MARKETING OF MILK - AMUL

INTRODUCTION This case study tells the origin and the history of the
milk Amul which has established a largest business of milk in the world. Amul has faced so many problems during its initial stages. Then for surviving they used such kind of marketing strategy so that they could come over the problem and it launched successful products like Amul Sathi, Amul gold full cream milk, Amul Shakti, Amul Taaza. Amul sold its product at the same price as that of loose milk that brought Amul to the success. Amul never compromised with the quality. Amul (Anand Milk Union Limited) a dairy cooperative movement was formed in 1946 in India. It was setup by Gujarat Cooperated Milk Marketing Federation (GCMMF) on Ahmadabads outskirts. The objective of GCMMF was operation flood is to spread the milk market in the methods. Amul has become the largest and most modern unit in Asia. Operation flood was initiated in 1970 and the NDDB (National Dairy Development)

The Problems Faced By Amul When first Amul milk was introduced
to the city. It was in colourful pack which was different from others. In that era brand preference was weak. So Amul was just another brand. A large segment of consumers who were illiterate. They were not aware to its superiority. So the consumer did not boost the sales due to lack of information. The competition was so intense that all other 20 brands sold the product at the same price. When the market leader changed it all other brands did same as they also follow that same price. Like this Amul continued to be vulnerable. For creating brand distinctiveness the pouches bore an expensive four colour design which was also used on insulated vans. While keeping in mind they

used colours and images like early morning symbols birds, flowers, sun, buffalo,, instead of making the pouch design copy heavy so that product should be easy to remember for consumers. Bright colours were used for varieties like blue colour indicated toned milk. Like this the brand started making an identity an image for itself. Even though the brand did not get success reason being the unawareness of consumers about varieties like toned milk and standardised milk. Consumers named standardised milk as bhainswala or harawala as it was green coloured and bore the picture of buffalo. The rival brands took the advantage of this n soon they stated manufacturing the pouches in same colour and bearing identical symbols. And when a consumer asked for bhainswala or harawala then the retailer could hand out another brand and pocket a higher margin. Milk is the primary need for the housewife as it is used early morning for - morning tea, to serve milk to children and for them with breakfast. And if is not available at that time then another brand is preferred which will be available at that time. So after bearing these all troubles that Amul had to reemphasise and redesign its marketing strategy.

Surviving in market by using marketing strategies 1) In 1994 GCMMF started removing restriction of the crate deposit and geographical limit and giving incentives to the field staff to appoint new retailers. Then the retailer strength doubled to 1200. The Company plans to increase the number to 2000 or one retailer per 300 household. 2) GCMMF capitalised on the upcoming settlements on city outskirts Thaltej, Gurukul and Vastrapur. 3) Still at the point of vadilal had 1500 outlets to sell ice cream so Amul planned to reach 2000 retailers. 4) The facts that the new settlements had poor roads and also were far off places added to the distribution costs but still going against the odds it

was able to open 170 retail outlets in one year the result, sales of 10000 LPD just there in those areas. 5) For keeping the high overheads low as well as limit outsourcing low it had distributers who would supply milk to the retailers. An invoice would be raised on distributers who would lift milk against an advance pay order in addition to two days banks gurantee. This minimised distributers hold on the distribution system.

Successful launches made by amul.

JUNE 1994

DOUBLE TONED MILK AMUL S FIRST PREMIUM BRAND

AMUL SATHI AMUL GOLD FULL CREAM MILK

PRICE Rs 9/lit

AUGUST 1994

PRICE RS 11/LIT

SAME YEAR

AMUL SINGLE TONED MILK

RS 1O/LIT AMUL SHAKTI

AMUL STANDARDISED OCT 1994 MILK AMUL TAAZA RS.9/LIT

THE NEW PLANS Introduction of the premium brand made it so successful that it easily overtook the 20 year old market leader shreesth. It outperformed its competitor in the ratio 2:1.

AMULs achievements were touching new heights as all the products that it launched were highly successful According to one of the objectives set by Amul wanted its customers to switch to pouched milk than loose milk. Amul sold its pouched at the same price as that of loose milk. As soon as the plan was implemented the competitors followed and there was an outstanding marketing activity that started. Next Amul targeted the labor class. Amul introduced the 200 ml pouches against the 500 ml pouches as the organization did want the segment to be left free for its competitor to capitalize. Till today the 200 ml pouches sells more than 11000 lit/day.

ACHIEVEMENTS

2.8 million milk producer member families 13,759 village societies 13 District Unions 8.5 million liters of milk procured per day Rs. 150 million disbursed in cash daily GCMMF is the largest cooperative business of small producers with an annual turnover of Rs. 53 billion The Govt. of India has honoured Amul with the Best of all categories Rajiv Gandhi National Quality Award. Largest milk handling capacity in Asia Largest Cold Chain Network 48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets Export to 37 countries worth Rs. 150 crores

Ques 1. Describe consumer behaviour in the context of a commodity like mik? Ans. Consumer behaviour in the context of a commodity like depends mainly upon the factors. A) Need or problem As we know necessity is the mother of all inventions, so the first and foremost thing is consumers need or demand which creates the buying decisions. A product like milk is a necessity good. It is needed in daily life. Secondly It is needed for each n every group or age of people. As it is an essential thing for infants. In fact in every house day starts with morning tea. Thirdly it depends upon what types of product a consumer want. For example some people need low fat milk rather some will go for high. Their needs vary not only with age but also with lifestyle and health condition like the diabetic or the old people would prefer low fat milk like one introduced by Amul under the name of Amul Sathi while for those who prefer high fat milk, Amul introduced its first premium branded product, Amul Gold Full Cream milk, and it is a base product for other based product also like chocolates, sweets etc. B) Information Consumer behaviour also depends upon information that a consumer have about a particular product. This information includes both internal and external information like what type of quality they like, they want. What are the products that are available what the views of others regarding that product etc are? Consumer behaviour also depends upon the message that is given by a particular brand. Like GCMMF started printing the fats & content of the milk on the pouches to educate the people about the difference in their offerings from the rest. C) Alternatives And Solutions Then it comes on selecting the brands whether that product is available in their place or not. Consumer behaviour also depends upon the price of the product that whether the particular product worth that price or not. D) Value Addition/ Added Advantages Consumer behaviour also depends upon the extra features provided with a particular product. It means the best alternative with value addition to the benefits of customers or society.

Ques2. What are the market segments that Amul can penetrate? Are there any other segmentation alternatives available to Amul? Ans. Following are the market segments that Amul is penetrating A) Education based segmentation A wide variety consumers also belong to illiterate group. So far their convenience Amul has used various early morning symbols like birds, flowers, the sun and buffalo on the pouches or packets. For increasing consumer awareness, Amul various symbols colours as standardised milk pouches which were green and bore the picture of a buffalo are known as bhainswala or harawala B) Product based segmentation Another basis for market segmentation of Amul is product based segmentation. The act permits four types of milk double toned milk, standardised milk. No other dairy in India sells more than two types so Amul established a presence in all existing segments but also created fresh ones. This helped during price hike because consumers drop from the variety. They favour to a less expensive and yet stay within the Amul job. C) Need based segmentation Amul also segmented its market on the basis of consumers need vary according to their age and health condition. For ex- old and diabetic and blood pressure patients prefer low fat milk, for which Amul introduced Amul Sathi whereas Children prefer full cream milk having high fat. Other alternatives are as follows 1) Geographical Segmentation Geographic segments involves dividing market into different geographical units such as nations, states, regions, countries, cities, neighbourhood. The company can operate in one or a few area, or operate in all but pay attention to local variations. They can consider this segmentation after answering such questions as which geographical as a contains most valuable customers or which distribution channel and promotional media work best in reaching our target cluster in each two. 2) Demographic Segmentation In demographic segmentation the market is divided into group on the basis of variable such as age , family size, family life cycle, gender, income, occupation, religion,

race, generation, social class etc. Consumers wants and abilities change with age. Men and women tend to have different attitudinal and behavioural orientation based partially on genetic makeup and socialization. Each generation is influenced by time in which it grow and demand changes. 3) Psychographic Segmentation Psychographics the science of using psychology and demographics to better understand consumers. In psychographic segmentation, buyers are divided into different groups on the basis of psychological or personality traits, lifestyle, or value. People within the same demographic group can exhibit very different psychographic profiles. 4) Behavioural Segmentation In behavioural segmentation buyers or customers are divided into groups on the basis of their knowledge of attitude toward use of, or response to a product. In fact it is believed that behavioural variables occasions, benefits, user status, usage rate, loyalty status, buyer readiness stage, and attitude are the best starting points for constructing market segment.

Quest3. If you were the marketing chief of Amul, what other innovations would you make in your marketing strategy? Ans. The current marketing strategies followed by Amul are as followsA) Price competitive factor. They charge competitive price in comparison to offer as higher or lower price would result in stoppage of selling and loss. B) Improving the distribution channel like minimising the transportation cost etc, that would result in less selling price. C) Opening 8 to 8 counters to provide steady price milk. Like by providing all the time the product the customer will get satisfaction. D) Launching different milk based brands like chocolates, sweets. E) Opening retail shops in accessible or upcoming areas like Thaltez, Gurukul and Vastrapur. Those areas where milk supply is not adequate sufficient. F) Educating customers on different aspects of quality control involved in milk packaging and distribution like giving the fat content on the pocket and the perishibility dote. G) Using local media such as local T.V. and radio channels, news papers and cable T.V. operations for promotional activities. H) Promoting Amul milk with the retailers and distributors by giving them different gifts and awards for their excellent services. I) School contact programmes and different competitors including the scholarship made it famous among the kids as well as the parents, who are the primary consumer. If I were the marketing chief of Amul , I would prefer some more strategic the following are the strategies a) Organising contest for the regular buyers would help in its promotion. b) Organising blood donation camp under the name of Amul. c) Doing community welfare works. d) Providing different offers to the customers like a particular celebration day offer, a monthly offer etc.

e) Creating beautiful or eye catching advertisements. f) Organising adventures events like quiz competition, beauty context etc.