ASSIGNMENT ON MARKETING MANAGEMENT

TOPIC- “With reference to the promotional mix of Amul Chocolates develop a strategic marketing plan for

their established target market”

BY- GAGAN KUMAR GOUDA

ASIAN SCHOOL OF BUSINESS MANAGEMENT

INTRODUCTION

Amul is an Indian dairy cooperative, based at Anand in the state of

Gujarat, India. The word Amul is derived from the Sanskrit word amulya

meaning rare, valuable. The co-operative was initially referred to as Anand

Milk Federation Union Limited hence the name AMUL. Formed in 1946, it is a

brand managed by a cooperative body, the Gujarat Co-operative Milk

Marketing Federation Ltd. (GCMMF). 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. Amul's product range includes milk powders,

milk, butter, ghee, cheese, Masti Dahi, Yoghurt, Buttermilk, chocolate, ice

cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk, basundi, Amul

Pro brand and others. Today Amul is a symbol of many things. Of 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

farmers' organisation. And of a proven model for dairy development.

Amul entered in chocolates segment in 1970. Amul chocolate’s

product range includes Amul Chocolates, Amul Chocozoo, Rejoice assorted

Chocolates, Nuts bout You, chocoheart musical pack, fundoo, bindaaz, Amul

Milk chocolate, Amul Dark Chocolate, Amul Wafer Chocolate, Amul Sugar

Free Chocolates. Amul Chocolates are very rich in quality and healthy. In

August 2007, Amul introduced Kool Koko, a chocolate milk brand extending its

product offering in the milk products segment. The milk chocolate market in

India has only three big players, Cadbury(70%), Nestle(15%) others(5) and

Amul (10%). It is not doing well as expected but slowly the market share of

Amul chocolates is increasing.

ABOUT THE PRODUCTS

Amul chocolates are made with goodness of rich creamy milk & delicious cocoa. Amul chocolates are made with high quality ingredients and processed with world class technology. Offers festival specific packs as well to meet customer needs. Specially designed fun animal shaped Choco zoo for children. Dark chocolates contains 55% cocoa - rich source of antioxidants. Crunchy wafer bars perfectly complimented with Choco layer. Chocolates are made through refiner from world's No. 1 Carle & Montanari to give a smooth mouth feel. Not only the Kids, these delectable choco bars are sure to make all of you go nuts too irrespective of the age.

SWOT ANALYSIS

Strengths

• ‘Amul’ have done very well with all the variety of milk products.

• The brand ‘Amul’ is well known to people & they can easily identify it from others.

• The prices of chocolates of ‘Amul’ can be made very economical and competitive.

• Amul Chocolates are rich in quality and healthy.

Weakness

• Failed to create awareness among people, Lack of advertisement.

• Amul Chocolate’s are not easily available in markets as compared to other brands.

• Failed to understand which advertisement medium to use.

• The major weakness is that Amul does not aim equally at all products. Its main strength has only been Butter, Cheese and milk.

Opportunities

• Scope of launching new variants.

• Aggressive promotional strategies an easy availability in the markets.

• Only one market leader Cadbury having 70% market share.

• There is a lot of potential for growth and development as huge population stay in rural market.

Threats

• Attractive Packaging of competitors products.

• Attractive advertisement by competitors.

• New and Foreign Competitors, Like Hershey’s, Bounty, Mars.

• Awareness level of AMUL CHOCOLATE is very low.

PORTER’S FIVE FORCES FRAMEWORK

FOR AMUL CHOCOLATES

1. Bargaining power of the suppliers:

In order to produce chocolates the materials required are

cocoa, milk, sugar, butter, milk powder, fruits etc. Amul is a market leader

in India in products like milk, milk powder and butter so it does not require

any other supplier. Other materials like cocoa , fruits and sugar can also be

bought easily as there are many suppliers considering that India is a land of

farmers where Agriculture is the backbone of the economy. Also there are

millions of farmers who supply fruits and sugar so the bargaining power of

the supplier is very less.

2. Bargaining power of the buyers:

India is a fast growing nation and buyers have a lot of options

when it comes to deciding which chocolate they want to buy. Hence the

bargaining power of the buyers is high.

3. Threat of substitute products:

In the last few years, Indian sweets have been substituted by

chocolates. So there is possibility that people can go back to sweets because

nowadays sweets manufacturers have introduced different varieties of

sweets like fat free sweets, sugar free sweets etc. Also lot of people these

days prefers power bars and protein bars which are also delicious like

chocolate but healthier as well compared to chocolates. Also there can be

other substitutes like waffers, cakes etc. India is well known for making

duplicate products of big brands like Dairy Milk(Cadbury’s ace product) &

Kit Kat(Nestlé’s ace product).Chocolate manufacturers need to make sure

they differentiate their products well & make consumers aware of the

difference because a large number of people in India are illiterate.

4. Threat of potential entrants:

In the Indian chocolate market there are 3 major players

namely Cadbury who is the market leader, Nestle & Amul. These 3

companies have been sharing 99% of the chocolate market in India for

many years which clearly explains that there is no real threat of new

entrants. However, in the last 5 years, foreign brands like Mars have

entered the market with products like Mars bar, Bounty & Snickers which

have become quite popular in major cities like Mumbai, Bangalore and

New Delhi.

5. Competitive Rivalry:

The biggest factor that is affecting Amul’s market share in

India from last 10 to 20 years is the growth of its competitors like Cadbury

& Nestle. Now, with the entry of foreign players like Mars its getting

tougher for them to increase the sales.

MODIFIED AND STRATEGIC

MARKETING MIX PLAN

PRODUCT:

The major reason why Amul chocolate as a product is declining

from the last 10 years is because of not meeting the demands of the consumers.

Cadbury & Nestle who are doing well in the chocolate market have

continuously launches new products and have been successful. Every product

has a life and it gets over one day. No product can live forever. Innovation is the

key to survive in modern day. Companies need to modify and improve their

product time to time. Innovation also led consumers to think that the company

cares about their needs and changes time to time to meet their demands.

PRICE:

Pricing is an important strategic issue because it is related to

product positioning. Furthermore, pricing affects other marketing mix elements

such as product features, channel decisions, and promotion. The objectives of

pricing are to maximize profits, to signal high quality and also to survive in

many cases. From a competitive standpoint, the firm must consider the

implications of its pricing on the pricing decisions of competitors. With such a

heavy competition in the chocolate market, Price plays a very important role. In

India, Brand loyalty is very rare. People will change their loyalty if they can

spend less. For example, If Cadbury sells its Fruit and Nut for Rs 20 Amul can

sell it for Rs 18.

PLACE:

The channels of distribution mean intermediaries or middlemen

who act as a link between the manufacturer and the consumers. Factors that

need to be considered when choosing the place are the characteristics of the

product, characteristics of the buyers, control and competitors channels. Since

chocolate is an edible product, Amul should adopt an intensive distribution

strategy where in they will manufacture products and make it available at

various shopping malls, food joints, local stores, Chocolate parlours etc. Amul

has a big brand name because of its dairy products. They can easily use it to

increase the awareness of its chocolates using various distribution channels.

PROMOTION: (PROMOTIONAL MIX STRATEGY)

Consumers here include Customers, shareholders, employees,

government and other parties related to the products like trade union and media.

they have follow both PUSH AND PULL marketing strategies. The aim of

promotion is to inform the consumers, differentiate from other products and to

persuade them to buy. There are many techniques of promotion like

Advertising, Sales promotions, Direct Marketing & Personal selling.

Amul has been criticised for lack of promotion. Amul has a strong

brand name because of its dairy product leadership. Amul must advertise its

chocolates using media like newspaper, television and internet to inform the

public about the quality & the price of its product. Consumers have a short

memory and its important for companies to remind them about the products.

Amul has totally shifted its focus from chocolates towards milk and other milk

products and have totally ignored chocolates. Using the mediums like

Television and newspaper the company needs to remind the public that they are

back with improved products at an affordable price.

In order to survive in the competitive market where players like

Cadbury & Nestle enjoy the market share Amul has to be different. They need

to give the customers a reason why they should buy their products. Amul has to

use Sales Promotion effectively to announce their comeback. They can give

price discounts, more for less offer & free samples to increase their sales.

Amul must divide its market using 2 bases of segmentation: 1st

Demographic Segmentation and 2nd Geographic Segmentation.

They can provide samples in retails outlets and malls so that people can

try it before buying it.

Proper social media development. Creates a buzz and getting others

talking about Amul chocolates.

Amul have to create a strong emotional bond between Amul chocolates

and consumers.

Never negate the core criteria while advertising.

Advertise through hoardings & posters in side of highways and crowdie

places.

Press releases (aware people & publicity).

Amul must also provide free chocolates to municipal schools where

majority of children come from a low income family. Free gifts like

pencils or Books can also attract their target market i.e. kids.

Amul also has to focus on Business to Business customers. They can give

special discounts or free samples to major retailers like Big Bazaar & D-

Mart to sell their products.

As a part of the customer contact programme, Amul must do direct

school program for Amul chocolates. E.g. they can sampling their latest

offering - among kids.

Amul does e-selling of all its products including chocolates but very few

people know about it tey have to promote it in social sites like face book

twitter, YouTube..etc.

AMUL must make use of the hoardings and print ads to communicate

with consumers.

Amul chocolate should host events and shows.

Amul can start some contest for chocolates as it is doing for some of its

other products. E.g Amul Chef of the Year, Amul Maharani Contest and

Amul Food Festival Contest.

Take consumer’s feedbacks / customer satisfaction surveys (maintain

good public relation).

Amul Should increase R&D spending to improve the quality & taste.

Since Amul chocolates is not doing well like Amul’s other products like

milk, yoghurt and cheese the objective or focus of Amul Chocolates as a

Business Unit would be to increase its market share.

CONCLUSION

One of the major reason for Amul chocolate is absence in hardcore

advertising so the product buzz and awareness of the product is not there in the

market or in people, the reason behind that is Amul does not want to give away

margins in advertising its products. As per Amul, their maximum budget for

advertising is 1% of the turnover. Above and beyond that will directly affect the

cost of the product. And the major reason for Amul’s strong presence in the

market is its excellent quality combined with the affordable price. Thus, overall

promotions will always be low for Amul. The bottom line is that we love that an

Indian brand like Amul chocolate will became the market leader in the whole

world.