Marketing Strategy of Amul – Taste of India

Research Paper

AbstractUnderstanding the Marketing strategy of Amul – India’s most trusted Brand in diary product with turnover of $2.5bn

Nidhi Sharma

Table of ContentsIntroduction.................................................................................................................................................2

Value opportunity and discovery.................................................................................................................2

A. Customer and Industry research.....................................................................................................2

B. Market segmentation and selection................................................................................................2

C. Branding affirmation and positioning..............................................................................................3

D. Competitive positioning...................................................................................................................3

Value creation.............................................................................................................................................4

A. Business Plan...................................................................................................................................4

B. Offer design and creation................................................................................................................4

C. Life cycle planning...........................................................................................................................5

D. Go to market planning.....................................................................................................................5

E. Innovation and differentiation.........................................................................................................5

Value communication..................................................................................................................................5

A. Media and influencer out reach......................................................................................................5

B. Thought leadership development....................................................................................................6

C. Industry segment communication...................................................................................................6

Value selling................................................................................................................................................6

Value recognition........................................................................................................................................6

A. Experience management.................................................................................................................7

B. Customer council and communities................................................................................................7

Social Media................................................................................................................................................7

Technology..................................................................................................................................................7

Metrics........................................................................................................................................................7

Conclusion...................................................................................................................................................8

References...................................................................................................................................................8

IntroductionAmul, meaning ‘priceless’ in sankrit, is India’s most trusted Brand in diary product with turnover of $2.5bn. The said Brand links the old and new India via Gandhian philosophy ‘co-operative rural villages’ with today’s emerging 21st century economic powerhouse. Formed in 1946, it is a Brand managed by the Gujarat Co-operative Milk Marketing Federation Ltd. (‘GCMMF’), which today is jointly owned by 3M milk producers in Gujarat.

The Amul Girl, its cartoon mascot, is India’s most famous advertising mascot and has helped turned the company she represents into one of the country’s most trusted brands. The Amul girl with her regular appearance on billboard, tongue-in-cheeks comments on present-day events, stands for the very fight its parent was born to counter. No wonder it’s ‘the utterly buttery’ ad series is the most sustained promotional campaign till date, finding a place in ‘Limca Books of Records and Guinness Books of Records.

Let’s understand how its marketing strategy fits in the framework of what we studied in the class.

Value opportunity and discoveryA. Customer and Industry researchDairy is the top ranking commodity in India and the dairy sector is about US 1.5M and is growing at 5M tons per annum over the next 15 years. The sector is highly competitive with a lot of regional players and the dairy products have a short shell life. The customers are very choosey and very sensitive to price and quality.

B. Market segmentation and selectionHindi speaking belt was a critical segment for Amul for a very long time. Hence most of its products are targeted for this segment. When the Brand was launched, the company had taken a conscious decision to be within the northwest region of India. Only once achieving sufficiency in these regions, did they expand their operations to South since it had a major regional competitor named ‘Nandini of Karnataka’. Within the geographical/ demographic segments, Amul had further sub-segments as per psychology i.e. Kids, Women, Calorie conscious, Youth and Health conscious. Amul also had industry based market segments i.e. Milk and Butter/ Cheese/ Ghee.

Amul started to diversify only once India achieved sufficiency in Milk production, thus, keeping the Indian values intact. No-wonder the Brand command huge respect in India and is also the most trusted brand in Asia. Only recently, has it diversified into overseas markets. The Brand target initially was low and middle income people with most its products priced accordingly and catered to regional and Indian audience. Later on with increase in the per capita income of the Indian consumers, it incorporated premium products and diversified into non-Indian segments like Pizza, cold drinks and cheese amongst others.

The persona that Amul used to market its product has evolved with changing women role in the country.

C. Branding affirmation and positioning

The brand is so strong and enjoy so much trust that it has become a ‘family brand’ in India. It represents the following three attributes (Meta values): Trust, Indianness and Quality. It’s logo ‘Taste of India’ along with its bubbly girl as a mascot are the USP. The print advertising that the company uses to be in visibility is consistent with the logo and mascot with pun comments on current issues of the country meaning that the advertising strategy of Amul is in line with branding strategy of Amul. Every Amul stores displays Mahatma Gandhi’s pic re-affirming its co-operative society business model invented by Gandhi.

D.

Competitive positioningAmul has a number of competitors ranging from local to national and international level for all its products. Till date, Amul Butter is the No 1 Brand in the butter category in India. Amul has different competitors in different segments.

The perceptual map gives the position of Amul with respect to its competitors.

As can be seen in the map above, in the price range, Amul has Britannia and Vadilal as competitors: Amul prices are reasonable. In the Quality range, Amul has a lot of competitors: HUL, Cadbury, Nestle and HUL. Amul is able to be the most trusted brand leveraging on its Brand Value Preposition .i.e. Indianness, Quality and Trust. Secondary attributes like availability and freedom quite accurately resonates the brand. The Amul print advertising is consistent and align with the mission of the Amul company. The Amul mascot ads with a mocking comment on the current issue going on in the country affirms Amul’s image of being innovative.

Elements of Brand:Name – Amul

Logo – Tag line – The Taste of IndiaMascot – White ponytailed polka dotted girlJingle – Utterly Butterly, Delicious AmulBrand Strategy – Branded House

. Kwality

. Mahananda

. Mother Dairy. Amul. Britannia

. Cadbury

. Nestle

. Vadilal

. HUL

Low Price

Low

High

Quality

Value creationA. Business Plan

Later on, once India achieved sufficiency in milk production, the company started to export milk to other countries like Singapore, Malaysia, Mauritius, China etc. The company business model was heavily dependent on the local network of milk distributors since poor farmers did not have enough money to travel and sell a perishable product like milk to far off places. Thus, the company was able to save on the huge money it would had to shell out in-case it had to source milk from a diary. The average milk intake from a farmer is just 3 litres per day and the farmer decides the volume. Since the volume of farmers is so huge, even if some farmers fail to provide milk on certain days the company could easily meet its demand. The business model was meant to be a win-win prepositions for all the stakeholders involved. More than the business model, GCMMF is an institution by itself, formed by the farmers to protect their interest from price exploitation by retailors.

B. Offer design and creationAmul, ‘Branded House’, has a strong product portfolio. The portfolio consist of following brands:

Amul Milk, Amul bread spreads, Amul Cheese, Amul Milk, Amul Kool and its variants, Amul pro, Amul ice cream, Amul Paneer, Amul Dahi, Amul Ghee, Amul Milk powders, Amul Nutramul, Amul mithai mate, Amul chocolates, Amul butter milk, Amul chocolate, Amul Basundi, Milk Powders, Malai Paneer, Amul skrikhand, Kool Café, Amul Masti Chaas, amongst others.

Amul has some of the similar products in its portfolio that lead to cannibalization of its sales but the Brand is not much affected by it since it aims to be a ‘Family Brand’ and want to cover maximum audience in order defend itself from competitors .e.g. Amul Kool vs Amul Nutramul, Milk Drinks, Amul cheese spread vs Amul processed spread, SAGAR vs Amulya. Amul offers a mix of both standard and customized products. Apart from dairy products, Amul has started to diversify into non-dairy products too i.e. Pizza, snacks, instant food, Vegs oils, etc

C. Life cycle planningAmul has a sizable number of products in its portfolio. The chart below, depicts the life cycle of its few products.

Amul’s parent company GCMMF is built on a unique business model which involved more than 16K village co-operative society comprising of 3.2M farmers, 5K distributers and network of 1M retailors. The supply chain is mainly owned by farmers. It has the largest distributer network for any FMCG company. In the mid of 1960’s when the farmers were seeking escape from exploitation from middleman and British style rule of Zamindars on the milk sector, these farmers took the help of a local leader ‘Sardar Patel’ and Syrian Christian from Kerala ‘Verghese Kurien’ to build a professionally run, sustainable supply chain.

Amul Mithai mate, milk powder, Amul Dahi, Buttermilk, Amul Kool, Amul Kool flavored bottle, Amul Lassi milk, Basundi, Amul Malai

Paneer, Amul Milk, Amul ice creams

Introduction Growth Maturity Saturation & Decline

Though Amul Butter is at the maturity stage, it still is the Number 1 Brand in the Butter/ Ghee/ Cheese segment. Its commands a market share of more than 80%, even though, products in the Maturity stage start to lose its market charm.

D. Go to market planningAmul offers a range of products in various categories like ice- cream, milk powders, Lassi, Cheese, Mithai, Pizza etc. The prices of fresh products with short shell life is reasonable, linked with the per capita income of middle class consumers in India.

E. Innovation and differentiationAmul keeps on innovating and adding new products in its portfolio, in line, with ever evolving consumer taste. One of the strategies it uses is have rotation plan every 3-4 years with slight variation in product taste. Latest addition is Amul’s ATM machine that gives 300 ml pouch of fresh milk in 0.17 dollars. Amul Parlor were launched in 2002 and contributed to 3% of Amul’s total turnover by 2009 (approx. 5000 in number now). Ever holiday season, a new product or a flavor in existing variety of product is added. Quality, Indianness and reasonable Pricing are the attributes by which Amul differentiates itself from its consumers. The trust that Amul enjoys among its consumers is based on its business model. In spite of immense competition, the Brand is able to survive and thrive because of its Glocalization reach of its business model. The business model also acts as an entry barrier for its competitors. Amul recently has undertaken itself for strategic partnerships and signed an agreement with WALMART to stock its shelves with Amul products. It has also tied up with Glaxo to sell baby products.

Value communicationA. Media and influencer out reachThe Media used was television and billboard ads initially. Later-on, Amul incorporated social media to reach its customers. The Amul website had a section named ‘Cricket, dedicated for cricket crazy fans which depicted world cricket rankings. Needless to say, India is a cricket crazy country.

Amul was also the sponsor for the following:

IPL matches London Olympics – official sponsors of Indian teams; Netherlands Cricket Team in World Cup

2011 Amul Master chef and Amul Star voice of India Amul Maharani contest 2009 Amul Chef of the Year

Bread spreadAmul Nutramul, cheese, Spray, Chocolate Milk, Kool Koho, Amul Kool Thandia, Amul Chocolate, Cooking Butter, Amul Pizza, Narmada Neer

Amul Butter, Amul Milk Amul Shakti,

Jaldara

Food Festival 2009 Advertising partners for Formula 1 Amul food festival Amul sponsored a singing competition ‘ Amul Star Voice of India’

The IPL online across both boxtv.com & youtube.com/indiatimes combined recorded a 52% growth viewership over 2012. What was interesting was Amul’s was on its toes to keep pace with IPL matches rolling out witty ads in less than a day and having them on its billboards the very next day. The likes on the facebook page of these ads conveyed the reach and effectiveness of Amul’s marketing strategies.

B. Thought leadership developmentIndia is the land with more than 1600 languages with Hindi being the official language. The ‘Utterly Butterly’ Amul ads were also designed in regional languages with English translations for urban cities. All the ads conveyed the same pun and were consistency. Further, some ads captured the region-specific current issue to create more visibility and customer intimacy.

C. Industry segment communicationSince the ads were designed to capture the hot selling current issue, it catered to most of the industry segment after-all who does not want to be up-to-date. During IPL season, ads centered around cricket whereas during election season, they centered on politicians.

Value sellingAmul used catchy and innovative ads to sells its products. The ‘Amul girl’ always used ‘pun’ to comment on latest news or current events. The ads conveyed the Indian values along with creating awareness about the issue the country was facing. Since most of the billboards ads were positioned on major highways, it increased the visibility for Amul and generated wide opinions and emotions among publics. Amul ads were the talking points for news reporters, politicians, student community, homemakers etc. Major activity of communication is done through its advocacy and promotional films. Amul has been consistent in its advertising campaign using the tag line ‘The Taste of India’ and ‘Amul Girl’ in all its ads till date. The metrics of these advertisement campaign tells us why huge marketing budget, ad campaign not always necessary to sell your product or build a trusted Brand. Amul’s advertising strategy is in line with the concept of Umbrella Branding. This saves the company the cost of creating a new advertisement for each of its product. What is surprising is that its advertising budget is less than 1% of its turnover. Amul quality products are its advertisement. Considering the cost, the reach of Amul’s ads is very high. Amul used inbound marketing advertisements to create awareness about its Brand via its advertisement. Though inbound marketing was invented by Brian Halligan and Dharmesh Shah of Hubspot, Sylvester daCunha (the brain behind the creation of Amul girl) used these techniques in a raw market in 1960s to create Brand awareness for Amul.

Value recognitionA. Experience managementIn 2013, one of Amul’s consumer from Gujarat uploaded a facebook video of contaminated milk packet. The video went viral inviting comments from all sections of society including the Food and Drug Association in India. Amul took instant redressal measures which included sending its quality inspector to the victim’s place and finding the root cause of the problem. On finding that the milk packet was well beyond its expiry date, Amul made an announcement, in interest of its consumers, on its website including leading newspapers and magazine, to take note of expiry date of short shell life products. Thus, Amul was able to save its Brand from contamination as well as educate its consumers about the shell life of perishable products.

B. Customer council and communitiesAmul has a customer grievance cell online as well as offline. The cell assures redressal of customer complain and grievance within a span of 48 hrs. Amul has a facebook page and twitter page. Both are used as a medium to interact with its consumers and well as to know how the product is faring in the market.

Social MediaAmul used the social media to market its products via s ‘Utterly Butterly’ Amul ads. There were pages on Facebook, twitter and orkut. People were joining, liking and commenting on its ads on these portals. It used Youtube advertising for first time in 2015 to create a 3 min video https://www.youtube.com/watch?v=Y_I1omigDRU. Most of the Brand awareness for Amul is done through ‘earned media’. Private Blogs, Fb and twitter comments on Amul’s witty ads create quite a sensation in the country. The ads created Epiphany, Awareness and Interest which brought the people to the stores to buy Amul. The quality at reasonable price created confidence and loyalty among its consumers. No wonder, Amul had a very high ‘Customer Life Time Value’ since its customers were loyal across generations.

TechnologyThe technology used to promote the Brand was internet (Amul website) and TV. Youtube, facebook, orkut, linkedin, etc were used to build Amul ads’ fan base.

MetricsSome major metrics which convey the effectiveness of Amul’s ‘Utterly Butterly’ ads:

Social media

14 brand post 19K total engagement on brand post 1,361engagement/ post 1.2M Fan page 762 Avg. people talking about this (‘PTAT’) 0.1% PTAT as % of Fans 1.5% Engagement as % of Fans Most engaging content type is photos ‘Utterly buttery Amul girl ads’

Survey

In the survey conducted over 9 markets, in the age group of 15 to 64 years and covered 12 product and services categories - ranked Amul as Number 1 Brand amongst 1000 Brands in Asia

ConclusionThe above parameter analysis resonates that to be a strong Brand, a company needs to have a strong business model, earn trust of people by being consistent with its missions and attributes for which it stands for. It does not always need a huge marketing budget to communicate with its customers and build customer loyalty.

By applying the learnings from the class, I would recommended the following to Amul for its international expansion:

Have a digital marketing budget for foray in the international markets Personas needs to be as per the local international markets Creating ads as per the ties of India and that of international market. E.g. Ads highlighting

President Obama visit to India Partner with major players like Targets, Costco, Whole Foods to have a demarcated place with

Amul branded products to increase visibility of the brand.

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