Amul Market Analysis - Punjab

Gap Analysis and Retail Penetration of

Amul

Project Mentor: Mr. Sumeet Saini

Presented by: Ridhi Dandona

Nitu Rakholya

Abhishek Swarnkar

Bikram Singh

– Summer Interns, SIMS, Pune

June 28th, 2006

Presentation to:

Amul India Ltd.

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2

Overview

• Objectives of the Study• Company Analysis• Gap Analysis and Retail Penetration of

Amul• Feasibility Study for Launch of Liquid

Milk• Findings• Recommendations



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Objectives of the Study

Determining Retail Penetration of Amul

Estimating various Gaps and their Intensity and Formulating Strategies

to Cover the Same

Analyzing Feasibility of Launch of Liquid Milk



4

Company AnalysisCompany Analysis



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Company Analysis

Strengths- Brand Name - Brand Performance

- Quality - Slipstreaming

- Distribution Network - Product Mix

- Pricing - Information Network

- Foreign Presence - Co-operative Society

- TQM - Personnel

Threats- Low yield

- Increasing Competition

- Various Players to enter the Retail Sector in Dairy Products.

- Milk from Unorganised Sector covering 83% market throughout India.

Opportunities- Export Potential - Untapped Western Mkts.

- Locational Advantage - Fast-Growing TP Mkt.

- International Market - Value Addition

- Plunge in Retail Industry (APO)

- Increasing Rural Awareness

Weaknesses- Regional Disparities

- Perishability of main ingredient

- Lack of Control over Yield

-Logistics of Procurement

- Straying from Core Competence



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Retail Penetration and Gap Analysis of Amul in

Ludhiana

Retail Penetration and Gap Analysis of Amul in

Ludhiana



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Retail Penetration in Dairy Sector

Sub Region – R1 Sub Region – R2



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Total %age Sales

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Products

PV Garg

ASAK

%age Retail Penetration in Dairy Sector in the Two Sub-Regions




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Competitor Analysis

020406080

100120140160180200

Butter Cheese Ghee Chocolates DairyWhitener

CondensedMilk

EnergyDrinks

Infant Milk

Products

No.

of O

utlet

s

Amul

Competitor 1

Competitor 2

Competitor Analysis of Amul in Dairy Sector, Ludhiana



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Gap Analysis

Composition Number

Potential Products

Med. Stores and Hosps. 52 Spray, Stamina

Restaurants 23 Butter, Cheese, Ghee, Chocolate, Stamina, Kool, Kafe’, Spiced Milk, Ice-

Creams.

Sweet Shops 18 Butter, Amulya, Ghee

Schools and Cafe’s 21 Kool, Kafe’, Stamina, Chocolates, Ice-Creams.

General Stores 137 Butter, Cheese, Ghee, Chocolates, Spray (in certain areas), Stamina, Fresh Cream,

Kool and Café (in certain areas) and Delicious (in

certain areas).

• Maximum Potential – Stamina

• Very Good Potential – Summers Products (Kool, Kafe’ Kool, Spiced Milk).

• Good Potential – Lower Priced Products (Ghee, Chocolates, Processed Cheese, Spray (in Certain Ares)).

• Good Potential – Amulya, for Sweet Shops.

Gap Composition of Amul in Dairy Sector, Ludhiana

Product Potential



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Gap Analysis

% Product Potential

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Products

%ag

e Pot

ential

% Product Potential

Productwise %age Potential of Amul in Dairy Sector in Ludhiana



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Penetration of Amul Ice-Creams in Ludhiana

Ice-Cream Availability

0%

10%

20%

30%

40%

50%

60%

70%

Amul Kwality Walls Cream Bell Others

Competitors

%ag

e Pe

netra

tion

R1

R2

Bakeries Gen. Stores

Others

Amul 6 2 3

Others 24 10 7

No. (with DF)

30 10 10

Total No. 61 105 64

Existing Outlets

0

20

40

60

80

100

120

Bakeries Gen. Stores Others

%ag

e pen

etra

tion

Amul

Others

Potential Outlets

0

20

40

60

80

100

120

Bakeries Gen. Stores Others

Tota

l Penetration

Total (with DF)

Total No.

Number of Outlets with Deep-Freezers and Amul Ice-Creams

Ice-Cream Demand in R1 & R2

Existing Outlets with Ice-Creams Potential Ice-Cream Outlets



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Feasibility Study for Launch of Liquid Milk in

Ludhiana

Feasibility Study for Launch of Liquid Milk in

Ludhiana



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Feasibility Study of Liquid Milk in Ludhiana

Sub - Region

Total Milk Supply (in Kgs.)

Morning Evening

R1 2148 1228

R2 3986 2996

Total Demand of Milk

0

500

1000

1500

2000

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3000

3500

4000

4500

R1 R2

Regions

Qty

(Ltr

s.) Mrng.

Evng.

Daily Supply of Milk in Ludhiana Total Demand of Milk in Ludhiana



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Feasibility Study of Liquid Milk in Ludhiana

Rivalry Between Existing Players

Verka being the only major player, there’s no ongoing rivalry in the sector.

Threat of Substitutes

Local Milkmen who sell open milk which is psychologically seen as fresher and healthier by people.

Barriers to Entry

Regular and Timely supply at least twice a day, which requires a plant to be set-up in the vicinity of the region.

Bargaining Power of Buyers

Non-existent; as there is only one major supplier in the region.

Bargaining Power of Suppliers

Verka, being the only major player as of now, can exercise its own terms and conditions in the market.



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FindingsFindings



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Findings

Retail Penetration and Gap Analysis of Amul in Ludhiana

• Less Aware Market in R2 Sub-Region.• Distributor Problems, especially in Sub-

Region R1 (PV Garg & Sons).• Lack of Visibility.• Low Margin.• Shortage/Unavailability of Certain

Products.

•Quality Problems.

•Back-Date Products.

•Cannibalization among Distributors.

•Cannibalization by other Products.

•Regional Taste Difference forming Niches.

•Need to focus on products with good potential (Amul Soups).

Amul-Ice Creams in Ludhiana

•Power and Infrastructure Problems.

•Seasonal Product.

•Lower Penetration in R1 Sub-Region.

Liquid Milk in Ludhiana

•Very attractive Market for Potential Entrants.

•High Supplier Bargaining Power.

•Threat of Substitutes.



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RecommendationsRecommendations



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Recommendations

• Promotion through wall-paintings, posters, road shows, Celebration Days and other such events.

• Timely and periodic reporting by the distributor to FFRs and at least quarterly to Depot in the form of reports.

• Direct communication of contests and sweepstakes to Retailers.

• Cater to “Bottom of the Pyramid” Segment to increase sales volume and deal with low margin problem.

• Regularize availability of products according to demand.

• To deal with back products, they can be given at a concessional rate to school and college canteens by making them direct party to Amul.

• Also, a 70:30 ratio of old and new products respectively can be maintained while supplying products so as to eventually eliminate back date problem.

• Factual Advertising can also help promote certain niche products.

• Good potential of Soups in Ludhiana.

• To deal with Power and infrastructure problem, HADF Scheme that has been started requires rigorous follow up and word-of-mouth promotion.

• To deal with seasonal demand of products, festivals and functions during winters must be targeted.

• R2 sub-region requires increase in awareness which can be achieved through events such as Celebration Day, Road Shows etc.

• For Liquid Milk, a plant in the vicinity is unavoidable.

• Also, to deal with Threat of Substitutes, there will have to be Narrowcast Advertising on Local Channels and Dailies presenting it as Fresher and Healthier than open milk.

Dairy Sector in Ludhiana Ice-Creams & Liquid Milk in Ludhiana

Amul Market Analysis - Punjab

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