A Marketing Management-2 project

Marketing Report on Amul Butter under the guidance of Prof. Kartik Dave

(Group 06)

Dhruv Gupta (13DM066)

Gaurav Gupta (13DM070)

Gayathri Pravallika Lavu (13DM071)

Gunjan Kalita (13DM075)

Jigyasa Gautam (13DM087)

Kishlay Saurabh (13DM092)

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Contents

Page No Introduction 3

Porter’s Five Force Model 3

SWOT Analysis 4

Marketing 4 P’s for Amul Butter 5

Product 5

Place 10

Price 12

Promotion 15

Branding 21

Market Survey 25

References 30

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Introduction

Formed in 1946, Amul is an Indian dairy cooperative with revenue of US$2.15 billion (2012–

13) and based at Anand in Gujarat, India. The brand name Amul means “AMULYA”. This

word is derived from the Sanskrit word “Amoolya” which means “ Priceless”. Brand Amul is

managed by Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF). Amul has

spurred the White Revolution of India, which has made India the largest produer of milk and

milk products in the world and the White Revolution has finally created a billion-dollar

brand. Today Amul dairy is No.1 in Asia and No.2 in the world, a matter of proud for whole

India. Amul has more than 150 chilling centres in various villages. The man behind the

success of Amul is Dr. Verghese Kurien, former chairman of the GCMMF.

Reasons For Success

1. Robust Supply Chain

2. Low Cost Strategy

3. Diverse Product Mix

4. Strong Distribution Network

5. Technology and e-initiatives

6. The Brand value of Amul (Quality, Value for Money, Availability and Service)

Porter’s Five Forces Model

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SWOT Analysis

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Marketing 4 P’s for Amul Butter

In the subsequent topics, we will look at the 4 P’s of Marketing – Product, Place, Price and

Promotion – in context to Amul Butter.

Product

PRODUCT MIX

PRODUCT MIX Column1

CATEGORY PRODUCTS

Bread spreads 1. Amul butter

2. Amul lite low fat breadspread

3. Amul cooking butter

Cheese Range 1. Amul Pasteurized Processed Cheddar Cheese

2.Amul Processed Cheese Spread

3. Amul Pizza (Mozarella) Cheese

4.Amul shredded Pizza Chesse

5.Amul Malai Paneer (cottage cheese),Frozen, Refrigerated and Tinned

6.Utterly Delicious Pizza

7.Amul Emmental Cheese

Deserts Amul Shrikhand (Mango, Saffron, AlmondPistachio, Cardamom)

Amul Amrakhand

Amul Mithaee Gulabjamuns

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Amul Mithaee Gulabjamun Mix

Amul Mithaee Kulfi Mix

Avsar Ladoos

Fresh Milk

Amul Shakti 3% fat Milk

Amul Taaza 1.5% fat Milk

Amul Ganthiya

Amul Gold 4.5% fat Milk

Amul Lite Slim-n-Trim Milk 0% fat milk

Amul Shakti Toned Milk

Amul Fresh Cream

Amul Snowcap Softy Mix

For Cooking Amul Pure Ghee

Sagar Pure Ghee

Amul Cow Ghee

Amul Malai Paneer

Mithai Mate

Pro-biotic Dahi

Masti Dahi Utterly Delicious Pizza

Powder Milk

Amul Infant Milk Formula 1 (0-6 months)

Amul Infant Milk Formula 2 (6 months above)

Amulspray Infant Milk Food

Amul Full Cream Milk Powder

Amulya Dairy Whitener

Sagar Skimmed Milk Powder

Sagar Tea and Coffee Whitener

Icecreams Amul Ice creamsRoyal Treat Range

(Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)

Nut-o-Mania Range

(Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival, BadshahiBadam Kulfi, Shista Pista Kulfi)

Utsav Range

(Anjir, Roasted Almond)

Simply Delicious Ra

nge (Vanilla, Strawberry, Pineapple, Rose, Chocolate)

Nature's Treat

(Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black Currant)

Sundae Range

(Mango, Black Currant, Chocolate, Strawberry)

Millennium Ice cream

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(Cheese with Almonds, Dates withHoney)

Milk Bars

(Chocobar, Mango Dolly, Raspberry Dolly, ShahiBadam Kulfi, Shahi Pista Kulfi, Mawa Malai Kulfi, Green PistaKulfi)

Cool Candies

(Orange, Mango)

CassattaTricone Cones

(Butterscotch, Chocolate)

Megabite

Almond Cone

Frostik - 3 layer chocolate Bar.

Fundoo Range

So we see the range of product of Amul you will notice it is everywhere it has made its

presence felt in each and every segment from milk to flavoured ice-cream it is gaining its

customer base in every nook and corner with passage of time it is penetrating deep in into

the market.

Market Share of different products of Amul

Category Market share Market position

Chocolate drink 90% 1

Butter ,ghee 85% 1

Cheese 50% 1

Sweets 50% 1

Milk Powder 40% 1

Ice –cream 24.75% 2

Chocolate 10% 3

Amul- Product Diversification

Seeking unfamiliar products or markets in the pursuits of growth with both dairy and non-

dairy products, Amul has come out with a lot of products at affordable price and most of

them are dominating in their particular segments.

Amul always had a secret philosophy behind its marketing strategy .

1. From the time of its existence Amul has made its entry into a lot of segments but at the

same it has maintained its growth in existing product line.

2. Despite market transition and foray into different segments, Amul never forgets its

principle of providing product at low cost price.

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Amul Butter

1. Amul butter’s core competency lie in the fact that they offer –they follow worked

standard methods like Quality Management in their operation .right from the beginning till

end they adopt Kaizan practices to ensure the quality of milk in term of acidity and its

sources.

2. Amul butter products advantage is not only restricted to the superior quality that it has

but also constant innovation that they undergo in their packaging. Right under their product

basket .Amul butter is available in following size.

500gm 100gm 50gm 20gm 10gm

3. As a move to target caterers and restaurants has put cases with 30 packs each 500gm This pack is not meant for retail selling and are without the outer packing that one finds on the retail package. This cuts down the cost for the High Consumption group as they are priced much less than the retail packs. 4. With the introduction of Amul Lite which offers a low fat and is a no cholesterol table margarine, it is targeting those group of customer who are health conscious. 5. With 86% market share and presence through more than 5, 00,000 retail outlets, it is the biggest brand in India. 6. Right now it is in the maturity stage and thus, is making huge profits.

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Line Extension Line extensions occur when a company introduces additional items in the same product category under the same brand name, usually with new flavours, forms, colours, added ingredients, package sizes, and so on. Amul extended its Amul Butter line to the following items:

Amul Unsalted Butter – without any added salt

Amul Cooking Butter – specially for cooking purposes

Amul Lite Breadspread – low-fat, low-calorie breadspead

Amul Delicious Table Margarine – a butter-substitute, prepared specially from vegetable oils and fats

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Place

How different can AMUL’s butter be, from butter offered by any other brand? Butter from

any brand, tastes more or less the same, offers similar nutrition and comes in similar

packaging. Yet, the customer, standing at the shop aisle, without any ambiguousness

chooses Amul over its competitors. That is a result of offering great value over a period; a

result of delivering great quality; result of powerful branding; and when all these come

together, you have consumers showing trust in brand, the ultimate prize that a marketing

company can hope to win.

Distribution Strategy:

Distribution is one of the prime factor for Amul’s success. Apart from being available at over

5,00,000 retail stores, Amul products can also be found at its own parlors located in various

cities. This large distribution network of Amul is the reason for easy availibility of its

products. In our survey of 53 consumers, over 95% consumers said that Amul butter was

available to them in near proximity.

With 6000 parlours across india, Amul already has a strong distribution network. Amul had

1000 parlours during 2010-11, but as chairman of GCMMF, Parthibhai G Bhatol, realised the

potential for growth, he and took the number of parlours to 6000 by 2013. These parlours

that retail the entire range of Amul products under one roof, have generated business of Rs

406 crore during the 2010-11 fiscal, growing by 37 per cent on a year-on-year basis.

Amul parlors run at conventional locations like residential and commercial areas,

educational institutions, railway stations, bus stands and other high traffic locations. This is

brilliant distribution strategy, as putting parlors in these areas not only increae sales but also

help in improving brand image. Amul already created 160 parlours at railway stations and

177 parlours at various centers of excellence.

Amul is now betting on quick service restuarants, that serves Pavbhaji, Amul pizzas, Amul

cheese burgers, sandwiches, ice-cream, sundaes and milk shakes, called Amul Cafes. Tasting

success with the two federation owned outlets of Amul Cafes at Ahmedabad, GCMMF is

eying to spread the network of cafes across the country in the coming two years. The

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federation now owns and operates two outlets in Ahmedabad, which have a turnover of Rs

1 lakh per day per outlet.

AMUL Supply Chain System Strong supply chain network is one of the prime reasons for success of Amul. It has one of

the largest supply chain system in India, with over 2.8 million milk producer members.

Presently it has 10000 village cooperative societies, 3600 wholesale distributors, 45 depots

in India with over 5,00,000 retailers spread all over India.

Amul, has recently kicked off its largest distribution expansion exercise to take its chilled

products like butter, cheese, ice-cream and paneer to small towns and districts to

population of up to 5,000 people. Now Gujarat Cooperative Milk Marketing Federation,

owner of the Amul brand, will service these districts through feeder markets.

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Price

Amul’s Pricing Strategies

AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya,"

was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are

found in several Indian languages. Amul products have been in use in millions of homes

since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul

Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made

Amul a leading food brand in India. (Turnover: Rs. 80.05 billion in 2009-10).

Today Amul is a symbol of:

high-quality products sold at reasonable prices,

the genesis of a vast co-operative network.

the triumph of indigenous technology

the marketing savvy of a farmers' organisation.

And of a proven model for dairy development.

Pricing Strategy of Amul

Cost Leadership: Objective of Amul’s objective of providing a value

proposition to a large customer base, led naturally to a cost leadership

position. As the Indian consumers’ purchasing power is low so its viable for

Amul to price its products as low as possible.

Financial Strategy: AMUL’s finance strategy is driven primarily by its desire to

be self-reliant and thus depend on internally generated resources for funding

its growth and development. This choice was motivated by the relatively

underdeveloped financial markets with limited access to funds, and the

reluctance to depend on Government support and thus be obliged to cede

control to bureaucracy.

AMUL’s financial strategy is characterized by two elements:

(a) retention of surplus to fund growth and development, and

(b) limited/ no credit, i.e., all transactions are essentially cash only.

For example, payment for milk procured by village societies is in cash and

within 12 hours of procurement (most, however, pay at the same time as the

receipt of milk). Similarly, no dispatches of finished products are made

without advance payment from distributors etc. This was particularly

important, given the limited liquidity position of farmer/suppliers and the

absence of banking facilities in rural India. This strategy strongly helped

AMUL implement its own vision of growth and development. It is important

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to mention that many of the above approaches were at variance with

industry practices of both domestic and MNC competitors of AMUL.

Value Pricing: Amul is always perceived as a low cost, value oriented brand.

Consumers prefer Amul because of their trust and belief in its quality. They

rate amul quite high on satisfaction mainly for it’s taste and good quality.

Due to low entry barriers many players have entered the dairy industry.

Goverdhan, Neutralite and our very old Mother Dairy , are some brands

which provide less costly substitutes to Amul products but due to immense

trust of consumers in Amul, and their affection with the brand ,Amul still

enjoys the market leader position. Amul enjoys huge share of heart and mind

of Indian consumers, so even a marginal increase in the prices of amul, make

consumers insensitive to its purchase.

Factors affecting Amul (Dairy products) consumption

India is the world leader in milk production with total volume of 115 milliontons. Driven by

steady population growth and rising income,milk consumption continuesto rise in India.

Dairy market is currently growing at an annual growth rate of around 7 per cent

in volume terms. The market size of Indian dairy industry stands at around US $45 billion.

Since India’s population is predominantly vegetarian, milk serves as an important part of the

daily diet. So the market is ever expanding.

Key facts:

65 per cent of the milk is sold in “loose” form

Only 5 per cent of the milk is sold through retail chains

70 per cent is delivered to the homes by ‘milk agents’

Carton milk or packaged milk has been growing at 24 per cent annually

Most branded FMCG companies are keen on launching flavoured dairy

productswhose market size is pegged at US$ 16

Consumer Elasticity: In spite of marginal increase in Amul prices, on frequent basis,

consumers are not easily switching to less costly branded substitutes. Especially in case of

Butter and milk, where Amul has reached the position of category replacement.

Reasons of low price sensitivity for Amul products:

1. High perceived quality of Amul products

2. Mostly loyal customers with share of heart to amul

3. Taste preferences

4. Expenditure is small part of buyer’s total income

5. Enjoys prestige and exclusiveness as a brand

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6. Dairy products are consumer goods category items

7. Less switching due to Halo effect of Amul as a brand

8. Dairy products are in conjunction with previously brought items (e.g. bread)

9. Perishable and non-durable nature of dairy product makes them an item of

daily purchase

10. Brand has successfully achieved category replacement ,especially in case of

Butter.

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Promotion

In Kotler’s words, Customers and businesses, if left alone will ordinarily not buy enough of

the organizations products. The organization must therefore undertake an aggressive selling

and promotion effort. Companies cannot survivewithout an efficient sales force. In spite of

being a farmers' co-operative, Amul has remained the undisputed market leader since its

inception in 1955, by offering quality products at competitive pricesand superior

distribution with the help of innovative and cost effective promotion.Their target is mostly

the middle class of India, who make volume in their sales. They emphasize more on brand

than the single product.

Journey from 1960’ to 2013:

First show of Amul,’ Amul moppet campaign’ was launched in summer of 1967 at charni

road on a billboard in Mumbai. It is a premiere for the most deliciously funny creations that

introduced the concept of consumer humour i.e., serious things spoken in jest. Amul

moppet is a thumb sized six year old girl, in red polka dotted dress, blue hair, round eyed,

chubby cheeked and winking at onlookers has been loved by everyone. It is shown up on

hoardings and product wrappers with the equally recognizable tagline Utterly Butterly

Delicious Amul from that year. Sylvester daCunha, was the managing director of the

advertising agency, ASP that created the campaign. The utterly butterly Amul girl was born

and she has not grown an inch since.

From then, its advertising has also started using tongue-in-cheek sketches starring the Amul

baby commenting sarcastically on the latest news or current events. The pun in her words

has been popular. Amul communicates through amul girl. The Butter Girl Ad campaign is the

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longest ever ad campaign and has been running for over 40 years now which is based on a

single theme, now trying for the Guinness records.

Some of the adverts are

Amul congratulates the success of the first test-tube baby

Indian Railways introduces cushioned chairs in the first class compartments.

Souyuz – Cosmonaut in space

As MTNL increases rates for local calls

Some other adverts

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The key elements of campaign success are,

Simplicity in ideas and events.

Humorous, topics may be serious or casual but they are with humour as base theme.

It is simple humour on something which everyone is thinking about, so it connects

well into the audience.

Consistent with the theme and also the baseline, utterly butterly delicious. They are

unchanged for the last 45 years.

Even during the current global crisis Amul didn’t bring down the frequency of the

advertisements which is another example of how to stay in touch with your

customers even when the amount of cash is decreasing around the planet.

Message in terms of symbols, signs and image, so that it reaches to maximum

number of people, independent of their age, education or background.

Evergreen incorporation of socio economic events, landmarks in sports, films and

every realm of life in India. A culture by itself, a tongue-in-check take on every

moment of significance of India.

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The Amul ads have witty one-liners which capture relevant events that have caught

the fancy of the nation. This instantly creates a connect with the populace and helps

them to identify with the brand in a surrogate manner.

The style of drawing is also very distinctive, and there is instant recognition of the

brand without even needing to take a close look. All in all, the Amul girl has become

iconic in Indian advertising.

The punch line, jingle, the slogan “Truly the taste of india” connects with the people.

Patriotic feeling, use of Hinglish in the adverts.

The billboard campaign has indeed done wonders for the Amul brand. The mascot was first

used for Amul butter. But in recent years in a second wave of ad campaign for Amul

products, she has also been for other product like ghee and milk. She is probably one of the

most enduring mascots in the world.

Amul has been ranked as the No. 1 Indian brand by Campaign magazine in its list of Top

1000 Brands of Asia for the third consecutive year in 2013.

PROMOTION THROUGH TV SHOW SPONSORSHIPS

Other than these ads, AMUL also sponsors TV shows like MasterChef India, Star Voice of

India, Music ka Maha Muqabla etc. Association with these TV shows helps Amul gain mass

media coverage and an opportunity to bind more with the youth.

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PROMOTION THROUGH SPORTS SPONSORSHIPS

Amul has done their promotional activities in the field of sports as well by sponsoring sports

teams and events. Amul sponsored the Sauber Formula 1 team in the 1st edition of the Airtel

Indian Grand Prix. Amul also sponsored the Indian contingent in the 2012 London Olympics.

Amul also sponsored the Dutch National cricket team.

Amul parlors:

Amul has recently entered into direct retailing through "Amul Utterly Delicious" parlours

created in major cities Ahmedabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and

Surat. Amul has plans to create a large chain of such outlets to be managed by franchisees

throughout the country. They have created Amul Parlours at some prominent locations in

the country, which are run by the company or its wholesale dealers like Delhi Metro Rail

Corporation, The Somnath Temple, National Institute of Design, Infosys Technologies in

Bangalore, Mysore &Pune, Wipro campus in Bangalore, Ahmedabad Municipal Corporation,

Surat Municipal Corporation, Delhi Police,Gujarat State Road Transport Corporation.

In order to come closer to the customer, Amul have decided to create a model for retail

outlets, which would be known as "Amul Preferred Outlets"(APO).

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Promotional Expenditure

Amul spends very less on its advertising budget, but spends it very effectively. Because of its

brand mascot, the Amul girl, the co-operative has been able to get away with spending just

1% of its revenues on advertising. In contrast, its competitors spends anywhere between 7

to 10 per cent on advertising. Amul positioning is “Value for Money”. It uses the services of

Da Cunha Associates & FCB Ulka for its advertising efforts.

Amul has its presence in more than 40 countries till date. No doubt, with this so 'Indian' and

unique way of advertising and Brand building, Amul will always pose a stiff task for the

behemoths like HLL, Nestle, P&G etc.,

Problems:

There is no continuity in previous TV campaigns other than topicals.

Total add spend is even less than 1% of total revenue, when it is around 14% for

Unilever, 8% for nestle& Britannia and for Cadbury it is 10%. It is good to an extent,

but to sustain the competition in wide product ranges and popularize the new

products, expenditure on promotional activities should be increased.

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Branding

THE BRAND THAT IS ‘AMUL’

The Tagline/Slogan: “The taste of India”

The Jingle: “Utterly Butterly Delicious… Amul”

The Character/Mascot: The Amul moppet has been the mascot of Amul

since 1967, sporting a young girl in a red polka dot dress with the

accompanying “Utterly Butterly Delicious” jingle. The character holds the

Guinness World Record for longest running ad-campaign.

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Strategies for building the brand name

Amul has adopted the following 4 strategies to build their brand name all across the globe:

Quality: No brand survives long if its quality does not equal or exceed what the

buyer expects. In the case of a food product like butter, this means that the brand

must always represent the highest hygienic, bacteriological and organoleptic

standards. It must taste good, and it must be good to consume.

Value for money: Amul believes that one gets what they pay for, and more. Even

when adverse conditions have reduced supplies of products like butter, it has

resisted the common practice of raising prices, charging what the market would

bear. The prices are reasonably set for different pack sizes.

Availability: A brand should be available when and where the customer wants it.

Amul has built what is probably the nation’s finest distribution network. They reach

hundreds of cities and towns through a cold chain that not only ensures that their

products are available, but they reach the customer at the farthest end of the

country with the same quality as one would find in Ahmedabad or Vadodara.

Service: For Amul, every customer complaint must be heard – not just listened to.

And, every customer complaint must be rectified to the extent humanly possible. For

close to fifty years now, Amul has honored its contract with the consumer.

The contract that is symbolized by the Amul brand means quality. It means value for money.

It means availability. And it means service.

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Brand Identity of Amul

How a business wants a brand's name, communication style, logo and other visual elements

to be perceived by consumers. The components of the brand are created by the business

itself, making brand identity the way in which a business wants consumers to perceive its

brands, not necessarily how it is actually perceived.

Brand identity is different than brand image, which is what consumers actually think. It is

constructed by the business itself. A negative gap between brand identity and brand image

means a company is out of touch with market sentiment, which will make selling its

products more difficult.

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Sources of Brand Equity Building a strong brand identity, awareness, and brand loyalty, leads to a strong brand equity.

Brand equity is a set of assets linked to a brand’s name and symbol that add to the value provided by a product or service to a customer.

Sources

of

Brand Equity

Product

Strategy

Distribution

Strategy

Pricing

Strategy

Communication

Strategy

Outdoor media

Broadcast media

Internet

First Mover

advantage

Market Leader

USP : Taste

Network of 3500

distributors

500,00 retail

outlets

Amul parlors, cafes

Low cost –

Affordability

High quality

Longtime survivors

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Market Survey

Methodology We created a survey form in Google Docs to gather responses from consumers of Amul

Butter. We circulated the form on social networking sites (Facebook, Google+ etc). We also

collected personal responses from consumers in 4 different cities – Delhi, Bangalore, Guntur

and Surat – so as to create diversity in the response findings.

The snapshot below is an excerpt from the created survey form:

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Survey Findings:

1. 68% people agree that Amul Butter is

value for price product.

2. 67% consumers will not be affected by

increase in 20% price of Amul Butter.

3. Even if there is 40% increase in price,

51% consumers will remain unaffected.

This shows really low price sensitivity

among consumers.

4. 70% people consume Amul Butter for

its taste.

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5. 55% people believe Amul Butter has

nutritional butter.

6. 72% consumers prefer Amul Butter,

over its more nutritious product Amul

Lite.

7. Britannia is most strong competitor for

Amul Butter.

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8. 96% consumers say that Amul butter

is available to them in proximity. This

depicts strong distribution channel of

Amul.

9. TV advertisements are most appealing,

in comparison to creative posters,

sponsored events, and its other

promotional strategies.

10. 74% consumers were not aware of

Amul girl’s 3d campaign which means Amul

needs to promote it more aggressively.

11. 53% consumers Amul needs to come up

with new packing for Amul butter.

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12. 51% consumers are still not aware of

Amul’s creative posters, which form

backbone of Amul’s marketing strategies.

Amul can add such posters on its packing,

which would also add new packaging to

its product.

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REFERENCES

www.amul.com

http://en.wikipedia.org/wiki/Amul

http://www.digitalimpulse.in/insights/amul-the-taste-of-india/#.UqD-p8QW3D4

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