AMUL CASE STUDY -Marketing management

GCMMF – Over View

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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.

GCMMF – History

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In 1946, under inspiration of Vallabhbhai Patel and Tribhuvandas Patel organized the farmers into co-operatives.

These co-operatives would procure milk from the farmers, process the milk and sell it in Gujarat and in Bombay.

In 1949, Dr. Kuriens got engaged with the Kaira �District Co-operative Milk Producers Union Limited (that �was the name of the co-operative registered).

Kaira District Co-operative Milk Producers Union �became better known by the brand name of the products marketed by it (Amul) than by the name of the co-operativeitself.

Amul meant priceless in Sanskrit which became the flagship brand for all the dairy products made by this Union. �

Full name “Anad milk Producers Union ltd.”

Objectives and Business Philosophy of GCMMF GCMMF had, as its 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• Centralized purchases and• Pooling of milk efficiently.

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Objectives and Business Philosophy of GCMMF 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.

The biggest strength of GCMMF was the trust it had created in the minds of its consumers regarding the quality of its products.

GCMMF, and its brand Amul, explained Mr. Vyas, stood for guaranteed purity of whatever products it had producedStudents

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Organizational structure

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ANAND PATTERN

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GCMMF: Few Facts (Capacity )(As on April 2000)

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Members: 12 district unions in Gujarat170 unions all over India

No. of Producer Members: 2.1 million in Gujarat9.31 million in India

Village level co-operatives : 72,774 in India

State Marketing Federation All dairies in a State (GCMMF in Gujarat)22 State Federations in India

Milk collection (Daily Average 1947):

250 liters per day

Milk collection (Daily Average 1999):

4 million liters per day

Initial Offering

| Procurement and Distribution of Milk |

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Diversification Moves by GCMMF

• Even at the time of its formation, GCMMF had three major products in its portfolio: liquid milk, butter and milk powder. Gradually, many new products were added to its range, largely milk derivatives.

• The most important of this diversification was into edible oils in 1988.

Dairy • Cheese Products• Bread Spreads• Milk Drinks &

Desserts• Fresh Milk

Non-Dairy• Instant Food• Snacks• Veg. Oils

GCMMF: Product Mix

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Amul Butter Ghee

Cheese Chocolates

Ice cream Milk

Nutramul Amulya

Amulspray Shrikhand

Chocolates Milk Powder and more

GCMMF: Few Facts (Competitor )(As on April 2000)

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Name of the Company:

Polson’s Dairy �

Reason of Success:

The company had a virtual stranglehold on the farmers, deciding the prices both of the procured as well as the sold milk.

Market and Product :

Polson’s Dairy chilled the �milk and supplied it to the city of Bombay. It also extracted dairy products such as cheese and butter.

GCMMF: Few Facts (Other Competitor )(As on April 2000)

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Product in Business

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RAW MILK

Packaged Milk(Ice

cream, beverag

es)

Condensed

(Ghee, butter and

cream)

DriedSkimmed Milk

Powder

Edible Oils and jam etc.

SWOT

InternalFactors

Strength Weakness

• First cooperative dairy brand in India

• Quality Product• Low Price• Pouch Milk• Less Competitors in

market• Farmer’s Support• Creative advertising

• Risks of complexity in product distribution

(supply chain management)• Not so developed distribution

network• Working with low skilled man force

ExternalFactors

Opportunity Threats

• Local market of Gujarat

• Bombay Market• Neighboring State

Market• Expand existing

categories to processed foods, ice cream , edible Oil etc.

• Competitors - Polsons �Dairy ,Hindustan Lever, Nestle etc.

• Upcoming Local brands• Consumer reaction on packed food• Better price offer from private milk

company

SWOT Analysis (Year 1946)

SWOT Analysis(Year 2000)

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SWOT

InternalFactors

Strength Weakness

• Largest dairy brand in India and World's Largest Pouched Milk Brand

• High Quality Product• Low Price• Strategic Product Mix• Large Distribution

Network• Brand Popularity• Farmer’s Support• Creative advertising

• Risks of complexity in product distribution

(supply chain management)• Fully dependent on farmers daily

milk contribution• Working with low skilled man force

ExternalFactors

Opportunity Threats

• International markets (SARC, USA and UK)

• Expand existing categories to processed foods, chocolates , edible Oil etc.

• Competitors - Polsons �Dairy ,Hindustan Lever, Nestle etc.

• Local brands

• Growing price of milk and manpower

• Export regulation

Market Segmentation

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Philip Kotler,

“Market segmentation is a process of identifying groups of buyers with different desires or requirements.”

Kids Women Calorie Conscious

Market Segmentation

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Youth Health Conscious

Market Segmentation (Benefit)

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Brands of GCMMF

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GCMMF: Benchmark

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The brand Amul, that has spurred the White Revolution of India

Made the country the world's largest producer of milk and milk products

The 'Utterly' tagline was suggested by author Nisha daCunha, the man behind the Amul butter advertising.

The Amul Girl, ambassador of Amul Butter Brand Image( The Amul girl was born in 1966).

ADVERTISEMENT AND PROMOTION BY GCMMF

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Coined the brand name, Amul

It was also a word that was easy to pronounce, easy to remember and that carried a wholly positive connotation.


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Amul Butter Girl


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Coined truly memorable slogans, such as:

• One for butter: �”Utterly Butterly Delicious”

• One for edible oils: �”Dhara, Shudh Dhara” � , emphasizing its purity

• For all its products : �”The Taste of India” �


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The hoardings, started in 1967, were changed weekly and every week it had a current and a new theme. They have continued till this day.

For example, during the emergency in 197677, when forced �sterilizations were done under government compulsion, the Amul hoarding read: We have always practiced compulsory � sterilization.�


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In ice creams, GCMMF emphasized in its advertisements that its ice cream was entirely vegetarian, made of pure milk and that it did not have any gelatin content, unlike that made by many of its competitors.

GCMMF had produced a number of TV campaigns of 30 to 60 seconds duration, on some or many of its �products.

GCMMF had sponsored well-received feature films. The first film was titled Manthan .� �


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Budget – Amul is investing 1% of its revenue which is very low as compared to Industry Average 8.9%.

Growth Rates in GCMMFs Businesses �(Percent)

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The profit margin in milk was generally low, due to the need to keep down the price of this essential commodity, which was also consumed by the poor and the lower middle class.

Suggestions & Recommendations

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• Though Amul’s hoardings are a huge success, it can penetrate even better in the rural areas by advertising actively through the media viz cable channels and newspapers. Sponsoring more shows on TV, sports events can be of great help.

• Amul can venture out on new products like dairy based sweets, baby food products, readymade foods, soft drinks etc.

• Amul can venture into offering low-fat versions of its products as it would help capture the hearts of health concisions generation.

• Focus on retail expansion in Indian cities, towns and villages , along with international penetration.

• More budget for advertisement expence

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AMUL CASE STUDY -Marketing management

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