UNIVERSITY OF MUMBAI

PROJECT REPORT ON

Strategy Management of Amul Company

SUBMITTED BY

PRASAD D. MAHAJAN

MASTERS IN COMMERCE - MANAGEMENT (Part I)

UNDER THE GUIDANCE OF:

Prof. Kanchan Fulmali

PTVA’s

M.L DAHANUKAR COLLEGE OF COMMERCE

Vile Parle (East), Mumbai

2012-2013

1

CERTIFICATE

I, Prof. Kanchan Fulmali here by certify that Prasad D. Mahajan of M. L.

Dahanukar College of Commerce of MCOM - Management (Part I) has completed

project on Human Resource Management of Amul Company during academic

year 2012-2013. The information submitted is true and original to the best of my

knowledge.

Signature of Project Guide Signature of the Principal

2

DECLARATION

I, Prasad D. Mahajan of M. L. Dahanukar College of Commerce of MCOM -

Management (Part I), hereby declare that I have completed project on Human

Resource Management of Amul Company in the academic year 2012-13, as per the

requirement of the University of Mumbai as a part of Masters In Commerce -

Management (Part I) programme. The information submitted is true and original to

the best of my knowledge.

Prasad D. Mahajan

3

ACKNOWLEDGMENT

I owe a great many thanks to a great many people who helped and supported

me during this project.

My deepest thanks to the Guide of this project Professor Kanchan Fulmali, for

guiding and correcting various documents of mine with attention and care. She has

taken pain to go through the project and make necessary correction as and when

needed.

I would also thank my Institution and my faculty members without whom this

project would have been a distant reality. I also extend my heartfelt thanks to my

family and well wishers.

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INDEX

Sr. No.

PARTICULARSPage No.

1 Executive Summary 7

2 Amul Organization Profile 8

3 Introduction 9

4 History of Amul Organization 10

3 Amul and Co-Operation 11

4 GCMMF 12

5 Strategic Management 14

6 Strategy Planning Process 15

7 Levels of Strategy 17

8 Types of Strategy 21

9 PEST Analysis Amul 26

10 4 P’s 27

11 Conclusion 34

12 Bibliography 36

5

Executive Summary

AMUL is a co-operative sector. It is the institution of the farmers, for the

farmers and from the farmers. The AMUL gives pleasure to the farmer to charge the

own price, which was not possible in earlier years. This union was born on 14th

December 1946. The union provides facilities to its members like more return,

satisfactory price, insemination, first aid, group Insurance, cattle food at confessional

price etc.

I have done case analysis on HRIS of AMUL and from that I have come to

know how organization operates and how the functions have been carried in the

organization. From this is case I have come to know how a wide organization like

AMUL manages its

AMUL dairy has five main departments like finance, personnel, commercial,

milk procurement and production. The finance department does the clerical work and

takes care of inflow and outflows of the cash. The other work of finance Department

is to audit of annual work.

The personnel department handles the work regarding personnel like

appointment, recruitment, promotion, transfer, dismissal, demotion, performance

appraisal etc.

6

Organization Profile

Name : Kaira District Co- Operative Milk Producers’

Union Limited, Anand.

Form : Co-Operative Sector under the Co- Operative Society Act.

Reg.Office : Kaira District Co-Operative Milk Producers Union Ltd,

Anand -3881001. Gujarat, India.

Promoters (1) Shri Tribhuvandas Patel

(2) Shri Morarji Desai

(3) Shri Vallabh Bhai Patel

(4) Dr. Varghese Kurien

Auditors : Special Auditors (Milk), Milk Audit Office Anand.

Socities : 1113.

Members : 6, 31,333.

Office Time : 10:00 A.M To 06:00 P.M.

Premises : 49.55 Acres.

Registration : 14th December, 1946.

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Introduction

AMUL means “priceless “in Sanskrit. A quality control expert in Anand

suggested the brand name “AMUL” from the Sanskrit word “Amoolya” variants, all

meaning “priceless” are found in several Indian languages. Amul products have been

used in millions of home since 1946.

Today Amul is a symbol of many things; of high – quality products sold at reasonable

prices; triumph of indigenous technology; of the marketing savvy of a farmer’s

organization and proven model for dairy development.

The topic “To study about Strategy and Market Share of Amul chocolates“

highlights on the market share of Amul Chocolates Pune city in comparison to

existing player in the Milk chocolate Market. The market share can be found with the

help of retailers. As the competitors are concerned there are only two of them i.e.

Cadbury and Nestle

The study is also concerned to find out the various reasons due to which the

retailers do not prefer to sell Amul Chocolates. Moreover the study also helps in

knowing the best medium for creating the awareness about the Amul Chocolates. To

know the Market share and problems faced by retailers is very important for every

organization for their promotion, expansion and development.

The main motto of AMUL is to help farmers. Farmers were the foundation

stone of AMUL. The system works only for farmers and for consumers, not for profit.

The main of AMUL is to provide quality products to the consumers at minimum cost.

The goal of AMUL is to provide maximum profit in terms of money to the farmers.

Vision of AMUL is to provide and vanish the problems of farmers (milk producers).

The AMUL apparition was to run the organization with co-operative of four main

parties, the farmers, the representatives, the marketers, and the consumers.

8

History

In early 1940’s a farmer in Kaira district, as elsewhere in India, derived his

income almost entirely from seasonal crops. The income from milk was paltry and

could not be depended upon. The main buyers were milk traders of Polson Ltd.-a

privately owned company that enjoyed monopoly for supply of milk from Kaira to

the Government Milk Scheme Bombay. The system leads to exploitation of poor and

illiterate farmers by the private traders.

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 cooperative union, instated of supplying milk to private

traders. Sardar Patel sent the farmer to Shri Morarji Dasai in order to gain his Co-

operation and help. Shri Dasai held a meeting at ‘Samrkha’ village near Anand, on

January 4, 1946. He advised the farmers to from a society for collection of the milk.

These village societies would collect the milk themselves and also decided prices for

that which would be profitable for them. The district union was also from to collect

the milk from such village cooperative societies and to sell them. It was also resolved

that the government should asked to buy milk from the union.

However, the government did not seem to help farmer by any means. It gave

the negative response by turning down the demand for the milk. To respond to this

action of government, farmer 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. Finely he decided to fulfill the farmers demand.

9

Thus their cooperative unions were forced at village and district level to

collect and sell milk on a cooperative basis, without the intervention of government.

Mr. Verghese Kurien had main interest in establishing union who was supported by

Shri Tribhuvandas Patel who convinced farmers in forming the cooperative unions at

the village level. ‘The Kaira District Co-operative Milk Producers’ Union’ was thus

established in Anand and was registered formally under section 10 of Bombay Act

VII of 1925 on December 14, 1946. Since then farmers are selling all the milk in

Anand through cooperative union. In 1955 it was commonly decided the sell milk

under the brand name ‘Amul’.

At the initial stage only 250 liters of milk was collected every day. But with

the growing awareness of the benefits of the co-cooperativeness the collection of milk

increased. Today Amul collect 50, 00,000 liters of milk every day. As the milk is

perishable commodity it became difficult to preserve milk for a 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 to develop the chilling

unit at various junctions, which would collect the milk and could chill so as preserve

it a for a longer period. Thus, today Amul has more than 168 chilling centers in

various villages. Milk is collected from almost 1097 societies.      

With the financial help from UNICEF, assistance from the government of

New Zealand under the Colombo plan, of Rs. 50 million for factory to manufactory

milk powder and butter. Dr. Rajendara Prasad, the president of India laid the

foundation on November 50, 1954. Shri Pandit Jawaharlal Nehru, the prime minister

of India declared it open at Amul dairy on November 20, 1955.

A plant to manufacture balanced cattle feed was formally commissioned on

October 31, 1964 by Shri Lalbahadur Shastri, the Prime Minister of India. At the

request of the government of India, a new dairy with a capacity to manufacture 40

tons of milk powder and 20 tons of butter a day was completed in 1963. This was

meant to meet the requirement of India’s defense forces. The dairy was declared open

by ShriMorarji Desai in April, 1965. in 1974, the Kaira Union setup a plant to

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manufacture high-protein weaning food, chocolate and malted food at Mogar, about 8

km south of Anand.

In September, 1981, the second cattle feed plant at ‘Kanjari’ were started. The

succesion of the co-generation project on September 11, 1985, marked a milestone on

the energy front when two gas turbine generators of 1.5 MW each based on natural

gas, were commissioned. On October 31, 1992, Dr. V. Kurien chairman, National

Dairy Development Board, laid the foundation of Kaira Union’s third dairy with a

processing capacity of 6.5 lakh liters of milk a day. Work on the third dairy and

cheese plant at ‘Khatraj’ with capacity for 20 Metric Ton of cheese per day, began in

February, 1994. Also in 1994, Kaira Union put up bread spread plant at ‘Mogar’ with

the assistance from National Dairy Development Board.

11

Amul and Co-Operation

The CEO, Mr. B M Vyas, said that. ³Amul is not a food company; it is an IT

company in the food business´. In saying this he was recognizing that the most

efficient way of building links between milk producers and consumers so as to

provide the best returns for the both is through IT innovation.

Thus is why Amul has embraced the ideas behind coop with such enthusiasm.

Not only will the TLD enable consumers in India to recognize an established brand

they can trust online, it will enable Amul to begin trading competitively throughout

the world, reaching markets, which have hitherto been inaccessible.

The CIO, Mr. Subbarao Hegde said, ³Information Technology is the most

effective tool we have in communicating with our members and the millions of

consumers who purchase Amul products throughout India every day. Coop not only

reflects the cooperative values which shape our own organization democratically

dynamic, it will also give us a vital business advantage as we seek to develop the

Amul brand throughout the world.´

AMUL means ³priceless´ in Sanskrit. The brand name ³Amul,´ from the

Sanskrit ³Amoolya,´was suggested by a quality control expert in Anand. Variants, all

meaning ³priceless,´ are foundin several Indian languages. Amul products have been

in use in millions of home since 1946.Amul Butter, Amul Milk Powder, Amul Ghee,

Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,

Nutramaul, Amul Milk and Amulya have made Amul a leading food brand in India.

(Turnover: Rs. 29 billion in 2004). Today Amul is a symbol of many things. Of high-

quality products sold at reasonable prices.

12

GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION

(GCMMF)

An Overview: -

Gujarat Cooperative Milk Marketing Federation (GCMMF) is India’s largest

food products marketing organization. It is state level apex body of milk cooperative

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.

Members : 12 district cooperative milk producers Union

No. of Producers Members : 2.36 million

No. of Village Societies : 11,333

Total Milk handling capacity : 6.9 million liters per day

Milk collection (Total –2002-03) :1.86 billion liters

Milk collection (Daily Average (2003-04) : 4.97 million liters

Milk Drying Capacity : 511 metric Tons per day

Cattle feed manufacturing : 2340 Mats per day

13

Strategic Management

Although the term “strategic management” is bantered around a lot in the

businesses world, it is not understood very well by most people. Essentially strategic

management answers the questions of “where do you want your business to

go”(goals), “how is your business going to get there” (strategy) and “how will you

know when you get there” (evaluation). A strategic management analogy is taking a

trip during your vacation. First you decide where you want to go – the natural beauty

of Yellowstone or the bright lights of Las Vegas. Then you develop a strategy of how

to get there – take an airplane (which flights), drive your car (which highways), etc.

This will be influenced by the amount of money, time and Other resources you have

available. Then you monitor your trip to see if your strategy takes you to your

destination and how your strategy worked (missed Flights, poor road conditions, etc.).

Below are concepts to help expand your understand of strategic management for a

business. These will help sharpen your focus for using Strategic Management for a

Value-added Farm Business.

Global Strategic Management

During the last half of the twentieth century, many barriers to international trade fell

and a wave of firms began pursuing global strategies to gain a competitive advantage.

However, some industries benefit more from globalization than do others, and some

nations have a comparative advantage over other nations in certain industries. To

create a successful global strategy, managers first must understand the nature of

global industries and the dynamics of global competition.

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The Strategic Planning Process

In today's highly competitive business environment, budget-oriented planning

or forecast-based planning methods are insufficient for a large corporation to survive

and prosper. The firm must engage in strategic planning that clearly defines

objectives and assesses both the internal and external situation to formulate strategy,

implement the strategy, evaluate the progress, and make adjustments as necessary to

stay on track.

A simplified view of the strategic planning process is shown by the following

diagram:

The Strategic Planning Process

The Strategic Planning Process

Mission &Objectives

Environmental Scanning Strategy Formulation Strategy Implementation

Evaluation & Control

Environmental Scan

The environmental scan includes the following components:

•Internal analysis of the firm

•Analysis of the firm's industry (task environment)

•External microenvironment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the

external analysis reveals opportunities and threats. A profile of the strengths,

weaknesses, opportunities, and threats is generated by means of a SWOT analysis.

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Strategy Formulation

Given the information from the environmental scan, the firm should match its

strengths to the opportunities that it has identified, while addressing its weaknesses

and external threats. To attain superior profitability, the firm seeks to develop a

competitive advantage over its rivals. A competitive advantage can be based on cost

or differentiation. Michael Porter identified three industry-independent generic

strategies from which the firm can choose.

Strategy Implementation

The selected strategy is implemented by means of programs, budgets, and

procedures. Implementation involves organization of the firm's resources and

motivation of the staff to achieve objectives. The way in which the strategy is

implemented can have a significant impact on whether it will be successful. In a large

company, those who implement the strategy likely will be different people from those

who formulated it. For this reason, care must be taken to communicate the strategy

and the reasoning behind it. Otherwise, the implementation might not succeed if the

strategy is misunderstood or if lower-level managers resist its implementation

because they do not understand why the particular strategy was selected.

Evaluation & Control

The implementation of the strategy must be monitored and adjustments made

as needed. Evaluation and control consists of the following steps:

1.Define parameters to be measured

2.Define target values for those parameters

3.Perform measurements

4.Compare measured results to the pre-defined standard

5.Make necessary changes

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Hierarchical Levels of Strategy

Strategy can be formulated on three different levels:

• corporate level

• business unit level

• functional or departmental level.

While strategy may be about competing and surviving as a firm, one can argue

that products, not corporations compete, and products are developed by business

units. The role of the corporation then is to manage its business units and products so

that each is competitive and so that each contributes to corporate purposes. Consider

Textron, Inc., a successful conglomerate corporation that pursues profits through a

range of businesses in unrelated industries. Textron has four core business segments:

•Aircraft - 32% of revenues

•Automotive - 25% of revenues

•Industrial - 39% of revenues

•Finance - 4% of revenues.

While the corporation must manage its portfolio of businesses to grow and

survive, the success of a diversified firm depends upon its ability to manage each of

its product lines. While there is no single competitor to Textron, we can talk about the

competitors and strategy of each of its business units. In the finance business

segment, for example, the chief rivals are major banks providing commercial

financing. Many managers consider the business level to be the proper focus for

strategic planning.

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Corporate Level Strategy

Corporate level strategy fundamentally is concerned with the selection of

businesses in which the company should compete and with the development and

coordination of that portfolio of businesses. Corporate level strategy is concerned

with:

•Reach - defining the issues that are corporate responsibilities; these might include

identifying the overall goals of the corporation, the types of businesses in which the

corporation should be involved, and the way in which businesses will be integrated

and managed.

•Competitive Contact - defining where in the corporation competition is to be

localized. Take the case of insurance: In the mid-1990's, Aetna as a corporation was

clearly identified with its commercial and property casualty insurance products. The

conglomerate Textron was not. For Textron, competition in the insurance markets

took place specifically at the business unit level, through its subsidiary, Paul Revere.

(Textron divested itself of The Paul Revere Corporation in 1997.)

•Managing Activities and Business Interrelationships - Corporate strategy seeks to

develop synergies by sharing and coordinating staff and other resources across

business units, investing financial resources across business units, and using business

units to complement other corporate business activities. Igor an off introduced the

concept of synergy to corporate strategy.

•Management Practices - Corporations decide how business units are to be governed:

through direct corporate intervention (centralization) or through more or less

autonomous government (decentralization) that relies on persuasion and rewards.

18

Business Unit Level Strategy

A strategic business unit may be a division, product line, or other profit center

that can be planned independently from the other business units of the firm. At the

business unit level, the strategic issues are less about the coordination of operating

units and more about developing and sustaining a competitive advantage for the

goods and services that are produced. At the business level, the strategy formulation

phase deals with:

• positioning the business against rivals

•anticipating changes in demand and technologies and adjusting the strategy to

accommodate them

•influencing the nature of competition through strategic actions such as vertical

integration and through political actions such as lobbying.

Functional Level Strategy

The functional level of the organization is the level of the operating divisions

and departments. The strategic issues at the functional level are related to business

processes and the value chain. Functional level strategies in marketing, finance,

operations, human resources, and R&D involve the development and coordination of

resources through which business unit level strategies can be executed efficiently and

effectively. Functional units of an organization are involved in higher level strategies

by providing input into the business unit level and corporate level strategy, such as

providing information on resources and capabilities on which the higher level

strategies can be based. Once the higher-level strategy is developed, the functional

units translate it into discrete action-plans that each department or division must

accomplish for the strategy to succeed.

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Horizontal Integration

The acquisition of additional business activities at the same level of the value

chain is referred to as horizontal integration. This form of expansion contrasts with

vertical integration by which the firm expands into upstream or downstream

activities. Horizontal growth can be achieved by internal expansion or by external

expansion through mergers and acquisitions of firms offering similar products and

services. A firm may diversify by growing horizontally into unrelated businesses.

Some examples of horizontal integration include:

•The Standard Oil Company's acquisition of 40 refineries.

•An automobile manufacturer's acquisition of a sport utility vehicle

manufacturer.

•A media company's ownership of radio, television, newspapers, books, and

magazines.

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Types of Strategy

Research and development strategy

Businesses cannot grow and survive without new products. It is the role of R&D

specialists to generate new product ideas, nurture them carefully and develop them

fully into commercially viable propositions. Where innovation proves to be a costly

exercise imitation could also be tried as a fruitful option. Many Japanese electronics

companies were quite successful in copying American technology and by avoiding

R&D costs, improved their competitive strength significantly.

Operations Strategy:

This strategy outlines steps to keep costs under check and improve operational

efficiency. The focus is on arriving at decisions regarding plant layout, plant capacity,

production processes, inventory management etc.

Financial strategy

It deals with financial planning, evaluating investment proposals securing funds for

various investments and controlling financial resources. Thus raising funds, acquiring

assets, allocating funds to operations, using funds efficiently etc are all part of the

strategy.

Marketing Strategy

It deals with strategies relating to product pricing, distribution and promotion of a

company’s offering important issues here cover what type of products at what prices

through which distribution channel and by the use of which promotional tool and

sales force etc.

21

Human Resources strategy

HR strategy deals with hiring, training, assessing, developing rewarding motivating

and retaining the number and types of employees required to run the business

effectively, internal (union contracts, productivity indices, labor turnover,

absenteeism accidents etc) and external factors (labor laws, son of the soil,

reservation, equal employment opportunity, employment of children and women etc)

need to be carefully evaluated while formulating HR strategies.

Constraints and strategic choice

Viewed collectively the R&D strategy should encourage innovation; marketing

should stress brand loyalty and reliable distribution channels of production should

maintain long production runs, cost reduction, finance should focus on cash flows and

positive returns and HR department should develop strategies for retaining and

developing a stable workforce. Of course organizations do come across constraints

while formulating functional level strategies in several forms, how to finance the

proposals what kind of risk to be taken, how to combine suppliers and make channel

partners happy, how to encounter competitive retaliation etc. In any case while

selecting appropriate strategies at corporate business and functional level the

following criteria should be kept in mind.

Strategy selection criteria

1) They are responsive to the external environment.

2) The offer a sustainable competitive advantage.

3) They are consistent with order strategies in the organization.

4) They provide adequate flexibility for the business and the organization.

5) They conform to the organization’s mission and long term objectives.

6) They are organizationally flexible.

22

Strategy Implementation:

Strategy implementation is the process of translation of strategies and policies into

action through the development of programs, budgets and procedures It is typically

conducted by the middle and lower level management but is reviewed by the top

management. However, programs and procedures are simply more detailed plans for

the eventual implementation of strategy. Unless the corporation is appropriately

organized, programs are adequately staffed and activities are properly directed these

operational plans fail to deliver the goods. To be effective a strategy must be

implemented through the right organization structure and appropriate management

practices. In addition, management must also ensure that there is progress towards,

objectives according to plan by instituting a rigorous process of control over

important activities. The following figure would help in understanding the process of

strategy implementation.

Directing

People should be motivated to implement a new strategy in desired ways. It is not

sufficient merely to have people who can do the job; it is necessary to have people

who want to do the job the way you need it done. In addition to traditional

motivational techniques managers should also make use of modern techniques in

order to inspire people to perk performances.

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The Factors That Shape Strategy

Organizations do not exist in a vacuum. Many factors enter into the forming

of a company's strategy. Each exists within a complex network of environmental

forces. These forces, conditions, situations, events, and relationships over which the

organization has little control are referred to collectively as the organization's

environment.

In general terms, environment can be broken down into three areas: the macro

environment, or general environment (remote environment) - that is, economic,

social, political and legal systems in the country; operating environment - that is,

competitors, markets, customers, regulatory agencies, and stakeholders; and the

internal environment - that is, employees, managers, union, and board directors. In

formulating a strategy, the strategic decision makers must analyze conditions internal

to the organization as well as conditions in the external environment, which are

described in the following sections.

Strategy Planning – Environmental Analysis

The 1st step of the strategy management process is environmental analysis.

An organization can only be successful if it is appropriately matched to its

environment. Environment analysis is the study of the organizational environment to

pinpoint environmental factors that can significantly influence organizational

operations. Managers commonly perform environmental analyses to help them

understand what is happening both inside and outside their organizations and to

increase the probability that the organizational strategies they develop will

appropriately reflect the organizational environment. In order to perform an

environmental analysis efficiently and effectively, a manager must thoroughly

understand how organizational environments are structured.

For purposes of environmental analysis, the environment of an organization is

generally divided into 3 distinct levels:

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General Environment

Operating Environment

Internal Environment

Managers must be well aware of these 3 organizational environmental levels,

understand how each level affects organizational performance and then formulate

organizational strategies in response to this understanding.

The General Environment:

The components normally considered part of the general environment are:

Economic

Social: Including Demographics and Social Values

Political

Legal

Technological

The Operating Environment:

The operating Environment includes various components like:

Customer

Competition

Labour

Supplier

International Issues

The Internal Environment:

The level of an organization’s environment that exists inside the organization

and normally has immediate and specific implications for managing the organization

is the internal environment. It includes marketing, finance and accounting, planning,

organizing, influencing and controlling within the organization.

25

Pest Analysis of Amul

P –

1) Since the budget range is decontrolled, no political effects are envisaged.

E –

1) Increasing per capita income resulting in higher disposable income

2) Growing middle class/urban population ± increase in demand.

3) Low cost of production ± better penetration.

S –

1) Per capita consumption expected to increase ± fashion.

2) Increasing gifts culture ± increase in demand.

3) Lower cholesterol than ³Mithais´ (sweet meat) ± substitute demand

T –

1) Will have to reinforce technology to international levels once India is a ³free´

economy

26

4 P’S OF MARKETING

The marketing mix, which is set of four elements or four “P” of marketing are as

follow

1. Product

2. Price

3. Place

4. Promotion

Same as four “P” there is also four “C” of marketing.

1. Customer solution

2. Cost

3. Convenience

4. Communication

Product :

A product is anything that satisfies needs or wants and can be offered to the

market for exchange. A product can be goods, services without product there is no

marketing. This includes product variety, product design, packaging, quality, brand

name, size etc. AMUL produces and sell i.e. Milk; it has to plan its product very

carefully so that the consumer gets only good quality products. There are various

products marketed by GCMMF

.

Price :-

The prices of products of Amul are also decided by the GCMMF. The

GCMMF conducts the market survey to check the validity and feasibility of prices in

the market and accordingly decides the prices of Amul products. The price of the

products of Amul are also decided by the Gcmmf .The Gcmmf conducts the market

survey to check the validity and feasibility of prices in the market and accordingly

decides the price of Amul products .

27

However, the price is inclusive of several elements like:

Labour cost

Processing cost

Packaging cost

Advertising cost

Transportation cost

Sales promotion cost

The GCMMF considers all this cost. Aspects and set them up in pricing structure to

decide the selling price of milk and milk products.

Setting the price based upon prices of the similar competitor products.Amul’s

new launch Choco Crunch Pricing is based on three types:-

1) Product is lasting distinctiveness from competitor's product.

Here we can assume

a) The product has low price elasticity.

b) The product has low cross elasticity.

c) The demand of the product will rise.

2) Products have perishable distinctiveness from competitor's

product, assuming the product features are medium distinctiveness.

3) Products have little distinctiveness from competitor's product.

Assuming that:

a) The product has high price elasticity.

b) The product has some cross elasticity.

c) No expectation that demand of the product will rise. Price is the factor

that beats out all other chocolates in the competition.

Promotion

28

IT includes a variety of techniques including advertisement, sale promotion,

public relations and personal selling that are used to communicate with customers and

potential customers. Television is the best media for advertising in the local areas.

Hoardings designed on the creative basis attract the customers more.

A successful product or service means nothing unless the benefit of such a

service can be communicated clearly to the target market. An organizations

promotional strategy can consist of:

Advertising: Is any non personal paid form of communication using any form of

mass media?

Public relations: Involves developing positive relationships with the organization

media public. The art of good public relations is not only to obtain favorable publicity

within the media, but it is also involves being able to handle successfully negative

attention.

Sales promotion: Commonly used to obtain an increase in sales short term. Could

involve using money off coupons or special offers.

Pull Strategy and Push Strategy: Communication by the manufacturer is not only

directed towards consumers to create demand. A push strategy is where the

manufacturer concentrates some of their marketing effort on promoting their product

to retailers to convince them to stock the product. A combination of promotional mix

strategies are used at this stage aimed at the retailer including personal selling, and

direct mail. The product is pushed onto the retailer, hence the name. A pull strategy is

based around the manufacturer promoting their product amongst the target market to

create demand. Consumers pull the product through the distribution channel forcing

the wholesaler and retailer to stock it, hence the name pull strategy. Organizations

tend to use both push and pull strategies to create demand from retailers and

consumers.

Place

29

Place refers to marketing activities that make products available to consumers

at the right time in a convenient location. Place refers as distribution Channels .IT is

the process of moving products from the producer the consumer. Amul has developed

federation and Amul parlors located in several parts of country. Amul have managed

to create more than 2300. Amul have identified certain potential locations such as

Railway, Airports, universities, and shopping malls. The GCMMF handles the

workers relating to Managing of stocks and distributors to in the country. Thus

GCMMF looks offer the disbursement of products to the various Marketing channels.

Product

Cost

A strong emphasis on target costing, design-to-cost, value engineering,

and design for manufacturability. Minimum product variety. Significant

manufacturing and accounting involvement in development. Suppliers are

well-integrated into the development process. Factory uses high volume

equipment specifically oriented to the product; automated material handling.

Quality /Reliability /Dependability

A disciplined and rigorous product development process. Strong focus

on understanding customer needs and providing products that meet those

needs. Use of techniques like FMEA, FTA, FRACAS, DOE, Taguchi

Methods, poke-yoke, and reliability prediction. Heavy emphasis on testing

and qualification. Processes are oriented to self-checking and adjustment and

use of computer- aided inspection and test equipment.

Time-to-Market

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Use of modular design approaches. Sufficient resources to undertake

development processes underway. Continuous surveillance of the marketplace

and understanding of customer needs. Well-defined development processes

based on tightly integrated design automation tools. Well-planned and

managed programs with clear definition and acceptance of responsibilities.

Process equipment to handle a wide range of work envelopes; FMS; quick set-

up and changeover.

Innovativeness/ Technology

A technology plan and roadmap based on the business and product

strategy and plan. Effective technology management. Process to review new

technologies developed outside for applicability internally. Effective process

to deploy new technology to development programs. State-of-the-art design

and analysis tools to support requirements of new technology. Policies to

invest in training and development of personnel to master new technology.

Culture open to new ideas and taking risks. Investment in new process

technology.

A starting point is to define and understand the company's

marketplace, customer needs and competition. Based on this assessment, the

company's primary competitive dimensions can be selected and a strategy

defined to develop and enhance these competitive dimensions. Once this is

done, product and process design based on IPD can be oriented to implement

this strategy.

Positioning Strategy

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When the list of target markets is made, a company might want to start on

deciding on a good marketing of a product. But an important step before developing

the marketing mix is deciding on how to create an identity or image of the product in

the mind of the customer. Every segment is different from the others, so different

customers with different ideas of what they expect from the product.

The Process of Positioning the Product of A Company:

Identifies the differential advantages in each segment. Decides on a different

positioning concept for each of these segments. This process is described at the

topic positioning; here different concepts of positioning are given. The process-

data model shows the concepts resulting from the different activities before and

within positioning. The analyses done of the market, competitors and abilities of

the company are necessary to create a good positioning statement. When the

positioning statement is created, one can start on creating the marketing mix.

B2C and B2B

The process described above can be used for both business-to-customer as well as

business-to-business marketing. Although most variables used in segmenting the

market are based on customer characteristics, business characteristics can be

describe during the variables which are not depending on the type of buyer. There

are however methods for creating a positioning statement for both B2C and B2B

segments. One of these methods is MIPS: a method for managing industrial

positioning strategies by Muhlbacher, Dreher and Gabriel-Ritter (1994)

Distribution Strategy

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In order to ensure a continuous & efficient distribution, an approximate figure

has to be arrived at for getting the initial orders & to ensure adequate supply so that

any delays or resultant losses are avoided. For this purpose, the company adopted the

consumer response hierarchy model so that, it is ensured that all the company enters

the market with a bang avoiding any problems of late or inadequate supplies. This is

highly essential to support the huge promotional budget, since if the supplies aren’t at

the right time, all other effort can be in vain.

Market Research Strategy

Market research is discovering what people want, need, or believe. It can also

involve discovering how they act. Once that research is complete it can be used to

determine how to market your specific product. Whenever possible, try to reduce

risks at the earliest possible stage. For example you could carry out market research

early on and not wait until you are almost ready to enter the market. If early market

research reveals that your business idea has real potential, you can use this

information in planning the build-up of your business. For starting up a business there

are a few things should be found out through market research in order to know if your

business is feasible. These are things like:

Acquisitions and Integration

Buying companies is a popular strategic tool used to fuel growth strategies.

Buying or merging with an existing company can boost your organization's market

share, increase operational efficiency and grant you access to additional talent and

customers. When done right, acquisitions can be a win-win-win for the buyer, the

seller and the customers. When acquisitions do not work out, however, the buying

company can incur significant financial loss, often putting it in a worse financial

situation than it was before the acquisition. Companies should only acquire

organizations they fully understand, in whose industries they have sufficient

experience.

CONCLUSION

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Competition will never end so let's not avoid it but face it confidently,

"For a chief executive, unless he knows where he is going no one can take him there".

What's the use of Marketing & Advertising if it does not reach the right

people and yield desired results? Therefore it is necessary for every individual who

has something to sell but no one to buy, to detect the problem areas and try to solve

them. But for this, knowing the right problem is extremely essential otherwise hitting

the target in dark means nothing. Therefore, it is rightly said that a "well defined

problem is half done". Once you know your drawbacks only then you can correct it.

Therefore, to know your drawbacks you need to conduct a survey and get information

right from the ultimate users of your product. They should be asked to bring out your

drawbacks. This will help you to not only know your pitfalls but also what your

customers want and their likes and dislikes and while doing so build a good rapport

with your customers. While conducting such surveys you can also advertise your

products among those customers who are not much aware of it.

"There are three ways of doing a thing—- the wrong way, the right way and

our way" whichever may be your way the ultimate aim is to achieve the results and

implement them to maximize customer satisfaction we all know competition is

intense then why not take it positively so that it helps us to improve our product

quality, makes customers loyal to us, helps us know our shortcomings and rectify

them. The best way to overcome your competitors is to give your customers what

they expect or probably more than that. To know the customers’ expectations towards

Amul, I had conducted a market Research of the existing customers, which helped me

to know the satisfaction, awareness and liking among customers for the products of

Amul and analyze the situation and provide them suggestion to improve the situation.

These suggestions if implemented would definitely yield results and

"Ultimately the results matter, how and who does it is immaterial".

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As we know that Amul is very big organization and market leader in dairy

products. It has maximum market share in Milk, Butter and Cheese, which are its

main/core products. As we know Amul is a co-operative organization but chocolate

industry is a profitable industry we can’t ignore it. With the help of research, company

can find out its week points in chocolate product and can increase its market share

through rectify mistakes. People have believed inAmul’s product and they will accept

its chocolates also if effective actions were taken. The survey resulted into following

conclusions:

Amul must come up with new promotional activities such that people become

aware about Amul Chocolates like Chocozoo, Bindaaz, and Fundoo.

Quality is the dominating aspect which influences consumer to purchase Amul

product, but prompt availability of other chocolate brands and aggressive

promotional activities by others influences the consumer towards them and

also leads to increase sales.

In comparison to Amul Chocolate, the other players such as Cadbury, Nestle,

are provide a better availability and give competition to the hilt.

People are mostly satisfied with the overall quality of Amul Chocolate, but for

the existence in the local market Amul must use aggressive selling techniques.

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BIBLIOGRAPHY

1. www.amul.com

2. www.google.com

3. www.marketresearch.com

5. www.dairy.com

6. Research Methodology. (Harper W.Boyd, C. R. Kothari

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