Presentation to:

Amul India Ltd.

Gap Analysis and Retail Penetration of Amul
Project Mentor: Mr. Sumeet Saini Presented by: Ridhi Dandona Nitu Rakholya Abhishek Swarnkar Bikram Singh Summer Interns, SIMS, Pune June 28th, 2006

Overview

Click to edit Master Objectives of the Study title style Company Analysis
Gap Analysis and Retail Penetration of Amul Feasibility Study for Launch of Liquid Milk Click to edit Master subtitle Findings style Recommendations

Objectives of the Study

Determining Retail Penetration of Amul Click to edit Master title style Estimating various Gaps and their Intensity and Formulating Strategies to Cover the Same

Click to edit Master subtitle style Analyzing Feasibility of Launch of Liquid Milk

Click to edit Master title style Company Analysis

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Company Analysis
- Brand Name
- Quality

- Distribution Network - Pricing - Foreign Presence - TQM

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- Brand Performance
- Slipstreaming - Product Mix - Regional Disparities - Perishability of main ingredient - Lack of Control over Yield -Logistics of Procurement - Information Network - Co-operative Society - Personnel

Strengths

Weaknesses

- Straying from Core Competence

Opportunities
- Export Potential - Locational Advantage - International Market

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- Untapped Western Mkts. - Fast-Growing TP Mkt. - Value Addition - Low yield - Increasing Competition

Threats

- Various Players to enter the Retail Sector in Dairy Products. - Milk from Unorganised Sector covering 83% market throughout India.

- Plunge in Retail Industry (APO) - Increasing Rural Awareness

Click to edit Master title style Retail Penetration and Gap

Analysis of Amul in Ludhiana
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Retail Penetration in Dairy Sector

Sub Region R1

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Sub Region R2

Retail Penetration in Dairy Sector

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

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%age Retail Penetration in Dairy Sector in the Two Sub-Regions
Total %age Sales
PV Garg

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gh ee ch oc ol at e he ez e cr ea m ko ol ilk pr ay io us ul ya at e r ut te bu tte rm ai m ul c de lic A

ASAK

ul B

Products

fre sh

ith

st am

ul s

in a

Retail Penetration in Dairy Sector

200 180 160 140 120 100 80 60 40 20 0

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Competitor Analysis of Amul in Dairy Sector, Ludhiana
Competitor Analysis
Amul

No. of Outlets

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Butter Cheese Ghee Chocolates Dairy Whitener Condensed Milk Energy Drinks Infant Milk

Competitor 1 Competitor 2

Products

Gap Analysis
Gap Composition of Amul in Dairy Sector, Ludhiana

Composition

Med. Stores and Hosps.

Restaurants

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Number Potential Products
Spray, Stamina

Product Potential

52

23

Butter, Cheese, Ghee, Chocolate, Stamina, Kool, Kafe, Spiced Milk, IceCreams.
Kool, Kafe, Stamina, Chocolates, Ice-Creams.

Sweet Shops Schools and Cafes General Stores

18 21

Butter, Amulya, Ghee

137

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Butter, Cheese, Ghee, Chocolates, Spray (in certain areas), Stamina, Fresh Cream, Kool and Caf (in certain areas) and Delicious (in certain areas).

Maximum Potential Stamina Very Good Potential Summers Products (Kool, Kafe Kool, Spiced Milk). Good Potential Lower Priced Products (Ghee, Chocolates, Processed Cheese, Spray (in Certain Ares)). Good Potential Amulya, for Sweet Shops.

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Gap Analysis

90% 80% 70%

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Productwise %age Potential of Amul in Dairy Sector in Ludhiana
% Product Potential

%age Potential

60% 50% 40% 30% 20% 10% 0%

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K oo l M ith

% Product Potential

Bu tte r

Products

Fr es h

Sp

Ic eC re am

C he es e

C ho co la te

St am in a

C re am

K oo l

he e

at e

M ilk

ra y

A m

ai m

Sp

D el ic

C af

ic ed

io us

ul y

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Penetration of Amul Ice-Creams in Ludhiana

Ice-Cream Demand in R1 & R2
Ice-Cream Availability
70% 60%
%age Penetration

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

50% 40% 30% 20% 10% 0% Amul

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Bakeries
6 24

Gen. Stores
2 10

Others
3 7

Amul

R1 R2

Others

No. (with DF)

Kwality Walls Cream Bell Others Competitors

30

10

10

Total No.

61

105

64

Existing Outlets with Ice-Creams

Existing Outlets
120

Total Penetration

%age penetration

100 80 60 40 20 0 Bakeries

Potential Ice-Cream Click to edit Master subtitleOutlets style

Potential Outlets
120 100 80 60 40 20 0 Total (with DF) Total No.

Amul Others

Gen. Stores

Others

Bakeries

Gen. Stores

Others

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Click to edit Master Feasibility title style Study for Launch of

Liquid Milk in Ludhiana
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Feasibility Study of Liquid Milk in Ludhiana

Daily Supply of Milk in Ludhiana

Sub Region

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Total Milk Supply (in Kgs.)
Evening
4500 4000 3500
Qty (Ltrs.)

Total Demand of Milk in Ludhiana

Total Demand of Milk

Morning

3000 2500 2000 1500 1000

Mrng. Evng.

R1 R2

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500 0

3986

2996

R1 Regions

R2

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Feasibility Study of Liquid Milk in Ludhiana

Bargaining Power of Suppliers

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

Threat of Substitutes

Rivalry Between Existing Players

Verka being the only major player, theres no ongoing rivalry in the sector.

Bargaining Power of Buyers

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

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

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

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Click to edit Master title style Findings

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Findings
Less Aware Market in R2 Sub-Region. Distributor Problems, especially in SubRegion R1 (PV Garg & Sons). Lack of Visibility. Low Margin. Shortage/Unavailability of Certain Products.

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Quality Problems. Back-Date Products. Cannibalization among Distributors. Cannibalization by other Products. Regional Taste Difference forming Niches. Need to focus on products with good potential (Amul Soups). Very attractive Market for Potential Entrants.

Retail Penetration and Gap Analysis of Amul in Ludhiana

Click to edit Master Liquid Milk in Ludhiana subtitle Power and Infrastructure Problems. style
Amul-Ice Creams in Ludhiana
Seasonal Product.
Lower Penetration in R1 Sub-Region.
High Supplier Bargaining Power.
Threat of Substitutes.

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Click to edit Master title style Recommendations

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Recommendations
Dairy Sector in Ludhiana

Promotion through wall-paintings, posters, road shows, Celebration Days and other such events. Timely and periodic reporting by the distributor to FFRs and at least quarterly to Depot in the form of reports. Direct communication of contests and sweepstakes to Retailers. Cater to Bottom of the Pyramid Segment to increase sales volume and deal with low margin problem. Regularize availability of products according to demand. To deal with back products, they can be given at a concessional rate to school and college canteens by making them direct party to Amul. Also, a 70:30 ratio of old and new products respectively can be maintained while supplying products so as to eventually eliminate back date problem. Factual Advertising can also help promote certain niche products. Good potential of Soups in Ludhiana.

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Ice-Creams & Liquid Milk in Ludhiana

To deal with Power and infrastructure problem, HADF Scheme that has been started requires rigorous follow up and word-of-mouth promotion. To deal with seasonal demand of products, festivals and functions during winters must be targeted. R2 sub-region requires increase in awareness which can be achieved through events such as Celebration Day, Road Shows etc. For Liquid Milk, a plant in the vicinity is unavoidable. Also, to deal with Threat of Substitutes, there will have to be Narrowcast Advertising on Local Channels and Dailies presenting it as Fresher and Healthier than open milk.

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