Rural Marketing AMUL

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Rural Marketing



Features

• Large and Scattered market - over 63 croreconsumers from 5,70,000 villages

• Major income from agriculture

• Low standard of living - low literacy, low percapita income, social backwardness, low savings,etc.

• Traditional Outlook-Do not prefer changes• Diverse socio-economic backwardness

• Infrastructure Facilities - physical distribution becomes costly



Challenges

• Underdeveloped People and Underdeveloped Markets

• Lack of Proper Physical Communication Facilities -

Nearly fifty percent of the villages in the country donot have all weather roads

• Media for Rural Communication - rural areas accountfor hardly 2000 to 3500 mobile theatres

• Many Languages and Dialects - number of recognizedlanguages are only 16, the dialects are estimated to bearound 850.



Challenges

• Dispersed Market - impossible to ensure theavailability of a brand all over the country

• Low Per Capita Income - about 33-35% of grossdomestic product is generated in the rural areas butit is shared by 74% of the population

• Prevalence of spurious brands and seasonal demand

• Different way of thinking - has a fairly simple

thinking as compared to the urban counterpart



4 A Approach



Availability:

• India’s 627,000 villages are spread over 3.2 million sq km

• Target- Reach atleast 13,113 villages with a population of more

than 5,000

• Study on buying behaviour of rural consumer indicates thatthe rural retailers influences 35% of purchase occasions

• Projects taken to Enhance and Control Supply Chain



Affordability:

• With low disposable incomes, products need to be affordable to the rural consumer

• Companies have addressed the affordability problem by introducing small unit packs

Eg. Cinthol, Fair Glow and Godrej in 50-gmpacks, priced at Rs 4-5

• Most of the villagers are paid on the basis of daily wages



Acceptability:

• There is a need to offer products that suit the ruralmarket

• In 1998, LG developed a customised TV for the ruralmarket and christened it Sampoorna

• The insurance companies that have tailor-made

products for the rural market have performed well

• Company tied up with non-governmentalorganisations and offered reasonably priced policies



Awareness:

• Mass media is able to reach only to 57% of the ruralpopulation

• For generating awareness, events like fairs and

festivals, Haats, etc., are used as occasions for brandcommunication

• Only 41 per cent rural households have access to TV

• LG Electronics uses vans, local language advertisingand road shows to reach rural customers



Opportunities

• Due to large size and demand base, rural markets offertremendous opportunity

• Rural India, accounts for more than 70% of India’s totalpopulation, 2.5 times that of US

• Today it accounts for more than 70% of the toilet soap

users and 40% of the two wheelers purchased

• In 2008, rural consumer market grew by more than 25%



Opportunities

• It is expected to reach US$425 billion in 2011 with 720-790million consumers

• The rural market in India is showing a growth of 15%

• FMCG sales are up 23% and telecom is growing at 13%

• 2009-10 union budget hiked the allocation for NREGA to US$8.03 billion

• Outlay of US$ 34.84 billion for improving ruralinfrastructure



Constraints

• With an average income of less than $42 per month,rural Indians have a very low disposable income

• Incomes vary greatly depending on the monsoons as aresult difficult to predict demand

• Minimal storage space and no refrigeration

• 627,000 villages spread over 3.2 million sq. Km, withpoor infrastructure distribution costs are very high



Constraints

• Low literacy rate of 36% as compared to the national averageof 52%

• Facilities such as telephone, fax and telegram are poor in rural villages

• Life in rural India still governed by a lot of customs andtraditions and people don’t adapt new practices

• Reach of formal media is low in rural markets

• It offers a very challenging career and requires specializedtalent



http://www.amul.com/



Agenda

• Products of AMUL

• History

• Birth and Development

• Three Tier Model

• Achievements

• Rural IT



Amul - Products• Butter Spreads

• Milk Drinks Amul Kool, Amul Kool Café,

Flavored Bottle Milk, Lassee,Thandai, Spiced Buttermilk,

Chocolate Milk, etc



Amul – Products• Powdered Milk

Skimmed Milk Powder, Spray Infant Milk Food, Tea Coffee Whitener, Amulya Dairy Whitener

• Milk, Cream, Cheese, Ghee, Ice-cream,Desserts, Chocolates, Health Drink



Amul – History• AMUL – Anand Milk Union Limited

• Formed in 1946 as a Dairy Co-operative

• AMUL – a brand name managed by GCMMF

• Spurred the White Revolution in India

• Dr. Verghese Kurien – Key person behind the success of Amul



Amul – Birth and Development

• Monopoly of the Polson Dairy in Anand

• Exploitation of the milk producers

• Unfair and manipulative trade practices

• Formation of Kaira District Co-operative Milk Producers’ UnionLimited

• Milk collection de-centralised

• First modern dairy of Kaira Union established at Anand- called AMUL

• Many such unions came up in Gujarat- Combining to form GCMMF



Three Tier Amul Model

Village Dairy Co-operative Society

Milk Union at the District level

Milk Federation at the State level.



Village Dairy Co-operative Society(VDCS)

• Main Objective- Collection of Milk

Weighing themilk

Determining thefat content

Calculation of the Purchase

price



Functions of VDCS

Collection of surplus milk

Providing support services to the members

Selling liquid milk for local consumers of the village

Supplying milk to the District Milk Union



Milk Union at the District Level

• Village Societies of a DistrictFormed by

• 9 to 18 Elected Representativesof the Village SocietiesHeaded by

• Member Secretary of the Board• Paid Employee

Managed by



Functions of Milk Union at District Level

Procurement of milk

Arranging transportation of raw milk from the VDCS to the Milk Union

Providing input services to the producers

Conduct training

Establish Chilling Centers & Dairy Plants

Selling at the District Level

Processing

Decide on prices of Milk to be paid and also the services offered



Functions of State Cooperative Milk Federation

Marketing of milk & milk products

Distribution network for marketing of milk & milk products.

Arranging transportation

Creating & maintaining the Brand

Providing support services

Determine the product mix and capacity for the same

Pricing



Achievements of ‘Amul

Movement’

• Production-20 million MT to 100 million MT in a span of 40 years

• Cattle population reached 500 million

• 13 million member families included

• Covers more than 125,000 villages of 180 Districts in 22

States

• 8.5 million liters of milk procured per day

• 48 Sales offices, 3000 Wholesale Distributors, 5 lakh retailoutlets



Amul – The Poster Boy of Rural IT

Roadmap• Automated milk collection system units for collection of milk

• Customised ERP system used in conjunction with GIS

• Data analysis software for forecasting milk production and productivity

• All zonal, regional and member dairies connected through VSAT

• Made IT education compulsory for all its employees

• Opted for the .coop domain to position its brand in a distinct way



THANK YOU!!!

Rural Marketing AMUL

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