ANMOL GARG

16P

AVNIE SAXENA

16P

JATIN RAI

16P024

PRASENJIT BHUIYA

16P

SHASHANK MITTAL

16P

SWASTI GUPTA 16P057

Market Development to Market Capture- the road ahead

for Amul

TABLEOFCONTENTS
INTRODUCTION

PURPOSE & OBJECTIVE OF THE PROJECT

SWOT ANALYSIS

PEST ANALYSIS

BCG MATRIX OF AMUL

PORTERS FIVE FORCES ANALYSIS

11

LITERATURE REVIEW

15

CONSUMER BEHAVIOR

16

POSITIONING STRATEGY

17

METHODOLOGY ADOPTED

19

RESULTS OF B2C SURVEY

20

FUTURE PROSPECTS OF AMUL

26

EXECUTIVE SUMMARY

28

REFERENCES

29

Market Development to Market Capture- the road ahead

for Amul
INTRODUCTION
Since the dawn of independence, dairy activities have been an integral part of Indian
Rural Economy. India is the worlds largest producer and consumer of dairy products.
The entire dairy production is consumed within the country and the country is neither an
importer and nor an exporter of significant value.
Although India boasts of being the largest producer of dairy products in the world, this
sector is in the nascent stage of development, modernization and industrialization. Also
the sector faces various other hurdles like shortage and poor quality of fodder, poor
transportation facilities, unkempt state of cattle and poorly developed cold chain
infrastructure. Indian Dairy industry is predominantly driven by three key factors1. Increasing population
2. Life expectancy
3. Preference of different age groups for dairy products
Although Indian Dairy Industry is estimated to have grown about 7% over the last
decade, it is still dominated by unorganized sector. Indian dairy industry is divided into
the organized sector and unorganized sector in 20-80 ratio.
Gujarat Co-operative Milk Marketing Federation Limited (GCMMF), which is jointly
owned by 3.6 million producers in Gujarat, holds position in the top 10 FMCG firms of
India with Amul brand as the second most recognized brand in India amongst all the
Indian and MNC brands. Amul as a brand is already present in 50 odd countries across
the globe; it saw an annual turnover of INR 10,000 Cr in 2010. It took 5 decades to
become an INR 2,000 crore entity but the turnover doubled to over INR 4300 Cr within
next 9 years from 1999 to 2007.

Market Development to Market Capture- the road ahead

for Amul
PURPOSE AND OBJECTIVE OF THE PROJECT
Amul to be ranked as number 1 dairy in Asia and number 2 in the world is a matter of
great pride for the state of Gujarat and India. This project will give us an insight about
how the dairy industry evolved and how Amul captured and sustained its position as the
market leader.

Understanding the dairy product market in India which is INR 3.6 lac crores industry
and is growing at about 10% annually in value terms
Studying the key drivers of Indian Dairy Industry which accounts for 17% of
countrys total expenditure on food
To understand the ascent of Amul from a small dairy cooperative in Anand, Gujarat
to becoming the Taste of India and to study the various factors which helped Amul in
becoming the market leader
To analyze the continual growth of Amul and the adopted marketing strategies for
the same
To understand the challenges faced by Amul in its upward journey and the methods
it employed to overcome them
To predict the future of dairy market based on our analysis and Amul as a leader
in the same

Market Development to Market Capture- the road

ahead for Amul
SWOT ANALYSIS
Strength:
1. Powerful brand: Amul is Indias second most recognized brand.
2. Strong supply chain: Amuls supply network consists of three levels.
These are rural level collection, district level processing and state level
supply.
3. Consumer connect: People can instantly connect with Amul
campaigns and its most famous character the Amul girl. It is an
innovative way of advertising with not much expenditure. Instant
connect - another form of advertising, touches on many contemporary
issues.
4. Consumer Sentiment: Amul has been able to connect with the
sentiment of the masses. It has created an image of the first swadeshi
brand. It was conceived and implemented indigenously.
5. Retail connection: Amul has a large number of company owned
outlets, franchise outlets and thousands of retail sellers. It provides
good margin to retailers and their well-being is taken care of. It has
also started Any Time Milk (ATM) counters.
6. Co-operative: Amul is jointly owned by 3.28 million farmers for whom
Amul has become family.
7. Low cost on Advertising: Unlike other FMCG companies, it doesnt
involve celebrities in its campaign and hence, managed to keep its
advertising cost within 1% of its budget.
8. Good quality of product: Amul maintains good quality checking and
safety standards.
Weakness:
1. Cost of Procurement: The major cost incurred is cost of procurement
from farmers and this cost cannot be reduced.
2. Cost of Operations Operations being a major part, Amul has to
constantly optimize this cost.
3. Other loss making units: Amul chocolates never succeeded in market,
which leads to extra burden on profit making unit.
4. Low presence in South: Amul has not been able to establish itself in
Southern India. It has high dependency on west and north Indian
markets.
Opportunities:
1. Penetration in International market: Amul is available in over 50
countries and it already exports milk to 20 countries. It also provides
an opportunity to explore the international market and increase its
market share.
2. Rise in purchase power: The purchase power capacity of the middle
class is increasing and it is an opportunity for Amul to increase its
sales.

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ahead for Amul
3. Expand untapped Indian market: Amul should look to increase its
market share in Southern India where it has not been able to capture
the market.
4. Rise in consumption of other milk products: With changing lifestyle,
consumption of milk products has increased significantly and it
provides Amul the opportunity to diversify its offerings and be the first
mover.

Threats:
1. Competition from MNCs: With FDI in dairy sector, MNCs like Nestle,
Danone may give stiff competition to Amul; if not in milk, then in milk
products. Even Mother Dairy, Saras and some other local players are
giving strong competition to Amul in some parts of the country.
2. Yield of Indian cattle: The yield of Indian cattle is significantly lower
when compared to its counterparts in Europe or US.
3. Increase in price: Increase in price of milk may result into loss of
volume in sales and profit margin.

PEST ANALYSIS
POLITICAL

Governments continued support to dairy sector

Food regulations of India
Banning of export of milk powder for some duration
FDI in dairy sector

ECONOMIC

Increasing per capita purchasing power of customers

Growing middle class/urban population
Low cost of production
Value for money

SOCIAL

Boost for Rural Economy

Changing need and lifestyle of the society
Demographics

TECHNOLOGY

Market Development to Market Capture- the road

ahead for Amul

Newer technology for quality

Improvement in Supply and logistics

Political:
Dairy is an important source of income for the rural population of our country. The Indian
government has given special attention to the Dairy sector right from the independence.
Amul was instrumental in bringing White Revolution to India. Amul is managed by a
cooperative body which is owned by 3.6 million milk producers in India. Government
provides various kinds of subsidies to help the dairy sector. Interest free loan for setting
up dairy units is provided. NABARD launched Dairy Entrepreneurship Development
Scheme to help people start dairy business. In addition to this, government also provides
technical and monetary support to cattle owners. Foreign Direct Investment is allowed in
dairy sector.
Milk is considered as one of the main constituents of our diet and its price change can
cause distress among masses. There have been interventions by the government to
check price rise. In 2011, government banned the export of milk powder to check the rise
in sudden price of the milk. Later this ban was lifted by the government. Again later in
2014, the government scrapped the incentive on export of milk powder to check prices.
Milk is a perishable item and hence has very low shelf life. Proper food regulations and
safety factors must be adhered to. Milk has to go through a number of safety checks and
compliance. After the Maggi fiasco, adherence to all the food standards has become all
the more important.
Economic:
For the middle class population, milk is considered as an essential product and people
still make an effort to purchase milk regardless of their cash position. Hence, an increase
in income will not affect the sales of milk in this category. But with rise in income, sale of
milk products increases which opens a gateway for increase in milk production. For lower
income groups with increase in purchasing power, the sale of the product will increase.
For higher income groups there is no effect on sales by an increase in purchasing power.
With growing middle class/ urban population, realization that milk is a basic element of a
meal increases. Thus, with their income they will try to arrange cash to buy milk. Hence,
the sale of milk will increase with an increase in the population of the middle class.
With low cost of production, the sales of milk will increase so people will start consuming
more milk as there is no limit to the quantity of milk consumed per family. Hence, it will
affect in two ways- basic consumption will increase and other derived products made at
home from milk will be increased too thus, overall increasing the sale.
Milk was one of the highest scoring foods and was shown to be one of the lowest-costing
source of protein, calcium and several vitamins. Other foods providing nutritional value
for money included juices, cereals, beans and eggs which are relatively more expensive.
Hence, it provides value for money.
Social:

Market Development to Market Capture- the road

ahead for Amul
Dairy is a major source of income for the rural population. Operation flood was launched
by the government with the purpose of inclusive growth, increase in milk production and
proper price for the consumer. The present government aims to double the income of the
farmers by the year 2022 and dairy will be one of the areas to look for.
There has been constant change in the lifestyle of the middle class of our country. With
the changing lifestyle, taste of people is also changing. Demand for low cholesterol milk
etc. is increasing. Amuls ATM (Any Time Milk) is also in response to the changing social
life pattern.
Demographics play a critical role in the demand of milk. Consumption varies from region
to region due to varying taste, culture etc. Sale of Amul milk also varies from state to
state due local competition, political clouts etc.

Technological:
Technology plays a crucial role in almost every sector and dairy is no exception to it. Milk
is a perishable item and improvement in technology is needed for proper storage, supply
etc. Health of the cows and buffaloes should also be monitored and technical knowledge
should be shared with the cattle owners. Equipment should upgraded periodically.
Supply and logistics is one of the most crucial areas for Amul and technological
innovation is a must. ATM(Any Time Milk) by Amul is an innovative concept to supply milk
throughout the day. Implementation of SAP and ERP should be done to improve logistics.

Market Development to Market Capture- the road

ahead for Amul
BCG Matrix of Amul
BCG MatrixThe Boston Consulting Group in 1970s developed a technique or a matrix to classify
businesses as per their performance into low or high performance category based on
business growth rate and market share.
The matrix can be classified as1. Low business growth rate and high market share Cash Cows
These category products generate large revenues for the company. It is the strong
product line of the company with a stagnant growth but generates heavy revenues for the
company.
2. High business growth rate and high market share Star
These are the growing businesses of a company. They are the leaders in market. They
are high on cash consumption as well the revenue generation.
3. Low business growth rate and low market share Dogs
This classification of business is the least preferred and least amount of investment and
marketing should be done for them. They consume a lot of cash and does not have much
potential of desired earnings.
4. High business growth and Low market share Question Mark
Businesses usually setup recently, which consume a lot of capital. They have the
tendency to move to either cash cows/stars or can move to dogs, depending entirely on
the strategy and business focus.
Amul Products in the BCG Matrix-

Stars

Question Marks

Amul Pure Ghee range

Amul Cheese Spread
Amul Kool
Amul Ice Creams
Business Growth Rate
(Low Dairy Whiteners
Amul
to High) Cash Cows

Amul fresh milk range

Amul Butter Range
Mozarella Cheese

BCG Matrix Analysis for Amul-

Amul Masti Dahi

Amul Lassi
Amul Mithai Mate
Amul Mithai Range
Boxed Milk Range
Dogs
Amul Chocolates
Nutramul Energy Drink
Amul Shakti
Amul Pizza
Market Share (Low to
High)

Market Development to Market Capture- the road

ahead for Amul
Since Cash Cows, Stars and Dogs segments are such that nothing much can be done
about them, a company should focus on its businesses under the Question Mark
Segment. Suggesting a few marketing strategies for the Businesses under the Question
Mark segment1. Masti Dahi/Lassi/Mithai Range
For these range of products what Amul needs to do is setup a chain of exclusive retail
outlets for its products. A similar strategy is being used by Mother Dairy in Delhi and
Haryana.
Marketing focus on these products should be increased and thereby increase the
reach of these products. These products should be clubbed with the Amul butter and
should be marketed as a range of dairy products of the company.
2. Boxed Milk Range
Amul can target the working class individuals or families where both the partners are
working and create a brand that provides ease of usage of milk and move the milk
from the range of perishable goods to that of something that can be stored in the fridge
and can be used for a prolonged period of time (2-3 days) rather than single day
consumption and promote their brand.
3. Amul Mithai Mate
Amul Mithai Mate is already in a stiff competition with Nestles Milkmaid which has
been dominating this sector for a very long time. An aggressive strategy to promote
the product needs to be acquired and similar on the lines of Milkmaid should be
projected as a product that can be used in day to day cooking rather than just special
occasions to make things better and tasty and increase the consumption quantity of
the product.

Market Development to Market Capture- the road

ahead for Amul
PORTERS FIVE FORCE MODEL
As per Porter (1980) a firm should be examined in connection to its industry. Factors
outside the business tend to impact all the business' organizations in the same way and
are accordingly not as imperative to consider.
To a huge degree, industry structure oversees the techniques open to the firms. The
benefit and appeal of an industry is reliant of the level of rivalry. Rivalry in an industry
starts from industry structure and goes well past the conduct of individual contenders.
The five forces described by Porter are:

1.

Threat of new entrants

Bargaining power of suppliers
Bargaining power of buyers
Rivalry among competitors
Threat from substitutes

Threat of New Entrants

It talks about the new companies that can enter the market and compete for market
share. It depends on various factors associated with the company which may/may not
hamper the provisions of existing firms on entry of a new company. Following are some
of the factors that determine the effect of new entrants:
a. Economies of Scale:
Amul, being the oldest player and the market leader, enjoys economies of scale, which
is difficult to match by any other competitor. The impact of this is that no local
contender has been able to develop to a national level.
b. Cost and Resource advantages:
Amul business model is of a co-operative society. It is managed under the norms of
GCMMF and market the products under the brand name Amul, which enjoys great
reputation at domestic and international level. The capital requirement in this industry
is high since procurement of raw materials is difficult for new entrants. Still new
entrants are emerging regionally like Gayatri, Royal, Sardar, Uttam and Shreshth. So
the threats of new entrants are moderate.
c. Brand Preferences and Consumer Loyalty:
Amul enjoys an immense level of Brand Preference since people associate the milk
category with the brand Amul itself. The level of preference specifically in the liquid
milk sector is that they would go to another retailer if the retailer does not have Amul
milk rather than buying any other brand.
d. Access to Distribution Channels:

Market Development to Market Capture- the road

ahead for Amul
GCMMF has a planned and well-knit distribution network comprising wholesalers,
distributors and retailers. The reach of this channel is deep- both in urban India and
within the villages. For a new entrant, access to such a promising channel would be a
very difficult task.
e. Capital Requirements:
The investment to start a regional dairy farm is relatively low but the total investment
required in the industry to grow nationally is huge. To compete with the brand Amul in
India is very difficult as Amul is synonymous to quality with which people have been
associating with for a long time.

2.

Bargaining power of supplier

The business purpose of Amul dairy is not profit. Being a part of a co-operative society, it
runs for the benefit of suppliers of milk (farmers) and users of milk products (consumers).
In accordance with the concepts of the cooperative society, suppliers have a bargaining
power to have a good return on their supply.
There is an appropriate bargaining power of the supplier. In olden days, there was no
cooperative society which resulted in the exploitation of the farmers. But, nowadays the
farmers rights are protected under the cooperative rules and regulations, which
ultimately results in moderate power of bargaining from the supplier.

3.

Bargaining power of buyers

a. Cost of switching to competitor brands:

Brand shifting is much prevalent in products such as ice cream, curd, milk powders,
milk additives etc. but it is comparatively less in liquid milk category. This is because
Amul has an emotional connect with the consumers and is synonymous with the
liquid milk category. Hence, the emotional cost of brand switching is high for
consumers and they tend to stick to Amul barring a few exceptions.
b. Large no. of buyers:
Milk is a necessity and hence, is a mass product. It has a considerable share in the
family budget of an average Indian household. All the demographic segments, from
poor to elite, consume liquid milk in different forms like milk, tea, coffee etc. Tea itself
is a much celebrated beverage in India.
The suppliers are few and regional. Amul operates nationally with its wide distribution
channel. There are many places in India where Amul enjoys a monopoly.
Moreover, the buyers are spread evenly over the country and their number depends
mainly on the population size which is ever increasing. Hence, buyers do not have
much bargaining power in this industry.

Market Development to Market Capture- the road

ahead for Amul
4.

Rivalry among competitors

a. Demand for the product:

The demand of Amul products is increasing at a very healthy rate. Also, Amul is
coming up with a lot of new products to stand against the rivalry in the market.
b. Nature of Competitors:
In different business categories, Amul faces competition from different players. But the
same is not seen in liquid milk category. Following table illustrates the different
categories and the competitors faced by Amul in these categories:
Category
Milk Powder

Competitor
Cadbury
Nestle

Chocolate

Cadbury
Nestle

Ice Cream

Kwality Walls
Mother Dairy
Vadilal

Butter and Cheese

Britannia

There is no major competitor of Amul in the liquid milk category as majority of the
competitors are regional and do not have a national presence.
Example: Verka in Punjab, Saras in Jaipur, Parag in parts of Uttarakhand and West
U.P., Sudha in parts of Jharkhand etc.
Moreover, in almost all categories there is presence of local retailers and processors
and milk vendors.
c. Mergers and Acquisitions:
Currently, there are no instances of mergers or acquisitions in this industry. However, if
any MNC wishes to enter through this route then the competition might become
severe.
5.

Threat of Substitutes
a. Price:

Market Development to Market Capture- the road

ahead for Amul
There is a scarce availability of a low priced substitute on a national scale for Amul.
As far as local vendors and retailers are considered, the price does not vary much
and customer generally tends to stick with the preferred brand Amul. This is also a
function of the income profile of the consumers. This is a front where Amul has a
scope of improvement since Indian consumer is highly price-sensitive and.
b. Satisfaction level of substitutes:
Customers do consider the substitutes almost equal on
quality if not better than Amul. Hence, switching is possible if
complemented by a price reduction by the competitors.
Overall, Amul has a low threat of substitutes since it enjoys
the position of a market leader in a product segment that is a
necessity. Still, there is a considerable scope of improvement
on the price front.
These 5 forces interact among themselves at different
degrees over a period of time. Moreover, it will get intense or
loosen up depending upon the moves of its competitors,
buyers, suppliers, etc. However, GCMMF has been able to
out-perform on almost all fronts of the business.

Market Development to Market Capture- the road ahead for Amul

Market Development to Market Capture- the road ahead for Amul

LITERATURE REVIEW
Amuls relationship with producers
The milk producers of Kaira district realized the repercussions of Polson dairys
monopoly and the need to form a cooperative to make the milk industry an organized
sector in India. The functional need, social need and need for a change worked in sync
to transform the milk sector in India. It is said that for Operation Flood, Dr Kuriens idea
of creating a sense of ownership among the farmers in turn created responsibility for the
products quality. As a result, taking inspiration from Amul, state federations now have
their own brands -- Nandini in Karnataka, Verka in Punjab, Saras in Rajasthan and
Mahananda in Maharashtra.

Amuls relationship with consumers

At the time AMUL was formed, majority of the consumers in India had limited purchasing
power and were value conscious with very low levels of consumption of milk and other
dairy products. When Amul started, there were no national players and the dairy market
was unorganized. During the introduction stage itself, Amul had a vision to provide their
products to end customers at the best affordable rates and the same vision is in place
even today. The success of this strategy is well recognized and remains the main plank
of AMUL's strategy even today. The choice of product mix and the sequence in which
AMUL introduced its products is consistent with this philosophy. Beginning with liquid
milk, the product mix was enhanced slowly by progressive addition of higher value
products while maintaining desired growth in existing products. Even today, while
competing in the market for high value dairy products, GCMMF ensures that adequate
supplies of low value products are maintained.
Amul has come a long way since its inception. And we hope there are many more such
success stories in India that can then become fables for future generations to read and
get inspired.

Market Development to Market Capture- the road ahead for Amul

CONSUMER BEHAVIOR
Objective:
Study the psychological, social and physical behavior of the consumers in terms of
buying roles, decision making process and the purchase behavior with limited
resources.
Introduction:
Consumer behavior is the study of individuals, groups, or organizations and the
processes the use to select, secure, use, and dispose of products, services,
experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society. The three key behaviors:
1. Factors affecting consumer behavior:

Personal Characteristics demography, lifestyles, personal traits

Cultural Characteristics Value, beliefs, cross-cultural factors
Influential groups family, leaders, celebrities
Situational and environmental factors purchase occasion, marketing
Stimuli need, want, demand, reasons
Information processing and analyzing by the customer

2. Five Stages of Consumers Decision Making Process:

Need recognition
Information Search
Evaluation of Alternatives
Purchase
Post Purchase Behavior

3. Need for studying consumer behavior:

The main purpose behind marketing a product is to satisfy the demands and wants of
the Consumers. Study of consumer behavior helps to achieve this purpose. Since the
consumers are the most important people for a marketer or sales person, hence it is
imperative for them to consider the likes and dislikes of the consumers so that they can
provide them with the goods and services accordingly.
A more careful analysis helps in more exact prediction about the behavior of consumers
of any product or services.
4.

Consumer Satisfaction:

Satisfaction is the state of being adequately rewarded in a buying situation for the
sacrifices made by the customer purchase.

Market Development to Market Capture- the road ahead

for Amul
The result of the satisfaction to customer from the purchases of the product or
services generates post-purchases attitude, higher purchase intentions and brand
loyalty.

POSITIONING STRATEGY
Positioning defines how you communicate the necessary benefits to potential
customers of your small business.
How you make your product, where you make your product, where you sell it and
your price exactly portrays your messages to the competing firms and the market
even without your using any overt advertising, public relations or promotions.
A positioning strategy is a branding procedure or plan that operates on the symbolic
levels of consumer consciousness, where minute details like meanings and
associations each and every word hold weight. A market positioning strategy is
built on business data and ensures to compose the exact words to balance concepts
of differentiation, distinction, and similarity in a unified brand-narrative. It is an effort,
generally long term, to leave a great impact with the minds of the target customers
about the identity of a company and its products or services, in a unique space. It is a
planned activity for a brand to create a differentiating factor from the similar products
available in the market and influence the way their target customer perceives them.
There are many ways in which a positioning strategy can be developed. It can be
obtained from the object attributes, competition, application, the types of consumers
involved, or the characteristics of the product class. All these attributes represent a
different approach in developing positioning strategies, even though all of them have
the common objective of projecting a favorable image in the minds of the consumers
or audience.
AMULs POSITIONING STRATEGY
Brand Positioning Strategy:
This strategy insures that the benefits that you affiliate with the brand are well placed
in the target consumers mind. It focuses on maximizing brand value. AMUL has
carefully cultivated the family based homely image which is shown in following
examples:
The taste of India campaign created value for everyone in the value chain
from customer to farmers.
Displayed an exemplary image of brand consistency by running the same
topical campaign of the AMUL butter girl for last four decades. AMULs
mascot, a chubby and cute little girl in a polka dot dress, is universally
recognizable in India.
The tagline, Utterly Butterly Delicious AMUL, is just as catchy. Its the longest
running advertisements in the world.
AMUL also created a very unique phenomenon: it was able to create a different brand
image for different people.
For milk producer, a life enriching experience

18

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for Amul

For consumers, an assurance of having wholesome milk

To a mother, a reliable source of nourishment for her family and kids
To the country, it was a larger purpose of self-reliance and rural development

AMUL used the strategy of Umbrella branding. It focused on efficiently promoting

different products under a single family brand name which lead to trial purchase,
product acceptance and other advantages. It helps carry the attributes of a successful
product to the newly launched product. AMUL milk had an attribute of great quality
thus, the products launched under the name of AMUL were perceived to be of good
quality by the customer. AMUL achieved sustainable growth with this family branding.
Product Positioning Strategy:
This strategy involves three processes Segmentation, Targeting and Positioning.
Segmentation is the process of grouping a market (i.e. customers) into smaller
subgroups. There are different types based on which the segmentation can be done
some of which are - Geographic, Demographic, Psychographic and Behavioral.
Targeting involves four activities
1. Defining the abilities of the product and resources needed to enter a market
2. Analyzing competitors on their resources and skills
3. Considering the companys abilities compared to the competitors
4. Deciding on the actual target markets.
Positioning means occupying the most desirable market space in consumers minds,
making the brand most impregnable. This is based on three components: emotional,
functional attribute and descriptive factor.
AMUL has segmented markets for kids, women, youth, calorie conscious and health
conscious consumers. Example- AMUL Kool, chocolate mix is targeted at children,
while teenagers prefer Kool Caf and mothers prefer AMUL Calci milk.
AMUL targeted the mass population in general rather than the rich people. It uses the
mass customer principle for both high end and low end products like butter and
cheese.
In India, AMUL has positioned itself with a huge supply chain and distribution
networks. It maintains strong connections with the sourcing farmers. AMUL always
places its product in that part of the market where it gets a favorable response over
the competing products. It launched Fresh Paneer free from harmful chemicals.
Other strategies used are for product repositioning.
Competitive Pricing Strategy:
This strategy focuses on the correct pricing of the product based on the prices that
the competition is charging. It dwells on the businesses which are producing the
same product in the market and aligns its pricing based on them. AMUL adopted a
low-cost price strategy to make its products much more desirable to its consumers by
making them affordable. AMUL adopted a very different business plan, which aims at
providing value for money products to its consumers, protecting suppliers which are
its basic milk-producing farmers. Thus, it follows a market oriented pricing strategy.

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Competitive Positioning Strategy:
This strategy is influenced by market profile, customer segments, customer analysis,
positioning strategy and value proposition. It specifies the positioning of the product
with respect to what you want to offer to the customer.
AMUL launched low price ice creams and competitively placed it against Kwality
Walls, which affected their business a lot. AMUL has positioned it as a slow
perishable and high on purity comparative to other milk brands, it has positioned as
high on taste and health.
AMUL has two major competitive advantages
One is the supply chain. Due to large numbers of dairy suppliers, the strength and
reliability of supply chain is very amazing for AMUL. Hence, it is able to produce such
high volumes.
Secondly, the competitive advantage is the huge product portfolio due to which it can
run AMUL shoppes and also have its products in retail. The portfolio is such that the
company has cash cows like ice cream and butter. Hence, the company generally
uses these competitive advantages to position its products.
Reiterating the same in The Financial Express (29-12-2014)- On AMULs strategic
plans, RS Sodhi, managing director of GCMMF said, We are adding more people to
our distribution team. Also, we are setting up new milk depots. We are expanding our
distribution and processing capacity by 12 % in 2015.

METHODOLOGY ADOPTED FOR DATA COLLECTION & ANALYSIS

We conducted a research by floating a survey within the consumers. It included
preparation of the questionnaire to be answered by consumers for knowing the
competitive position of Amul in the milk market.
Two data sources were used for collecting the data for analyzing Amuls competitive
strength in the market:
1. Primary data:
Questionnaire was used to collect primary data. It was prepared keeping the
objective of research in mind. Google form was floated to understand the competitive
strength of AMUL milk on various online (social media sites, WhatsApp) and offline
platforms and within our professional and personal contacts.
Retailer meetings also provided us deep insights into the customer buying patterns.
2. Secondary data:
It was done by referring to various sources available online describing how Amul milk
has evolved over the years.
Analysis was done by collating primary data and secondary data collected which was
in sync with each other.

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RESULTS OF B2C SURVEY
Following pie charts show the results of the online B2C survey conducted:

What is your occupation

Student30%

Working

70%

Majority of the respondents surveyed were in the age bracket of 21-30 years and are
students.

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This shows that the majority of the respondents consume milk which is a healthy
sign for the milk industry.

How much milk do you and your family consume?

8%

28%
23%
<1 L

1-2 L

2-3 L

>3 L

40%

The average milk consumption of an Indian consumer is below global milk

consumption which opens up a huge market for milk consumption.

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Majority of the milk sold is in packaged form which shows that the consumers prefer
ease of convenience which comes with the packaged product. 26% of people are still
purchasing loose milk, which presents a market opportunity for AMUL to move the
consumers up the value chain from loose to plastic pack to tetra pack.

AMUL is preferred by half of the respondents. 21% is captured by other brands

which are mostly local in nature. AMUL with better retail network can capture this
market and expand its market share.

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The results indicate the importance of brand loyalty and the effect of brand
management on consumer mind-set.

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Do you like flavored milk?

33%
Yes

No

67%

How frequently do you purchase flavored milk?

12%

18%
49%

Daily
Once a week
Twice a week
Monthly
Rarely

7%
14%

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The study also reflects the growing preference for flavored milk category and its
increasing consumption across all customer segments. This new domain can be
explored both nationally and internationally in the Indian flavors like Kesar badam
and elaichi. This can become the biggest market for AMUL in near future where the
market size is still increasing and the profit margin per unit is higher.
In order for dreams to come to reality and for liabilities to turn to assets one must
meet the needs of the customers. The factors considered by the customers before
purchasing milk are nutritional value, brand value and availability. Finally, we
conclude that, majority of the customers are satisfied with the milk and milk products
of AMUL because of its good quality, reputation and ease of availability.
Opening more outlets, marketing campaigns, better product lines, etc. can increase
the market share of AMUL and strengthen its position where it is already the market
leader. AMUL also has to take its competitors into consideration and most
importantly its customers before making any move.

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FUTURE PROSPECTS OF AMUL
The Gujarat Cooperative Milk Marketing Federation (GCMMF) that sells Amul brand
of milk and dairy products across the country has crossed a sales turnover of Rs
23,000 crore for the financial year 2015-16. It clocked a 11% growth compared to the
previous fiscal when the turnover stood at Rs 20,733 crore.
Amul daily sells 120 lakh litres of milk across the country, of which 50 lakh is sold in
Gujarat. Sodhi said that the GCMMF plans to achieve a sales turnover of Rs 30,000
crore by 2017-18.

Amul plans to enhance its milk processing capacity from the current 281 lakh litres
per day to 380 lakh litres in the next five years. The 17 member unions of GCMMF
with farmer member strength of more than 36 lakh across 18600 villages of Gujarat
are procuring on an average 180 lakh litres of milk per day. Milk procurement of
GCMMF has increased from 90 lakh litres per day in 2009-10 to 180 lakh litres per
day. No state has seen such a growth.

Farmers in Gujarat are getting 8-10% higher price of milk every year. The higher
prices of milk in the state is also the reason of Gujarat registering a 15% annual
growth in the number of cattle.

The GCMMF has also inked an agreement with Madhur dairy operated by
Gandhinagar District Co-operative Milk Producers Union Ltd (GDCMPU) under
which Madhur will sell Amul brand of milk in Gandhinagar. So far, Madhur used to
sell over a lakh litres of milk daily under its own brand.

The proposed arrangement is expected to benefit 43,000 members of 116 village cooperative milk producing societies of GDCMPU Ltd and consumers of Gandhinagar
district.

AMUL has huge future prospects as the Indian and International milk market is
growing year on year. The increasing purchasing capacity of people, large population
size combined with demand for nutritional products and increasing network of AMUL
outlets show a promising future.
Main reasons which will play an important role in the growth of AMUL:

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1. Increasing purchasing power of people The purchasing power of people on an
average is increasing globally and this will lead to an increase in demand for
nutritional products like milk and milk products. Studies over the years have
shown that the demand for milk and milk products increases as the income of
people increases.
2. The movement of consumers from loose milk to packaged milk and gradually up
the value chain holds a significant market for AMUL.
3. International Market AMULs presence on the Global Dairy Trade (GDT)
platform in which only the top six dairy players of the world sell their products,
has earned respect and recognition across the world. By selling milk powders on
GDT, AMUL could not only realize better prices as per market demand but it also
firmly established itself in the league of top dairy players in world trade. It also
has tied up with international retail giants like Walmart.
4. Expanding distribution network AMUL currently has 6,700 outlets where on it is
planning to add 1,000 more outlets in the year 2016 alone. With this increasing
number of outlet reach, AMUL is planning to increase its volume share as well as
the market share.
5. New product line The value based products like AMUL Kool with different
flavours is showing the highest growth rate year on year.

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EXECUTIVE SUMMARY
Analysing AMULs journey from inception as a small dairy cooperative in Anand,
Gujarat to becoming the Taste of India, we studied various factors using SWOT,
PEST, BCG matrix, Porters analysis which helped us in understanding how
Amul became the market leader and has held the postion since a long time.
It gave us insights about the Indian dairy product market which is an INR 3.6 lac
crores industry and is growing at about 10% annually in value terms. We studied
the key drivers of Indian Dairy Industry which accounts for 17% of countrys total
expenditure on food and analyzed the brand positioning strategies adopted by
Amul responsible for its continual growth and dominant position in the Indian
dairy sector. The pricing strategies of Amul have played a major role in
popularizing the dairy sector in India and making it affordable for customers as
well as profitable for suppliers. The credit for partially orgnaising the vast
unorganized sector certainly goes to Amul.
The B2C survey results reinstated the fact that AMUL is mostly the first choice of
Indian consumer in dairy products specially for liquid milk and customers
associate quality with brand which Amul has maintained very well.
Coupled with the vision of Amul regarding its growth plan for the next 5 years to
tap more than 700 more villages, we have given our suggestions on strategies to
be adopted in order to increase its market share in the short-term as well as the
long-term course.

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REFERENCES
1. http://www.amul.com/
2. https://en.wikipedia.org/wiki/Amul
3. http://www.amuldairy.com/
4. http://www.bbamantra.com/project/segmentationtargeting-and-positioning-of-amul/
5. http://www.marketing91.com/marketing-strategy-amul/
6. http://www.impactonnet.com/How-Amul-became-an-Indian-family-brand
7. http://www.slideshare.net/shrutivatrana/branding-strategies-of-amul
8. http://www.studymode.com/subjects/porter-5-model-for-amul-page1.html
9. http://indianexpress.com/article/india/india-news-india/amul-crosses-rs-23000crore-turnover-in-2015-16

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