Amul butter v/s Britannia (Product Strategy)

0Title :

FOOD INDUSTRY

The food industry is the complex, global collective of diverse businesses that together

supply much of the food energy consumed by the world population. Only subsistence

farmers, those who survive on what they grow, can be considered outside of the scope

of the modern food industry.

The food industry includes:

Regulation: local, regional, national and international rules and regulations for food

production and sale, including food quality and food safety, and industry lobbying

activities

Education: academic, vocational, consultancy

Research and development: food technology

Financial services: insurance, credit

Manufacturing: agrichemicals, seed, farm machinery and supplies, agricultural

construction, etc.

Agriculture: raising of crops and livestock, seafood

Food processing: preparation of fresh products for market, manufacture of prepared

food products

Marketing: promotion of generic products (e.g. milk board), new products, public

opinion, through advertising, packaging, public relations, etc

Wholesale and distribution: warehousing, transportation, logistics

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Amul butter v/s Britannia (Product Strategy)

Retail: supermarket chains and independent food stores, direct-to-consumer,

restaurant, food services

ADVANTAGE OF INDIA UNDER FOOD INDUSTRY:

India is one of the largest food producers in the world

India has diverse agro-climatic conditions and has a large and diverse raw material base

suitable for food processing companies 7

Investment requirement of around US$ 15 billion exists in the food processing sector

India is looking for investment in infrastructure, packaging and marketing

India has huge scientific and research talent pool

A largely untapped domestic market of 1000 million consumers

300 million upper and middle class consume processed food

200 million more consumers expected to shift to processed food by 2010

Well developed infrastructure and distribution network

Rapid urbanization, increased literacy, changing life style, increased number of women

in workforce, rising per capita income- leading to rapid growth and new opportunities

in food and beverages sector

50 per cent of household expenditure by Indians is on food items

Strategic geographic location (proximity of India to markets in Europe and Far East,

South East and West Asia)

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Amul butter v/s Britannia (Product Strategy)

Under the food industry, Dairy product is very important part of food processing. Dairy

processing is acting good role in India.

Dairy Processing

India ranks first in the world in terms of milk production. Indian production stands at

91 million tones growing at a CAGR of 4 per cent. This is primarily due to the initiatives

taken by the Operation flood programmes in organizing milk producers into

cooperatives; building infrastructure for milk procurement, processing and marketing

and providing financial, technical and management inputs by the Ministry of Agriculture

and Ministry of Food Processing Industries to turn the dairy sector into viable self-

sustaining organized sector. About 35% of milk produced in India is processed. The

organized sector (large scale dairy plants) processes about 13 million tones annually,

while the unorganized sector processes about 22 million tones per annum. In the

organized sector, there are 676 dairy plants in the Cooperative, Private and Government

sectors registered with the Government of India and the state Governments. 8

Major Indian and Overseas Players in the Food industry

ITC Limited

Parle Products Pvt. Ltd.

Agro Tech Foods

Amul

Perfetti India Ltd.

Cadbury India Ltd.

PepsiCo India Holdings

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Amul butter v/s Britannia (Product Strategy)

Nestle India Pvt. Ltd.

Britannia Industries Ltd.

Hindustan Unilever Limited

MTR foods limited

Godrej industries Limited Dabur India Ltd.

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Amul butter v/s Britannia (Product Strategy)

India has a unique pattern of production, processing and marketing/consumption of

milk, which is not comparable with any large milk producing country. Approximately 70

million rural households (primarily, small and marginal farmers and landless

labourers ) in the country are engaged in milk production. Over 11 million farmer are

organized into about 0.1 million village Dairy Cooperative Societies (DCS)(about 110

farmers per DCS). The cumulative milk handled by DCS across the country is about 18

million kg of milk per day. These cooperatives form part of a national milk grid which

links the milk producers throughout India with consumers in more than 700 towns and

cities bridging the gaps on account of seasonal and regional variations in the availability

of milk.

The Ministry of food Processing Industries is promoting organized Dairy processing

sector to accomplish upcoming demands of processed dairy products and helping to

identify various areas of research for future product development and quality

improvement to revamp the Indian dairy export by way of providing financial

assistance to the dairy processing units. 32 Units have been sanctioned financial

assistance (Rs.591 lakhs) under the plan scheme of the Ministry during the year 2006-

07.

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Amul butter v/s Britannia (Product Strategy)

History

Amul (AMUL means "priceless" in Sanskrit. The brand name "Amul," from

the Sanskrit "Amoolya," was suggested by a quality control expert in Anand.

Formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex

cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd.

(GCMMF), which today is jointly owned by some 2.8 million milk producer in Gujarat

India.

AMUL is based in Anand, Gujarat and has been an example of a co-operative

organization's success in the long term. It is one of the best examples of co-operative

achievement in the developing economy “Anyone who has seen ... the dairy cooperatives

in the state of Gujarat, especially the highly successful one known as AMUL, will

naturally wonder what combination of influences and incentives is needed to multiply

such a model a thousand times over in developing regions everywhere." The Amul

Pattern has established itself as a uniquely appropriate model for rural development.

Amul has spurred the White Revolution of India, which has made India the largest

producer of milk and milk products in the world. It is also world’s biggest vegetarian

cheese brand.

Amul is the largest food brand in India and world's Largest Pouched Milk Brand

with an annual turnover of US $1050 million (2006-07. Currently Unions making up

GCMMF have 2.8 million producer members with milk collection average of 10.16

million litres per day. Besides India, Amul has entered overseas markets such as

Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few

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Amul butter v/s Britannia (Product Strategy)

South African countries. Its bid to enter Japanese market in 1994 did not succeed, but

now it has fresh plans entering the Japanese markets.

Company information

The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the

largest food products marketing organisation of India. It is the apex organization of the

Dairy Cooperatives of Gujarat. This State has been a pioneer in organizing dairy

cooperatives and our success has not only been emulated in India but serves as a model

for rest of the World. Over the last five and a half decades, Dairy Cooperatives in Gujarat

have created an economic network that links more than 2.8 million village milk

producers with millions of consumers in India and abroad through a cooperative system

that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level,

affiliated to 13 District Cooperative Milk Producers’ Unions at the District level and

GCMMF at the State level. These cooperatives collect on an average 7.5 million litres of

milk per day from their producer members, more than 70% of whom are small,

marginal farmers and landless labourers and include a sizeable population of tribal folk

and people belonging to the scheduled casts.

The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It

markets the products, produced by the district milk unions in 30 dairy plants, under the

renowned AMUL brand name. The combined processing capacity of these plants is 11.6

million litres per day, with four dairy plants having processing capacity in excess of 1

million Litres per day. The farmers of Gujarat own the largest state of the art dairy plant

in Asia – Mother Dairy, Gandhinagar, Gujarat - which can handle 2.5 million litres of

milk per day and process 100 MTs of milk powder daily. During the last year, 3.1 billion

litres of milk was collected by Member Unions of GCMMF. Huge capacities for milk

drying, product manufacture and cattle feed manufacture have been installed. All its

products are manufactured under the most hygienic conditions. All dairy plants of the

unions are ISO 9001-2000, ISO 22000 and HACCP certified. GCMMF (AMUL)’s Total

Quality Management ensures the quality of products right from the starting point (milk

producer) through value chain until it reaches the consumer.

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Amul butter v/s Britannia (Product Strategy)

Ever since the movement was launched fifty-five years ago, Gujarat’s Dairy

Cooperatives have brought about a significant social and economic change to our rural

people. The Dairy Cooperatives have helped in ending the exploitation of farmers and

demonstrated that when our rural producers benefit, the community and nation

benefits as well. The Gujarat Cooperative Milk Marketing Federation Ltd. cannot be

viewed simply as a business enterprise. It is an institution created by the milk

producers themselves to primarily safeguard their interest economically, socially as

well as democratically. Business houses create profit in order to distribute it to the

shareholders. In the case of GCMMF the surplus is ploughed back to farmers through the

District Unions as well as the village societies. This circulation of capital with value

addition within the structure not only benefits the final beneficiary – the farmer – but

eventually contributes to the development of the village community. This is the most

significant contribution the Amul model co-operatives has made in building Nation.

Methodology ::

TITLE OF THE STUDY

A study of the of AMUL BUTTER ‟ beverages products in the market to compete with

Britannia.

OBJECTIVE OF THE RESEARCH

To find out the “AMUL BUTTER‟ can only a product to dominate the dairy product

market

To find out the factors which Amul can stay in market since last so many year.

PROBLEM STATEMENT

where Amul had penetration for its products, this study is intended to find out the

percentage of Amul products exists now and find out the factors that influence the

buying decision of retailers of beverage products.

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Amul butter v/s Britannia (Product Strategy)

SCOPE OF THE STUDY

The scope of the study is limited solely to the markets visited by the researcher for the

purpose of research; this may hence not be a total reflection of the penetration of AMUL

products for all the retail outlets in Cochin.

SOURCES OF DATA

Primary sources

The primary data was collected through questionnaires. They were filled using the

scheduled method of data collection by the researcher.

Secondary sources

The secondary sources were used only for collecting information regarding the

sample, they were however not used for analysis.

RESEARCH DESIGN

A Research design specifies the methods and procedures for conducting a particular

study. It is a map (or) blue print to which the research is to be conducted. Descriptive

research design has been considered as a suitable methodology for present study and

for data analysis.

SAMPLING DESIGN

The sampling design used was Convenience sampling, which is a non-probability

sampling method. The convenience factors were the availability and approachability of

the respondents.

LIMITATIONS OF THE RESEARCH

The limitations of the research were as follows

1. Lack of proper experience on the part of the researcher in conducting such studies in

the past.

2. Time frame required was not enough to survey more number of outlets.

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Amul butter v/s Britannia (Product Strategy)

ANALYSIS TECHNIQUES

Quantitative analysis is performed using the data collected at each outlet to estimate

the presence of Amul products.

Tools Utilized

Percentage Analysis

Graph Chart

Amul Brand Building

GCMMF (AMUL) has the largest distribution network for any FMCG company. It

has nearly 50 sales offices spread all over the country, more than 3,000 wholesale

dealers and more than 5,00,000 retailers. AMUL is also the largest exporter of dairy

products in the country. AMUL is available today in over 40 countries of the world.

AMUL is exporting a wide variety of products which include Whole and Skimmed Milk

Powder, Cottage Cheese (Paneer), UHT Milk, Clarified Butter (Ghee) and Indigenous

Sweets. The major markets are USA, West Indies, and countries in Africa, the Gulf

Region, and (SAARC) neighbours.

In September 2007, Amul emerged as the leading Indian brand according to a

survey by synovate to Asia’s top 1000 Brands.

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Amul butter v/s Britannia (Product Strategy)

Products

Amul Butter Amul Lite Delicious Table

Margarine

Amul's product range includes milk powders, milk, butter, ghee, cheese, curd,

chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk, basundi,

Nutramul brand and others. In January 2006, Amul plans to launch India's first sports

drink Stamina, which will be competing with Coca Cola's Powerade and PepsiCo’s

Gatorade.

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

its product offering in the milk products segment. Other Amul brands are Amul Kool, a

low calorie thirst quenching drink; Masti Butter Milk; Kool Cafe, ready to drink coffee

and India’s first sports drink stamina.

Amul's sugar-free Pro-Biotic Ice-cream won The International Dairy Federation

Marketing Award for 2007.

Mascot

Since 1967 Amul products' mascot has been the very recognisable "Amul baby"

(a chubby butter girl usually dressed in polka dotted dress) showing up on hoardings

and product wrappers with the equally recognisable tagline Utterly Butterly Delicious

Amul.The mascot was first used for Amul butter. But in recent years in a second wave of

ad campaign for Amul products, she has also been used for other product like ghee and

milk.

Advertise

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Amul butter v/s Britannia (Product Strategy)

An Amul butter ad on Pakistan's Kargil War fiasco. The image shows the "Amul

baby" in between George Fernandes and Atal Behari Vajpayee.

Its advertising has also started using tongue-in-cheek sketches starring the Amul

baby commenting jovially on the latest news or current events. The pun in her words

has been popular. Amul outdoor advertising uses billboards, with a humorous take on

current events and is updated frequently. The Amul ads are one of the longest running

ads based on a theme, now vying for the Guinness records for being the longest running

ad campaign ever with Smokey Bear. Sylvester da Cunha was the managing director of

the advertising agency, ASP, that created, in 1967, the campaign.

Rivals

The success of Amul resulted in similar organizations being setup by state

governments throughout India, most of which had reasonable success. Examples are

Milma in Kerala, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, K.M.F (Nandini) in

Karnataka, Sudha in Bihar, Omfed in Orissa, saras in Rajasthan, Parag in Uttar Pradesh,

Verka in Punjab, Aanchal in uttaranchal, Vita in Haryana and others.

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Amul butter v/s Britannia (Product Strategy)

Britannia

Eat healthy Think better

Britannia Industries Limited is an Indian company based in Kolkata that is

famous for its Britannia and Tiger brands of biscuit, which are highly recognised

throughout the country. Britannia is one of India’s leading biscuit firms, with an

estimated 38% market share.

The Company's principal activity is the manufacture and sale of biscuits, bread,

rusk, cakes and dairy products.

The Britannia's fame is largely acknowledged through the colourful Britannia

logos that Indian cricketers such as Virender Sehwag and Rahul Dravid wear on their

bats.

Britannia, one of the premier food product companies in India. Britannia started

as a small biscuit company in 1892 and has grown to a household name. Britannia

started its business in Calcutta (now Kolkata) with an initial investment of Rs. 295.

From thereon, Britannia's business flourished acquiring a reputation for quality and

value.Britannia Industries Ltd. has a number of awards and accolades in its name like.

Forbes Global rated Britannia 'One amongst the Top 200 Small Companies of the World'.

The Economic Times pegged Britannia India's 2nd Most Trusted Brand.  

 

Activities  

 

Britannia product line includes biscuits, snacks, packed milk, cheese, butter,

buttermilk and yogurt. Britannia owns popular brands like :

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Amul butter v/s Britannia (Product Strategy)

NutriChoice SugarOut.

NutriChoice Digestive Biscuit.

Treat Fruit Rollz.

New Britannia Milk Bikis.

Britannia Marie Gold Doubles.

Britannia 50-50.

Tiger.

History

Britannia Industries Limited is an Indian company based in Kolkata that is

famous for its Britannia and Tiger brands of biscuit, which are highly recognised

throughout the country. Britannia is one of India’s leading biscuit firms, with an

estimated 38% market share.

The Company's principal activity is the manufacture and sale of biscuits, bread, rusk,

cakes and dairy products.

The Britannia's fame is largely acknowledged through the colourful Britannia logos that

Indian cricketers such as Virender Sehwag and Rahul Dravid wear on their bats.

It was started way back in 1892 with an investment of Rs. 295. Initially, biscuits

were manufactured in a small house in central Kolkata. Later, the business was acquired

by the Gupta brothers and operated under the name of V.S. Brothers. In 1918, C H

Holmes, an English businessman in Kolkata was taken as a partner and The Britannia

Biscuit Company Limited (BBCo) was launched. The Mumbai factory was setup in 1924

and Peek Freans, UK acquired a controlling interest in BBCo. Biscuits were in big

demand during World War II, which gave a fillip to the company’s sales. The company

name was changed to the current Britannia Industries Limited in 1979. In 1982 Nabisco

Brands Inc., USA became a major foreign shareholder

Kerala businessman K. Rajan Pillai secured control of the group in the late 1980s,

becoming known in India as the 'Biscuit King'. In 1993, the Wadia Group acquired a

stake in ABIL, UK and became an equal partner with Groupe Danone in Britannia

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Amul butter v/s Britannia (Product Strategy)

Industries Limited. In what The Economic Times referred to as one of [India's] most

dramatic corporate sagas, Pillai ceded control to Wadia and Danone after a bitter

boardroom struggle,[4] then fled his Singapore base to India in 1995 after accusations

of defrauding Britannia, and died the same year in Tihar Jail.

Dairy products

Dairy products contribute close to 10 per cent to Britannia's revenue. Britannia trades

and markets dairy products, and its dairy portfolio grew at 47% in 2000-01 and by 30%

in 2001-02. Britannia holds an equity stake in Dynamix Dairy and had outsourced the

bulk of its dairy products from its associate. Its main competitors are Nestle India, and

the National Dairy Development Board (NDDB),and amul (GCMMF). The story of one of

India's favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be

precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata)

with an initial investment of Rs. 295.

The company we all know as a britannia today.

The beginnings might have been humble-the dreams were anything but. By 1910, with

the advent of electricity, Britannia mechanised its operations, and in 1921, it became

the first company east of the Suez Canal to use imported gas ovens. Britannia's business

was flourishing. But, more importantly, Britannia was acquiring a reputation for quality

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Amul butter v/s Britannia (Product Strategy)

and value. As a result, during the tragic World War II, the Government reposed its trust

in Britannia by contracting it to supply large quantities of "service biscuits" to the

armed forces.  

 

As time moved on, the biscuit market continued to grow… and Britannia grew along

with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits

from Parry's who till now distributed Britannia biscuits in India. In the subsequent

public issue of 1978, Indian shareholding crossed 60%, firmly establishing the

Indianness of the firm. The following year, Britannia Biscuit Company was re-christened

Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs.100 crores

revenue mark.

On the operations front, the company was making eqally dynamic strides. In 1992, it

celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate

identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products

market. In 1999, the "Britannia Khao, World Cup Jao" promotion further fortified the

affinity consumers had with ‘Brand Britannia’.

Britannia strode into the 21st Century as one of India's biggest brands and the

pre-eminent food brand of the country. It was equally recognised for its innovative

approach to products and marketing: the Lagaan Match was voted India's most

successful promotional activity of the year 2001 while the delicious Britannia 50-50

Maska-Chaska became India's most successful product launch. In 2002, Britannia's New

Business Division formed a joint venture with Fonterra, the world's second largest

Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of

its vision and accelerating graph, Forbes Global rated Britannia 'One amongst the Top

200 Small Companies of the World', and The Economic Times pegged Britannia India's

2nd Most Trusted Brand.  

 

Today, more than a century after those tentative first steps, Britannia's fairy tale

is not only going strong but blazing new standards, and that miniscule initial investment

has grown by leaps and bounds to crores of rupees in wealth for Britannia's

shareholders. The company's offerings are spread across the spectrum with products

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Amul butter v/s Britannia (Product Strategy)

ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented

Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India's

one billion population and a strong management at the helm means Britannia will

continue to dream big on its path of innovation and quality. And millions of consumers

will savour the results, happily ever after

Joint venture with New Zealand Dairy

On 27 October 2001, Britannia announced a joint venture with Fonterra Co-

operative Group of New Zealand, an integrated dairy company from procurement of

milk to making value-added products such as cheese and buttermilk. Britannia planned

to source most of the products from New Zealand, which they would market in India.

The joint venture will allow technology transfer to Britannia. Britannia and New

Zealand Dairy each holding 49% of the JV, and the remaining 2 per cent held by a

strategic investor. Britannia has also tentatively announced that its dairy business

would be transferred and run by the joint venture. The authorities' approval to the joint

venture obliged the company to start manufacturing facilities of its own. It would not be

allowed to trade, except at the wholesale level, thus pitching it in competition with

Danone, which had recently established its own dairy business. [edit] Biscuits

The company's factories have an annual capacity of 433,000 tonnes.[1] The

brand names of biscuits include VitaMarieGold, Tiger, Nutrichoice Junior,Good Day, 50

50, Treat, Pure Magic, Milk Bikis, Good Morning, Bourbon, Thin Arrowroot, Nice and

many more.

Tiger, the mass market brand, realised $150.75 million in sales including exports

to countries including the U.S. and Australia, or 20% of Britannia revenues in 2006.

The company alleged that Danone has violated its intellectual property rights in

the Tiger brand by registering and using Tiger in several countries in 2006 without the

consent of the Britannia Board. Managing Director Vinita Bali claims the company found

out in 2004 Danone launched the Tiger brand in Indonesia in 1998 and later in

Malaysia, Singapore, Pakistan and Egypt when it attempted to register the Tiger

trademark in some of these countries.[8] Whilst it was initially reported in December

2006 that agreement had been reached,[9] it was reported in September 2007 that a

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Amul butter v/s Britannia (Product Strategy)

solution remained elusive.[8] In the meantime since Danone's biscuit business has been

taken over by Kraft, the Tiger brand of biscuits in Malaysia has been renamed Kraft

TiGER Biscuits beginning September 2008.

Britannia initiated legal action against Danone in Singapore in September 2007.

The dispute has been resolved with Denone paying Rs 220 Million for utilizing the

brand, and Britannia securing legitimate right to use the Tiger brand worldwide.

The Wadia Group (parent company of Britannia) along with Groupe Danone of France

has turned up to be an International FMCG Major specializing in Fresh Dairy Products,

Bottled Water and Biscuits/Cereals. One of the World leaders in the food industry, some

of its achievements are:

No # 1 worldwide in Fresh Dairy Products.

No # 1 worldwide equally placed in Bottled Water (by volume).

No # 2 worldwide in Biscuits and Cereal Products.

 

 

GROUPE DANONE three core business areas are Fresh Dairy Products, Beverages and

Biscuits and Cereal Products strives to improve the lives of people around the world by

providing them with better and value added food products. Its dominant position

worldwide is based on major international brands and on its rock solid presence in local

markets (about 70% of global sales come from brands that are local market leaders).  

 

Performance 

 

Britannia has registered a turnover of Rs 21,993 million for the year ended 31st March

2006-07. Britannia has posted Net Profit to the tune of Rs 1076 million for the year

ended 31st March 2006-07.  

Ownership and relationship between major shareholders

The Wadias' Kalabakan Investments and Groupe Danone have two equal joint

venture companies, Wadia BSN and UK registered Associated Biscuits International

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Amul butter v/s Britannia (Product Strategy)

Holdings Ltd., which together hold 51 per cent stake in Britannia. The ABIH tranche

was acquired in 1992, while the controlling stake held by Wadia BSN was acquired in

1995. It was agreed that, in case of a deadlock between the partners, Danone is obliged

to buy the Wadia BSN stake at a "fair market value". ABIH which has a separate

agreement signed in 1992 and is subject to the British law.

Wadia was to be Danone's partner in the food and dairy business, and product

launches from Groupe Danone’s were expected but never materialised despite the JV

being in existence for over 11 years in India. Under the 1995 joint venture agreement,

Danone is prohibited from launching food brands within India without the consent of

the Wadias.[14] In addition, the partners agreed there would be the right of first refusal

to buy out the remaining partner in the event of the other wishing to sell its holding. In

May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone

invested in a Bangalore-based bio nutrition company, Avesthagen, in October 2006 in

violation of the government's Press Note 1, 2005, which requires a foreign company to

obtain the consent of its Indian joint venture partner before pursuing an independent

business in a similar area, including joint ventures based purely on technical

collaboration. Danone argued that Press Note 1 did not apply to it as it did not have a

formal technology transfer or trademark agreement with Avesthagen, and that its 25

pct holding in Britannia was indirect. Wadia also filed a case in the Bombay High Court

for a breach of a non-compete clause in that connection. The court ordered Danone not

to alienate, encumber or sell shares of Avestagen. In September 2007, the Foreign

Investment Promotion Board of India rejected Danone's claims that it does not need a

non-compete waiver from the Wadias to enter into business in India alone. In June

2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in Bangalore.

After a prolonged legal battle, Danone has finally agreed to sell its stake in Britannia and

get out of this line of business. Danone will sell its 25.48% stake to Leila Lands, which is

a Wadia group entity based in Mauritius. The deal is valued to be at $175–200 m. With

this buy-out, Wadia's will hold a majority stake of 50.96%.

For more than a decade, biscuit manufacturer Britannia Industries has called on

consumers to "Eat Healthy, Think Better." Now, emerging from a period of internal

crisis and preparing to address a larger slice of India's growing food space, the 90-year-

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Amul butter v/s Britannia (Product Strategy)

old Bangalore-based company is taking on a new slogan: Zindagi mein Life.Translated

literally from Hindi, the new slogan means "adding life to life" -- or, as managing

director Vinita Bali puts it, "adding enjoyable vitality to life."According to Bali, who has

been at Britannia's helm since 2005, "Over the past few years, as we looked at what we

stand for and what we could stand for, we felt that if our promise to consumers [is to]

make products that are not just enjoyable but also good for them, then we need to make

that promise come alive through our products."

This is perhaps best exemplified by Britannia's decision to remove 8,500 tons of

Trans fat from its biscuits in the last year, making them completely trans fat-free. The

company was under no regulatory compulsion to do so; in fact, it is the only biscuit

manufacturer in India to have taken such a step. Over the last few years, Britannia has

also fortified many of its products with vitamins and micronutrients such as iron.

Currently, 50% of its products are fortified.

Positioning the Britannia brand as both enjoyable and healthy is core to Bali's

growth strategy. She stresses that Britannia is not in the "health food" business, but

rather "in the business of delight and enjoyment," competing not only with other

biscuits but also with savories, chocolates and other snacks.

By marketing itself as a healthier alternative, however, Britannia seeks to sharply

differentiate itself from other brands -- and that move has paid off. Last September,

Microsoft founder and philanthropist Bill Gates included Britannia's fortified snacks in a

list of eight examples of 'creative capitalism' published in Time magazine. The company

was also recently recruited to participate in former U.S. President Bill Clinton's

campaign against childhood malnutrition through the high-profile Clinton Global

Initiative. 

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Amul butter v/s Britannia (Product Strategy)

Hungry for More

The new positioning is also intended to strengthen the mother brand itself. With

the introduction of the "Eat Healthy, Think Better" campaign in 1997, Britannia focused

on building its individual brands, such as Tiger glucose biscuits, Good Day cookies and

Treat cream biscuits. That was fine, as biscuits accounted for the bulk of the company's

revenues. (For the year ended March 2008, biscuits brought in about 90% of Britannia's

net sales of $650 million.)

But now Britannia wants to broaden its menu. In addition to growing its core

biscuit business, it wants to significantly expand its small businesses including dairy,

bread, cake and rusk (known as zwieback in the U.S.). The dairy business, which

Britannia entered in 1997 and spun off as a joint venture with New Zealand's Fonterra

Group in 2002, has revenues of barely $36 million and has yet to become profitable.

Britannia has dabbled with bread and cake for more than two decades and entered the

rusk market a few years ago. These three businesses together take in just $68 million.

More important, Britannia looks to explore other opportunities within the

growing food space. According to a November 2008 report by the Federation of Indian

Chambers of Commerce and Industry and management consulting firm Technopak

Advisors, the Indian food industry is estimated to have been at $200 billion in 2006-07

and is expected to grow to $300 billion by 2015. The report considers the food industry

to include fruits and vegetables, dairy products, marine and fish, meat and poultry,

breads and bakery, confectionary and packaged foods, and alcoholic and non-alcoholic

beverages.

"Our vision is to become a larger player in the food space, and as we get into

newer products and newer categories, their strength will be derived from the Britannia

mother brand," says Durgesh Mehta, who was Britannia's chief financial officer when he

was interviewed for this article. He has since moved on to become CFO of Bombay

Dyeing, which, like Britannia, is a Wadia Group company.

What new areas might Britannia enter? Company officials aren't saying, though

speculation includes breakfast items and ready-to-cook and ready-to-eat products. Bali

says that Britannia will not look at staples such as rice, wheat flour and sugar. "We will

21

Amul butter v/s Britannia (Product Strategy)

pursue profitable growth opportunities where we can create propositions that are

relevant and differentiated from a consumer point of view," she notes.

Adds Neeraj Chandra, Britannia's vice president and chief operating officer: "We are

looking at categories that gel with our principles of enjoyable and healthy food. We

want to participate in as many consumption moments as possible in the food space

through both leveraging our current products better and through different kinds of

products."

Industry players and analysts see Britannia's move as both smart and inevitable.

"Britannia certainly has the capability to be a larger player in food," says Harish Bijoor,

chief executive officer of Harish Bijoor Consults and a visiting professor at the

Hyderabad-based Indian School of Business. "The brand equity of Britannia can be as

elastic or as inelastic as its vision is for the Indian market."Nikhil Sen, who was with

Britannia for more than 25 years, including a brief stint as chief operating officer, adds:

"Redefining its boundaries to become a larger player in food is a great strategy for

Britannia, and it certainly has the capability to do so." Sen is currently managing

director of Unibic Biscuits India, the Indian arm of the Australian biscuit company.Both

Sen and Bijoor add a note of caution. "Britannia has been very good at developing its

current business, but it has not come out with any innovations in recent years," Sen

says. "There has not been a single new product in the past few years which has been

pioneering for the category. There has been no new energy, no 'wow' factor. Britannia

needs to innovate."Adds Bijoor: "Dairy and biscuits is still a wide-open arena, and there

is [a lot of growth] in this space itself. Britannia is in an enviable position to leverage

[these] opportunities, but it needs to be far more aggressive." Bijoor is also not

convinced about Britannia's positioning as health-cum-enjoyment: According to his

research, taste and health are mutually exclusive in the Indian context.B. P. Agarwal,

managing director of Surya Food & Agro, which makes the Priya Gold regional brand of

biscuits, says that while Britannia undoubtedly remains a market leader, much of its

strength is derived from past glory and its strong consumer equity. "The new products

that Britannia has been introducing in recent times have been more by way of tweaking

the existing portfolio. It has been launching variants with new packaging, but there is

nothing dramatically new," Agarwal says. Recent launches including Chutkule, a snack

22

Amul butter v/s Britannia (Product Strategy)

product, and Fruit Rollz -- both of which Britannia has discontinued -- failed to excite

consumers, he says.

Ingredients for Growth

So what are Bali's main ingredients for growth? Investments in people, brands

and infrastructure, improved efficiencies and cost reduction, and new choices for

consumers.

For instance, the company has been investing significantly in higher and better

quality of human resources both at the front end and at the back end. It has sharply

segmented its go-to-market strategy and, unlike an earlier focus on simply increasing

the number of outlets it covered, Britannia now has separate teams for general sales,

modern trade, institutions, and semi-urban and rural markets. It is building strong

capabilities in each of these segments.

Britannia has also been working with an international consulting agency for

building capabilities in shopper understanding as opposed to consumer understanding.

Says Chandra: "These are some finer distinctions we would not even have thought of

three years ago."

In 2008, Britannia divided its product portfolio into two distinct categories:

"health and wellness" and "delight and lifestyle." Products such as Tiger glucose and

NutriChoice biscuits fall under the former category, while Good Day and Treat fall under

the latter. Each category is headed by a senior executive responsible for outlining

distinct growth strategies.

Other initiatives include introducing personal consumption packs to attract

youth and people on the move, adding transit points such as bus stops and small

roadside shops to its distribution network, and addressing workers in the business

process outsourcing industry as a potential new market.

Meanwhile, Britannia has doubled its ad spending in the last three years. It is

also working to increase trade marketing visibility and, for the first time ever, has

signed on with a trade marketing agency. According to Mehta, Britannia plans to

23

Amul butter v/s Britannia (Product Strategy)

increase advertising and marketing spending to 10% to 12% of sales over the next few

years from a current 7%.

On the infrastructure front, Britannia has added 200,000 tons of annual capacity,

an increase of about 60%. It has also devised a long-term distributed manufacturing

strategy, put in place a continuous replenishment supply efficiency system, and

strengthened its supply chain management significantly. According to Rajesh Lal, vice

president and chief technology officer: "The stocks at our distributors are now

replenished within 24 hours, and in the past three years we have increased the

availability of our [stock-keeping units] from 60% to 90% across the country." Lal adds

that cost reductions over the last three years have saved the company $30 million.Bali is

looking to leverage all these new pieces for maximum competitive advantage. Sources

inside Britannia say revenue targets are $1.25 billion by 2010 and $3 billion by 2015.

While Bali won't commit to any numbers, her hunger clearly is to be the best. "There is a

huge opportunity out there in the market and it is up for grabs," she says. "What we

make of it depends on our ability to commercialize the opportunity. We want to be

among the three fastest-growing FMCG companies in the country and to grow

profitably."

Amul product range

Bread Spreads

Amul ButterUtterly Butterly Delicious

Amul LiteLow fat, low Cholesterol Bread Spread

Delicious Table MargarineThe Delicious way to eat healthy

24

Amul butter v/s Britannia (Product Strategy)

Milk Drinks

Amul Kool Millk Shaake

Amul Kool

Amul Kool Cafe Kool KokoA delight to Chocolate Lovers. Delicious Chocolate taste

Nutramul Energy DrinkA drink for Kids - provides energy to suit the needs of growing Kids

Amul Kool Chocolate Milk

Amul Kool Flavoured Bottled Milk

Amul Kool Flavoured Tetra Pack

Amul Masti Spiced ButtermilkAmul introduces the Best Thirst Quenching Drink

Amul Lassee

Amul Kool Thandai

25

Amul butter v/s Britannia (Product Strategy)

Powder Milk

Amul Spray Infant Milk FoodStill, Mother's Milk is Best for your baby

Amul Instant Full Cream Milk PowderA dairy in your home

Sagar Skimmed Milk PowderWhich is especially useful for diet preparations or for use by people on low calorie and high protein diet.

Sagar Tea Coffee Whitener

Amulya Dairy WhitenerThe Richest, Purest Dairy Whitener

   

Fresh Milk

Amul Fresh MilkThis is the most hygienic milk available in the market. Pasteurised in state-of-the-art processing plants and pouch-packed for convenience.

Amul Gold Milk

Amul Taaza Double Toned Milk

Amul Lite Slim and Trim Milk

26

Amul butter v/s Britannia (Product Strategy)

Amul Fresh Cream Amul Shakti Toned Milk

Amul Calci+ Amul Buttermilk

Cheese

Amul Pasteurised Processed Cheese100% Vegetarian Cheese made from microbial rennet

Amul Cheese SpreadsTasty Cheese Spreads in 3 great flavours..

Amul Emmental CheeseThe Great Swiss Cheese from Amul, has a sweet-dry flavour and hazelnut aroma

Amul Pizza Mozzarella CheesePizza cheese...makes great tasting pizzas!

Gouda Cheese

   

For Cooking

Amul / Sagar Pure GheeMade from fresh cream. Has typical rich aroma and granular texture. An ethnic product made by dairies with decades of experience.

Cooking Butter

27

Amul butter v/s Britannia (Product Strategy)

Amul Malai PaneerReady to cook paneer to make your favourite recipes!

Utterly Delicious Pizza

Britannia product

Britannia product line includes biscuits, snacks, packed milk, cheese, butter, buttermilk and yogurt. Britannia owns popular brands like :

NutriChoice SugarOut. NutriChoice Digestive Biscuit. Treat Fruit Rollz. New Britannia Milk Bikis. Britannia Marie Gold Doubles. Britannia 50-50. Tiger.

28

Amul butter v/s Britannia (Product Strategy)

PRODUCT DEVELOPMENT

Cooperative system

Profitability

Committed to the farmers

DISTRIBUTION NETWORK

300 stock keeping units,

46 sales offices,

3,000 distributors,

1,00,000 retailers with refrigerators and

5,00,000 non-refrigerated retail outlets...

29

ICE

CREA

MLIQUID FRESH

MILKPIZZA

COMPETITION

Amul butter v/s Britannia (Product Strategy)

FUTURE PLANS

Expansion of distribution network, creative marketing, consumer

education and product innovation, we will leverage effectively on rising

income levels and growing affluence among Indian consumers.

Tapping the rising demand for new value-added products.

Milk shed area will increase to 231 lakh kg per day (23.1 million kg per

day), at an annual growth rate of 4%

Installing Bulk Milk Chillers and Automatic Milk Collection Systems in all

our village cooperative societies.

Collect as much as 195 lakh kg per day (19.5 million kg per day) of milk in

the peak flush season.

Satellite dairies with combined processing and liquid milk packaging

capacity of 50 LKPD will be established in major metro market

We plan to double to processing capacity of our dairy plants to 20.7 million

kg per day, by 2020

Milk drying capacity will also be enhanced by 200 MT’s per day

Plan to expand our cattle feed manufacturing capacity, more than four

times to 12,000 MT’s per day, by 2020.

Total investments envisaged for creating all the required infrastructure

would be Rs. 2,600 crores (Rs. 26 billion) till the year 2020

30

Amul butter v/s Britannia (Product Strategy)

Findings from surveys ::

Job employee57%

Business man10%

housewifes10%

student23%

survey- 60 people

The reason people prefer AMUL product

Product People Taste Price variety

Taste & Price

Taste & variety

All 3

Amul 48 38 6 3 - 1 -Britannia - - - - - -Nutrilite 1 - - - 1 - -Home-made 1 1 - - - - -Amul & home made

6 2 1 - 1 2 -

Amul & nutrilite

3 2 - 1 - - -

All 4 1 - 1total 60 43 7 4 2 3 1

Product People

advertise

Newspaper

sample

Ad & news

Ad, new,& mag

All 3

Amul 48 43 1 - 2 2 -Britannia - - - - - -Nutrilite 1 - - - 1 - -Home-made 1 - 1 - - -Amul & home made

6 5 - - 1 - -

Amul & nutrilite

3 2 1 - - - -

All 4 1 1 - - - - -total 60 51 2 1 4 2 0

31

Amul butter v/s Britannia (Product Strategy)

Product People

Local Mkt Super mkt Both

Amul 48 34 14 -Britannia - - - -Nutrilite 1 1 - -Home-made 1 1 - -Amul & home made

6 4 2 -

Amul & nutrilite 3 3 - -All 4 1 1total 60 44 16 -

Q .1) What kind of butter you buy ?

Product Amul Britannia Nutrilite Home-made 38 15 4 3

Total 60

Amul Britannia Nutrilite Home-made0

5

10

15

20

25

30

35

40

Market survey

Mostly use

32

Amul butter v/s Britannia (Product Strategy)

Q.2) Why do you prefer particular brand ?

People Taste Price variety Taste & Price

Taste & variety All 3

60 43 7 4 2 3 1

Taste

price

variety

Taste &price

Taste & variety

All 3

0 5 10 15 20 25 30 35 40 45 50

Prefer by public

Prefer by public

Q.3) How you come to know about this product ?

People Advertisement

Newspaper sample Ad. & News Ad, News,& Mag

60 51 2 1 4 2

33

Amul butter v/s Britannia (Product Strategy)

Advertisement Newspaper Sample Adv. & News Adv.News & magazines

0

10

20

30

40

50

60

people

levels

Q.4) Where do you normally buy Amul product from ?

People Local Mkt Super mkt60 44 16

73%

27%

SalesLocal market Super market

Q .6) Which quantity do you normally buy ?

34

Amul butter v/s Britannia (Product Strategy)

100 gm 500 gm 1 kg 5 kg

39

97

5

BuyBuy

Q .7) How many times do you buy Amul Butter ?

2 time in week 1 time in week on special occasion other 0

5

10

15

20

25

Buying time

Buying time

Q .8) For what purpose do you butter mostly ?

35

Amul butter v/s Britannia (Product Strategy)

On roti13%

On pav bhaji33%

On Bread38%

On Dosa17%

Purpose

Q .10) At what time you see more no. of ads. On Amul & Britannia ?

Morning Afternoon Evening Night0

5

10

15

20

25

30

35

40

45

AmulBritannia

36

Amul butter v/s Britannia (Product Strategy)

Q .12) What difference you see in both the product ?

16%

21%

14%21%

28%

DifferenceQuality Quantity Promotion Size Price

Q .13) Can you recall latest Amul Or Britannia advertisement ?

Amul Britannia0

20

40

60

80

100

120

140

NOYes

Q .14) Who will be the better competitor to Amul ?

37

Amul butter v/s Britannia (Product Strategy)

Britannia Nutrilite Local Brand0

5

10

15

20

25

30

35

40

45

50

competitors

competitors

Q .16) If Amul come with low cholesterol did you accept it ?

Yes No0

10

20

30

40

50

60

70

Levels

Levels

Q . 17) Do you think that the present cost of product which you prefer is costly? If yes what will be your ideal price range for 100gm butter pack ?

38

Amul butter v/s Britannia (Product Strategy)

Rs. 11 to 15

Rs.16 to20

Rs. 21 to 25

0 10 20 30 40 50 60

Price range

Price range

Q . 18) Would you prefer to switch to butter of anther brand if it is cheaper than your preferred brand without any change in quality & taste ?

Another Brand

YesNo

Q .20) Dou you fell that company should change their brand name ?

39

Amul butter v/s Britannia (Product Strategy)

Company Name

YesNo

Q .21) Amul product with the Red colure packing its work in the market or not ?

Yes No0

10

20

30

40

50

60

70

Prefer

Prefer

Q .22) Why do you fell Britannia brand is not as well, dairy product in market as compare to Amul ?

40

Amul butter v/s Britannia (Product Strategy)

Britannia0

10

20

30

40

50

60

low qualitysmall sizehigh priceless promotionproblem in packing

Q .23) If company gives 20%off to customer it’s help to growth of selling of company product ?

Yes No0

10

20

30

40

50

60

70

80

90

Offer ratio

offer ratio

41

Amul butter v/s Britannia (Product Strategy)

CONCLUSION

Most of the people always prefer Amul for any dairy product.

Low cost than any other brand was the one of the reason to chose Amul as

a best product.

AMUL’S Philosophy

Trustworthy of 1,000 million Indians

Also known for food brand

On the concern of distribution channel , most of the retailers agree that

Amul has good distribution channel.

Amul gives the better replacement offer to the expired product than the

other company products.

Replacement offer to the expired product is one of the most important factor for

influencing the stocking decision of the product.

Ranking of some other factors that influence the retailers stocking decision:

42

Amul butter v/s Britannia (Product Strategy)

Following is the order in which the retailers ranked the other factors that

influence their stocking decision.

i. Consumer preference given by the company to the retailers of the product was raked

1st

ii. Promotional strategies of the company for promoting its products was ranked 2nd

iii. Offers for the product was ranked 3rd

iv. Packaging of the product was ranked only 4th

43

Amul butter v/s Britannia (Product Strategy)

Overall ranking of the factors that influence the retailers stocking decision.

Following is the sequential order in which the retailers ranked the factors that influence

their stocking decision.

i. Trust of the company is the most important point for its products.

ii. Credit offered by the distributor

iii. Distribution in supplying the products regularly

iv. Discounts provided by the company for its products.

44

Amul butter v/s Britannia (Product Strategy)

RECOMMENDATIONS

1. Amul has a relatively good distribution network, but still company is not able to

fulfill the demand of outlet in the peak season when demand is very high. Here

company should consider on the supply of product in the peak season.

2. Amul should take care of their goodwill of company market any damage product

sell in the open market it may be effect company reputation.

3. Given the fact that margin offered to the retailer is not similar in the case of the

competitors product. For this fact, the company should give good margin to the

retailers than the competitors.

4. Company should also give the replacement offer to those outlet which is running

with small business.

5. Only fresh product should be supply in the outlet. The main cause of the supply

of fresh product is that customer always wants fresh product. They don‟t want

to take 3 or 4 days old product.

45

Amul butter v/s Britannia (Product Strategy)

Appendix ::Market survey on

Amul butter v/s Britannia

Personal detail :

Name :

Address :

Age :

Gender :

Occupation :

Income p.a. :

Total family member :

Questions :

Q .1) What kind of butter you buy ?

-- Amul Britannia

Nutrilite Home - made

Q.2) Why do you prefer particular brand ? -- Price Taste

Variety

Q.3) How you come to know about this product ?

-- Advertisement Newspaper

Sample Magazines

Q.4) Where do you normally buy Amul product from ?

-- Local market Super market (big bazaar)

46

Amul butter v/s Britannia (Product Strategy)

Q .5) Did you ever use any other Brand ?

-- Yes No

Q .6) Which quantity do you normally buy ?

-- 100 gm 500

1 kg 5 kg

Q .7) How many times do you buy Amul Butter ?

-- 2 times in week Once in week

On special occasion Others

Q .8) For what purpose do you butter mostly ?

-- On roti On Bhaji

On bread On dosa

Q .9) Do you recall advertisement of Amul butter ?

-- Yes No

Q .10) At what time you see more no. of ads. On Amul ?

-- Morning Afternoon

Evening Night

Q .11) At what time you see more no. of ads. On Britannia ?

-- Morning Afternoon

Evening Night

47

Amul butter v/s Britannia (Product Strategy)

Q .12) What difference you see in both the product ?

-- Quality Quantity Promotion

Size Price

Q .13) Can you recall latest Amul advertisement ?

-- Yes No

Q .14) Who will be the better competitor to Amul ?

-- Britannia Nutrilite Local Brand

Q .15) Do you find that Amul butter having high cholesterol ?

-- Yes No

Q .16) If Amul come with low cholesterol did you accept it ?

-- Yes No

Q . 17) Do you think that the present cost of product which you prefer is costly? If yes what will be your ideal price range for 100gm butter pack ?

-- Rs. 11 to 15 Rs. 16 to 20

Rs. 21 to 25

Q . 18) Would you prefer to switch to butter of anther brand if it is cheaper than your preferred brand without any change in quality & taste ?

-- Yes No

Q .19) Is there anything that you feel lacking in your preferred brand ?

--

48

Amul butter v/s Britannia (Product Strategy)

Q .20) Dou you fell that company should change their brand name ?

-- Yes No

Q .21) Amul product with the Red colure packing its work in the market or not ?

-- Yes No

Q .22) Why do you fell Britannia brand is not as well, dairy product in market as compare to Amul ?

-- Low quality Small size High price

Less promotion Problem in packing

Q .23) If company gives 20%off to customer it’s help to growth of selling of company product ?

-- Yes No

Q .24) Can you suggest a change which will improve the product further ?

--

49

Amul butter v/s Britannia (Product Strategy)

BIBLIOGRAPHY

Marketing research

WEBLIOGRAPHY

www.wikipedia.org

www.amul.com

www.google.com

50