G2 7 Amul Case Study

Amul – The Taste of India

 Group – G2:7  Group Members  Abhishek Kekre  Bharath Kumar B  Gulab Nebhani  Lalima Dutta Choudhury  Tanya Dutta

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

Low Cost Strategy Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money

Success!!

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

Strong Distribution Network Amul 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 technology Complementary assets to enhance milk production E-commerce.

GCMMF – 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.

Facts 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 - 200809):

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 RAW MILK

pasteurization

Condensed Ghee Butter Cream

Packaged Milk Ice cream Beverages

Dried Skimmed Milk Powder

Industry Analysis : Porter’s 5 Forces Threat of new entrants Is high because There are no entry barriers

Bargaining Power of Customers is High because of Various competitors

Competitive Rivalry is

High due to

Other brands and Local players

Threat of substitutes is high because of availability of Other products

Bargaining Power of Suppliers is low because the suppliers Are rural milk producers

SWOT Analysis 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

Opportunities

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

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

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

Customer Based Market Segmentation Kids Women Youth Calorie Conscious

Health Conscious

Amul Kool Chocolate Milk Nutramul Energy Drink Amul Kool Millk Shaake

Amul Calci + Utterly Delicious Pizza Amul Emmental Cheese Amul Cheese Spreadsv Amul Lite Sagar Skimmed Milk Powder Amul Lite Slim and Trim Milk

Nutramul Amul Shakti Health Food Drink

Industry Based Market Segmentation Ice-cream Manufacturers

Restaurant/Food Chains

Coffee Shop Chains

Milk

Temples

Bakery & Confectionaries

Pizza Retailers

Snacks Retailers

Butter/Cheese/Ghee

Advertisements  AMUL is well known for its innovative hoardings. Find below a

few:

Advertisements

Mix… 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 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 Amul

Amul - Product Diversification Seeking unfamiliar products or markets in the pursuits of growth with both dairy and non-dairy products Secret Philosophy  Progressive addition of higher value products while maintaining the desired growth in existing products.  Amul introduced products with consistent value addition but never left the core philosophy of “providing milk at a basic, affordable price”

Amul - 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… •Defending against Mahananda, Vijay, Milma & other co-operative milk brands •Aggressive moves against Britannia, Nestle, Mother Dairy and Kwality

•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

Amul – BCG Matrix High

Business growth Rate

Amul Ice-cream

Amul Chocolate

Amul Cheese Amul Butter

Low

Amul Chocolate drink High

Low Relative Market Share

Amul – 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 Chocolates .

Low

Growth Phase

Decline

Sales

Introduction

Decline Sales

Phase

Amul Milk, Amul Fruit and Nut

New Brands Rejoice, Kite Bite, Nuts about you Sugar Free Choco Zoo

Inadequate Success Failed new brands Excessive discounts 10% Market share Tough competition by Market Leaders – Cadbury (70%), Nestle

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 !!