vs P&G rivalry exists in every retail counter or modern retail showrooms. And it is most prominent in personal care or hygiene products like Detergents, shampoo, soaps, and others. P&G has head and shoulders, HUL has dove. P&G has Olay, whereas HUL has Sunsilk and Tresemme. P&G has Old spice, HUL has Axe. Thus, powerful products are present in both the companies, both of them die hard rivals to each other. However, each of the companies have their own trademark products as well. For example, HUL has Pure it which P&G does not have. On the other hand, P&G has a product like Duracell which HUL does not have. Thus, 2 mammoth companies, with many SBU’s and with multiple products in each SBU, the HUL vs P&G rivalry can best be assumed to be the toughest of them all.

Pepsi vs Coke (Soft drinks): Whenever you talk about FMCG rivals, you have to talk about Pepsi and Coke by default. Coca cola has far stronger brand equity when compared to Pepsi. However, this is not a war for brand equity, it is a war for market dominance. And both the companies are very aggressive when it concerns their marketing or their distribution. Both the companies are known to break distributors by giving them huge margins and at the same time, they are known to take direct digs at each other. Due to their intense rivalry, no other soft drink brand has been able to survive in this market. Thus, the 2nd highest FMCG rivalry award goes to Pepsi vs Coke.

Nestle vs Kraft foods (Chocolates): Nestle KitKat, nestle munch, Alpino, Classic Nestle, Milky bar, eclairs and polo are some of the top products which come in the chocolate brands for Nestle. All of these 10

products are widely in demand in the market. And they sell in huge volumes. However, Nestle products just challengers to the market leader – Dairy milk and Cadbury from Kraft foods. Dairy milk is one of the most marketed and most liked chocolates across India. At the same time, Cadbury celebrations is a popular gifting product and targets occasions and festivals with an emotional touch. In this rivalry, nestle is quite far behind but has always been the thorn in an otherwise flawless leadership by Cadbury. Where Nestle has KitKat, Cadbury has Perk. Similarly, Cadbury has its own version of Eclairs. Thus, these FMCG rivals are set to be rivals for the coming years. Though, it can be forecasted that Nestle will remain the challenger and Cadbury the market leader.

Colgate vs Pepsodent (Tooth Paste): One company vs one single product, always at war. Colgate is a complete company with its major focus being dental health. Hence Colgate has several times come out with variants like Colgate for sensitive teeth, normal Colgate, Colgate gel etc. However, whatever innovation it brings, Pepsodentis not far behind. Pepsodent is a strategic business unit of Hindustan unilever ltd and is one of the toughest competitors for Colgate. These two toothpaste brands have always been at loggerheads and the situation does not look like improving in the near future. Where Colgate has the brand value, Pepsodent has the powerful distribution support of HUL. Because of all other products of HUL, pepsodent reaches even rural areas easily and hence has a high turnover. Off course, there are other products in the toothpaste market, but these two are the toughest competitors amongst them all.

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Sectoral growth: According to a CII-BCG white paper on the FMCG sector, growth in disposable income, increased urbanisation, and the increase in the number of nuclear households are driving the growth of the Indian branded FMCG sector, which is pegged at about $65 billion and has been growing at a robust pace. “The FMCG sector has been delivering far superior returns over the past few years compared to most other sectors. Our projections indicate that the sector will continue to grow by 13-14 per cent in the next 5-10 years and is likely to become a $220-240 billion industry by 2025,” Singhi added. The CII-BCG white paper will be unveiled on Monday at the CII National FMCG summit, which will see top CEOs deliberating on the theme ‘Re-imagining FMCG in India’. Shiv Sivakumar, Chairman, CII National Committee on FMCG 2015-16, & Chairman and CEO, PepsiCo India, said the FMCG sector is already a key driving force behind ‘Make in India’ and a bedrock of talent. "India is at the cusp of the FMCG S-curve and there is significant room to grow over the next 5-10 years. A nominal GDP growth rate of roughly 12 percent over the next three years could signal an FMCG growth by over 15 per cent, depending on player action," the CII-Bain & Company said. The report noted that the industry has seen the growth rate accelerating in 2016 over the previous two years, with 18 of the 22 categories recording an uptick, driven by rural markets. Last year, the FMCG industry grew at 9 percent till October and rural growth was 1.7 times the urban. Across these 22 categories, volume growth was driven by underlying penetration gains and even highly penetrated categories such as toothpaste and hair oil, both with over 95 per cent penetration, recorded material penetration gains, it added. "Food emerged as the fastest growing segment at 10 percent, with larger towns and more affluent consumers driving this growth. On the other hand, home care grew at 9 percent, which was driven by less affluent consumers residing in small towns and rural areas".

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Government policies and regulations:

Goods and Service Tax (GST): GST, upon being implemented shall replace the multiple indirect taxes levied on FMCG sector with a uniform, simplified and single-point taxation system. A swift move to the proposed GST may reduce prices, bolstering consumption of FMCG products.

Food Security Bill: The Food Security Bill has been passed recently by the Union Cabinet. As per the bill, 5Kg of food grains per person per month will be provided at subsidized prices by the State Governments under the targeted public distribution system. This is expected to result in higher inflow of investments into the agriculture sector in the coming years.

Excise Duty: Excise duty on other beverages and lemonade would be decreased to reduce retail sale price by 35%. Excise duty on various tobacco products other than beedi would be increased, resulting in retail price of tobacco products going up by 10-15%.

Relaxation of License Rules: Industrial license is not required for almost all food and agro-processing industries, barring certain items such as alcoholic beverages, cane sugar, and hydrogenated & animal fats as well as items reserved for exclusive manufacture in the small-scale sector.

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PESTEL ANALYSIS Pestel analysis is a tool to understand the environment in which business operates, & the opportunities & threats that lie within it. By understanding the environment in which it operates, it can take advantage of the opportunities & minimizing the threats. Specifically, PESTEL analysis is useful tool for understanding risks associated with markets growth or decline & directing business to grow. P – Political factors E – Economic factors S – Socio-cultural factors T –Technological factors E - Environment factors L - Legal factors A PESTEL analysis is a measurement tool, looking at all the external factors of the organization. It is often used within a strategic SWOT analysis (strength, weaknesses, opportunities & threats analysis). PESTEL ANALYSIS ON FMCG INDUSTRIAL: -

POLITICAL FACTORSPolitical stability: Political stability is one of the important most factor which influence the growth of business directly. If Political stability is higher, then it leads to perfection in Business & on the other hand if there is instability the business will have to suffer. Taxation policy: Tax policy of government will affect the price of inputs & it ultimately affect the prices of final products & it will directly affect the sale of product. Government intervenes: This indicates that at what level the government intervenes in the economy. If the government intervene is more sometimes it helps the organization at large extent. Subsidies: The subsidies which are provided by government to different organisation at different level also help it to grow at faster rate & helps the organisation in reducing the finance which is to be funded from outside & it directly reduces interest amount paid in favour of fund raised from outside. Trading policies: This indicates the policies related to import & export of goods and services from different nations. If the policies are favourable more goods & services will be imported& exported, & on the other hand if policies are unfavourable it will restrict the import & export. Labour law: Labour law also affect the organisation, for example- child labour, a child below14 year of age cannot work in factory or any hazardous place.

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ECONOMIC FACTORS – Interest rates: Interest rate directly affect the cost of capital, if the interest rate is higher the cost of capital will increase & if it is lower than cost of capital will be lower. This directly affect the profit of the organization & it’s growth. Tax charges: If the tax charged by the government is lower than it will reduce the product price & if it is higher than it will increase the prices of the products. Exchange rates: This shows that what is the exchange rate or foreign currency rate. If exchange rate is higher more amount is paid on import of goods & if it lowers less amount is to be paid & on the other hand if it is higher the amount received will be more & if it is lower the amount received will be low. National income: National income is important factor as if affect the growth of the organisation. If per capita income is more the amount spend will be more & if it will be lower the amount spent will be less. Economic growth: Economic growth is important factor in the development of the organization. If economy grows at a higher speed it will directly affect the growth of the organization. Inflation rate: Inflation means the rise in the value of all the product in the economy, if inflation rate is higher the cost of products will be higher & if inflation rate is lower the cost of product will be lower. This directly affect the growth of the organization.

SOCIO –CULTURAL FACTORS – Demographics: Demographics is the study of human population in the economy. It helps the organization to divide the markets in different segments to target a large of customers. For Example- according to race, age, gender, family, religion, & sex. Distribution of income: This shows that how income is distributed in the economy. It directly affects the purchasing power of the buyers. And ultimately leads to increase or decrease in the consumption level of the products. Changes in life style: Change in life style also leads to increase or decrease in the demand for different commodities. For example- presently LCD & LED TV’s have replaced Digital displayed TV set, this shows that the changes in life style of consumers. Consumerism: This indicates that a large number of options are available while purchasing of goods to consumers, so the choice becomes easy & quality products can be choose by consumers. So, while purchasing a consumer have different choices to select product according to his needs. Education levels: Education is one of the most important factor which influence the buying power of consumer, while selecting a particular good a consumer should know all its features so it can differentiate them with another product. 15

Law affect social behaviour: Different laws are made by the government to safe guard the rights of consumers. For example- Consumer protection act, this law indicates that a consumer can file a case against a seller if he finds that he is cheated.

TECHNOLOGICAL FACTORSAdvancement in technology: New technology helps in economising the scale of production, this means that new technology helps in increasing the level of production, & reducing the costs of inputs, & maximising the level of profits. Discoveries & innovation: Advancement in technology will leads to discoveries &innovations & further improvements in technology so as to improve perfections in the production process. Competitive forces: Advancement in technology will also leads to competition in the markets, more quality products will be provided to consumers to cover a large number of market. Automation: Change in technology will leads to automation, this means that with new technology labour required is less as machines are automatic. All the works are done automatically by the machines as earlier it is labour oriented. Now all the work is machine oriented. Obsolete rate: Day-by-day new inventions are made so the rate of obsolete is higher, as in Computer LAPTOPS have replaced the PC. This shows that the technology becomes obsolete very fast. Research & development: This department plays a vital role in the development of the organization. As this department always do research that what are the demand of the markets & how to make advancements so the organization can survive in the competitive world.

ENVIRONMENTAL FACTORS – Ecological: The ecological and environment aspects such as weather, climate, & climate changes, which may especially affect industry such as tourism, farming, & insurance. In FMCG Air conditioner’s demand increase in summer season. Environmental issues: Global warming is one of the major issue now-a-days as external factor is becoming a significant issue for firms to consider. Many remedies have been taken to reduce Global warming. Environmental regulations: Various regulations have been declared by government to safeguard the environment. For example-no company should through its waste in rivers.

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LEGAL FACTORS– Employment law: Employment law provides equal opportunities to every citizen to work &earn his livelihood. It provides equal opportunities to every citizen. Consumer protection: This law helps to protect the rights of consumers & he can file a case against seller if he fined that he is cheated. Industry-specific regulations: These laws are related to industry for example- no industry can establish in between cities i.e. it should be outside the cities

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PORTER’S FIVE FORCE MODEL

1) Barriers to Entry and exit: The Indian FMCG Industry is characterized with modest entry and exit barriers. Integrated business model and increasing capital requirement in the industry restrict new entrants. Huge investments in setting up distribution networks and promoting brands and competition from established companies. 2) Threat of substitutes: Being an essential commodity the demand for consumer products is elastic. Multiple brands positioned with narrow product differentiation. Companies entering a category /trying to gain market share compete on pricing which increases products substitution. Hence, threat of substitute is high in the industry. 3) Buyer bargaining power: High brand loyalty for some products, thereby discouraging customers’ product shift. But low switching cost and aggressive marketing strategies under intense competition within the FMCG companies, induce Customers to switch between products, thereby driving value for money deals for consumers. 4) Supplier bargaining power: Prices are generally governed by international commodity markets, making most FMCG companies price takers. Due to the long-term relationships with suppliers etc., FMCG companies negotiate better rates during times of high input cost inflation 5) Industry Competition: Competitiveness among the Indian FMCG players is high. With more MNCs entering the country, the industry is highly fragmented. Advertising spends continue to grow and marketing budgets as well as strategies are becoming more aggressive. Private labels offered by retailers at a discount to mainframe brands act as competition to undifferentiated and weak brands.

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MAJOR PLAYERS MARKET SHARE

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CLUSTER MAPPING

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INTRODUCTION Company Overview: AMUL- The Taste of India

Fast Moving Consumer Goods is the 4th largest growing sector in Indian Economy. FMCG has three segments: 1. Food and Beverages-19% 2.Healthcare-31% 3.Households and personal care-50% The growth of FMCG company from 2011 to 2018 is 60%, and it is expected to grow at a compound rate of 20.6 % every year. The new investment FMCG is looking for is in energy efficient plant so that it benefits the society and lower the cost in long term. Indian FMCG Companies are ITC, Godrej consumer products ltd, Britannia, Emami, Amul, Dabur, Etc. The brand name Amul means “AMULYA”. This word derived from the Sanskrit word “AMULYA” Which means “PRICELESS”. A quality control expert in Anand had Suggested the Brand name “AMUL”. Amul products have Been in Use in millions of Homes since 1946. Amul Butter, Amul Milk powder, Amul Ghee, Amulspray, Amul Cheese, Amul chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. (The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many things like of the high-quality products sold at reasonable prices, of the genesis of a vast co-operative network of the triumph of indigenous technology of the marketing savvy of a farmer’s organization. And have a proven model for dairy development (Generally Known as “ANAND PATTERN”) 22

Anand Milk Union Limited or Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat. Amul spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. The white revolution was spearheaded by Tribhuvandas Patel under the guidance of Sardar Patel and Varghese Kurien. As a result, Kaira District Milk Union Limited was born in 1946. Tribhuvandas became the founding chairman of the organization and led it until his death. He hired Dr. Kurien three years after the white revolution. He convinced Dr. Kurien to stay and help with the mission.] Kurien, founder-chairman of the GCMMF for more than 30 years (1973–2006), is credited with the success of Amul. Amul has become the largest food brand in India and has ventured into markets overseas. Amul products are now available in more than 20 countries. Amul brand of milk and milk products has been recognised as best Indian FMCG Company by International Advertising Association (IAA). Amul is marketed by Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF). Amul is India’s largest food brand with annual turnover of Rs.38000 Crore. Amul is currently procuring 180 Lakh litres per day through 18600 village dairy cooperative societies. Amul has very vast product range Milk, Cheese, Paneer, Butter, Beverages, Etc. Internet survey on all the products of Amul, the result is Amul Chocolate does not have much product mix depth and even its turnover and sales growth over these years are not growing comparatively. The reason for this study is to find out people’s behaviour regarding Amul Chocolate & the advertisement medium most preferred for advertising the Amul chocolate to increase its awareness in the market. This examination incorporates the consumer psyche and perception of Amul Chocolate in Indian Market. The medium used for the survey will be Email and it would be through questionnaire.

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HISTORY & EVOLUTION OF THE COMPANY: Amul is an Indian Dairy Cooperative, based at Anand, Gujarat. Amul started India’s White Revolution, which than leaded India to became world’s largest producer of milk and milk products. This white revolution was started by Tribhuvandas Patel, as a result Kaira district Milk Union Limited was born in 1946. Within a short span of time, GCMMF opened five union in another district that were – Baroda, Mehsana, Banaskantha Sabarkantha, Surat. GCMFF is the largest food products marketing organization of India. In the year 1946 the first milk union was established. This union was started with 250 litres of milk per day.in the year 1955 AMUL was established. In the year 1946 the union was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION. This union selected the brand name AMUL in 1955. In the early 40’s, the mains sources of earning for the farmers of Kaira district were farming and selling of milk. That time there was high demand for milk in Bombay. The main supplier of the milk was Polson dairy limited, which was a privately-owned company and held monopoly over the supply of milk at Bombay from the kaira district. This system leads to exploitation of poor and illiterates ‘farmers by the private traders. The traders used to beside the prices of milk and the farmers were forced to accept it without uttering a single word. However, when the exploitation became intolerable, the farmers were frustrated. They collectively appealed to sardar Vallabhbhai 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 co-operatives union, Instead of supplying milk to private traders. Sardar Patel sent the farmers to Shri Morarji Desai to gain his co-operation and help. Shri desai held a meeting at Samarkha village near Anand, on 4th January 1946.He advised the farmers to form a society for collection of the milk. These village societies would collect the milk themselves and would decide the prices at which they can sell the milk. The district union was also formed to collect the milk from such village co-operative societies and to sell them.it was resolved that the government should be asked to buy milk from the union However, the govt did not seem to help farmers by any means.it gave the negative response by turning down the demand for the milk.to respond to this action of govt. The farmers 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. Having seemed the condition, he decided to fulfil the farmers demand. Thus, their cooperative unions were forced at the village and district level to collect and sell milk on a cooperative basis, without the intervention of Government Mr. VerghesKurien showed main interest in establishing union who was supported by Shri TribhuvandasPatel who lead the farmers in forming the co-operative unions at the 24

village level. The Kaira District Milk Producer’s Union was thus established in ANAND and was registered formally on 14th December 1946.Since Farmers sold all the milk in Anand Through a co-operative union, it was commonly resolved to sell the milk under the brand name AMUL. At the Initial stage only 250 litres of milk were collected every day. But with the growing awareness of the benefits of the cooperativeness, the collection of milk increased. Today Amul collect 11 lakhs litres of milk every day. Since milk was a perishable commodity it becomes difficult to preserve milk flora longer period. Besides when the milk was to be collected from the far places, there was a fear of spoiling of milk. To overcome this problem the union thought out to develop the chilling unit at various junctions, which would collect the milk and could chill it, to preserve it for a longer period. thus, today Amul has more than 150 chilling centres in various villages. Milk is collected from almost 1073 societies. With the financial help from UNICEF, assistance from the govt. of New Zealand under the Colombo plan, of Rs. 50 million for factory to manufacture milk powder and butter was planned. Rajendra Prasad, the president of India laid the foundation on November 15, 1954.Shri Pandit Jawaharlal Nehru, the prime minister of India declared it open at Amul Dairy on November 20,1955.

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PEOPLE POWER: AMUL’S SECRET OF SUCCESS The system succeeded mainly because it provides an assured market at remunerative prices for producer’s milk besides acting as a channel to market the production enhancement package. What’s more, it does not disturb the agro-system of the farmers.it also enables the consumer an access to high quality milk and milk products. Contrary to the traditional system, when the profit of the business was concerned by the middleman, the system ensured that the profit goes to the participants for their socio-economic upliftment and common good

Looking back on the path traversed by Amul, the following features make it a pattern and model for their socio-economic elsewhere. Amul has been Able to: 

Produce an appropriate Blend of the Policy Ma kerns Farmers Board of Management And the professionals: each group appreciating its routes and limitations,

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Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment.

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Provide a support system to the milk producers without disturbing their agroeconomics system,

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Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers and

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Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense. Amul is an example par excellence, of an intervention for rural change.

The Union looks after policy formulation, processing and marketing of milk, provision of technical inputs to enhance milk yield of animals, the artificial insemination service, veterinary care, better feeds and the like-all through the village societies. Basically, the union and cooperation of people brought Amul into fame i.e. AMUL (ANAND MILK UNION LIMITED), a name which suggest THE TASTE OF INDIA.

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AMUL AS AN ORGANIZATION :

6,94,271 Number of Producer Members 1713 Number of Village Dairy Cooperative Societies

Total Milk Handling Capacity

5 Million liters per day

2.5 Million liters Milk Collection (Daily Average)

Milk Drying Capacity

150 Mts per day

Cattle Feed Manufacturing Capacity

2500 Mts per day

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PRODUCT PORTFOLIO: Amul mainly produces dairy product which falls under nondurable goods category but also produces durable goods Examples Durable Goods: Milk Powders, Ready to Serve Soups Non-Durable Goods: - Fresh Milk, Cheese Range & Ice creams

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SALES GROWTH HISTORY: Market shares, competitors market share of Amul:    

Amul has set up its largest dairy with processing capacity of 30 lakh liters a day at Dehradun and Haryana to server the NCR region. No. 1 In Indian Market 65% of Indian Market share Rs. 80,000 Crore Milk business per year

SALES GROWTH OF AMUL TILL 2017-18

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

30

Sales Turnover

Rs (million)

US$ (in million)

2010-11

97742

2172

2011-12

116680

2500

2012-13

137350

2540

2013-14

181434

3024

2014-15

207330

3410

2015-16

229720

3500

2016-17

270850

4100

2017-18

292250

4500

(source:-amul.com)

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MARKET SHARES, COMPETITORS MARKET SHARES Amul turnover grows 8% to Rs 29,085 crore in 2017-18 Gujarat Co-operative Milk Marketing Federation Ltd, which markets the Amul brand of milk and dairy products, reported an 8% increase in turnover at Rs 29,220 crore for the financial year ended March 31, 2018. Its branded consumer products registered growth of 14% over the previous year, with products such as cheese, butter, milk beverages, paneer, cream, buttermilk and dahi having expanded 20-40%. The group turnover of Amul brand has crossed Rs 41,000 crores which is 10% higher.

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Competitors Market Share: Amul has some good competitors who have entered the market in the last decade and growing strong steadily. Most of these ice creams entered regionally but then held on to the regional market share. Thus, even though individually these brands might not be a worthy adversary, combined and with their total net aggregate, all of them together are giving a very tough competition to Amul. Some of these competitors are Kwality walls, Vadilal, Havmore, Dinshaws, Arun Ice cream, Baskin Robbins, London dairy and others. Many of these ice cream products have their own niche or geographic targets. Arun ice cream is strong in the south whereas havmor and Vadilal are strong in the west. Besides these organized players, there are many unorganised local players who also give competition to Amul by having their own outlets and their own variants of ice cream. However, the competition in Butter and Cheese and other dairy products is far lesser.

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Total Man Power, organizational structure Organizational design is a formal, guided process for integrating the people, form of the organization as closely as possible to the purpose of an organization. It is used to match the organization seek to achieve. Through the design process, organizations act to improve the probability that the collective efforts of members will be successful. Organizational design involves the creation of roles, processes and formal reporting relationships in an organization.

THE AMUL MODEL: Amul has a Co-operative form with a blend of professionalism. In the corporate form of an organization the shareholders are non-participative members whereas in this form the members are the participative owners of the organization. There are basically three tiers a dairy cooperative viz., the village society- procurement unit, the unionwhich is the processing unit and the federation which is the marketing unit all being an institution in itself. The institutions at each tier have the bond of organic and interinstitutional linkages and obligations which provide sense of purpose and directions in their activities. To manage these units efficiently the leaders felt a need of the professionals. These professionals have a hierarchy similar to that of the corporate structure with the managing director as their head. The Managing Director of all these units is appointed by the board of directors. The board of directors comprises of the farmers members who come from the respective societies. So, at each level the decision-making lies in the hands of the producers only, which give them a feeling of ownership to them.

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BCG MATRIX: Amul brand is a renowned name in the dairy industry in India, supplying milk, butter and other dairy related products to the Indian population. The application of BCG Matrix on the brand can provide information about the products that are a source of revenue for the organization. Moreover, it can also help in pointing out the products that hold no prominent growth chances in the future due to industry trends and market share. The BCG matrix for Amul is given below:

Stars: Leader in the market, Consumes a lot of Cash and Generated lot of revenue. There are some products which have high market share and have the potential to grow more in the future. The industry dynamics are also supportive of the growth as the industry is in the phase of development as well. These products have the potential of being positioned as cash cows owing to the growth prospects. As far as star is concerned, ice creams manufactured by the company and ghee are the two key products which have the potential to grow taking benefit from the growth opportunities presented by the industry. The health-conscious consumers have been targeted by the ice cream providing them with the option of ice creams that do not contain sugar. The ice cream with probiotics is another indication of the way the sweet milk-based dessert has helped the company to achieve a high market share. The brand of Amul ghee has also been a star for the company

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Cash Cows: Generate a lot of cash for the company, When the market share of a product is high and it is being sold in an industry that had developed to such an extent that no significant growth is expected in future, then the product can be deemed as a Cash cow. Organizations use the cash cows to bring in revenues, while taking the benefit of the low investment needed to sustain the profitability of those products. The market share of these products is not likely to experience massive gains either, but the current position makes them a high revenue generator. There are two main products of Amul which can be placed in the category of cash cow, fresh milk and butter.

Dogs: Low Growth and low market share. Dogs are those products that have low market share and at the same time have limited likelihood of growing into a profitable business unit for an organization. The low chances of success suggest that the management needs to be careful with the decision of investing resources in such a product since it offers no significant benefit to the organization. These products can be regarded as cash traps due to the low chances of becoming a significant source of profitability for the company. Investment in these businesses is not likely to yield much profits, therefore they are not seen as a useful source of earning. Amul has few products which have not been able to generate the expected sales and revenues. One of the notable examples in this regard is Amul chocolate, which has experienced a demand of 3500 tons of chocolate. This situation indicates some development in the business position of the chocolate brand, but the competitors make it difficult to increase the market share to a significant degree that could make this product become a source of sustainable revenues. The modified strategy of managing the chocolate brand is expected to bring an increase in the market share of the product in the coming years, which suggests that the chocolate brand can become a star if profitability targets are achieved. Another product that is underperforming for the company is Amul pizza.

Question Mark: Business usually at start-up and can consume lot of cash. With proper focus they can became Star or Cow. The products that have some likelihood of overcoming the challenges and grow the market share in future have been termed as question marks in the BCG matrix. One of the reasons why this category is labelled as question mark is that these products can either become a success in the form of taking the position of a star, or become a source of continued loss for the company. The industry has growth potential, thus making it possible for the products to have room for growth if the pertinent issues are effectively managed. However, ineffective management of these issues can make it difficult to expand the market share of the product. There are some products being managed by Amul that can be identified as a question mark as their potential as a source of profitability remains uncertain. Amul lassi has been marketed with the aim to increase the market share and compete with the other beverages available to the market.

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SWOT ANALYSIS MATRIX OF AMUL:

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PORTER’S FIVE FORCE MODEL FOR COMPETITION

The success of the national and local competitor’s brands includes effectives distribution system, advertising, good pricing policy etc. the factors ascribed by porter are.     

Threats of new entrants Bargaining power of suppliers Bargaining power of buyers Rivalry among competitors Threats from substitutes

These factors can be explained in context to GCMMF as below

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Threats of new Entrants 

Economies of Scale: GCMMF enjoys economies of scale, which is difficult to match by any other competitor. It is because of his reasons that no regional competitor has grown to a national level.



Cost and Resources advantages: Amul dairy is co-operative society. That means “cooperation among competitive is the fundamental principle. Amul dairy is managed the norms of GCMMF and market the products under the brand name „Amul‟ which has very good reputation at domestic and international level. Here the raw material procurement is very difficult for the new entrants. Consequently, capital requirement is also high. Still new entrants are moderate.





Brand preferences and consumer loyalty: there is an immense level of Brand preference of Amul in the mind of the people. The level of preference specifically in the liquid in the milk sector is that would go to other retailer if the retailer does not have milk.



Access to distribution channels: The distribution channel of GCMMF is a very planned and perfect one. For any new entrant to enter it would be a very difficult task. For GCMMF the result is years of hard work and its investment in its employees as well as at different levels in the distribution network.



Inability to much the technology and specialized know- how of firms already in the industry: The technology used by Amul is imported from Denmark. It is a state of art technology in India, a firm would require a huge amount of resources.



Capital Requirements: the total investments required in the industry is huge and is a decision worth considering even for MNC‟s. The investments decision cover the processing costs as well as marketing costs. To compete with the brand Amul in India is difficult as Amul is synonymous to Quality.

Bargaining power of supplier: 

The objective of Amul dairy is not profiting. As it is a part of cooperative society, it runs for the benefit of farmers those are suppliers of milk and users of milk products. According the concept of the cooperative society supplier has bargaining power to have a good return on his or her supply. However, supplier has limited rights to bargain with the cooperative society because it is made and run for the sake of mass and not for individual benefit. But it is made sure that the supplier gets his fair share of return.



There is appropriate bargaining power of the supplier. In olden days there were not any kind of cooperative societies as the farmer was exploited. But, nowadays the farmer’s rights are protected under the cooperative rules and regulation, which ultimately results in moderate power of bargaining from the supplier. 39

Bargaining power of buyers 

Cost of switching to competitor brands: The switching of brand is seen very much in products such as ice cream, curd, milk powders, milk additives etc. but it can be seen comparatively less in liquid milk category. Even if the buyers shift to the other brands of milk, the value that they get is less than they would get from consuming Amul.



Large no. of buyers: Milk is a necessity product and hence is a mass product. It has a considerable share of the rupee spent by any Indian. Moreover, the buyers are spread evenly over the country and do not have any bargaining power.

Rivalry among competitors: 

Demand for the product: The demand of the products of GCMMF is increasing at a very healthy rate. To stand against the rivalry GCMMF is coming with a wide range of products.



Nature of competitors: In different business category GCMMF faces competition from different players. In the milk power category, it faces competition from Cadbury & Nestle, in the chocolate category also I face competition from Cadbury & Nestle. While in the ice cream market it faces competition from Britannia. Moreover, in almost a category there is presence of local retailers and processors and milk vendors. Rivalry intensifies as each of the competitors has different lines and this would in turn depend on the importance the line hold for competitor.



Mergers and acquisition: As such in the industry there are no mergers or acquisitions. However, if any MNC wishes to enter through this route then the competition might be severe.

Threats of Substitute: 

Availability of attractive priced substitutes: Different substitutes are available for different category of products. There is ample availability of low priced substitutes from local vendors retailers. This is a front where GCMMF is still finding hard to combat.



Satisfaction level of substitutes: Customers do consider these products as equal on quality if not better then products of GCMMF. Hence the rate of customers switching to the substitutes is very high. Moreover, the buyers also can switch to the customers easily without any hurdles.

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AMUL STRENGTH & WEAKNESS ON ITS VALUE CHAIN  Strength 





  

Variety of their products: The Company has made it possible to have numerous types of milk. Amul milk is found in variants like Amul Gold, Amul Tazza, and Amul Slim n’ Trim, Amul spray for infants and much more based on the region. They also produce UHT treated milk packed in Tetra pack to increase the shelf life of milk. Strong advertisements: Amul milk has one of the best advertisements in India. Almost every urban citizen is aware of the Amul girl that they use for advertising. They produce her being relevant to the things happening in the country. High Product Quality: Amul milk has a distinct taste and very good quality. The milk is pasteurized in a hygienic way and is sourced from local cows with a good diet. The plastic it is packed in is good, and they treat the milk in best of the factories. An initiative with a cause: Amul milk is sourced from farmers who produce the best quality milk. This helps the farmers get the money that they deserve, and Amul gets to produce their milk products. Strong distribution and supply chain: Amul milk particularly Amul Tazza can be found all over India. All the milk shops have them because of the need that the company has created in the market. Keeping up with the trend: Amul milk is following the trends for a long time. They have produced the slim n’ trim variant for the health-conscious people. Just like that the lactose-free milk is also quite helpful for people who are allergic to it.

 Weakness: 





Rising market of competitors: The competitors of Amul milk are rising. Companies like Britannia, Go, Nestle and Mother Dairy are also getting ahead in the game. Expensive Price: Amul milk variants tend to be priced higher than other companies. The reason Amul claims is due to their quality, but often consumers pick the lower priced variant just because of the affordability. Tackling the Rural Market: The people residing in the rural belt like to have raw cow’s milk more than the pasteurized version. Better knowledge of them would increase the market.

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BUSINESS STRATEGY OF AMUL COMPANY SEGMENTATION: Amul Follows Mass Population segmentation, this is because Amul is not only present in milk but also in Ice Cream, Butter, Cheese, Butter Milk, etc. TARGETING: Target audience are middle class people. POSITIONING: In terms of positioning, Amul has top of the mind positioning because it is the first brand which comes in mind when talking of Ice cream, milk, cheese, butter or any other milk-based products.

COMPETITIVE ADVANTAGE OF AMUL: There are two Competitive advantage of Amul: 1.Supply Chain: Because of the large numbers of dairy suppliers, Amul has a tremendous strength and reliability in its supply chain. Hence it is able to produce such high volumes. 2.High Product Portfolio: Due to this it can run Amul Shoppe’s and also have its products present in retail.

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THE RESEARCH PROBLEM: Amul Chocolate’s Market share in the year 2016-17 is 3% in Chocolate industry in India. The biggest problem Amul is Facing in its chocolate segment is increasing competition. The Biggest Competitors of Amul are Cadbury, Nestle Etc. The Awareness level of Amul Chocolate is very low as compared to its other product specially the products like milk, butter, ice cream. Amul as a FMCG is performing extremely well in those categories except Amul Chocolate.

RESEARCH PROBLEM:  

To Find the performance of Amul Chocolate Viz-a-Viz other brands. To know consumer Psyche and their behavior towards Amul Chocolate

RESEARCH OBJECTIVE:    

To Gauge Awareness of people towards Amul Chocolate. To Find Out which segment chocolates are mostly liked/preferred. To understand which advertisement medium must Amul use. To know the perception of Amul Chocolates in comparison to other brands.

INFORMATION REQUIRED:  

Information about all the competitors present in the chocolate segment. Information about the comparative packs and prices of all the competitors existing in the market

RESEARCH INSTRUMENTS: Primary Research: 

Questionnaire

Secondary Research: 

Internet

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FORMULATION OF HYPOTHESIS: Design Questionnaire:

Questions are as follows: Gender:o Male o Female o Prefer not to say 1. o o o

Do You Like Chocolates? Yes No Maybe

2. o o o

Do you prefer new flavours in chocolate? Yes No Maybe

3. o o o

Who in your family purchases chocolates? Teenagers Kids Elders

4. o o o

Where do you buy chocolate from? Online General Store Super Market

5. o o o o

Which Type of Chocolate do you prefer? Wafers Bars Candies Others

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6. o o o o o o

What type of chocolate do you prefer? Milk chocolate Dark chocolate White chocolate Fruit and nuts Caramel Other

7. o o o

Which brand do you prefer? Amul Nestle Cadbury

8. o o o

Do you prefer the same brand of chocolate every time at a particular event? Yes No Maybe

9. o o o

How many chocolates do you purchase in a month? Less than 10 10-20 More than 20

10. What influences your chocolate buying decision? o Television o Hoarding o Radio o Digital Platforms o Magazines/ Newspaper 11. To what extent celebrity endorsement is important in chocolate branding? 12. What according to you is the significance of packaging of chocolate? o Marketing of the product o Protection of the product o Both

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13. To what extent each of the following impact your purchase decision? o Flavor o Taste o Quality o Quantity o Packaging o Brand o Calories o Ingredients 14. How important is the nutrients information behind the pack? 15. Have you heard of Amul Chocolate? o Yes o No o Maybe 16. Have you tried Amul chocolates? o Yes o No o Maybe 17. Rate your awareness about amul chocolates

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ANALYSIS:

47

48

49

50

51

52

53

54

55

CONCLUSION: •

It turns out people are aware of Amul but they do not prefer it into the Chocolates so much as people take Amul as a milk brand and is highly attached to it.

•

12 is the highest number of people who are aware about Amul Chocolates.

•

Amul should brand its chocolates through emotional attachment connecting teenagers

•

Amul should brand its product through the Indian festivals and its touch with celebrity endorsements and should include range category with its different flavors

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REFERENCE:



https://en.wikipedia.org/wiki/Amul https://www.pdfcoke.com/doc/28134383/Product-Mix-Amul https://www.ijser.org/researchpaper/A-CASE-STUDY-OF-AMULCOOPERATIVE-IN-INDIA-IN-RELATION-TO-ORGANIZATIONALDESIGN-AND-OPERATIONAL-EFFICIENCY.pdf //economictimes.indiatimes.com/articleshow/63583079.cms?utm_s ource=contentofinterest&utm_medium=text&utm_campaign=cppst https://www.pdfcoke.com/doc/83825076/Amul-Strategy



https://en.wikipedia.org/wiki/Fast-moving_consumer_goods



http://reports.dionglobal.in/actionfinadmin/reports/fdr0108201343.pdf



https://www.pdfcoke.com/doc/248600592/Pestel-Analysis-on-Fmcg-Industry-

  



Economics-Essay 

https://www.omicsonline.org/open-access/a-study-on-consumer-behavior-towardsfmcg-products-among-the-rural-suburban-hhs-of-ernakulam-23754389.1000127.pdf



http://economictimes.indiatimes.com/industry/cons-products/fmcg/domesticfmcg-firms-log-more-revenue-than-mncs-in-fy16report/articleshow/55153280.cms



6)http://www.thehindubusinessline.com/economy/indian-fmcg-sector-poisedto-grow-at-1314-in-next-few-years/article8004697.ece



7)http://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcgsales-see-12-per-cent-growth-in-rural-markets-7-per-cent-rise-in-food-andbeverages-category-in-july/articleshow/60520017.cms

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