Final Report Amul

A REPORT ON
MARKET ANALYSIS OF AMUL ICE CREAMS IN HYDERABAD: A COMPARATIVE STUDY
BY VARUN 09BSHYD0957
GUJRAT CO-OPERATIVE MILK MARKETING FEDERATION LTD (GCMMF) AMUL
A REPORT ON
MARKET ANALYSIS OF AMUL ICE CREAMS IN HYDERABAD: A COMPARATIVE STUDY

BY VARUN 09BSHYD0957
GUJRAT CO-OPERATIVE MILK MARKETING FEDERATION LTD (GCMMF) AMUL
A REPORT SUBMITTED IN THE PARTIAL FULFILMENT OF THE REQUIREMENTS OF MBA PROGRAM OF IBS HYDERABAD
TO FACULTY GUIDE PROF. TRILOCHAN TRIPATHY COMPANY GUIDE MR. S V R CHARY
DATE OF SUBMISSION May 14, 2010
IBS HYDERABAD
CERTIFICATE
This is to certify that the thesis titled Market Analysis of Amul Ice Creams: A Comparative Study is a bonafide work done by Mr. Varun, Enrollment No. 09BSHYD0957, in partial fulfilment of the requirements for the award of the degree of MBA and submitted to IBS, Hyderabad. This work was not submitted earlier at any other University or Institute for the award of the degree.
Project Coordinator: Prof. Trilochan Tripathy IBS Hyderabad
AKNOWLEDGEMENT
I would like to take this opportunity to express my sincere acknowledgement to the management of Gujarat Co-operative Milk Marketing Federation Ltd (AMUL), Hyderabad for providing a wonderful opportunity to undergo summer internship programe (SIP) with the company.
I express my sincere thanks to my company guide Mr. S.V.R Chary, Deputy Manager-Sales, Gujarat Co-operative Milk Marketing Federation Ltd (AMUL),Hyderabad for giving me an opportunity to work under his guidance and support during the course of the project. His valuable inputs and suggestions have played a crucial role at every stage in the development of the project.
Words are insufficient to express my gratitude to Prof. Trilochan Tripathy, Faculty, Department of Economics, IBS Hyderabad, my faculty guide, for all the teachings, suggestions and his valuable contributions for deepening my learning of management, market research and the actual work process in the real world. He has been kind enough to correspond with me and being always there with his time, support and advice on the project. I would like to thank all the respondent for their time and support. Finally, I would like to thank the entire AMUL team, my parents and friends for their commendable support, motivation and encouragement at all time which really helped in successful completion of my project report.
Varun
DECLARATION
This is to certify that the thesis titled Market Analysis of Amul Ice Creams: A Comparative Study is a bonafide work done by Mr. Varun, Enrollment No. 09BSHYD0957, in partial fulfillment of the requirements of MBA Program and submitted to IBS Hyderabad. I also declare that this project is a result of my own efforts and that has not been copied from anyone and I have taken only citations from the literary resources which are mentioned in the Bibliography section.
This work was not submitted earlier at any other university or institute for the award of the degree.
Date: May 14, 2010 Place: Hyderabad
Varun
ABSTRACT
This report offers an insight to the size and shape of the ice-cream market at Hyderabad. It provides the latest retail sales data of Hyderabad, allowing us to identify the share of various brands and local players. It identifies the leading companies, leading brands thus provide a comparative analysis taking into account the market size, demographic distribution of ice cream, launch of new products, trade promotional policies adopted by each brand and other amenities that a retailer requires from a company. Certain marketing strategies are being devised for Amul ice cream to help and enhance its market size in Hyderabad. The research involves collection and analysis of primary data using a questionnaire, from various retailers through direct interviews in Hyderabad and secondary data from various sites and online journals and articles. Mathematical and statistical (factor analysis) tools are used to analyze the data collected. The study reveals that Amul is the market leader with 35% market share followed by Kwality Walls. The research demonstrate that 15 to 35 years age group is the top consumer of the ice cream and Vanilla is the highest selling flavor, occupies 28% market share closely followed by the Butterscotch. Trade promotion decisions are grouped under three factors named as pecuniary benefits, back-up and complimentary policy. Other important characteristics of the industry includes product features, demand management, credit, trade promotion and competence. Comparative analysis of all these factors leads to various conclusion and recommendations.
Table of Contents
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AKNOWLEDGEMENT ...................................................................................................................................... i DECLARATION ............................................................................................................................................... ii ABSTRACT..................................................................................................................................................... iii 1. INTRODUCTION ..................................................................................................................................... 1 1.1 PURPOSE AND SCOPE OF THE PROJECT ........................................................................................ 1
1.2 OBJECTIVES OF THE STUDY ................................................................................................................. 2 1.3 RESEARCH METHODOLOGY .......................................................................................................... 2
1.3.1 RESEARCH DESIGN ....................................................................................................................... 2 1.3.2 SAMPLING DESIGN ....................................................................................................................... 3 1.3.3 SAMPLING .................................................................................................................................... 4 1.3.4 COLLECTION OF DATA: FIELD WORK ............................................................................................ 4 1.3.5 STATISTICS TOOL .......................................................................................................................... 5 1.4 LIMITATIONS OF THE STUDY ............................................................................................................... 5 1.5. LITERATURE REVIEW .......................................................................................................................... 6 2. INDUSTRY ANALYSIS.................................................................................................................................. 7 2.1 AN INTRODUCTION TO THE INDIAN DAIRY INDUSTRY ....................................................................... 7 2.2 AN INTRODUCTION TO THE INDIAN ICE CREAM INDUSTRY ............................................................... 9 2.3 MAJOR PLAYERS IN THE INDIAN ICE CREAM INDUSTRY ................................................................... 11 2.4 MAJOR PLAYERS IN THE HYDERABAD ICE CREAM MARKET ............................................................. 14 3. PRIMARY TABULATION AND INTERPRETATION ...................................................................................... 18 3.1 PENETRATION IN THE MARKET ......................................................................................................... 18 3.2 DEMOGRAPHIC DISTRIBUTION ......................................................................................................... 20 3.3 TYPE OF ICE-CREAM .......................................................................................................................... 21 3.4 FLAVORS ............................................................................................................................................ 22 3.5 TYPE OF PACKAGING ......................................................................................................................... 23 3.6 SOURCE OF INFORMATION ABOUT NEW VARIANT TO THE RETAILERS ........................................... 23 3.7 SALES ................................................................................................................................................. 24 3.8 FACTOR ANALYSIS ............................................................................................................................. 26 3.8.1 TRADE PROMOTION POLICY ...................................................................................................... 26
3.8.2 CHARACTERISTICS OF ICE CREAM INDUSTRY............................................................................. 29 3.9 FACTORS AT A GLANCE ..................................................................................................................... 31 3.9.1 FACTORS FOR TRADE PROMOTION POLICY ............................................................................... 31 3.9.2 FACTORS FOR ICE CREAM INDUSTRY CHARACTERISTICS ........................................................... 33 3.10 FACTORS AT A GLANCE: COMPARISON OF AMUL WITH INDUSTRY ............................................... 36 3.10.1 TRADE PROMOTION POLICY .................................................................................................... 36 3.10.2 FACTOR FOR CHARACTERISTICS ............................................................................................... 37 3.11 COMPARISON OF AMUL WITH KWALITY WALLS ............................................................................ 40 3.11.1 TRADE PROMOTIN POLICY .................................................................................................. 40
3.11.2 INDUSTRY CHARACTERISTICS ................................................................................................... 42 4. CONCLUSIONS ......................................................................................................................................... 44 5. RECOMMENDATION ............................................................................................................................... 46 6. ANNEXURE .......................................................................................................................................... 47 ANNEXURE I QUESTIONNAIRE ............................................................................................................. 47 ANNEXURE II- FACTOR ANALYSIS (TRADE PROMOTIONAL POLICIES)..................................................... 53 ANNEXURE III- FACTOR ANALYSIS (CHARACTERISTICS) .......................................................................... 56 7. REFERENCES ............................................................................................................................................ 61
LIST OF FIGURES
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Figure 1 The Indian dairy exports and projected exports volume. ............................................................... 8 Figure 2 Market share of various brands .................................................................................................... 10 Figure 3 Market share of Branded and Grey market .................................................................................. 10 Figure 4 Market share of various Flavors.................................................................................................... 11 Figure 5 Market share of single and multi brands retailers ........................................................................ 18 Figure 6 Single and Multi brand outlet of various brands .......................................................................... 18 Figure 7 Share of single and multi brand retailers in various areas............................................................ 19 Figure 8 Incidence of visits of various age-group ....................................................................................... 20 Figure 9 Preference of type of ice- cream .................................................................................................. 21 Figure 10 Sales of the various flavors ......................................................................................................... 22 Figure 11 Preference of various packagings ............................................................................................... 23 Figure 12 New variants' information source............................................................................................... 24 Figure 13 Market share of brands............................................................................................................... 24 Figure 14 Annual sale of various brands seperated in weekdays and weekend. ....................................... 25 Figure 15 Variables of pecuniary benefits to retailers. ............................................................................... 31 Figure 16 Variables of back-up policy. ........................................................................................................ 32 Figure 17 Variables for complimentary policy factor.................................................................................. 32 Figure 18 Variables related to product characteristics. .............................................................................. 33 Figure 19 Variables related to competence ................................................................................................ 34 Figure 20 Variables related to demand. ..................................................................................................... 35 Figure 21 Comparison of back-up policies of Amul and Industry. .............................................................. 36 Figure 22 Comparison of pecuniary befits to retailers By Amul and industry. ........................................... 36 Figure 23 Comparison of complimentary policy by Amul and Industry ..................................................... 37 Figure 24 Comparison of competence factor. ............................................................................................ 37 Figure 25 Comparison of product features. ................................................................................................ 38 Figure 26 Comparison demand management. ........................................................................................... 39 Figure 27 Comparison of Pecuniary benefit by Amul and Kwality walls..................................................... 40 Figure 28 Comparison of back-up policy of Amul and Kwality Walls......................................................... 41 Figure 30 Complimentary policy of Amul and Kwality Walls. ..................................................................... 41 Figure 31 Competence factor of Amul and Kwality walls. .......................................................................... 42 Figure 32 Product features of Amul and Kwality walls. .............................................................................. 43 Figure 33 Demand management of Amul and Kwality Walls. .................................................................... 43
LIST OF TABLE
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Table 1 Comparison of sales and days ratio. .............................................................................................. 25 Table 2 Factors for Trade promotion policy ............................................................................................... 28 Table 3 Factors for ice cream industry Characteristics ............................................................................... 30
CHAPTER - 1 INTRODUCTION
1. INTRODUCTION
The project focuses on the present scenario of Amul Ice-cream in Hyderabad. It offers the comparative analysis of Amul and its competitors with respect to Trade promotion policies and various characteristics of the Industry in terms of quality, margin, new product development, packaging etc. This study identifies the potential of ice-cream market in Hyderabad and determines the market size through latest sale data gathered from the retailers.
1.1 PURPOSE AND SCOPE OF THE PROJECT

The main purpose of the research project is to the study the ice-cream market at Hyderabad taking into account market size, competitors and retailers. The Project focuses on the present scenario of Amul Ice-cream in the market. The research has been designed in a way to execute a comparative study of Amul and its competitors with respect to rate, margin, communication, promotional schemes, strengths and weakness. One of the phases of research also lays emphasis on studying and understanding trade promotional strategies and several offerings to the retailers by various ice cream brands in the said region. With emerging competitors of ice cream products in the local markets and also existing competition from the domestic players, it is always necessary to fabricate various plans and strategies according to the prevalent market conditions. Another important purpose of this project is to analyze the present status of Amul in the ice cream segment in Hyderabad and design certain strategies to make it a preferred brand to be sold by retailers. The project will help the company and various other bodies to obtain a feedback and take care of various issues existent in the present market.
1.2 OBJECTIVES OF THE STUDY

To find out the size of ice-cream market in Hyderabad. To identify the demographic distribution of ice-cream consumption in Hyderabad. To find out Amuls position in this segment in Hyderabad To compare trade promotional policies given by various brands.
To seek general perception of retailer towards AMUL ice cream.

1.3 RESEARCH METHODOLOGY
1.3.1 RESEARCH DESIGN The survey research method is the basic research design. Each respondent was interviewed in his or her work place. The personal interview were generally last between 35 and 45 minutes, although the variation of the length of interview depends upon interest, readiness and previous experience of the retailers. This study includes two type of marketing research method: 1. Exploratory research 2. Descriptive research
Exploratory research Exploratory research seeks to discover new relationship, emphasis on discovery of ideas. Marketing researches devote a significant portion of their work on exploratory studies when very little is known about the problem being examined. It includes the study of the present market of Hyderabad to find out the factors which play a vital role in determining the objective of the study. Descriptive research The main purpose of descriptive research, is to describe characteristics of a population or a phenomenon. Questionnaire was developed in a manner so as the grab the required information and personal interviews were conducted for accuracy and correctiveness. My questionnaire consist of: Category scales Multiple choice questions
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Dicthomus Open ended questions
Category Scales: An attitude scale consisting of several response categories to provide the respondent with alternative ratings. Multiple choice questions: Questions of this type offer the respondents an alternative to choose the right answer among others. It is faster, time saving and less biased. It also simplifies the tabulating process. Open ended questions: In this type respondents are free to answer in their own words and express the ideas they think are relevant, such questions are good as first questions or opening questions. They introduce the subject and obtain general reaction. Dicthomus: These are the questions which are boolean in nature. These answers are straightforward and respondents have to answer them in a straight way. That means the answer can only be either Yes or No. 1.3.2 SAMPLING DESIGN Sample design is a definite plan of obtaining some items from the whole population. The sample design used in this project is two state sampling i.e. Cluster and Convenience. In the probability sampling methods, each items in the sample is chosen one at a time from a complete list of universe elements. In marketing research practice, it will sometimes be more expedient to select clusters or groups of universe elements, rather than to choose sample items individually. Sampling methods in which universe elements are chosen in groups rather than individually are called cluster-sampling methods. They are widely used in the sampling of human populations. When no complete universe listing exists, a type of sampling is called area sampling may be the only practically feasible form of probability sampling. Sample design is a definite plan of obtaining some items from the whole population. The sample design used in this project is two state sampling i.e. cluster sampling and convenience
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sampling. The whole city was divided into five geographical areas among five members and I have chosen Mehdipatnam, Banjara hills, Lakri ka pul, Nampally, Vijay nagar, Venkat raman colony, Attapur and Langar house. The total sample size was 100. Cluster sampling Here the whole area is divided into some geographical area and a definite number of retailers were to be surveyed. Cluster sampling are frequently utilized when no list of sample population is available. Convenience sampling This type of sampling is chosen purely on the basis of convenience and according to convenience I visited cinemas, station, markets for residential areas and commercial markets. 1.3.3 SAMPLING Sampling technique : Non probability sampling(A non probability sampling technique is that in which each element in the population does not have an equal chance of getting selected). Sample unit : People who sell ice-cream available in general stores, superstores, bakery, fast food joint, restaurants etc. Sample size : Respondents (who are doing ice-cream business atleast from 1 year). Sample consist of 100 retailers. Method : Survey through questionnaire and direct interviews. Data analysis method: Mathematical and graphical method. Area of survey : Mehdiptnam and near by regions.. Timing of survey : 9.00 am to 12.30 pm and 5.00 pm to 8.00 pm 1.3.4 COLLECTION OF DATA: FIELD WORK Primary Data Questionnaire was prepared after study of the present market area to find out the vital factors keeping the objective of research in mind. Questions were asked to respondents (retailers) considering the basic principles and probing was done if required. Direct interviews were conducted, in order to get accurate information. correct information I had to approach retailers doing business atleast from 1 year and covered all the area distinctly as chosen by me.
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People were not willing to answer, when they were contacted between 1.00 pm to 5.00 pm, the time when most of the people take rest during the scorching heat. Secondary Data The study also involve use of internet, books and various journals and papers so as to accomplish the purpose of the study in a better way. Secondary data is collected to mention facts and figures from previous reports and articles. 1.3.5 STATISTICS TOOL Data being collected can be analyzed through various statistical tools. Applicability of particular tool depends upon the form of data. In this study, I have used Factor analysis. A type of analysis used to discern the underlying dimensions or regularity in phenomena. Its general purpose is to summarize the information contained in a large number of variable into smaller number of factors. It is a mathematical tool in which each variable is expressed as a linear combination of underlying factor. The purpose of applying factor analysis here is to summarize the data collected through questionnaire. I have taken twenty variables which defines the trade promotional policies and various offering provided by the ice cream companies to the retailers. All variables will be prcised into definite factors which affect the industry most thus data will be concluded in appropriate manner.
1.4 LIMITATIONS OF THE STUDY

The case of External Validity holds true as the data collected from the various regions of Hyderabad can not be used for generalization, i.e., the data collected from Hyderabad is not a true representative of the population of India. The presence of extraneous variables is unavoidable. The study is confined to organized sector of the industry. The study being done during the peak season for the companys business, the information and the outcome of this study may not be applicable for the complete year. Language used to fill the questionnaire were Hindi and English therefore few shopkeepers who could not understand either of the language refused to fill the questionnaire.
1.5. LITERATURE REVIEW

According to DARE-Because Entrepreneurs Do Report (Ice Cream Industry in India Other Business Opportunities), the ice cream industry in India is worth Rs. 2,000 crores. The industry can be divided into the branded market and the unbranded market. The branded market at present is 100 million liters per annum valued at Rs. 800 crores. In 2008-09, in the branded ice cream market, Amul held the number one spot, with a market share of 38%, followed by Kwality Walls at 14%, Vadilal at 12% and Mother Diary at 8%. The per capita consumption of ice cream in India is approximately 300 ml, as against the world average of 2.3 liters per annum. Vanilla, Strawberry and Chocolate together constitute approximately 60% of the market. According to Indian Dairy Industry Report, there are regional disparities in production and consumption of milk. The per capita availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day. This disparity is due to concentration of milk production in some pockets and high cost of transportation. In India about 46 per cent of the total milk produced is consumed in liquid form and 47 per cent is converted into traditional products like cottage butter, ghee, paneer, khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like milk powders, processed butter and processed cheese. The remaining 54% is utilized for conversion to milk products. Among the milk products manufactured by the organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed milk infants foods etc. Of these ghee alone accounts for 85%. According to Reportlinker-Report on Indian ice-cream market,2009), The Indian ice cream market was until recently reserved for the small-scale sector. It was opened to large-scale manufacture only in 1997. Since then the market has been witnessing fierce battles and huge investments on the part of major players in cold chains and infrastructure. The overall industry has been growing at a sluggish rate of 3-4 %. But the organized sector has been growing in the region of 12-15 % over the last five years.
CHAPTER 2 INDUSTRY ANALYSIS
2. INDUSTRY ANALYSIS
2.1 AN INTRODUCTION TO THE INDIAN DAIRY INDUSTRY
Today, India is 'The Oyster' of the global dairy industry. It offers opportunities abounding to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the international dairy processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world.
Salient features of Indian Dairy Industry Indias dairy sector is expected to triple its production in the next 10 years in view of expanding potential for export to Europe and the West. Moreover, with WTO regulations expected to come into force in coming years all the developed countries which are among big exporters today would have to withdraw the support and subsidy to their domestic milk products sector. India today is the lowest cost producer of per liter of milk in the world, at 27 cents, compared with the U.S' 63 cents, and Japans $2.8 dollars. To take advantage of this lowest cost of milk production and increasing production in the country, multinational companies are planning to expand their activities here. Along with the national players like, Amul and Mother Dairy, global players like Nestle have also made substantial investments to capitalize the potential of this segment. The urban market for milk products grew at an approximate accelerated pace of around 33% per annum to around Rs.43,500 crores till year 2005. This growth came from the greater emphasis on the processed foods sector and also by increase in the conversion of milk into milk products. Probiotic dairy products, which build immunity and help in digestion, are an emerging trend in the India food market. India has the largest population of cattle in the world.
According to Dairy India 2007 estimates, the current size of the Indian dairy sector is US$ 62.67 billion and has been growing at a rate of 5 per cent a year. The dairy exports in 200708
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rose to US$ 210.5 million against US$ 113.57 last fiscal, whereas the domestic dairy sector is slated to cross US$ 108 billion in revenues by 2011. Both production and consumption of milk and its derivatives are traditionally high in the country. The graph below shows the Indian diary exports over the last two years and projected export volume in 2011.
Exports (in US million $)

1200 1000 800 600 400 200 0 113.57 2006-2007 210.5 2007-2008 2011 (Projected) 1080
Figure 1 The Indian dairy exports and projected exports volume.
Source: http://www.workosaur.com/food-industry-overview/
2.2 AN INTRODUCTION TO THE INDIAN ICE CREAM INDUSTRY

The global market of ice creams was pegged at $61.6 billion in terms of retail value or 15 billion liters in terms of volume in 2007. Of this, the Asia Pacific ice cream market was worth $13 billion in terms of retail value and 5128 million liters in terms of volume. The Indian ice cream industry was regulated and later reserved for the small-scale sector. Such reservations restricted the development of an organized sector in this industry. During the initial six years of Indian economic liberalization process, which started in 1991, not many changes were initiated for the development of the industry. It remained a protected field for the small-scale player, who in turn could not do much for the growth of the industry. Lack of competitiveness in terms of manufacturing, product innovation and marketing, resulted in the emergence of small ice cream makers with local brands and fragmented market. Even the sole national brand, Kwality Ice Cream Company owned Kwality brand, did not have substantial market share to be truly termed as national brand. Moreover, the shortage of reliable power supply in most parts of the country and the slow pace of development of cold chains hindered the creation of a nationwide brand in this segment. The scenario began changing when the Indian Government de-reserved the ice-cream industry in 1997. The regulatory industry structure did not provide enough scope for scaling up. Besides, India had a very low per capita consumption of ice cream, though Indian climatic condition favors ice cream consumption. The per capita consumption of ice creams in India is just 300 ml per annum, compared to 22 liters in the US, 18 liters in Australia and 14 liters in Sweden. India is far behind even in terms of the world average per capita ice cream consumption of 2.3 litres per annum. Thus, the country had a large untapped potential. Many Multinational companies (MNCs) Baskin Robbins, Cream Bell etc, sensing the huge growth opportunity, made entry into the Indian market. However, till 2000, three years after the deregulation, the market was largely dominated by the small manufacturers. During this period, the organized sector accounted for only 25% market share in the Rs. 1000 crore ice cream industry. The existing national brand, Kwality Walls, was wagering a war with another national brand, Anand based Gujarat Co-operative Milk Marketing Federations (GCMMF) brand, Amul. During 1997-2003, Kwality Walls volume sales and turnover declined by 65% and 39% respectively while those of Amul catapulted by 575% and 484% respectively. In the changed scenario, Amul consolidated
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its market leadership with 32% market share, while Kwality Walls stood at a distant second with dismal 8% market share. The Indian Ice cream market is currently figured to be worth Rs. 2000 crores, growing at a rate of approximately 12%. The ice cream market in India can be divided into: the branded market and the grey market. The branded market at present is 100 million liters per annum valued at Rs. 800 crores. The grey market consists of small local players. Till 2009, in the branded ice cream market, Amul held the number one spot, with a market share of 38%, followed by Kwality Walls at 14%, Vadilal at 12%, and Mother Dairy at 8%.
Market Share (percent of Branded Market)

28% Amul 38% Kwality Walls Vadilal 8% 12% 14% Mother Dairy Others
Figure 2 Market share of various brands Source:http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-industry-in-india.htm
The market is totally dominated by vanilla, strawberry and chocolate flavors contributing around 60% of the total market followed by butterscotch and other flavors.
Market Share ( in Rs. Crore)

40% 60% Branded Market Grey Market
Figure 3 Market share of Branded and Grey market
Source: http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-industry-in-india.htm
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Market Share of Flavors

Sales 80% 60% 60% 40% 40% 20% 0% Vanilla, Strawberry & Chocolate Others
Figure 4 Market share of various Flavors
Source: http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-industry-in-india.htm
2.3 MAJOR PLAYERS IN THE INDIAN ICE CREAM INDUSTRY

Kwality Walls
Source: http://www.siesons.net/css/images/kwality%20walls.gif
Kwality Ice Cream is the pioneer in the Indian ice-cream manufacturing industry and in 1956 became the first company in the country to use imported technology for manufacturing icecream on a commercial scale. As the ice-cream industry exploded in India, in 1995 Kwality Group joined hands with Hindustan Lever Limited and then there was no looking back. The Indian consumer market was introduced to KWALITY WALLS the result of a collaboration between global brand Walls and the leading Indian ice-cream brand Kwality. Though the two giants eventually parted ways, the collaboration made Kwality a household name and created deep in roads for the brand in the consumer market.
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Source: http://www.kwalitygroup.com/library/images/Spot_IceCream.jpg
Kwallity Walls was launched in 1995 as Hindustan Unilever Ltd s. master brand for ice creams. With in-depth knowledge of the Indian market and Unilevers state-of-the-art technology, Kwallity Walls has been delivering superior quality products under its international brands. Hindustan Unilever started by merging 6 existing ice cream brands in the country and then launched Kwallity Walls range of ice creams and frozen desserts. Amul
Source: http://www.amulicecream.in/
Amul Ice Cream was launched on 10th March, 1996 in Gujarat. The portfolio consisted of impulse products like sticks, cones, cups as well as take home packs and institutional/catering packs. Amul ice cream was launched on the platform of Real Milk, Real Ice Cream given that it is a milk company and the wholesomeness of its products gives it a competitive advantage. In 1997, Amul ice creams entered Mumbai followed by Chennai in 1998 and Kolkata and Delhi in
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2002. Nationally it was rolled out across the country in 1999. It has combated competition like Walls, Mother Dairy and achieved the No 1 position in the country. This position was achieved in 2001 and it has continued to remain at the top. Today the market share of Amul ice cream is 38% making it market leader.Not only has it grown at a phenomenal rate but has added a vast variety of flavors to its ever growing range. Currently it offers a selection of 220 products. Amul has always brought newness in its products and the same applies for ice creams. In January 2007, Amul introduced SUGAR FREE & ProLife Probiotic Wellness Ice Cream, which was a first in India. This range of SUGAR FREE, LOW FAT Diabetic Delight & ProLife Probiotic Wellness Ice Cream is created for the health conscious. Amuls entry into ice creams is regarded as successful due to the large market share it was able to capture within a short period of time due to price differential, quality of products and of course the brand name. Amul Ice Cream was launched on 10th March, 1996 at Ahmedabad. Subsequently the distribution and marketing operations were rolled out across the country. Mother Dairy
Source: http://www.stockwatch.in/files/Mother.Dairy.jpg
Source:http://static.indianexpress.com/mimages/Friday%20%20%20,%20May%2001,%202009%20at%201534%
20hrs/M_Id_74828_Mother_Dairy.jpg
Mother Dairy, an ice cream and milk brand of National Dairy Development Board (NDDB), gave tough competition to Amul and Kwality Walls in the Delhi market. After NDDB introduced Mother Dairy as its own brand, the relation between GCMMF and NDDB got strained. Initially, Amul used Mother Dairys facilities to cater to the markets of Faridabad, Gurgaon and Ghaziabad, but the rift between GCMMF and NDDB prompted Amul to supply the
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entire demand of the Delhi market and its adjoining regions from Gujarat. Mother Dairy also stopped sellin Amuls products from its outlets. Vadilal
Source: http://www.englishunstoppable.org/partnerslogo/logo_vadilal.jpg
Another strong regional in the market emerged from Ahmedabad known as Vadilal Industries Ltd, with a turnover of Rs. 96 crore. With its manufacturing units located in Gujarat and Uttar Pradesh, vadilal had its presence in the states of Gujarat, Rajasthan, Uttar Pradesh and Madhya Pradesh. Some other brands that are present in the market are South India dominated Arun ice cream, French based Cream Bell, US based Baskin Robbins etc.
2.4 MAJOR PLAYERS IN THE HYDERABAD ICE CREAM MARKET

Amul
Kwality Walls
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Heritage
Source http://upload.wikimedia.org/wikipedia/en/thumb/1/11/HeritageFoodslogo.jpg/250px-
HeritageFoodslogo.jpg
The Heritage Group, founded in 1992 by Nara Chandrababu Naidu, with three business divisions viz., Dairy, Retail and Agri under its flagship Company Heritage Foods India Limited, one infrastructure subsidiary Heritage Infra Developers Limited and other associate companies. The annual turnover has crossed $200 million during 2008-09. Presently, Heritages milk products have presence in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Maharashtra. Heritage has its headquarters in Hyderabad, Andhra Pradesh. Jersey
Source: http://cms.mumbaimirror.com/portalfiles/32/6/200907/Image/TFPJ-Company16.jpg
Creamline, an ISO 22000 accredited dairy, is a leading manufacturer and supplier of milk and milk products in Southern India spanning across Andhra Pradesh, Tamil Nadu, Karnataka and with a foothold at Nagpur in Central India. It operates its milk procurement, milk and milk products processing and distribution through Strategic Business Units (SBUs). Its milk and dairy products are sold under the popular brand name JERSEY. Since inception, the company has been
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growing consistently under the visionary leadership of promoter directors, business acumen of operational heads and unrelenting efforts of committed workforce. The company is possible of achieving a turnover of Rs. 4500 millions for the FY 2009-2010 and is set to achieve an ambitious target of Rs.10500 millions by end 2013. The Company entered into strategic partnership with M/s. Godrej Agrovet Limited, the largest animal feed manufacturing company in the country, in the Year 2005 by offering equity stake of to strengthen its backward integration with farmers, the primary producers of milk, for compound feed supply. The Company is open to strategic business tie-ups at national and international level and is looking at export opportunities to its products Since its incorporation in the year 1986, the company has successfully applied many innovative practices like 24 hour parlors with unemployed youth in 1993, mobile milk testing labs in 1998 etc. The company is now planning to expand its operations to Central India by setting up new Processing & Packaging Units. Dinshaws
Source: http://mh-31.com/nagpur/images/stories/mh/reviews/dinshaw/dinshaw%20logo%20copy.png
From the hand-churned ice cream from 1932 to the present day most ultra modern ice cream making plant, Dinshaws has come a long way. The Dinshaws plant is ISO and HACCP certified where Dinshaws ice cream is manufactured at a state of the art manufacturing unit in Butibori, which is around 40 km south of Nagpur. Until early seventies, ice cream sales was carried out by Dinshaws only as a summer time activity and that too only in Nagpur. But then onwards, it was extended as a year round
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serving to the palates of Nagpurians. The year 1981 saw next leap when Dinshaws moved beyond just one shop and grew not just in Nagpurs various pockets, but even in nearby towns. This continued rise has today led to Dinshaws ice cream delighting the taste buds of ice cream lovers in 13 states, through around 6870 outlets pan India. More than 11 million liters of Dinshaws ice cream delighted its patrons during 2008-09. Now Dinshaws is considered to be holding appreciating market share in west and central India.
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CHAPTER - 3 MAIN TEXT
3. PRIMARY TABULATION AND INTERPRETATION

3.1 PENETRATION IN THE MARKET
AVAILABILITY
Multibranded 37%
Amul 12%
Kwality Walls 17% Heritage 6% Jersey 3% Dinshaw's 3%
Others 22%
Figure 5 Market share of single and multi brands retailers
Source: Field Survey. 2010
AVAILABILITY
30 25 20 15 10 5 0 Amul Kwality Walls Heritage Jersey Dinshaw's Others 12 6 3 3 3 3 8 17 25 26 22 19
Figure 6 Single and Multi brand outlet of various brands
AREAWISE AVAILABILITY
15 10 5 0 AMUL Kwality walls Heritage Dinshaw's Jersey Others
Figure 7 Share of single and multi brand retailers in various areas. Source: Field Survey. 2010
These graphs exhibit the number of retail outlet present in all the areas in which survey was done. Analysis of data suggests that there are two type of retail outlet exists in the market which are: 1) Exclusive outlet: Retail outlets which keep only one brand. 2) Multi-branded outlet: Retail outlets which keep two or more than two outlets at one place. Key observations: In total 63% retailers prefer to keep only one brand and rest keep two or more than two brands. Kwality Walls holds first position for both exclusive and multi-branded outlet. Though AMUL is available at 37 outlet but number of multi-branded outlet is almost double of exclusive outlet. Areawise graph shows that AMUL is present predominantly in all the regions along with Kwality walls whereas Jersey, Dinshaws and Heritage is not present at few places. At Attapur reach of the Others brand is reasonably better than all other brands.
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3.2 DEMOGRAPHIC DISTRIBUTION
Age Group
700 600 500 400 300 200 100 0 07-15 15-25 25-35 35-45 45 above
Figure 8 Incidence of visits of various age-group
Key observations: Demographic distribution of customers is one of the major concerns of any industry. According to the research, the highest consumers fall in the age group of 25-35 closely followed by the consumers of age group of 15-25. As per the graph customers who consume ice-creams commonly lies between 15-35 years of age which include college going students, married couples. It can be seen that the least amount of consumers are in the age group of 7-15 mostly because they are dependents and they do not have a large amount of disposable income with them.
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3.3 TYPE OF ICE-CREAM
Type of Ice creame

Normal Sundae 9% 12% 43% Sherbet Gelato
36%
Figure 9 Preference of type of ice- cream
This is an attempt to study the preference of type of ice cream. There are four type of icecream in the market which are readily consumed. All four type of ice-creams are manufactured mostly by all the companies. Analysis suggest that Normal ice-cream is favored most which holds 43% share of consumption as described by the retailers. Sundae grabs the second position holding 36 % part of preference. Sherbet and Gelato are new generation, health friendly icecreams which exhibit very less share in comparison to the Normal and Sundae. Lack of awareness among people for Gelato and Sherbet might be the reason for low preference of these ice cream.
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3.4 FLAVORS
Flavor
Vanilla Chocolate Butter Scotch 9% 28% 18% Strawberry Others
25%
20%
Figure 10 Sales of the various flavors
In the market we can find many flavors such as Vanilla, Chocolate, Strawberry, Butter scotch, Mango, Litchi, Mixed fruit, Two in one etc. In this study only four flavors are being taken distinctly and all other flavors has been clubbed under the category Others. Among various flavors present in the market Vanilla is the most preferred flavor followed by Butterscotch with a very small margin of 3%. It has been observed that vanilla is basically consumed by families in form of family packs. Economic pricing of vanilla can be the reason for its highest sale. Chocolate and Strawberry holds almost same rank on the preference list with market share of 20 and 18 percent respectively. Other flavors like Mango, Litchi etc. contribute a little part of consumption. Some other interpretations conveys that Amul offers significantly wide range of flavors.
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3.5 TYPE OF PACKAGING
Packaging
Cup Cones Family Pack Stick
20% 27%
26% 27%
Figure 11 Preference of various packagings
Source: Field Survey. 2010.
During the initial phase of study it was observed that ice-cream are available in number of packets. Out of all Cup, Cones, Family pack and Stick are used most commonly by all the companies. I have not taken any other type of packaging in to the account as their visibility in the market is almost negligible. This study demonstrate that Cup, Cones and Family packs are preferred equally by the people whereas sticks have got the least preference. This trend can be accredited to location of type of retail outlet in the surveyed area and variability in the taste of different age group. Relatively Low-price Cups are generally consumed by the kids and low income group members.
3.6 SOURCE OF INFORMATION ABOUT NEW VARIANT TO THE RETAILERS

In the era of competition every company wants to stay ahead. Same is the case with Icecream companies. New product development and acquiring the shelf-space along with existing products is quite intricate work. This is done by advertisement on mass scale to cause awareness or by salesman at retailers level. Apart from advertisement and salesmen, customer demand and word of mouth are also considered which act as source of information. This study displays that
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. 700 600 500 400 300 200 100 0
New Variants' Information Source
COMPONY ADDS
COMPONY SALESMAN
CUSTOMER DEMAND
WORD of MOUTH
Figure 12 New variants' information source
out of four, company salesman is the chief source who update the retailer about all the new variants.Customer demand participate significantly to communicate retailer about the new launch. This indicates that companys initiative are less than the customers willingness to try new variant. Company advertisements also play a vital role which may enhance the awareness among retailers directly or indirectly.
3.7 SALES
Percentage of sale
Others 23% Heritage 4% Jersey 4% Dinshaw's 4% Kwality Walls 30%
Figure 13 Market share of brands
Amul 35%
Source: Field survey 2010.
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AMUL is the market leader with 35% market share which is 5% more than Kwality Walls unlike their availability in the surveyed area. Brands like Dinshaws, Heritage and Jersey jointly share only 12% of the market size which is much less than their share at domestic level. Other companies together occupy 23% share in the market. It can be said that as a brand Amul and Kwality Walls are the main competitors.
SALES (per annum)

12000 10000 8000 6000 4000 2000 0 weekend weekend weekend weekend weekend weekdays weekdays weekdays weekdays weekdays weekdays weekend Rupees ( 000)
Amul
Kwality Walls Dinshaw's
Jersey
Heritage
Others
Figure 14 Annual sale of various brands seperated in weekdays and weekend.
Source: Field survey 2010.
Research says that the sale of all brands divided into weekdays and weekend separately. Though the sale of weekdays is greater than weekend sale but the ratio of weekend sale and weekdays sale is greater than the ratio of number of weekend and weekdays in an year as shown in the table below:
Table 1 Comparison of sales and days ratio. Weekend sale / Weekdays sale
6130/11490 = 0.53 5350/10060 = 0.53 820/1430 = 0.57 520/1290 = 0.40 830/1350 = 0.61 4070/7670 =.054
No. of weekend / No. of weekdays

100/260 =0.38 100/260 =0.38 100/260 =0.38 100/260 =0.38 100/260 =0.38 100/260 =0.38
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The reason of such a variation in the sale on weekdays and weekend put light on consumption trends, behavior and habits of the customers.
3.8 FACTOR ANALYSIS

Primary data collected from ice cream retailers in the various area of Hyderabad is analyzed by Factor analysis. This analysis is done on two types of data, one is the trade promotional policies and other is the various characteristics related to ice cream industry which jointly consist of 20 different variable. Report consists of detailed explanation of both the data and interpretation. 3.8.1 TRADE PROMOTION POLICY Trade promotion is a required to push the sales of the company, varies at different level of business hierarchy. It act as the encouragement which stimulate quicker or greater purchase of particular products or services by consumers or the trade. Various activities and schemes which promote sales-force, distributors, retailers to improve sales are considered to be the part of salespromotion. This study is limited to various tools used by companies to enhance sales through retailers. The purpose of the trade promotion can be explained as follows: To occupy the shelf-space at retail outlet. To convince the retailer to sell the products of concerned company before others. To motivate the retailers and their sales clerks to push the product. To induce retailers to promote the brand by featuring, display, and price reductions, and
This study has taken seven different variables into the account under the title Trade promotion policy employed by the ice-cream companies. These variables are named as highest advertising allowance, free merchandise, bulk order discount, rewards, maximum sales incentives, discount off list price, and grievance redressal. All of these trade promotional policies are explained below: Highest Advertising Allowance An advertising allowance given by the companies to the retailers so as to compensates the expenses incurred by the retailers for advertising the manufacturers product.
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Discount Off list Price It is also known as price-off. It is straight discount off the list price on each case purchased during a stated time period. It is basically introduced to sales of the product which moves very slowly. Free Merchandise An another form of promotion policy which offers the extra cases of merchandise to retailers who buy a certain amount of the product to be sold.
Bulk Order Discount It is an additional margin given to the retailers along with the fixed margin when they make order in bulk. Company policy and the quantity of the product ordered determines the range of discount provided to the retailer. Maximum Sales Incentives The incentive given to the retailers on maximum sale among many retailers located in a particular area. Rewards These are sort of bonuses provided to retailers when the retailer performs exceptionally well or makes the highest amount of sale for a prolonged period of time. Bonuses can be provided in different forms, for example, cash or company sponsored tour packages etc. Grievance Redressal It is the facility provided to retailers by the company to resolve the issues related to trade. Complaints and problems of the retailers are being addressed by the concerned officials of the company. As mentioned earlier seven types of trade promotional policies were taken as variables to extract the major factors that form the major chunk of the various promotional policies offered by a company to various ice cream retailers and shopkeepers. Factor analysis of these seven variables is found valid as KMO ( Kaiser-Mayer-olkin) value which measures the adequacy of sampling comes out to be 0.577. Data is reduced to three factors. The three factors identified under which these policies can fall are:
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1) Pecuniary benefits to Retailer 2) Back-up policy 3) Complimentary promotion Table 2 Factors for Trade promotion policy Factor No. Factor 1 Factor Name Pecuniary Benefits to Retailer Variables o Discount Off list Price o Bulk Order Discount o Maximum Sales Incentives o Highest Advertising Allowance o Grievance Redressal o Free Merchandise o Rewards
Factor 2 Factor 3
Back-up policy Complimentary Promotion
Factor 1: Pecuniary Benefits to Retailer Under this factor the variables or the trade promotional policies present are Discount Off list Price, Bulk order discount and Maximum sales incentive. This factor indicates that these trade promotional policies provides monetary benefits to the retailer vis--vis increases the volume of the sale. Factor 2: Back-up policy This includes Highest advertising allowance and Grievance redressal. High advertising allowance means that monetary help provided by the company to the retailers so as to motivate the retailer for initiating or continuing the individual efforts of advertising company products. This factor helps the company to maintain good relation with the retailers. Factor 3: Complimentary promotion This factor comprises of Free merchandise and rewards. Free merchandise is generally goods which contain companys logo or companys name which when used promotes the product of that brand. Rewards persuade the retailers to perform extra-ordinary which are being admired by company resulting into benefits to the retailers. Both the variables expresses the appreciation of retailer by the company.
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3.8.2 CHARACTERISTICS OF ICE CREAM INDUSTRY Ice cream has a range of characteristics which is distinct from all the other industries. In this research project we have considered 13 such characteristics to deduce certain factors that are vital for the ice cream industry. The 13 features taken as variables for this analysis are: 1) Margins 2) Deep-freezer 3) Trade Promotional Policies 4) Logistics 5) Product quality 6) Range of Flavors 7) Attractive Packaging 8) Durability of the Product 9) Replacement Policy 10) Demanded Products 11) Excess Demand Handling 12) Credit Policy 13) Price Sensitivity
Factor analysis of these seven variables is found valid as KMO ( Kaiser-Mayer-olkin) value which measures the adequacy of sampling comes out to be 0.660. Data is reduced to five factors. The five factors identified are as follows: 1) Product Feature 2) Competence 3) Demand management 4) Credit 5) Trade promotion
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Table 3 Factors for ice cream industry Characteristics Factor No. Factor 1 Factor name Product Feature Variables o o o o o o o o o o o o Range of flavors Attractive Packaging Durability of the Product Quality of the Product Margin Deep-freezer Logistics Replacement policy Price sensitivity Demanded product Excessive demand handling Credit policy
Factor 2
Competence
Factor3 Factor 4 Factor 5
Demand management Credit Trade promotion
o Trade promotion policy
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3.9 FACTORS AT A GLANCE

3.9.1 FACTORS FOR TRADE PROMOTION POLICY Pecuniary benefits to retailers The trade promotional policies given by the company to the retailers in order to provide monetary benefits to the retailer include: Discount off list price Bulk order discount Maximum sales incentive
The graph below shows the average of the ratings given to each of these factors by the respondents.
Pecuniary Benefits
300 250 200 150 100 50 0 Discount offlist price Bulk order discount Incentive
Figure 15 Variables of pecuniary benefits to retailers.
It can be observed that most of the companies prefer to provide bulk order discount rather than providing the retailer discount off list price and Incentives. Back-up policy The trade promotional policies given by the company to the retailers in order to maintain good relations with retailer include: Advertisement allowance Grievance redressal
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Back-up policy
250 200 150 100 50 0 Advertisement allowance Greivance redressal
Figure 16 Variables of back-up policy.
It can be inferred from the above diagram that companies believes in addressing the complaints and problem as soon as possible rather providing advertisement allowance. Complimentary policy The trade promotional policies given by the company to the retailers in order to appreciate retailers are: Free merchandise Rewards
Complimentary Policy
170 168 166 164 162 Free merchandise Rewards
Figure 17 Variables for complimentary policy factor
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From the diagram, it can be seen that company consider free merchandise as good option to express their appreciation for retailers which otherwise fulfill the purpose of indirect communication rather than giving rewards. 3.9.2 FACTORS FOR ICE CREAM INDUSTRY CHARACTERISTICS Product features The features of product i.e. ice cream collectively forms the first factor which includes: Quality of ice cream Range of flavors Durability of ice cream Packaging of the ice cream
Product Feature
600 500 400 300 200 100 0 Product quality Range of flavors attractive packaging Product durability
Figure 18 Variables related to product characteristics.
Above graphs states that product quality, range of flavors and attractiveness of packaging are much more concerned variables for the company than product durability. Competence To stay in the market all companies have to show their competence in one or other way.here competence comprises of following variables: Margin Deep-freezer Logistics
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Replacement Price The graph below shows the average of the ratings given to each of these factors by the
respondents.
Competence
600 500 400 300 200 100 0 Margin Deep-freezer Logistics Replacement Price senitivity
Figure 19 Variables related to competence
From the graph it can be seen that companies tries to stay ahead in terms of margin and logistics. Providing deep- freezer to the retailers is also an area of concern that too at rfeasonable rates with life time maintenance responsibility. Replacement and price sensitivity are seems to be less concerned variables where companies try to show their competency. Demand management This includes the variables related to the demand of products by the retailers. It includes: Demanded products Excessive demand
Demanded products means that the amount of product ordered by the retailers on regular basis whereas excessive demand occurs occasionally.
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Demand Management
470 460 450 440 430 420 410 400 390 Demanded product Excess Demand handling
Figure 20 Variables related to demand.
From the above diagram it can be inferred that company focuses a lot on the routine demand. Credit This factor consist of only one variable i.e Credit policy adopted by the various company. As per the research, companies hardly prefer credit sale unlikely many other industries. Trade promotion This factor consist of trade promotion policy. It is taken separately so as to understand the attitude of retailers towards the polices employed by the companies. It is an important factor from companies point of view.
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3.10 FACTORS AT A GLANCE: COMPARISON OF AMUL WITH INDUSTRY

3.10.1 TRADE PROMOTION POLICY Back-up policy
Back-up policy
250 200 150 100 50 0 Advertisement allowance grievance redressal AMUL Industry
Figure 21 Comparison of back-up policies of Amul and Industry.
Amul presents the same characteristics of back-up policy like the whole industry. Understanding and resolving the problem is given the prime importance and retailers are motivated less to advertise about the company. Pecuniary Benefits to Retailer
Pecuniary benefits
300 250 200 150 100 50 0 Bulk order discount Incentive Discount off list price AMUL Industry
Figure 22 Comparison of pecuniary befits to retailers By Amul and industry.
Figure Source: Field Survey. 2010
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From the graph it can be seen that Amul provides discount on the list price unlike the pecuniary policies of all players in the surveyed region. Incentives is considered as the last option which determines that Amul altogether follows the different monetary benefit strategy for the retailers. Complimentary policy
Complimentary policy
200 150 100 50 0 Free merchandise Rewards AMUL Industry
Figure 23 Comparison of complimentary policy by Amul and Industry
Every brands put all the efforts to show their presence and cause awareness among people through various marketing strategies. Like all other players Amul also believes in distributing free merchandise than rewards. Logo and pictures of the ice creams on the merchandise when used by the retailers fulfill the purpose of the company. 3.10.2 FACTOR FOR CHARACTERISTICS Competence
Competence
600 400 200 0 Logistics Margin Deep freezer Price sensitivity Replacement AMUL Industry
Figure 24 Comparison of competence factor of Amul and IndustryS
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Being the market leader of India Amul follow various competitive tools so as to stay ahead in the market. Amul provide less margins to the retailers than many other companies but has developed a good logistics system which gets the appreciation of the retailers. Relative analysis suggest that Amul provides the reasonable priced products to the consumers. Deep freezer facility is still an issue to think about. Product features
Product features
600 500 400 300 200 100 0 Prod. Quality Range of Flavors Attractive Packaging Prod. Durability AMUL Industry
Figure 25 Comparison of product features of Amul and Industry
Like all, Amul stresses upon providing high class products to the consumers in terms of quality, range and packaging. This shows that industry is focused towards providing good products to the consumers.
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Demand management
Demand management
500 450 400 350 300 250 200 150 100 50 0 Demanded Product Excess demand handling AMUL Industry
Figure 26 Comparison demand management of Amul and Industry
Routine management of demand is found easy by all the companies. Managing excess demand is managed inappropriately .Amul demonstrate the same characteristics like the Industry.
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3.11 COMPARISON OF AMUL WITH KWALITY WALLS

Kwality Walls is the main competitor of Amul. Though Kwality walls presence in the market is better than Amul yet Amul is the leader in terms of sales. Amul holds 35 percent market share which is closely followed by the Kwality walls which has 30 percent market share. This section closely examines all the factors to understand the strength and weakness of the Amul with respect to its chief competitor i.e Kwality Walls. 3.11.1 TRADE PROMOTIN POLICY Pecuniary Benefit to retailer
Pecuniary benefits
120 100 80 60 40 20 0 List price discount Bulk order discount Amul Kwality Walls Incentive
Figure 27 Comparison of Pecuniary benefit by Amul and Kwality walls.
Source: Field survey 2010
Both companies have adopted different monetary policy to promote trade. Both companies shares the mind and market significantly. Being the best players of the industry both needs to expand the total market therefore retailers are provided discounts to enhance share. As discussed earlier Amul depends upon list price discount rather than bulk order discount where as Kwaliity walls moreover provides bulk order discount to the retailers. There is insignificant difference in incentive given by both the players.
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Back-up policy
Back- up policy
100 80 60 40 20 0 Advertisement allowance Amul Grievance redressal Kwality Walls
Figure 28 Comparison of back-up policy of Amul and Kwality Walls
Improper operations and marketing strategy can leads to conflict between retailers and the company there fore proper grievance redressal system is required so as to avoid any obstruction in the business. Both the companies are highly directed towards backing up the retailers by maintaining efficient grievance redressal system. Complementary policy
Complimentary policy
80 60 40 20 0 Rewards Amul Free merchandise Kwality Walls
Figure 29 Complimentary policy of Amul and Kwality Walls.
Amul supports distributing free merchandise to the retailers instead of giving rewards to the retailers unlike Kwality walls. According to me Amul follows good strategy because giving
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merchandise increases awareness along with appreciating the retailer which is not the case in giving rewards. 3.11.2 INDUSTRY CHARACTERISTICS Competence
Competence factor
250 200 150 100 50 0 Price sensitivity Replacement Amul Margin Kwality Walls Deep freezer Logistics
Figure 30 Competence factor of Amul and Kwality walls.
From the above graph it can be easily noticed that Amul does not hold good position in terms of providing deep freezer to the retailers. This can be the reason of the low availability of Amul than Kwality walls. One thing can also be deducted that Kwality walls provides
replacement facility of the damaged product to the retailers effectively which also promote retailers to keep kwalitys product. All three other characteristics show insignificant difference which makes competition intense. Product features Sale of ice creams largely depends upon the class of product provided by the brand. Both the products are preferred for providing high class ice creams. Both companies offers wide range of flavors and durability of product is considered as good.
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Product features
300 250 200 150 100 50 0 Product Quality Flavor range Amul Attractive packaging Kwality Walls Product durability
Figure 31 Product features of Amul and Kwality walls. Source: Field survey 2010
Overall products of the Kwality walls are considered better than the Amul. People prefer Kwality walls in terms of quality and packaging. Demand Management
Demand management
170 160 150 140 130 120 Demanded product Amul Kwality Walls Excessive demand handling
Figure 32 Demand management of Amul and Kwality Walls.
From the above graph it can be inferred that Amul has the inappropriate management of the demand. Graph clearly determines that kwality walls got an edge in terms of developing routine and excessive demand.
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CHAPTER 4 CONCLUSIONS
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4. CONCLUSIONS
This study identifies the potential and opportunity in Hyderabad ice cream industry. It includes analysis of people preference of flavors, type of ice cream, packaging and reveals demographic patterns of buying. Detailed analysis of trade promotion policies and various characteristics is done. Working on such lines, certain conclusions can be derived cited below. Retailers are interested to keep only one brand rather than two or more than two brand. Amul has less penetration than Kwality Walls in terms of exclusive and multi-branded retail outlets. Brands like Dinshaws, Heritage and Jersey have very poor visibility in terms of retail outlet. Various other companies like Masqati and Jumani shares remarkably better shelf space than Dinshaws, Heritage and Jersey. Normal and sundae are preferred most when it comes to any brand. Being new in the market sherbet and gelato share very less amount of awareness and sales. Preference of the flavors by the consumers is quite diversified still Vanilla tops the list of preference. Demographic pattern has shown dissimilar trends than the general perception of consumption of more ice cream by the kids. Young and middle aged individuals consumes large amount of ice group than any other age-group. Information about the new products to the retailers is generally parted through the salesmen. Companies initiatives are less than the willingness of the customers to try new products. Amul is the leader in terms of revenue generation which is closely followed by the Kwality Walls. Though local players individually do not grab noticeable market share but jointly holds 23 percent market share. Consumption of ice creams increases during weekends upto a large extent. Various trade promotion policies have been adopted by the companies moreover players believes in providing bulk order discount, avoiding any dispute with the customers and distributing free merchandise. Amul provides off-list discount rather than bulk order discount.
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Industry demonstrate distinct attributes which includes product quality, demand management, logistics and various facilities given to the retailers. High quality product and efficient meeting of day to day demand are the basic requirements of the industry. Deep freezers are provided to the retailers to store ice creams. Replacement and credit is hardly practiced by companies except few.
Demand management and deep freezer facility of Amul is the least accepted in the market whereas its ice creams are considered as reasonably priced and high class. Deep freezer facility and demand management of Kwality walls is better than Amul whereas both give almost equal margin to the retailers. Lastly, it can be concluded that competition is intense in the market which demands effective trade promotion policies, efficient demand management, high class products and well organized logistics system.
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CHAPTER 5 RECOMMENDATIONS
5. RECOMMENDATION
All companies displays various strength and weakness which determines their position in the market, brand value and sales turnover. This study has been devised to compare Amul with other companies and analyze general trends of the industry. This section includes recommendations to the Amul so as to improve its performance and grab opportunities. Being the market leader Amul needs to expand its business in Hyderabad. New customers should be targeted by increasing awareness or by adopting geographical-expansion strategy. In the surveyed region consumption by the kids is least, school can be targeted to improve the sale through kids. Availability can be increased by providing Deep freezers at reasonable rates which motivate the retailer to keep Amul in his or her shop. Many companies provide deep freezer at 40 to 50 percent lower rates than Amul. Demand management of Amul is very poor specially in meeting the excessive demand in summer or peak load season. It can be improved by relevant forecasting thus keeping appropriate stock. Amul requires good logistics and delivery system to avoid delay in release of products ordered by the retailers. Ares like Attapur, Hydergudda and Nana-nagar have very few outlets of Amul. Amul needs to review the allocation of the retailers according to the geographical areas and demographics so that its penetration in the market might increases. Amul should upgrade its reward and incentive policy to promote trade through retailers and develop the retailer friendly image.
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CHAPTER 6 ANNEXURE
6. ANNEXURE
ANNEXURE I QUESTIONNAIRE
MARKET ANALYSIS OF AMUL ICE CREAMS A COMPARATIVE STUDY
Answer the questions on the basis of following scale: 1234567Almost never preferred Usually not preferred Sometimes but infrequently preferred Indifferent/Neutral Often preferred Usually preferred Almost always preferred
1. Since how many years you are in the business of ice creams? 2. I keep one/many/all of the following brands in my ice cream shop. Please tick a) b) c) d) e) f) g) AMUL Kwality Walls Heritage Jersey Dinshaws ... ...
3. Rank the type of ice cream people prefer most on a scale of 1 -7. 1 Normal (ice cream) Sundae Sherbet Gelato (type of Italian ice cream) 2 3 4 5 6 7
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4. Rank the flavors according to their sale on a scale of 1-7. 1 Vanilla Chocolate Butter Scotch Strawberry Others 5. Most of the people prefer to have ice cream with/in? 1 Cup Cones Family Pack Stick Others 6. How frequently do you keep latest variants on the shelf? a) b) c) d) e) f) g) All of the time Very often Often Sometimes Just now and then Rarely Never 2 3 4 5 6 7 2 3 4 5 6 7
7. How do you come to know about the launch of new variants? 1 Company Advertisement Company Salesmen Customer Demand Word of Mouth 48 2 3 4 5 6 7
8. Which brand launches the variants most frequently? 1 AMUL Kwality Walls Heritage Jersey Dinshaws Others 9. The most frequent age group to visit your outlet to buy an ice cream is 1 7-15 years 15-25 years 25-35 years 35-45 years 45 & above 10. Why so? ... 2 3 4 5 6 7 2 3 4 5 6 7
11. On which days a week your outlet is open? Please tick. Monday Tuesday Wednesday Thursday Friday Saturday Sunday
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12. What is the approximate average daily sale (in rupees) of the following brands on weekdays? a) b) c) d) e) f) AMUL . Kwality Walls .. Heritage Jersey ... Dinshaws Others
13. What is the approximate average daily sale (in rupees) of the following brands on weekend? a) b) c) d) e) f) AMUL . Kwality Walls .. Heritage Jersey ... Dinshaws Others
14. How many days an year you keep your outlet closed?
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Rank the following brands on a scale of 1 to 7 for the characteristics given below (1 being the least preferred and 7 being the most preferred in the category)
AMUL 1. 2. 3. 4. 5. 6. 7. Highest advertising allowance Discount off list price Free merchandise Bulk order discount Maximum sales incentives Rewards Grievance redressal
KWALITY WALLS
HERITAGE
JERSEY
DINSHAWS
OTHERS
AMUL 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. High Associated Margins Deep Freezer Facility Trade Promotional Policies Efficient Logistics Product Quality Wide range of Flavors Attractive Packaging Durability of Product Replacement Policy Demanded Products Credit Policy Excess Demand Handling Price Sensitivity
KWALITY WALLS
HERITAGE
JERSEY
DINSHAWS
OTHERS
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1. Name of the shop: 2. Shop Type: Kirana Store Bakery Fast Food Joint Restaurant Others..
3. Locality: 4. Name of the owner: 5. Age: 6. Sex: 7. Education Qualification: 8. My ice cream business is: Exclusively mine Supported Yes/No
9. Does anybody provide you counter assistance?
10. If Yes, who is the concerned person..
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ANNEXURE II- FACTOR ANALYSIS (TRADE PROMOTIONAL POLICIES)
Factor Analysis:
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .577
Bartlett's Test of Sphericity
Approx. Chi-Square df Sig.
37.973 21 .013
Com m unalitie s Initial Highes t_advertisement_ allow ance Dic ount_of f _lis t_price Free_merchandis e Bulk_order_dis count Max imum_sales _ incentiv es Rew ards Grievance_redres sal 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Ex traction .556 .630 .769 .626 .361 .449 .622
Ex traction Method: Principal Component A nalys is .

Total Variance Explaine d Initial Eigenvalues Total % of Variance Cumulative % 1.677 23.960 23.960 1.265 18.075 42.035 1.070 15.292 57.327 .835 11.924 69.251 .816 11.660 80.911 .776 11.083 91.994 .560 8.006 100.000 Extraction Sums of Squared Loadings Total % of Variance Cumulative % 1.677 23.960 23.960 1.265 18.075 42.035 1.070 15.292 57.327 Rotation Sums of Squared Loadings Total % of Variance Cumulative % 1.613 23.042 23.042 1.297 18.528 41.570 1.103 15.757 57.327
Component 1 2 3 4 5 6 7
Extraction Method: Principal Component Analysis.
53
Scree Plot
1.75
1.50
Eigenvalue
1.25
1.00
0.75
0.50 1 2 3 4 5 6 7
Component Number
Component Matrix(a) Component 1 Highest_advertisement_allowance Dicount_off_list_price Free_merchandise Bulk_order_discount Maximum_sales_incentives Rewards Grievance_redressal .144 .697 -.284 .754 .594 2 .722 -.198 .002 -.231 -.062 -.477 .648 3 -.121 .324 .830 .069 .062 .243 .441
-.402 .082 Extraction Method: Principal Component Analysis. a 3 components extracted.
54
a Rotated Com pone nt M atrix
1 Highes t_advertis ement_ allow ance Dicount_of f _lis t_price Free_merchandis e Bulk_order_dis count Max imum_sales _ incentiv es Rew ards Grievance_redress al -.079 .783 -.060 .780 .587 -.194 .022
Component 2 .741 -.021 -.160 -.012 .104 -.593 .599
3 -.031 .132 .860 -.131 -.076 .243 .513
Ex traction Method: Principal Component Analys is. Rotation Method: Varimax w ith Kais er Normalization. a. Rotation converged in 4 iterations.
Com pone nt Tr ansform ation Matrix Component 1 2 3 1 .935 -.254 .249 2 .285 .953 -.097 3 -.213 .162 .964
Ex traction Method: Principal Component Analys is. Rotation Method: Varimax w ith Kais er Normalization.
55
ANNEXURE III- FACTOR ANALYSIS (CHARACTERISTICS)
Factor Analysis:
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .660 Bartlett's Test of Sphericity Approx. Chi-Square df Sig.
295.037 78 .000
Communalities Initial Margin Deep_freezer_facility Trade_promotion_policies 1.000 Logistics Product_quality Wide_range_of_flavors Attractive_packaging Durability_of_product Replacement_policy Demanded_products Credit_policy Excessive_demand_handling 1.000 Price_sensitivity 1.000 .734 .657 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 .769 .593 .717 .705 .733 .612 .692 .756 .649 1.000 1.000 Extraction .725 .420
Extraction Method: Principal Component Analysis.
56
Total Variance Explained Extraction Sums of Squared Initial Eigenvalues Loadings Compon % of Cumulativ % of Cumulativ ent Total Variance e% Total Variance e% 1 3.054 23.491 23.491 3.054 23.491 23.491 2 1.783 13.717 37.208 1.783 13.717 37.208 3 1.537 11.824 49.032 1.537 11.824 49.032 4 1.237 9.516 58.548 1.237 9.516 58.548 5 1.153 8.866 67.414 1.153 8.866 67.414 6 .931 7.162 74.576 7 .721 5.545 80.121 8 .637 4.901 85.021 9 .484 3.724 88.746 10 .458 3.526 92.271 11 .384 2.951 95.222 12 .334 2.567 97.789 13 .287 2.211 100.000 Extraction Method: Principal Component Analysis. Rotation Sums of Squared Loadings % of Cumulativ Total Variance e% 2.587 19.903 19.903 1.879 14.450 34.353 1.661 12.779 47.133 1.366 10.507 57.640 1.271 9.774 67.414
Component Matrix(a) Component Margin Deep_freezer_facility Trade_promotion_policies Logistics Product_quality Wide_range_of_flavors Attractive_packaging Durability_of_product Replacement_policy Demanded_products Credit_policy Excessive_demand_handli ng Price_sensitivity 1 -.604 -.385 .176 -.291 .767 .760 .774 .580 -.211 -.309 .054 -.289 2 .453 -.021 .348 .608 .246 .185 .209 .340 .602 .294 .427 .446 3 -.278 -.387 .031 -.184 -.049 .103 .000 -.084 -.472 .755 .035 .663 .144 4 .078 .344 .505 .310 .253 .149 .161 -.333 -.240 -.009 -.668 .087 .164 5 .268 .062 -.601 .093 .039 .246 .254 .205 -.063 .058 -.130 -.067 .714
-.311 -.055 Extraction Method: Principal Component Analysis. a 5 components extracted.
57
Scree Plot
Eigenvalue
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Component Number
58
Rotated Component Matrix(a) Component 1 Margin Deep_freezer_facility Trade_promotion_policies Logistics Product_quality Wide_range_of_flavors Attractive_packaging Durability_of_product Replacement_policy Demanded_products Credit_policy Excessive_demand_handling Price_sensitivity -.257 -.249 .174 .055 .800 .827 .849 .599 -.067 -.114 -.001 -.071 .007 2 .775 .439 .168 .736 -.048 -.144 -.080 -.018 .647 -.015 .041 .126 .220 3 .099 -.219 .164 .189 -.100 .004 -.078 -.103 -.144 .855 .121 .838 .211 4 .032 -.342 -.183 -.046 -.025 -.002 .004 .485 .485 .042 .795 .050 -.323 5 -.217 -.010 .807 .102 .253 .010 .021 -.086 .111 -.097 .024 .089 -.678
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 6 iterations.
Component Transformation Matrix
Component 1 2 3 4 5
1 .845 .340 .038 .223 .345
2 -.418 .691 -.473 .282 .211
3 -.239 .406 .876 .102 .023
4 .121 .434 -.063 -.878 -.151
5 .200 .230 -.063 .300 -.902
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
59
CHAPTER 7 REFERENCES
60
7. REFERENCES
1. (n.d.). Retrieved 4 6, 2010, from http://www.amulicecream.in/about_history.html 2. (n.d.). Retrieved 5 6, 2010, from www.wikipedia.org. 3. (n.d.). Retrieved 5 10, 2010, from www.google.co.in: 222.google.co.in 4. About History. (n.d.). Retrieved 4 6, 2010, from
http://www.amulicecream.in/about_history.html: http://www.amulicecream.in/about_history.html 5. Amul Ice Cream: Marketing Strategy, 506-031-1 (2006). 6. Company Profile. (n.d.). Retrieved 4 4, 2010, from http://www.creamlinedairy.com/: http://www.creamlinedairy.com/cprofile.html 7. Dinshaw's. (n.d.). Retrieved 4 3, 2010, from http://www.facebook.com/:
http://www.facebook.com/pages/Dinshaws/93914427946?v=info 8. Food Industry Overview. (n.d.). Retrieved 4 4, 2010, from : http://www.workosaur.com/: : http://www.workosaur.com/food-industry-overview/ 9. Ice Cream Industry in India. (n.d.). Retrieved 4 22, 2010, from http://www.dare.co.in/: http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-industry-inindia.htm 10. Indian Dairy Industry. (n.d.). Retrieved 4 16, 2010, from http://www.aavinmilk.com/: http://www.aavinmilk.com/dairyprofile.html 11. Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Marketing Management- A South Asian Perspective. New Delhi: Pearson education, Inc. 12. Kwality Walls Ice Cream. (n.d.). Retrieved 4 2, 2010, from
http://www.kwalitygroup.com/: Cream/Default.aspx
http://www.kwalitygroup.com/Kwality-Walls-Ice-
13. Zikmund, W. G. (2003). Business Research Methods. New delhi: Cengage Learning India Private Limited.
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A REPORT ON

MARKET ANALYSIS OF AMUL ICE CREAMS IN HYDERABAD: A COMPARATIVE STUDY

GUJRAT CO-OPERATIVE MILK MARKETING FEDERATION LTD (GCMMF) AMUL

MARKET ANALYSIS OF AMUL ICE CREAMS IN HYDERABAD: A COMPARATIVE STUDY

GUJRAT CO-OPERATIVE MILK MARKETING FEDERATION LTD (GCMMF) AMUL

DATE OF SUBMISSION May 14, 2010

Project Coordinator: Prof. Trilochan Tripathy IBS Hyderabad

Date: May 14, 2010 Place: Hyderabad

1.2 OBJECTIVES OF THE STUDY ................................................................................................................. 2 1.3 RESEARCH METHODOLOGY .......................................................................................................... 2

1.1 PURPOSE AND SCOPE OF THE PROJECT

1.2 OBJECTIVES OF THE STUDY

To seek general perception of retailer towards AMUL ice cream.

Dicthomus Open ended questions

1.4 LIMITATIONS OF THE STUDY

1.5. LITERATURE REVIEW

CHAPTER 2 INDUSTRY ANALYSIS

Exports (in US million $)

Figure 1 The Indian dairy exports and projected exports volume.

2.2 AN INTRODUCTION TO THE INDIAN ICE CREAM INDUSTRY

Market Share (percent of Branded Market)

Figure 2 Market share of various brands Source:http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-industry-in-india.htm

Market Share ( in Rs. Crore)

Figure 3 Market share of Branded and Grey market

Market Share of Flavors

Figure 4 Market share of various Flavors

2.3 MAJOR PLAYERS IN THE INDIAN ICE CREAM INDUSTRY

2.4 MAJOR PLAYERS IN THE HYDERABAD ICE CREAM MARKET

CHAPTER - 3 MAIN TEXT

3. PRIMARY TABULATION AND INTERPRETATION

Kwality Walls 17% Heritage 6% Jersey 3% Dinshaw's 3%

Figure 5 Market share of single and multi brands retailers

Source: Field Survey. 2010

Figure 6 Single and Multi brand outlet of various brands

Source: Field Survey. 2010

3.2 DEMOGRAPHIC DISTRIBUTION

Figure 8 Incidence of visits of various age-group

Source: Field Survey. 2010

3.3 TYPE OF ICE-CREAM

Type of Ice creame

Figure 9 Preference of type of ice- cream

Source: Field Survey. 2010

Figure 10 Sales of the various flavors

Source: Field Survey. 2010

3.5 TYPE OF PACKAGING

Figure 11 Preference of various packagings

Source: Field Survey. 2010.

3.6 SOURCE OF INFORMATION ABOUT NEW VARIANT TO THE RETAILERS

. 700 600 500 400 300 200 100 0

New Variants' Information Source

Figure 12 New variants' information source

Source: Field Survey. 2010

Source: Field survey 2010.

SALES (per annum)

Kwality Walls Dinshaw's

Figure 14 Annual sale of various brands seperated in weekdays and weekend.

Source: Field survey 2010.

No. of weekend / No. of weekdays

3.8 FACTOR ANALYSIS

Back-up policy Complimentary Promotion

Factor3 Factor 4 Factor 5

Demand management Credit Trade promotion

o Trade promotion policy

3.9 FACTORS AT A GLANCE