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

i

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 Varun

Place: Hyderabad

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 Page no.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 Page no.

Figure 1 The Indian dairy exports and projected exports volume...............................................................8Figure 2 Market share of various brands...................................................................................................10Figure 3 Market share of Branded and Grey market.................................................................................10Figure 4 Market share of various Flavors...................................................................................................11Figure 5 Market share of single and multi brands retailers.......................................................................18Figure 6 Single and Multi brand outlet of various brands..........................................................................18Figure 7 Share of single and multi brand retailers in various areas...........................................................19Figure 8 Incidence of visits of various age-group.......................................................................................20Figure 9 Preference of type of ice- cream.................................................................................................21Figure 10 Sales of the various flavors........................................................................................................22Figure 11 Preference of various packagings..............................................................................................23Figure 12 New variants' information source..............................................................................................24Figure 13 Market share of brands.............................................................................................................24Figure 14 Annual sale of various brands seperated in weekdays and weekend........................................25Figure 15 Variables of pecuniary benefits to retailers...............................................................................31Figure 16 Variables of back-up policy........................................................................................................32Figure 17 Variables for complimentary policy factor.................................................................................32Figure 18 Variables related to product characteristics..............................................................................33Figure 19 Variables related to competence...............................................................................................34Figure 20 Variables related to demand.....................................................................................................35Figure 21 Comparison of back-up policies of Amul and Industry...............................................................36Figure 22 Comparison of pecuniary befits to retailers By Amul and industry............................................36Figure 23 Comparison of complimentary policy by Amul and Industry.....................................................37Figure 24 Comparison of competence factor............................................................................................37Figure 25 Comparison of product features................................................................................................38Figure 26 Comparison demand management...........................................................................................39Figure 27 Comparison of Pecuniary benefit by Amul and Kwality walls....................................................40Figure 28 Comparison of back-up policy of Amul and Kwality Walls........................................................41Figure 30 Complimentary policy of Amul and Kwality Walls.....................................................................41Figure 31 Competence factor of Amul and Kwality walls..........................................................................42Figure 32 Product features of Amul and Kwality walls..............................................................................43Figure 33 Demand management of Amul and Kwality Walls.....................................................................43

LIST OF TABLE ` Page no.

Table 1 Comparison of sales and days ratio...............................................................................................25Table 2 Factors for Trade promotion policy...............................................................................................28Table 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

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 Amul’s 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 DESIGNThe 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

2

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

3

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 samplingHere 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 samplingThis 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. In order to get

correct information I had to approach retailers doing business atleast from 1 year and covered all

the area distinctly as chosen by me.

4

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

précised 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 company’s 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.

5

1.5. LITERATURE REVIEWAccording 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.

6

CHAPTER – 2

INDUSTRY ANALYSIS

2. INDUSTRY ANALYSIS

2.1 AN INTRODUCTION TO THE INDIAN DAIRY INDUSTRYToday, 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

India’s 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 Japan’s $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 2007–08

7

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.

2006-2007 2007-2008 2011 (Projected)0

200

400

600

800

1000

1200

113.57210.5

1080

Exports (in US million $)

Figure 1 The Indian dairy exports and projected exports volume.

Source: http://www.workosaur.com/food-industry-overview/

8

2.2 AN INTRODUCTION TO THE INDIAN ICE CREAM INDUSTRYThe 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 Federation’s (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

9

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%.

38%

14%12%

8%

28%

Market Share (percent of Branded Market)

AmulKwality WallsVadilalMother DairyOthers

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.

40%

60%

Market Share ( in Rs. Crore)

Branded MarketGrey 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

10

Vanilla, Strawberry & Chocolate Others0%

10%

20%

30%

40%

50%

60%

70%

60%

40%

Market Share of FlavorsSales

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 ice-

cream 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.

11

Source: http://www.kwalitygroup.com/library/images/Spot_IceCream.jpg

Kwallity Wall’s was launched in 1995 as Hindustan Unilever Ltd ‘s. master brand for ice

creams. With in-depth knowledge of the Indian market and Unilever’s state-of-the-art

technology, Kwallity Wall’s 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 Wall’s 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

12

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. Amul’s 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 Dairy’s facilities to cater to the markets of Faridabad,

Gurgaon and Ghaziabad, but the rift between GCMMF and NDDB prompted Amul to supply the

13

entire demand of the Delhi market and its adjoining regions from Gujarat. Mother Dairy also

stopped sellin Amul’s 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

14

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, Heritage’s 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

15

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.

Dinshaw’s

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, Dinshaw’s has come a long way. The Dinshaw’s plant is ISO and HACCP

certified where Dinshaw’s 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 Dinshaw’s only as a summer

time activity and that too only in Nagpur. But then onwards, it was extended as a year round

16

serving to the palates of Nagpurians. The year 1981 saw next leap when Dinshaw’s moved

beyond just one shop and grew not just in Nagpur’s various pockets, but even in nearby towns.

This continued rise has today led to Dinshaw’s 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

Dinshaw’s ice cream delighted its patrons during 2008-09. Now Dinshaw’s is considered to be

holding appreciating market share in west and central India.

17

CHAPTER - 3

MAIN TEXT

3. PRIMARY TABULATION AND INTERPRETATION

3.1 PENETRATION IN THE MARKET

Amul12%

Kwality Walls17%

Heritage6%

Jersey3%

Dinshaw's3%

Others22%

Multi-branded

37%

AVAILABILITY

Figure 5 Market share of single and multi brands retailers

Source: Field Survey. 2010

Amul Kwality Walls Heritage Jersey Dinshaw's Others0

5

10

15

20

25

30

12

17

6

3 3

22

25 26

3 3

8

19

AVAILABILITY

Figure 6 Single and Multi brand outlet of various brands

Source: Field Survey. 2010

MEH

DIPTNAM

NAMPALLY

BANJARA H

ILLS

LAKRI k

a PUL

VIJAY N

AGAR

VNKT RAM

AN COL

ATTAPUR

LANGAR H

OUSE02468

10121416

AREAWISE AVAILABILITY

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, Dinshaw’s and Heritage is not present at few places. At Attapur

reach of the Others brand is reasonably better than all other brands.

19

3.2 DEMOGRAPHIC DISTRIBUTION

07-15 15-25 25-35 35-45 45 above0

100

200

300

400

500

600

700Age Group

Figure 8 Incidence of visits of various age-group

Source: Field Survey. 2010

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.

20

3.3 TYPE OF ICE-CREAM

43%

36%

12%

9%

Type of Ice creame

Normal Sundae Sherbet Gelato

Figure 9 Preference of type of ice- cream

Source: Field Survey. 2010

This is an attempt to study the preference of type of ice cream. There are four type of ice-

cream 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 ice-

creams 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.

21

3.4 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.

22

28%

20%25%

18%

9%

FlavorVanilla Chocolate Butter Scotch Strawberry Others

Figure 10 Sales of the various flavors

Source: Field Survey. 2010

3.5 TYPE OF PACKAGING

27%

27%

27%

20%

PackagingCup Cones Family Pack Stick

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 Ice-

cream 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 retailer’s 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

23

.

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 company’s initiative are less than the customer’s 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

24

COMPONY ADDS COMPONY SALESMAN CUSTOMER DEMAND WORD of MOUTH0

100

200

300

400

500

600

700

New Variants' Information Source

Amul35%

Kwality Walls30%

Dinshaw's4%

Jersey4%

Heritage4%

Others23%

Percentage of sale

Figure 12 New variants' information source

Source: Field Survey. 2010

Figure 13 Market share of brands

Source: Field survey 2010.

A 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 Dinshaw’s, 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.w

eekd

ays

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ken

d

wee

kday

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Amul Kwality Walls Dinshaw's Jersey Heritage Others

0

2000

4000

6000

8000

10000

12000

SALES (per annum)

Ru

pe

es

( 0

00

)

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 No. of weekend / No. of weekdays6130/11490 = 0.53 100/260 =0.38

5350/10060 = 0.53 100/260 =0.38

820/1430 = 0.57 100/260 =0.38

520/1290 = 0.40 100/260 =0.38

830/1350 = 0.61 100/260 =0.38

4070/7670 =.054 100/260 =0.38

25

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 sales-

promotion. 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 manufacturer’s product.

Discount Off list Price

26

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:

1) Pecuniary benefits to Retailer

27

2) Back-up policy

3) Complimentary promotion

Table 2 Factors for Trade promotion policy

Factor No. Factor Name VariablesFactor 1 Pecuniary Benefits to Retailer o Discount Off list Price

o Bulk Order Discounto Maximum Sales Incentives

Factor 2 Back-up policy o Highest Advertising Allowanceo Grievance Redressal

Factor 3 Complimentary Promotion o Free Merchandiseo Rewards

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-à-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 company’s logo or company’s 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.

28

3.8.2 CHARACTERISTICS OF ICE CREAM INDUSTRYIce 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

29

Table 3 Factors for ice cream industry Characteristics

Factor No. Factor name Variables

Factor 1 Product Feature o Range of flavorso Attractive Packagingo Durability of the Producto Quality of the Product

Factor 2 Competence o Margino Deep-freezero Logisticso Replacement policyo Price sensitivity

Factor3 Demand management o Demanded producto Excessive demand handling

Factor 4 Credit o Credit policy

Factor 5 Trade promotion o Trade promotion policy

30

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.

Discount offlist price Bulk order discount Incentive0

50

100

150

200

250

300

Pecuniary Benefits

Figure 15 Variables of pecuniary benefits to retailers.

Source: Field Survey. 2010

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

31

The graph below shows the average of the ratings given to each of these factors by the respondents.

Advertisement allowance Greivance redressal0

50

100

150

200

250

Back-up policy

Figure 16 Variables of back-up policy.

Source: Field Survey. 2010

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

The graph below shows the average of the ratings given to each of these factors by the respondents.

Free merchandise Rewards162

163

164

165

166

167

168

169

170

Complimentary Policy

Figure 17 Variables for complimentary policy factor

Source: Field Survey. 2010

32

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 CHARACTERISTICSProduct 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

The graph below shows the average of the ratings given to each of these factors by the respondents.

Product quality Range of flavors attractive packaging Product durability0

100

200

300

400

500

600

Product Feature

Figure 18 Variables related to product characteristics.

Source: Field Survey. 2010

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

33

Replacement

Price

The graph below shows the average of the ratings given to each of these factors by the

respondents.

Margin Deep-freezer Logistics Replacement Price senitivity0

100

200

300

400

500

600

Competence

Figure 19 Variables related to competence

Source: Field Survey. 2010

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.

34

The graph below shows the average of the ratings given to each of these factors by the respondents.

Demanded product Excess Demand handling390

400

410

420

430

440

450

460

470

Demand Management

Figure 20 Variables related to demand.

Source: Field Survey. 2010

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.

35

3.10 FACTORS AT A GLANCE: COMPARISON OF AMUL WITH INDUSTRY

3.10.1 TRADE PROMOTION POLICY

Back-up policy

Advertisement allowance grievance redressal0

50

100

150

200

250

Back-up policy

AMULIndustry

Figure 21 Comparison of back-up policies of Amul and Industry.

Source: Field Survey. 2010

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

Bulk order discount Incentive Discount off list price0

50

100

150

200

250

300

Pecuniary benefits

AMULIndustry

Figure 22 Comparison of pecuniary befits to retailers By Amul and industry.

Figure Source: Field Survey. 2010

36

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

Free merchandise Rewards0

20

40

60

80

100

120

140

160

180

Complimentary policy

AMULIndustry

Figure 23 Comparison of complimentary policy by Amul and Industry

Source: Field Survey. 2010

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

Logistics Margin Deep freezer Price sensitivity Replacement0

100

200

300

400

500

600

Competence

AMULIndustry

Figure 24 Comparison of competence factor of Amul and IndustryS

Source: Field Survey. 2010

37

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

Prod. Quality Range of Flavors Attractive Packaging Prod. Durability0

100

200

300

400

500

600

Product features

AMULIndustry

Figure 25 Comparison of product features of Amul and Industry

Source: Field Survey. 2010

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.

38

Demand management

Demanded Product Excess demand handling0

50

100

150

200

250

300

350

400

450

500

Demand management

AMULIndustry

Figure 26 Comparison demand management of Amul and Industry

Source: Field Survey. 2010

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.

39

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

List price discount Bulk order discount Incentive0

20

40

60

80

100

120

Pecuniary benefits

Amul Kwality Walls

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.

40

Back-up policy

Advertisement allowance Grievance redressal0

10

20

30

40

50

60

70

80

90

100

Back- up policy

Amul Kwality Walls

Figure 28 Comparison of back-up policy of Amul and Kwality Walls

Source: Field survey 2010

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

Rewards Free merchandise0

10

20

30

40

50

60

70

Complimentary policy

Amul Kwality Walls

Figure 29 Complimentary policy of Amul and Kwality Walls.

Source: Field survey 2010

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

41

merchandise increases awareness along with appreciating the retailer which is not the case in

giving rewards.

3.11.2 INDUSTRY CHARACTERISTICSCompetence

Price sensitivity Replacement Margin Deep freezer Logistics0

50

100

150

200

250

Competence factor

Amul Kwality Walls

Figure 30 Competence factor of Amul and Kwality walls.

Source: Field survey 2010

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 kwality’s 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.

42

Product Quality Flavor range Attractive packaging Product durability0

50

100

150

200

250

300

Product features

Amul Kwality Walls

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

Demanded product Excessive demand handling120

125

130

135

140

145

150

155

160

165

Demand management

Amul Kwality Walls

Figure 32 Demand management of Amul and Kwality Walls.

Source: Field survey 2010

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.

43

CHAPTER – 4

CONCLUSIONS

44

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 Dinshaw’s, 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 Dinshaw’s,

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.

44

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.

45

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.

46

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:

1- Almost never preferred2- Usually not preferred3- Sometimes but infrequently preferred4- Indifferent/Neutral5- Often preferred6- Usually preferred7- 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) AMULb) Kwality Wallsc) Heritage d) Jerseye) Dinshaw’sf) ..…………….g) ..…………….

3. Rank the type of ice cream people prefer most on a scale of 1 -7.

Normal (ice cream)

Sundae

Sherbet

Gelato (type of Italian ice cream)

47

1 2 3 4 5 6 7

4. Rank the flavors according to their sale on a scale of 1-7.

Vanilla

Chocolate

Butter Scotch

Strawberry

Others…………………… 5. Most of the people prefer to have ice cream with/in?

Cup

Cones

Family Pack

Stick

Others……………………

6. How frequently do you keep latest variants on the shelf?

a) All of the timeb) Very oftenc) Oftend) Sometimese) Just now and thenf) Rarelyg) Never

7. How do you come to know about the launch of new variants?

Company Advertisement

Company Salesmen

Customer Demand

Word of Mouth

48

1 2 3 4 5 6 7

1 2 3 4 5 6 7

1 2 3 4 5 6 7

8. Which brand launches the variants most frequently?

AMUL

Kwality Walls

Heritage Jersey

Dinshaw’s

Others

9. The most frequent age group to visit your outlet to buy an ice cream is

7-15 years

15-25 years

25-35 years 35-45 years

45 & above

10. Why so? …………………………………………………………………………………………… …………………………………………………………………………………………...

11. On which days a week your outlet is open? Please tick.

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

12. What is the approximate average daily sale (in rupees) of the following brands on weekdays?

49

1 2 3 4 5 6 7

1 2 3 4 5 6 7

a) AMUL ………………………………….b) Kwality Walls …………………………..c) Heritage …………………………………d) Jersey …………………………………...e) Dinshaw’s ………………………………f) Others……………………………………

13. What is the approximate average daily sale (in rupees) of the following brands on weekend?

a) AMUL ………………………………….b) Kwality Walls …………………………..c) Heritage …………………………………d) Jersey …………………………………...e) Dinshaw’s ………………………………f) Others……………………………………

14. How many days an year you keep your outlet closed? …………………………

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)

50

AMUL KWALITY WALLS

HERITAGE JERSEY DINSHAW’S OTHERS

1. Highest advertising allowance

2. Discount off list price

3. Free merchandise

4. Bulk order discount

5. Maximum sales incentives

6. Rewards

7. Grievance redressal

AMUL KWALITY WALLS

HERITAGE JERSEY DINSHAW’S OTHERS

1. High Associated Margins

2. Deep Freezer Facility

3. Trade Promotional Policies

4. Efficient Logistics

5. Product Quality

6. Wide range of Flavors

7. Attractive Packaging

8. Durability of Product

9. Replacement Policy

10. Demanded Products

11. Credit Policy

12. Excess Demand Handling

13. Price Sensitivity

1. Name of the shop:

2. Shop Type:

51

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

9. Does anybody provide you counter assistance? Yes/No

10. If Yes, who is the concerned person………………………………………..

52

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-Square37.973

df21

Sig..013

Communalities

1.000 .556

1.000 .630

1.000 .769

1.000 .626

1.000 .361

1.000 .449

1.000 .622

Highest_advertisement_allowance

Dicount_off_list_price

Free_merchandise

Bulk_order_discount

Maximum_sales_incentives

Rewards

Grievance_redressal

Initial Extraction

Extraction Method: Principal Component Analysis.

53

Total Variance Explained

1.677 23.960 23.960 1.677 23.960 23.960 1.613 23.042 23.042

1.265 18.075 42.035 1.265 18.075 42.035 1.297 18.528 41.570

1.070 15.292 57.327 1.070 15.292 57.327 1.103 15.757 57.327

.835 11.924 69.251

.816 11.660 80.911

.776 11.083 91.994

.560 8.006 100.000

Component1

2

3

4

5

6

7

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Extraction Method: Principal Component Analysis.

7654321

Component Number

1.75

1.50

1.25

1.00

0.75

0.50

Eig

en

va

lue

Scree Plot

Component Matrix(a)

Component

1 2 3Highest_advertisement_allowance

.144 .722 -.121

54

Dicount_off_list_price .697 -.198 .324Free_merchandise -.284 .002 .830Bulk_order_discount .754 -.231 .069Maximum_sales_incentives

.594 -.062 .062

Rewards -.402 -.477 .243Grievance_redressal .082 .648 .441

Extraction Method: Principal Component Analysis.a 3 components extracted.

Rotated Component Matrixa

-.079 .741 -.031

.783 -.021 .132

-.060 -.160 .860

.780 -.012 -.131

.587 .104 -.076

-.194 -.593 .243

.022 .599 .513

Highest_advertisement_allowance

Dicount_off_list_price

Free_merchandise

Bulk_order_discount

Maximum_sales_incentives

Rewards

Grievance_redressal

1 2 3

Component

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

Rotation converged in 4 iterations.a.

Component Transformation Matrix

.935 .285 -.213

-.254 .953 .162

.249 -.097 .964

Component1

2

3

1 2 3

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser 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 295.037

df 78

Sig. .000

Communalities

Initial ExtractionMargin 1.000 .725Deep_freezer_facility 1.000 .420

Trade_promotion_policies1.000 .769

Logistics 1.000 .593

Product_quality 1.000 .717

Wide_range_of_flavors 1.000 .705

Attractive_packaging 1.000 .733

Durability_of_product 1.000 .612

Replacement_policy 1.000 .692

Demanded_products 1.000 .756

Credit_policy 1.000 .649

Excessive_demand_handling1.000 .734

Price_sensitivity 1.000 .657

Extraction Method: Principal Component Analysis.

56

57

Total Variance Explained

Component

Initial EigenvaluesExtraction Sums of Squared

LoadingsRotation Sums of Squared

Loadings

Total% of

VarianceCumulativ

e % Total% of

VarianceCumulativ

e % Total% of

VarianceCumulativ

e %1 3.054 23.491 23.491 3.054 23.491 23.491 2.587 19.903 19.9032 1.783 13.717 37.208 1.783 13.717 37.208 1.879 14.450 34.3533 1.537 11.824 49.032 1.537 11.824 49.032 1.661 12.779 47.1334 1.237 9.516 58.548 1.237 9.516 58.548 1.366 10.507 57.6405 1.153 8.866 67.414 1.153 8.866 67.414 1.271 9.774 67.4146 .931 7.162 74.5767 .721 5.545 80.1218 .637 4.901 85.0219 .484 3.724 88.74610 .458 3.526 92.27111 .384 2.951 95.22212 .334 2.567 97.78913 .287 2.211 100.000

Extraction Method: Principal Component Analysis.

Component Matrix(a)

Component

1 2 3 4 5Margin -.604 .453 -.278 .078 .268Deep_freezer_facility -.385 -.021 -.387 .344 .062Trade_promotion_policies

.176 .348 .031 .505 -.601

Logistics -.291 .608 -.184 .310 .093Product_quality .767 .246 -.049 .253 .039Wide_range_of_flavors .760 .185 .103 .149 .246Attractive_packaging .774 .209 .000 .161 .254Durability_of_product .580 .340 -.084 -.333 .205Replacement_policy -.211 .602 -.472 -.240 -.063Demanded_products -.309 .294 .755 -.009 .058Credit_policy .054 .427 .035 -.668 -.130Excessive_demand_handling -.289 .446 .663 .087 -.067

Price_sensitivity -.311 -.055 .144 .164 .714

Extraction Method: Principal Component Analysis.a 5 components extracted.

58

13121110987654321

Component Number

3

2

1

0

Eig

enva

lue

Scree Plot

59

Rotated Component Matrix(a)

Component

1 2 3 4 5Margin -.257 .775 .099 .032 -.217Deep_freezer_facility -.249 .439 -.219 -.342 -.010Trade_promotion_policies

.174 .168 .164 -.183 .807

Logistics .055 .736 .189 -.046 .102Product_quality .800 -.048 -.100 -.025 .253Wide_range_of_flavors .827 -.144 .004 -.002 .010Attractive_packaging .849 -.080 -.078 .004 .021Durability_of_product .599 -.018 -.103 .485 -.086Replacement_policy -.067 .647 -.144 .485 .111Demanded_products -.114 -.015 .855 .042 -.097Credit_policy -.001 .041 .121 .795 .024Excessive_demand_handling

-.071 .126 .838 .050 .089

Price_sensitivity .007 .220 .211 -.323 -.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 51

.845 -.418 -.239 .121 .200

2.340 .691 .406 .434 .230

3.038 -.473 .876 -.063 -.063

4.223 .282 .102 -.878 .300

5.345 .211 .023 -.151 -.902

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

60

CHAPTER – 7

REFERENCES

61

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-in-

india.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/: http://www.kwalitygroup.com/Kwality-Walls-Ice-

Cream/Default.aspx

13. Zikmund, W. G. (2003). Business Research Methods. New delhi: Cengage Learning India

Private Limited.

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