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SINHGAD INSTITUTE OF MANAGEMENT AND
COMPUTER APPLICATION
PROJECT REPORT ON-
MARKET SURVEY AND DISTRIBUTION STRATEGY
IN TARGET MARKET IN PUNE
PROJECT GUIDE SUBMITTED BY:
SURENDRA KUMAR NAGARHITESH ACHARYA
(MMM I SEM)
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INTRODUCTION
I did my project in Gujarat Co-Operative Milk Marketing Federation Limited on
Market survey and Distribution strategy in target marketin Pune. During my
summer project, I got an opportunity to apply my marketing skills and theoretical
knowledge that I had learnt in my marketing studies with the information and
suggestion provided by the company guidance, which was a great learning
experience for me and that will definitely help me in developing qualities required
for an manager.
In todays competitive market every organization has to take initiative to keep its
product demand in market and also to update its product according to customer
demand. For the fulfillment of customers demand, retailer plays a major role. I did
my research work on distribution strategy adopted in target market. My objective
was to study awareness level of Retailers, availability of Amul products in retail
outlets and Retailers problems in regards to Amul.
Indian FMCG is one of the most emerging markets in the global scenario because
India has second largest population of the world and their food pattern increasing
day by day.
Gujarat co-operative milk and marketing federation is well known fast moving
consumer goods company in India. It operates all over India through a nationwide
network of distributor and retailer outlets.
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Reasons for selecting the topic
There are many reasons for selective the topic distribution strategy in target market.
They are as follows:
I am doing Master in Marketing Management, therefore marketing is my core
subject and I thought to have practical experience with my theoretical knowledge.
During the initial discussions with Mr. HITENDRA SINHA (Sales Executives),he
suggest me that there are problems arising in distribution in Pune Depot (Amul)
due to lack of good market information. They assigned me the Research work and
told me to get market information.
EXECUTIVE SUMMARY
The project entitled Distribution Strategy in Target Market was a very nice and
challenging experience for me in doing the project in a company like AMUL.
Within these two months (4th may to 3 July) of my project period I went to many
retail shop in Pune to gather information of retailers. I have visited MG road,
Camp, Harapsar, Shivaji Nagar, & various others scattered parts of the city.
Objective:-
This project was done by me in AMUL company was out with broad objective like
understanding the real market scenario, awareness level of retailers, problems of
retailers and distribution strategy in target market.
Research Methodology:-
The various means and methods have been deployed for effective collection of the desired
data-has been elucidated in this section.
The following marketing search tools were made use of
Depth interview method.
1- Questionnaire direct structured method.
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Both primary and secondary data were used to collect information regarding this
project. These data were collected through direct retailers interactions as well as
through secondary research work involving internet search.
Sampling size:-
The sample size is one hundred twenty (120).
Findings:-
I have found in my project that there are problems regarding AMULs distribution
system in terms of availability and delivery of products at right time with others
problems like replacement and complains handling. Amul have advantages like
packaging, quality as well as brand name.
Suggestions:-
The distribution of products should not only be simpler but also much faster and
there should be regularity of supply by distributors. AMUL should provide
awareness about schemes and replacement facility given to retailers as distributors
hide this fact.
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COMPANY PROFILE
Name: - KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS
UNION LIMITED, ANAND Known as AMUL (Anand
Milk Union Ltd)
Form: - Co-operative sector registered under the Co-operative Society
Act
Location: - Amul dairy, Station road, Amul Dairy road, Anand- Gujarat
India.
Registration: 14th December 1946
Registered Office: - Kaira District Co-operative Milk Producers Union Limited
Anand-388001
Major Plants $ Chilling Centres:-
Dairy Plant,Anand
Mogar Complex,Mogar
Kheda Satellite Dairy,Khtaraj
Cattle feed factory,Kanjari
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Camby satellite Dairy,Undei
Chilling Centre, Balasinor
Kapadwanj Chilling Centre,Kapadwanj
Amul Satellite dairy,Pune
Kolkata Unit, Kolkata
Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative
movement in India. It is a brand name managed by an apex cooperative
organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF),
which today is jointly owned by some 2.6 million milk producers in Gujarat, India.
It is based in Anand town of Gujarat and has been a sterling example of a co-
operative organization's success in the long term.
The Amul Pattern has established itself as a uniquely appropriate model for rural
development. Amul has spurred the White Revolution of India, which has made
India the largest producer of milk and milk products in the world. It is also the
world's biggest vegetarian cheese brand.
GCMMF:
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food
products marketing organization. It is a state level apex body of milk cooperatives
in Gujarat which aims to provide remunerative returns to the farmers and also serve
the interest of consumers by providing quality products which are good value for
money.
Amul's product range includes Milk powders, Milk, Butter, Ghee, Cheese, Curd,
Chocolate, Ice cream, Shrikhand, Paneer, Gulab Jamuns, Burundi, Nutramul brand
and others. In January 2006, Amul plans to launch India's first sports drink
Stamina, which will be competing with Coca Cola's Powerade and PepsiCo's
Gatorade.
Amul is the largest food brand in India and world's Largest Pouched Milk Brand
with an annual turnover of US $1050 million (2006-07). Currently Amul has 2.6
million producer members with milk collection average of 10.16 million litres per
day. Besides India, Amul has entered overseas markets such as Mauritius, UAE,
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USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South
African countries. Its bid to enter Japanese market in 1994 had not succeeded, but
now it has fresh plans of flooding the Japanese markets .Other potential markets
being considered include Sri Lanka.
Dr Verghese Kurien, former chairman of the GCMMF, is recognised as the man
behind the success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the
Banaskantha Union, was elected chairman of GCMMF.
Gujarat Cooperative Milk Marketing Federation GCMMF:
An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food
products marketing organization. It is a state level apex body of milk cooperativesin Gujarat which aims to provide remunerative returns to the farmers and also serve
the interest of consumers by providing quality products which are good value for
money.
Members:13 district cooperative milk producers'
Union
No. of Producer Members: 2.7 million
No. of Village Societies: 13,141
Total Milk handling capacity: 10.21 million liters per day
Milk collection (Total - 2007-08): 2.69 billion liters
Milk collection (Daily Average 2007-08): 7.4 million liters
Milk Drying Capacity: 626 Mts. per day
Cattle feed manufacturing Capacity: 3090 Mts per day
HISTORY
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Amul was formally registered on December 14, 1946. The brand name Amul,
sourced from the Sanskritword Amoolya, means priceless. It was suggested by a
quality control expert in Anandand it was chosen because it was a perfect acronym
forAnand MilkUnion Limited?
The Amul revolution was started as awareness among the farmers. It grew and
matured into a protest movement that was channeled towards economic prosperity.
Over five decades ago, the life of an average farmer in Kheda District was very
much likes that of his/her counterpart anywhere else in India. His/her income was
derived almost entirely from seasonal crops. The income from milk buffaloeswas
undependable. Milk producers had to travel long distances to deliver milk to the
only dairy, the Polson Dairy in Anand often milk went sour, especially in the
summer season, as producers had to physically carry milk in individual containers.
Private traders and middle men controlled the marketing and distribution system for
the milk. These middlemen decided the prices and the off-take from the farmers by
the season. As milk is perishable, farmers were compelled to sell it for whatever
they were offered. Often, they had to sell cream and gheeat throw-away prices. Inthis situation, the private trader made a killing.
Moreover, the government at that time had given monopoly rights to Polson Dairy,
which was run by a person of Parsidescent, (around that time Polson was the most
well known butter brand in the country) to collect milk from Anand and supply to
Mumbai city in turn (about 400 kilometers away).
Another problem farmers faced was that in winter the milk output of buffaloes
doubled which caused prices to fall down even further. India ranked nowhere
amongst milk producing countries in the world in 1946. Gradually, the realization
dawned on the farmers with inspiration from then nationalist leaders
SardarVallabhbhai Patel(who later became the first Home Minister of free India)
and Morarji Desai(who later become the Prime Minister of India) and local farmer,
freedom fighter and social worker Tribhovandas Patel, that the exploitation by the
trader could be checked only if they marketed their milk themselves. Amul was the
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result of the realization that they could pool up Their milk and work as a
cooperative.
Market share of Amul in India
AMUL
40%
HUL
30%
VADILAL
20%
OTHERS
10%
MARKET SHARE
Among the major players in this industry AMUL has a market share of around
40%,. Hindustan Unilever Ltd with an estimated market share of 30% represented
mainly by Kwality Walls brand and lastly Vadilal is the player in the national
market with 20% of the market share and 10% of the others brand like Mother
Dairy, Arun Dairy and some local brands
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SWOTANALYSIS
MISSION &VISION OF AMUL
MISSION OF AMUL
The main mission of Amul is to help farmers. Farmers were the foundation stone of Amul
Company. The system works only for farmers and for consumers, not for profit. The main
aim of Amul is to provide quality products to the consumer at minimum cost. The goal of
Amul is to provide maximum profit in terms of money to the farmers.
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VISION OF AMUL
Vision of Amul is to provide and vanish the problems of farmers (milk producers) of their
livelihood. The Amuls apparition was to run the organization with the co-operation of four
main parties like the farmers, the representatives, the marketers and the customer.
ACHIVEMENTS
INTERNATIONAL CIO 100 AWARDS FOR RESOURCEFULNESS
GCMMF is a winner of the prestigious international CIO 100 award from IDG's
CIO Magazine, USA. The 2003 CIO 100 award recognizes the organizations
around the world that excel in positive business performance through resourceful
IT management and best practices.
This CIO International IT excellence Award has recognized the Cooperative
Movement & its Leadership under the "Amul" brand, initiated by Dr. V Kurien,
Milkman of India, whos main Motto is to build Indian Society economically &
literally strong through innovative cooperative resourceful network, so as toprovide quality service & products to the end consumers and good returns to the
farmer members.
This award has also given direction that IT need to be encouraged & adopted more
& more at grass root level and bridge the digital divide through proper training, re-
training so as to bring radical change & benefit to the Indian society.
It has also recognized the Managing Director, Mr. B M Vyas, who has taken IT
initiative by setting the direction "GCMMF as IT Company in Food business".
It has also inspired all the employees of GCMMF Enterprise to sustain the
challenges as a "Change Agent" by excelling their IT skills in order to transform
the people around them towards IT Integration (e-Vision) on both the ends of
supply chain (Village level Farmer to end consumer). This award also motivated
the each & every member dairy, Amul's wholesale distributors, retailers,
transporters and suppliers who have supported whole-heartedly the IT initiatives of
GCMMF.
The Gujarat Co-operative Milk Marketing Federation (GCMMF) has been
honoured at the CIO 100 Symposium & Award Ceremony on August 19, 2003, at
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the Broad moor in Colorado Springs, Colorado, USA. Shri Subbarao Hegde, Head
of IT had been to USA and received the said Award on behalf of GCMMF.
BOARD MEMBERS
Shri Ramsinh Prabhatsinh Parmar Chairman
Shri Rajendrasinh Dhirsinh Parmar Vice-Chairman
Shri Dhirubhai Amarsinh Zala Director Smt. Mansinh Kohyabhai Chauhan Director
Shri Maganbhai Gokalbhai Zala Director
Shri Shivabhai Mahijibhai Parmar Director
Shri Pravinsinh Fulsinh Solanki Director
Shri Chandubhai Madhubhai Parmar Director
Shri Bhaijibhai Amarsinh Zala Director
Shri Bipinbhai Manishankar Joshi Director
Smt. Sarayuben Bharatbhai Patel Director
Shri Ranjitbhai Kantibhai Patel Director
Shri B. M. Vyas Managing Director
G.C.M.M.F
Shri Deepak Dalal District Registrar
Shri Rahul Kumar Managing Director
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AMUL PRODUCTS
Bread Spreads
Amul Butter
Utterly ButterlyDelicious
Amul Lite
Low fat, low CholesterolBread Spread
Delicious Table
Margarine
The Delicious way toeat healthy
Beverage Range
Amul Kool Amul Kool Cafe
Kool Koko
A delight to ChocolateLovers. DeliciousChocolate taste
Nutramul Energy Drink
A drink for Kids -provides energy to suitthe needs of growing Kids
Amul Kool Chocolate
Milk
Amul Kool Flavoured
Bottled Milk
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Amul Kool Flavoured
Tetra Pack
Amul Masti Spiced
Buttermilk
Amul introduces the BestThirst Quenching Drink
Powder Milk
Amul Spray Infant Milk
Food
Still, Mother's Milk isBest for your baby
Amul Instant Full
Cream Milk Powder
A dairy in your home
Sagar Skimmed Milk
Powder
Which is especially usefulfor diet preparations orfor use by people on lowcalorie and high proteindiet.
Sagar Tea Coffee
Whitener
Amulya Dairy Whitener
The Richest, Purest DairyWhitener
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Fresh Milk
Amul Fresh Milk
This is the most hygienicmilk available in themarket. Pasteurised instate-of-the-art processing
plants and pouch-packedfor convenience.
Amul Gold Milk
Amul Taaza Double
Toned Milk
Amul Lite Slim and
Trim Milk
Amul Fresh Cream Amul Shakti Toned
Milk
Cheese
Amul Pasteurised
Processed Cheese
100% Vegetarian Cheesemade from microbialrennet
Amul Cheese Spreads
Tasty Cheese Spreads in 3great flavours..
Amul Emmental Cheese
The Great Swiss Cheesefrom Amul, has a sweet-dry flavour and hazelnutaroma
Amul Pizza Mozzarella
Cheese
Pizza cheese...makesgreat tasting pizzas!
Gouda Cheese
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For Cooking
Amul / Sagar Pure Ghee
Made from fresh cream.Has typical rich aroma
and granular texture. Anethnic product made bydiaries with decades ofexperience.
Cooking Butter
Amul Malai Paneer
Ready to cook paneer tomake your favouriterecipes!
Utterly Delicious Pizza
Mithai Mate
Sweetened CondensedMilk - Free flowing andsmooth texture. White tocreamy color with a
pleasant taste.
Masti Dahi
Desserts
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Amul Ice Creams
Premium Ice Cream madein various varieties andflavours with dry fruitsand nuts.
Amul Shrikhand
A delicious treats,anytime.
Amul Mithaee Gulab
Jamuns
Pure Khoya GulabJamums...best served
piping hot.
Gulab Jamun Mix
Amul Chocolates
The perfect gift for someone you love.
Amul Lassee
Amul Basundi
Health Drink
Nutramul
Malted Milk Foodmade from maltextract has thehighest proteincontent among all the
brown beveragepowders sold inIndia.
INDUSTRY PROFILE
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FOOD INDUSTRY
The food industry is the complex, global collective of diverse businesses that
together supply much of the food energy consumed by the world population. Only
subsistence farmers, those who survive on what they grow, can be considered
outside of the scope of the modern food industry.
The food industry includes:
Regulation: local, regional, national and international rules and regulations for
food production and sale, including food quality and food safety, and industry
lobbying activities
Education: academic, vocational, consultancy
Research and development: food technology
Financial services: insurance, credit
Manufacturing: agrichemicals, seed, farm machinery and supplies, agricultural
construction, etc.
Agriculture: raising of crops and livestock, seafood
Food processing: preparation of fresh products for market, manufacture of
prepared food products
Marketing: promotion of generic products (e.g. milk board), new products, public
opinion, through advertising, packaging, public relations, etc
Wholesale and distribution: warehousing, transportation, logistics
Retail: supermarket chains and independent food stores, direct-to-consumer,
restaurant, food services
ADVANTAGE OF INDIA UNDER FOOD INDUSTRY:
India is one of the largest food producers in the world
India has diverse agro-climatic conditions and has a large and diverse raw material
base suitable for food processing companies Investment requirement of around US$
15 billion exists in the food processing sector
India is looking for investment in infrastructure, packaging and marketing
India has huge scientific and research talent pool
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A largely untapped domestic market of 1000 million consumers
300 million upper and middle class consume processed food.
200 million more consumers expected to shift to processed food by 2010.
Well developed infrastructure and distribution network.
Rapid urbanization, increased literacy, changing life style, increased number of
women in workforce, rising per capita income- leading to rapid growth and new
opportunities in food and beverages sector.
50 per cent of household expenditure by Indians is on food items.
Strategic geographic location (proximity of India to markets in Europe and Far
East, South East and West Asia).
Under the food industry, Dairy product is very important part of food processing.
Dairy processing is acting good role in India.
Dairy Processing
India ranks first in the world in terms of milk production. Indian production stands
at 91 million tones growing at a CAGR of 4 per cent. This is primarily due to the
initiatives taken by the Operation flood programmes in organizing milk producers
into cooperatives; building infrastructure for milk procurement, processing and
marketing and providing financial, technical and management inputs by the
Ministry of Agriculture and Ministry of Food Processing Industries to turn the dairy
sector into viable self-sustaining organized sector. About 35% of milk produced in
India is processed. The organized sector (large scale dairy plants) processes about
13 million tones annually, while the unorganized sector processes about 22 million
tones per annum. In the organized sector, there are 676 dairy plants in the
Cooperative, Private and Government sectors registered with the Government of
India and the state Governments.
The Ministry of food Processing Industries is promoting organized Dairy
processing sector to accomplish upcoming demands of processed dairy products
and helping to identify various areas of research for future product development
and quality improvement to revamp the Indian dairy export by way of providing
financial assistance to the dairy processing units. 32 Units have been sanctioned
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financial assistance (Rs.591 lakhs) under the plan scheme of the Ministry during
the year 2006-07.
Major Indian and Overseas Players in the Food industry
ITC Limited
Parle Products Pvt. Ltd.
Agro Tech Foods
Amul
Perfetti India Ltd.
Cadbury India Ltd.
PepsiCo India Holdings
Nestle India Pvt. Ltd.
Britannia Industries Ltd.
Hindustan UniLever Limited
MTR foods limited
Godrej industries Limited
Dabur India Ltd.
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AMUL COMPETITORS
Amul have strong competitors in market like Britannia, Nestle, Pizza Hut, Nirulas, Hul
and Cadbury in various sectors which are represented below in form of diagram:-
ICECREAM
LIQUID FRESHMILK
PIZZA
COMPETITION
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THEOROTICAL BACKGROUND
Distribution Strategy
Marketing consists of the "4Ps:" product, place, promotion and price. Product refers
to what is being sold, promotion to how it is touted in the market, and price to the
strategy used to generate revenue. Place is the method of distribution that the
company selects to move its product to the market. This consideration, distribution,
can be critical to a company's success since choosing the wrong distribution system
can mean that the company's product is not available to the consumers when they
need it. Lost sales result, and companies can suffer serious consequences due to
poor distribution. This research considers the overall issue of distribution and
factors that companies need to take into account when developing a distribution
strategy.
Few manufacturers sell their goods directly to end users; one of the primary
exceptions to this is farmers who sell to consumers. However, most manufacturers
sell their goods to wholesalers, who sell to distributors, who sell to retail stores,
who sell to consumers. Sometimes the distributor is eliminated, or the wholesaler
and distributor are the same. In some instances, such as with retailers who are as
large as Wal-Mart, the manufacturers do market directly to the retailer.
This system, while it sounds cumbersome when described, can actually prove quite
efficient. Manufacturers typically produce large quantities of goods. These are
divided into smaller shipments (but still containing large numbers here is no excess
inventory carrying costs. However, this is not an effective method for retailers
because they cannot determine demand with the accuracy of a foreman on a
production line. Recommendations Companies who are evaluating their distribution
system need to take into account the end user and the best way to reach that user.
Industrial users are not reached effectively through retailers, and consumers are not
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reached through industrial supply houses. Some industries do not lend themselves
well to wholesalers and distributors, and manufacturers serving only a local market
may be able to more efficiently serve as wholesaler to their clients. Building a close
relationship with customers and suppliers is important so that manufacturers and
distributors have a clear idea of the factors behind increases (or decreases) in
demand. This can help prevent surpluses and shortages and ensure that all of the
participants in the distribution channel receive the maximum benefit from the
system.
Distribution Strategies Importance
For product-focused companies, establishing the most appropriate distribution
strategies is a major key to success, defined as maximizing sales and profits.
Unfortunately, many of these companies often fail to establish or maintain the most
effective distribution strategies. Problems that we have identified include:
Unwillingness to establish different distribution channels for different products
Fear of utilizing multiple channels, especially including direct or semi-direct sales,
due to concerns about erosion of distributor loyalty or inter-channel cannibalization
Failure to periodically re-visit and update distribution strategies
Lack of creativity and resistance to change
To be fair, there can be sound reasons for these perceived weaknesses. More
typically, however, they are due to failings such as simple inertia, lack of
understanding of the ultimate customers and their preferences, or a failure to
acknowledge the importance of a distribution strategy
Distribution system
Distribution system has two divisions, namely
Physical Distribution
Channels of distribution
The channel members such as mercantile agents, wholesalers and retailers are
middlemen in distribution and they perform all marketing functions .Such
middlemen facilitate the process of exchange and create time, place and position
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utilities through matching and sorting process. Sorting enables meeting the supply
with consumer demand.
Physical distribution-
Physical distribution looks after physical handling of goods and assures maximum
customers service .It aims at offering delivery of right goods at right time at right
place to the customers physical distribution activities cover at right placed to the
customers Physical distribution cover-
Order processing
Handling of goods
Packaging
Warehousing
Transportation
Inventory control
Customer service
All middlemen in distribution perform these functions and they assure placing the
product within an arms length of customers desire and demand.
Channels of distribution
A channel of distribution is an organized network or a system of agencies network or asystem of agencies and institutions, which in combination perfume all the activities
required to link producer with users and users with producers to accomplish the marketing
task.
According to Phillip kotler-Marketing channels is an independent organization involved
in the process of making a product or service available for use or consumption.
Thus, a channel of distribution is a pathway directing is a pathway directing the flow of
goods and services from producers to consumers composed of intermediaries through their
functions and attainment of mutual objectives. These intermediaries are as follows:-
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Manufacturer-Consumer
In this channel Manufacture sells directly to ultimate consumer. The major ways
are door to door, home parties, mail order, telemarketing, television selling and
manufacturer owned stores.
Manufacturer Retailer Consumer
This channel has one intermediary namely retailer. The most common channel for
consumer durables such as textiles, shoes, readymade garments and so on.
Manufacturer-Wholesaler-Consumer
This channel bypasses the last name retailer, when there are large and institutional
buyers. Example-industrial buyers, Government, consumer co-operatives,
Hospitals, educational institutions, business houses.
Manufacturer-Agent-Wholesaler-Retailer-Consumer
This is a longest channel of distribution, where the producer uses the services of
agent middlemen such as sales agent for the initial dispersion of goods. The agent
in turn may distribute to wholesalers, who in turn sells to retailers and thus reaches
consumers.
Functions of the distribution channels in brief:-
Buying and assembling of goods.
Providing warehouse facility.
Providing transportation of goods from products to their warehouse.
Financing
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Risk bearing, Grading, packing, and packaging
Dispatching and selling the goods.
Advertising
Providing market information
Informing about consumer preferences.
Factors affecting distribution strategy
Market factors:
An important market factor is "buyer behavior"; how do buyers want to purchase
the product? Do they prefer to buy from retailers, locally, via mail order or perhaps
over the Internet? Another important factor is buyer needs for product information,
installation and servicing. Which channels are best served to provide the customer
with the information they need before buying? Does the product need specific
technical assistance either to install or service a product? Intermediaries are often
best placed to provide servicing rather than the original producer - for example in
the case of motor cars.
The willingness of channel intermediaries to market product is also a factor.
Retailers in particular invest heavily in properties, shop fitting etc. They may
decide not to support a particular product if it requires too much investment (e.g.
training, display equipment, warehousing).
Another important factor is intermediary cost. Intermediaries typically charge a
"mark-up" or "commission" for participating in the channel. This might be
deemed unacceptably high for the ultimate producer business.
Producer factors
A key question is whether the producer has the resources to perform the functions
of the channel? For example a producer may not have the resources to recruit, train
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and equip a sales team. If so, the only option may be to use agents and/or other
distributors.
Producers may also feel that they do not possess the customer-based skills to
distribute their products. Many channel intermediaries focus heavily on the
customer interface as a way of creating competitive advantage and cementing the
relationship with their supplying producers.
Another factor is the extent to which producers want to maintain control over how,
to whom and at what price a product is sold. If a manufacturer sells via a retailer,
they effective lose control over the final consumer price, since the retailer sets the
price and any relevant discounts or promotional offers. Similarly, there is noguarantee for a producer that their product/(s) are actually been stocked by the
retailer. Direct distribution gives a producer much more control over these issues.
Product factors:
Large complex products are often supplied direct to customers (e.g. complex
medical equipment sold to hospitals). By contrast perishable products (such as
frozen food, meat, bread) require relatively short distribution channels - ideally
suited to using intermediaries such as retailers.
Distribution Intensity
There are three broad options - intensive, selective and exclusive distribution: Intensive distribution aims to provide saturation coverage of the market by using all
available outlets. For many products, total sales are directly linked to the number of
outlets used (e.g. cigarettes, beer). Intensive distribution is usually required where
customers have a range of acceptable brands to choose from. In other words, if one
brand is not available, a customer will simply choose another.
Selective distribution involves a producer using a limited number of outlets in a
geographical area to sell products. An advantage of this approach is that the
producer can choose the most appropriate or best-performing outlets and focus
effort (e.g. training) on them. Selective distribution works best when consumers are
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prepared to "shop around" - in other words - they have a preference for a particular
brand or price and will search out the outlets that supply.
Exclusive distribution is an extreme form of selective distribution in which only one
wholesaler, retailer or distributor is used in a specific geographical area.
Amul catering need of every sections of society
CUSTOMER BASED MARKET SEGMENTATION
Kids:- Amul cool chocolate milkNutramul energy drinkAmul kool milk shake
Women: - Amul calci
Youth: - Utterly Delicious PizzaAmul Emmental cheeseAmul cheese spreadsv
Caloric Conscious:-Amul liteSagar skimmed milk pasteAmul lite slim trim milk
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Health Conscious:-NutramalAmul Shakti
Health food drinkINDUSTRY BASED MARKET SEGMENTATION
MILK:-
Ice cream manufactures
Restaurant/Food chains
Coffee shop chains
Temples
Butter/cheese/ghee:-
Bakery Confectionaries
Pizza Retailers
REASONS FOR SUCCESS
Robust Supply chain
Vast and complex hierarchical network. Co-operation stretches from small suppliersto large fragmented markets
Low cost strategy
Affordable and attractive to consumer
Guaranteeing them value for money
Diverse Product Mix
Amul Butter
Milk Powder
Ghee
Amulspray
Cheese
Chocolates
Shrikhand
Ice-cream
Nutramul
Amulaya
Strong distribution network Available in 500,000 retail available across India
Available 3500 distributors
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Available dry and cold warehouses to buffer inventory
Technology and e-initiatives
New Product Process technology.
SCOPE OF THE PROJECT
Being in the field work, I came into contact with distributors & retailers and
enriched my knowledge regarding marketing field.
A. I have increased my knowledge regarding the Retailers problem and strategy follow
by distributors to sell their products to Retailers.
B. The Retailers expectations & opinion from the Company is known during the field
work.
C. To help Company to design better distribution channel.
D. Binding customers loyalty by providing best quality to the retailers.
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OBJECTIVES OF THE STUDY
According to needs of the Company I have decided my objectives:-
Primary objectives
1. To know the awareness level of the Amul products among Retailers.
2. To know about the availability of the Amul products in local Retail Outlet
3. To know the Retailers problems in regards to AMUL products as well as distribution
process.
Secondary objectives
1. To understand Retailer buying Behaviors.
2. To know the competitors availability in the market
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MARKETING RESEARCH METODOLOGY
Marketing research plays an important role in the process of marketing. It helps the
firm to acquire a better understanding of the consumers, the competition and the
marketing environment.
DEFINITION
Marketing research is a systematic gathering, recording and analysis marketing
problem to facilitate decision making.
- Coundiff & Still.
Marketing research is a systematic problem analysis, model building and fact
finding for the purpose of important decision making and control in the marketing
of goods and services.
- Phillip Kotler.
MAIN STEPS INVOLVED IN MARKETING RESEARCH
Defining the Marketing Problem to be tackled and identifying the market research
pr
(1) Define the problem and its objectives.
(2) Identify the problem.
(3) Determine the information needed.
(4) Determine the sources of information.
(5) Decide research methods.
(6) Tabulate, Analyze and interpret the data.
(7) Prepare research report.
(8) Follow-up the study.
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(1) Define the problem and its objectives: - This includes an effective job in planning
and designing a research project that will provide the needed information. It also
includes the establishment of a general framework of major marketing elements
such as the industry elements, competitive elements, marketing elements and
company elements.
(2) Identify the problem: - Identifyingthe problem involves getting acquainted with
the company, its business, its products and market environment, advertising by
means of library consultation and extensive interviewing of companys officials.
(3) Determining the specific Information needed :- In general the producer, themanufacturer, the wholesaler and the retailer try to find out four things namely :-
(a) What to sell
(b) When to sell
(c) Where to sell
(d) How to sell
(4) Determine the sources of information:-(a) Primary Data: - Primary datas are those which are gathered
specially for the project at hand, directly e.g. through questionnaires &
interviews. Primary data sources include company salesman, middleman,
consumers, buyers, trade associations executives & other businessman & even
competitors.
(b) Secondary Data: - These are generally published sources,
which have been collected originally for some other purpose. Source are internal
company records, government publication, reports & publication, reports &
journals, trade, professional and business associations publications & reports.
(4) Decide Research methods for collecting data: - If it is found that the
secondary data cannot be of much use, collection primary data become
necessary. Three widely used methods of gathering primary data are
A) Survey
B) Observation
C) Experimentation
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d) Panel Research
A) Survey Method: - In this method, information gathered directly from individual
respondents, either through personal interviews or through mail questionnaires or
telephone interviews.
B) Observation Method: - The research data are gathered through observing and
recording their actions in a marketing situation. This technique is highly accurate. It is
rather an expensive technique.
C) Experimental Method: - This method involves carrying out a small scale trial
solution to a problem, while at the same time, attempting to control all factors relevant
to the problem. The main assumption here is that the test conditions are essentially the
same as those that will be encountered later when conclusions derived from the
experiment are applied to a broader marketing area.
D) The Panel Research: - In this technique the same group of respondents is contacted
for more than one occasion; and the information obtained to find out if there has been
any in their taste demand or they want any special quality, color, size, packing in the
product.
(5) Follow-up the study: - The researchers, in the last stage, should follow up this
study to find if his recommendation are being implemented. The marketing
research process which I adopted is influenced by theory of marketing consist the
following stages:-
Defining the problem and the research objective: -
The objective of my research is to determine the distribution strategies in target market.My
target markets are M.G road, Camp, Shivaji Market and Bhawani Peth.
Developing the research plan: -
When the problem is identified, the next step is to prepare a plan for getting the
information needed for the research. The present study will adopt the well structure
questionnaire and interview for collecting the necessary data from the Retailers.
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Collecting and Sources of data:-
Market research requires two types of data, i.e., primary data and secondary data. I used
both types of data for collecting information. Mostly primary data I used well-structuredquestionnaires to collect information from the Retailers..
In my project primary data involves:-
Interviewing the Amul Retailers
Observation at retail outlets.
Interviewing was done on basis of questionnaire for retailers; observation method was
followed for distributors and consumers. Lots of care was taken at the time of
preparing questionnaire so that it gives a better and authentic result.
Secondary Data: - The secondary data are those which have already been collected by
someone else and which have already been passed through statistical process.
In my project secondary data involves:-
Organization , journals , and booklets
Retailers price list
Analysis of Collecting Data:-
This involves converting raw data into useful information. It involves tabulation of data,
using Microsoft Excel on them for developing Graphs and chart to retrieve useful
information from the data collected.
Report Research Findings:-
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This is the part which gives a quick view of my marketing survey effort. The report with
the research finding is a formal written document. The research finding and personal
experience will be used to propose suggestion & recommendations to improve the
distribution strategy. In this research report I include everything whatever I found at the
time of survey.
RESEARCH PROCESS
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RESEARCH DESIGN
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Research design is the plan structure and strategy of investigation conceived so as
to obtain answers to research question and control variance.
Research design is the blueprint for the collection, measurement, and analysis of
data.
Research design category into three:-
Research design in case of exploratory research studies.
Research design in case of descriptive and diagnostic research studies.
Research design in case of hypothesis-testing research studies.
RESEARCH DESIGN USED IN MY RESEARCH
METHOD USED FOR DATA COLLECTION
Observation and Interview of retailers
TOOLS FOR DATA COLLECTION
Primary Data: Interview Schedule
Secondary Data: Company journals & sites
SAMPLE DATA
Universe : - Retailers of 4 areas of pune
Population : - Retailers, their competitor, selling outlets, presently not
selling Amul brand but wanted to sell.
Sample Size : - Number of retailers are 120
Sample method: - Convenient sampling method
Statistical technique: - Percentage method
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DATA ANALYSIS
TITLE
(1) Which of the following brand do you provide?
OBSERVATION TABLE
Parameter Amul Cadbury Nestle HUL
Respondents 112 98 87 115
Percentage (%) 93 82 73 96
GRAPHICAL REPRESENTATION
INTERPRETATION
93% Retailers have Amul products, 82% have Cadbury products, 73% have Nestle
products, and 96% have Hul products.
HUL products are available in the retailers shop more compare to Amul and other
Brands.
So research shows that Amul finds second place in retailer shop.
TITLE
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2. How do you contact with the Amul distributor?
OBSERVATION TABLE
Sample size-120
Medium Telephone Email Personal Visit
Respondents 88 5 27
Percentage (%) 73 4 23
GRAPHICAL REPRESENTATION
INTERPRETATION
73% Retailers communicate with Telephone, 23% communicate with Personal visit
and 4% communicate with Email to their distributor respectively.
Retailers finds convenient with Telephone compare with others means of
communication.
So, research shows that Telephone is the most popular means of communication
TITLE
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(3) Does Amul distributor supply exact quantity as per order?
OBSERVVATION TABLE
Sample size-120
Supply of product Yes No
Respondent 68 52
Respondent (%) 56.7 43.3
GRAPHICAL REPRESENTATION
INTERPRETATION
Out of 120 Retailers,
68(56.7%) retailers say that distributor supply as per order but 52(42.3%) retailers
complain short supply of demanded product.
So, we can say that supply given by distributor is not equal to demand of retailers.
TITLE
(4) What is your opinion regarding speed of receiving Amul products after placing order
by Retailers?
OBSERVATION TABLE
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Sample size 120
Frequency of
product
Fast Very Fast Medium Slow
Respondent 18 32 60 10
Respondent (%) 15 27 50 8
GRAPHICAL REPRESENTATION
INTERPRETATION
Out of 120 Respondents,
18(15%) Retailers feels that frequency of receiving products are fast, 32(27%) feels
that frequency are very fast, 60(50%) retailers feels that frequency are medium, and
10(8%) feels that frequency are slow.
So, we can that frequency of receiving products after placing order by retailers are
medium.
TITLE
5. What is your opinion regarding Packaging of Amul products?
OBSERVATION TABLE
Sample size-120
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Packaging Excellent Good Satisfied Poor
Respondent 17 51 43 9
Respondent (%) 14.2 42.5 35.8 7.5
GRAPHICAL REPRESENTATION
INTERPRETATION
14.2% Retailers believe that amul have got Excellent Packaging, 42.4% believe that Amul
have good packaging, 7.5% Retailers believe that Amul have poor packaging and 35.8%
Retailers are satisfy with Amul packaging
So, we can say that Amul have got packaging advantage
6.TITLE
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Do you have cooling equipment?
OBSERVATION TABLE
Sample size-120
Cooling equipment Yes No
Respondent 97 23
Respondent (%) 81 19
GRAPHICAL REPRESENTATION
INTERPRETATION
Out of 120 retailers, 97(81%) retailers say that they have cooling equipment while
23(19%) retailers say that they have no cooling equipment.
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TITLE
7. How often the Amul product does get damaged?
OBSERVATION TABLE
Sample size-120
Frequency of
damaged goods
Never Sometimes Many times Always
Respondent 9 91 15 5
Respondent (%) 7.5 75.8 12.5 4.2
GRAPHICAL REPRESENTATION
INTERPRETATION
Out of 120 respondents,
91 retailers(71.8%) complaint that products sometimes damaged during the distribution
process, 15(12.5%) complaints that many times products damaged, 5(4.2%) complaints
that products always damaged and 9(7.5%) Retailers believe that products never
damaged during distribution process.
So, we can say that damaging of products takes place during distribution process which
should be minimized.
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TITLE
(8) Which Company solve problem fast in terms of Replacement?
OBSERVATION TABLE
Sample size-120
REPLACEMENT Amul Cadbury Nestle HUL
RESPONDENT 10 53 34 23
RESPONDENT
(%)
8.3 44.2 28.3 19.2
GRAPHICAL REPRESENTATION
INTERPRETATION
Out of 120 Retailers,
53(44.2%) retailers are happy with the replacement facility given by Cadbury, 34
(28.3%) retailers are happy with the replacement facility of Nestle, 10(8.3%) are happy
with replacement facility of Amul and 23(19.2%) are happy with replacement facility
of HUL.So, we can say that Amul gives the least Replacement facility.
TITLE
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9. Are you getting facility of credit purchase for Amul products?
OBSERVATION TABLE
Sample size-120
Credit Purchase Yes No
Respondent 13 107
Respondent (%) 10.8 89.2
GRAPHICAL REPRESENTATION
INTERPRETATION
11% Respondents saying that Company is providing credit facility while 89 % are not
agree with this view.
TITLE
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11 Which Company gives you better sales promotion schemes?
OBSERVATION TABLE
Sample size-120
Sales promotionschemes
Amul Cadbury Nestle HUL
Respondent 39 32 29 20
Respondent (%) 32.5 26.7 24.2 16.6
GRAPHICAL REPRESENTATION
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INTERPRETATION
From the above pie chart we can say 32.5% retailers better sales promotion schemescompare to other Company.26.7% favour for Cadbury, 24.2% for Nestle and 16.6% forHUL in providing sales promotion schemes respectively
TITLE
(13) Which Company gives you better margin on sale?
OBSERVATION TABLE
Sample size-120
Sales margin Nestle Cadbury Amul Hul
Respondent 23 32 22 43
Respondent (%) 19.2 26.7 18.3 35.8
GRAPHICAL REPRESENTATION
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INTERPRETATION
38.8% Retailers believe that Hul gives the better sales margin , 26.7% Retailers believe
that Cadbury gives better sales margin while 19.2% believe in Nestle and 18.3% believe inAmul in terms of sales margin.
So, we can say that sales margin is one of the factors that makes Amul unpopular in retailoutlets.
OBSERVATIONS AND FINDINGS
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Amul finds second place in Retailers outlets after HUL products as 93% Retailers have
Amul products and 96 % have HUL products. Cadbury finds third place and Nestle fourthplace with 82% and 73% Retailers have these products respectively.
Telephone is the most popular means of communication as 73% Retailers communicate
with telephone to their distributors. Again 23% communicate with Personal visit and
4% communicate with Email to their distributors.
57% Retailers said that distributor supply as per order but 43% Retailers complaints
about short supply of demanded product.
Replacement facility given by Amul is not up to the mark as only 8.3% are happy with
replacement facility given by Amul compare to other brands like Cadbury, Nestle and
HUL.
As per survey 81% retailers have cooling equipment while 19% retailers said that
they have no cooling equipment.
.
Survey shows that75.8% retailers complaint that products sometimes damaged
during the distribution process, 12.5% complaints that many times products damaged,
4.2% complaints that products always damaged and 7.5% retailers said that products
never damaged during distribution process.
Sales margin is one of the factors that makes Amul unpopular in retail shop as
survey shows that 38.8% retailers said that HUL gives the better sales margin, 26.7%
retailers said that Cadbury gives better sales margin while 19.2% said Nestle and
18.3% said Amul in terms of sales margin.
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Amul have got Packaging advantage as survey shows that14.2% retailers believe
that Amul have got Excellent Packaging, 42.5% believe that Amul have good
packaging, 7.5% retailers believe that Amul have poor packaging and 35.8%
Retailers are satisfy with Amul packaging.
Survey shows that 32.5% retailers say that Amul provides better sales promotion
schemes compare to other Company.26.7% favour for Cadbury, 24.2% for Nestle
and 16.6% for HUL in providing sales promotion schemes.
Distribution to Retailers: - Amul having 3-4 vans with each distributor to distribute
the product according to the demand.
Payment period:-Payment collection is done by distributors between 12pm to 4pm
in cash as well as in demand draft and cheques.
Payment method:-During the survey, it is observed that only 11% were only getting
credit facility, while 89% wants product for 2-3 days credit. But company provide
credit only if they maintain good relationship..
.
.
LIMITATIONS
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Some retailers do not gives time as they are busy with customers.
Some retailers manipulated the facts and figures while interview.
Consumers taste and preference changes very frequently.
As the research work needs to be undertaken in the morning time, it was found difficultto meet many retailers.
Large sample size would have given much better conclusion.
Lack of Company support and inadequate data due to Company privacy and secrecy
makes my research incomplete.
.
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SUGGESTIONS
Proper delivery should be done and Retailers should get products as per order. For this
distributor can develop good distribution network.
During distribution process care should be taken in handling of products so that
damaged should be minimized.
Company person should visit to the retailers regularly so that complaints of retailers
about distributor can be taken into notice.
.
Replacement facility should be provided up to certain extent
.
Margin of sales should be increased as it motivates retailers to push the sales of
product.
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CONCLUSION
Amul is confident of growing its business through innovation coupled with an
aggressive marketing and rural distribution drive. Despite several shortcomings
Amul contains brand name and have good promotion program.
The major problem as far as Pune concerned is high competition and loyalty
towards competitors.
There is need for proper concentration on marketing strategy especially on
promotion programme, delivery of the product, and facilities like replacement and
credit to retailers.
Amul should implement and amend marketing strategy as soon as possible because
Nestle, HUL and Cadbury also introducing new flavor and offering consumer and
retailer.
The Amul should focus on accelerated growth of the impulse segment, through
more focused brands and deliver affordable products through appropriate
innovation. This will provide the platform for a stronger performance in the years
ahead.
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BIBLIOGRAPHY
BOOKS:-
Kotler Philip: Marketing Management, eleventh edition, Pearson Education PvtLtd. Indian Branch, Delhi.
C.R. Kothari: Research Methodology (Methods & Techniques), Second Edition,New Age International Publishers, New Delhi.
V.S. Ramaswamy: Marketing Management, third edition, MacMillan India Ltd.New Delhi
MAGAZINE:-
Business Today
India Today
WEBSITE:-
www.amul.com/companyprofile.htm/annualreport.htm on
www.wikipedia.com on 27/8/09
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ANNEXURE
Name of Retail outlet ---------------------
Address-------------------------------
Contact No------------------------
Email id------------------------
1. Which of the following brand do you provide?
(a) Amul (b) Cadbury
(c) Nestle (d) Hul
2 How do you contact with the Amul distributor?
(a)Telephone (b) Personal visit of Employee
(c)Email
3. Does Amul distributor supply exact quantity as per order?
(a) Yes (b) No
4. What is the speed of receiving the products after placing Amul order by you?
(a) Very fast (b) Fast
( c) Medium (d) Slow
5. What is your opinion regarding Amul packaging?
(a) Excellent (b) Good
(c) Satisfied (d) Poor
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6 Do you have cooling equipment?
(a)Yes (b) No
7. How often the Amul product does get damaged?
(a) Always (b) Sometimes
(c) Never (d) many times
8. Which Company solve problem fast in terms of Replacement?
(a) Amul (b) Cadbury(c) Nestle (d) Hul
9 Are you getting facility of credit purchase for Amul products?
(a) Yes (b) No
10. Which Company gives you better sales promotion schemes?
(a) Amul (b) Cadbury
(c) Nestle (d) Hul
11. Which Company giving better margin on sales?
(a) Amul (b) Cadbury
(c) Nestle (d) Hul
12. Would you like to give any suggestions?
i. -----------------------------
ii. ------------------------------
iii. ---------------------------------
DATE SIGNATURE
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