Capstone Research Project (Avinash Arreja PGDM 3494)
Capstone Research Project (Avinash Arreja PGDM 3494)
Capstone Research Project (Avinash Arreja PGDM 3494)
Management
SUBMITTED TO
Departement of Marketing Management ITM Business School
2017-2019
2
INDEX
CONTENT PAGE NO.
Introduction 3
Overview 4
Literature Review 6
History & Evolution 5
Domestic & Foreign Competition 7
Sectoral Growth 9
Government policies & regulations 10
PESTEL analysis 11
Cluster Mapping 17
Introduction 19
3
INTRODUCTION
Frequent purchase
Low involvement (little or no effort to choose the item)
Low price
Short shelf life
Rapid consumption
High volumes
Low contribution margins
Extensive distribution networks
High stock turnover
4
OVERVIEW
The Indian FMCG industry represents nearly 2.5% of the country’s GDP.
The industry has tripled in size in past 10 years and has grown at ~17%CAGR
in the last 5 years driven by rising income levels, increasing urbanisation, strong
rural demand and favourable demographic trends.
The sector accounted for 1.9% of the nation’s total FDI inflows in April 2000-
September 2012. Cumulative FDI inflows into India from April 2000 to April
2013 in the food processing sector stood at `9,000.3 crore, accounting for
0.96% of overall FDI inflows while the soaps, cosmetics and toiletries,
accounting for 0.32% of overall FDI at `3,115.5 crore.
Food products and personal care together make up two-third of the sector’s
revenues.
Rural India accounts for more than 700 mn consumers or 70% of the Indian
population and accounts for 50% of the total FMCG market.
With changing lifestyle and increasing consumer demand, the Indian FMCG
market is expected to cross $80 bn by 2026 in towns with population of up to
10 lakhs.
India's labor cost is amongst the lowest in the world, after China & Indonesia,
giving it a competitive advantage over other countries.
Unilever Plc's $5.4 billion bid for a 23% stake in Hindustan Unilever is the
largest Asia Pacific cross border inbound merger and acquisition (M&A) deal
so far in FY’14 and is the fifth largest India Inbound M&A transaction on record
till date.
Excise duty on cigarette has been increased in the Union Budget for 2013-14,
which would hit major industrial conglomerates like ITC, VST Industries in the
short term.
5
Key Concerns for the sector:
High inflation
Rising cost of inputs
Emergence of private labels
Counterfeits and pass-offs
Rupee depreciation may hit margins of companies
Infrastructure bottlenecks
6
Objective of the Report
3. To know the factors which affect consumer buying behaviour with Amul
Chocolates
7
LITERATURE REVIEW
FMCG scenario
The term FMCG (fast moving consumer goods), although popular and frequently used
does not have a standard definition and is generally used in India to refer to products
of everyday use. Conceptually, however, the term refers to relatively fast-moving items
that are used directly by the consumer. The Indian FMCG sector has a market size of
US$ 13.1 billion and is the fourth largest sector in the Indian economy. A well-
established distribution network, mature logistics, intense competition between the
organized and unorganized segments, National brands and private labels/local brands
characterize the sector. It has been estimated that FMCG sector sales in India is likely
to increase from Rs. 92,100 cores in 2011-12, to over Rs.1,30,000 cores in 2015. With
the presence of 12.2% of the world population in the villages of India, the Indian rural.
FMCG market is formidable indeed. The Indian rural market has more than 700 Million
Consumers (70% of the Indian population) and accounts for 50% of the total FMCG
market. The Personal care category in India was valued at Rs. 54.6 billion. An average
Indian spends 8% of his income on personal care products. Personal care mainly
consists of Hair Care Skin Care, Oral Care, Personal Wash (Soaps), Cosmetic and
Toiletries, Feminine Hygiene.
The sales of FMCG Personal care segment is growing by leaps and bounds in Kerala,
with the most literate and trans-culture embracing consumers in India. Kerala has been
witnessing a social transformation over the past decade to form a modern consumerist
state with little focus on farming sector, increased interest in I.T related parks,
educational services, medical facilities and tourism, higher income with huge
remittances from the NRI’s and increased living standards even in the rural areas
providing better growth prospects and demand for the FMCG sector. The per capita
consumption of FMCG products is on the rise, thanks to the consumer acculturation.
The deeper market penetration and positioning of FMCG brands catering.
8
DOMESTIC FMCG:
Domestic FMCG firms log more revenue than MNCs in FY16: Report
Country's seven leading FMCG companies have fared better than their multinational
peers in terms of revenue growth in India during 2015-16 fiscal, says a report.
Among the domestic FMCG majors, ITC Ltd reported a revenue of $ 5,944.79 million,
while Britannia Industries Ltd's revenue was at $ 1,222.75 million, the report said.
Dabur India's revenue stood at $ 884.62 million and Godrej Consumer Products Ltd
reported a revenue of $ 740.24 million. Marico's revenue was at $ 761.14 million while
that of Amul was $ 743.69 million.
"The performance of Patanjali Ayurved has been unmatched and leaves behind all its
competitors in the segment with record growth of 146.31 per cent in the revenue on
year-on-year basis. Patanjali Ayurved achieved the revenue of $ 769.23 million during
2015-16," the report said.
On the other hand, revenues of multinational companies such as Hindustan Unilever
Ltd stood at $ 4,921.10 million, while Procter & Gamble Hygiene & Health Care Ltd
reported revenue of $ 382.20 million.
GlaxoSmithKline Consumer Healthcare Ltd's revenue was at $ 662.88 million, while
revenues of Colgate-Palmolive (India ) Ltd's and Gillette stood at $ 640.35 million and
$ 321.62 million, respectively.
As per the study, Nestle's revenue was at $ 1,257.74 million and PepsiCo India
reported a revenue of $ 1,250.77 million.
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Foreign competitors:
FMCG is an industry where the competition goes on for years. There are so many
tactics to fight competition in FMCG, that the companies do not back off and from time
to time they keep introducing new measures to ward off competitors. Furthermore, this
industry is pockmarked with unorganised competition wherein small and medium
manufacturers also give tough competition to established companies. Here we discuss
the top 6 FMCG rivals of all time, companies which have been in competition with each
other for years.
Due to their intense rivalry, no other soft drink brand has been able to survive in this
market. Thus, the 2nd highest FMCG rivalry award goes to Pepsi vs Coke.
10
products are widely in demand in the market. And they sell in huge volumes. However,
Nestle products just challengers to the market leader – Dairy milk and Cadbury from
Kraft foods.
Dairy milk is one of the most marketed and most liked chocolates across India. At the
same time, Cadbury celebrations is a popular gifting product and targets occasions
and festivals with an emotional touch. In this rivalry, nestle is quite far behind but has
always been the thorn in an otherwise flawless leadership by Cadbury.
Where Nestle has KitKat, Cadbury has Perk. Similarly, Cadbury has its own version
of Eclairs. Thus, these FMCG rivals are set to be rivals for the coming years. Though,
it can be forecasted that Nestle will remain the challenger and Cadbury the market
leader.
These two toothpaste brands have always been at loggerheads and the situation does
not look like improving in the near future. Where Colgate has the brand value,
Pepsodent has the powerful distribution support of HUL. Because of all
other products of HUL, pepsodent reaches even rural areas easily and hence has a
high turnover. Off course, there are other products in the toothpaste market, but these
two are the toughest competitors amongst them all.
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Sectoral growth:
According to a CII-BCG white paper on the FMCG sector, growth in disposable
income, increased urbanisation, and the increase in the number of nuclear households
are driving the growth of the Indian branded FMCG sector, which is pegged at about
$65 billion and has been growing at a robust pace.
“The FMCG sector has been delivering far superior returns over the past few years
compared to most other sectors. Our projections indicate that the sector will continue
to grow by 13-14 per cent in the next 5-10 years and is likely to become a $220-240
billion industry by 2025,” Singhi added.
The CII-BCG white paper will be unveiled on Monday at the CII National FMCG
summit, which will see top CEOs deliberating on the theme ‘Re-imagining FMCG in
India’.
Shiv Sivakumar, Chairman, CII National Committee on FMCG 2015-16, & Chairman
and CEO, PepsiCo India, said the FMCG sector is already a key driving force behind
‘Make in India’ and a bedrock of talent.
"India is at the cusp of the FMCG S-curve and there is significant room to grow over
the next 5-10 years. A nominal GDP growth rate of roughly 12 percent over the next
three years could signal an FMCG growth by over 15 per cent, depending on player
action," the CII-Bain & Company said.
The report noted that the industry has seen the growth rate accelerating in 2016 over
the previous two years, with 18 of the 22 categories recording an uptick, driven by
rural markets.
Last year, the FMCG industry grew at 9 percent till October and rural growth was 1.7
times the urban.
Across these 22 categories, volume growth was driven by underlying penetration gains
and even highly penetrated categories such as toothpaste and hair oil, both with over
95 per cent penetration, recorded material penetration gains, it added.
"Food emerged as the fastest growing segment at 10 percent, with larger towns and
more affluent consumers driving this growth. On the other hand, home care grew at 9
percent, which was driven by less affluent consumers residing in small towns and rural
areas".
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Government policies and regulations:
GST, upon being implemented shall replace the multiple indirect taxes levied on
FMCG sector with a uniform, simplified and single-point taxation system. A swift move
to the proposed GST may reduce prices, bolstering consumption of FMCG products.
The Food Security Bill has been passed recently by the Union Cabinet. As per the bill,
5Kg of food grains per person per month will be provided at subsidized prices by the
State Governments under the targeted public distribution system. This is expected to
result in higher inflow of investments into the agriculture sector in the coming years.
Excise Duty:
Excise duty on other beverages and lemonade would be decreased to reduce retail
sale price by 35%. Excise duty on various tobacco products other than beedi would
be increased, resulting in retail price of tobacco products going up by 10-15%.
Industrial license is not required for almost all food and agro-processing industries,
barring certain items such as alcoholic beverages, cane sugar, and hydrogenated &
animal fats as well as items reserved for exclusive manufacture in the small-scale
sector.
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PESTEL ANALYSIS
Pestel analysis is a tool to understand the environment in which business operates, &
the opportunities & threats that lie within it. By understanding the environment in which
it operates, it can take advantage of the opportunities & minimizing the threats.
Specifically, PESTEL analysis is useful tool for understanding risks associated with
markets growth or decline & directing business to grow.
P – Political factors
E – Economic factors
S – Socio-cultural factors
T –Technological factors
E - Environment factors
L - Legal factors
A PESTEL analysis is a measurement tool, looking at all the external factors of the
organization. It is often used within a strategic SWOT analysis (strength, weaknesses,
opportunities & threats analysis).
POLITICAL FACTORS-
Political stability: Political stability is one of the important most factor which influence
the growth of business directly. If Political stability is higher, then it leads to perfection
in Business & on the other hand if there is instability the business will have to suffer. Taxation
policy: Tax policy of government will affect the price of inputs & it ultimately affect the
prices of final products & it will directly affect the sale of product. Government
intervenes: This indicates that at what level the government intervenes in the economy.
If the government intervene is more sometimes it helps the organization at large extent.
Subsidies: The subsidies which are provided by government to different organisation
at different level also help it to grow at faster rate & helps the organisation in reducing
the finance which is to be funded from outside & it directly reduces interest amount paid in favour
of fund raised from outside. Trading policies: This indicates the policies related
to import & export of goods and services from different nations. If the policies are
favourable more goods & services will be imported& exported, & on the other hand if policies
are unfavourable it will restrict the import & export. Labour law: Labour law also affect the
organisation, for example- child labour, a child below14 year of age cannot work in factory or
any hazardous place.
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ECONOMIC FACTORS –
Interest rates: Interest rate directly affect the cost of capital, if the interest rate is higher
the cost of capital will increase & if it is lower than cost of capital will be lower. This
directly affect
the profit of the organization & it’s growth.
Tax charges: If the tax charged by the government is lower than it will reduce the product price
& if it is higher than it will increase the prices of the products. Exchange rates: This
shows that what is the exchange rate or foreign currency rate. If exchange rate is higher
more amount is paid on import of goods & if it lowers less amount is to be paid & on
the other hand if it is higher the amount received will be more & if it is lower the amount
received will be low.
National income: National income is important factor as if affect the growth of the
organisation. If per capita income is more the amount spend will be more & if it will be lower the
amount spent will be less.
Economic growth: Economic growth is important factor in the development of the
organization. If economy grows at a higher speed it will directly affect the growth of the
organization.
Inflation rate: Inflation means the rise in the value of all the product in the economy, if inflation rate is
higher the cost of products will be higher & if inflation rate is lower the cost of product will be lower.
This directly affect the growth of the organization.
Demographics: Demographics is the study of human population in the economy. It helps the
organization to divide the markets in different segments to target a large of customers. For
Example- according to race, age, gender, family, religion, & sex.
Distribution of income: This shows that how income is distributed in the economy. It
directly affects the purchasing power of the buyers. And ultimately leads to increase or decrease in
the consumption level of the products.
Changes in life style: Change in life style also leads to increase or decrease in the demand for
different commodities. For example- presently LCD & LED TV’s have replaced Digital
displayed TV set, this shows that the changes in life style of consumers.
Consumerism: This indicates that a large number of options are available while purchasing of goods
to consumers, so the choice becomes easy & quality products can be choose by consumers. So,
while purchasing a consumer have different choices to select product according to his
needs.
Education levels: Education is one of the most important factor which influence the
buying power of consumer, while selecting a particular good a consumer should know all its
features so it can differentiate them with another product.
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Law affect social behaviour: Different laws are made by the government to safe guard the rights of
consumers. For example- Consumer protection act, this law indicates that a consumer
can file a case against a seller if he finds that he is cheated.
TECHNOLOGICAL FACTORS-
Advancement in technology: New technology helps in economising the scale of
production, this means that new technology helps in increasing the level of production, & reducing
the costs of inputs, & maximising the level of profits. Discoveries & innovation: Advancement
in technology will leads to discoveries &innovations & further improvements in technology
so as to improve perfections in the production process.
Obsolete rate: Day-by-day new inventions are made so the rate of obsolete is higher,
as in Computer LAPTOPS have replaced the PC. This shows that the technology becomes
obsolete very fast.
Research & development: This department plays a vital role in the development of
the organization. As this department always do research that what are the demand of
the markets & how to make advancements so the organization can survive in the
competitive world.
ENVIRONMENTAL FACTORS –
Environmental issues: Global warming is one of the major issue now-a-days as external factor is
becoming a significant issue for firms to consider. Many remedies have been taken to
reduce Global warming.
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LEGAL FACTORS–
Employment law: Employment law provides equal opportunities to every citizen to work &earn his
livelihood. It provides equal opportunities to every citizen.
Consumer protection: This law helps to protect the rights of consumers & he can file
a case against seller if he fined that he is cheated.
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PORTER’S FIVE FORCE MODEL
1) Barriers to Entry and exit: The Indian FMCG Industry is characterized with
modest entry and exit barriers. Integrated business model and increasing
capital requirement in the industry restrict new entrants. Huge investments in
setting up distribution networks and promoting brands and competition from
established companies.
2) Threat of substitutes: Being an essential commodity the demand for consumer
products is elastic. Multiple brands positioned with narrow product
differentiation. Companies entering a category /trying to gain market share
compete on pricing which increases products substitution. Hence, threat of
substitute is high in the industry.
3) Buyer bargaining power: High brand loyalty for some products, thereby
discouraging customers’ product shift. But low switching cost and aggressive
marketing strategies under intense competition within the FMCG companies,
induce Customers to switch between products, thereby driving value for money
deals for consumers.
4) Supplier bargaining power: Prices are generally governed by international
commodity markets, making most FMCG companies price takers. Due to the
long-term relationships with suppliers etc., FMCG companies negotiate better
rates during times of high input cost inflation
5) Industry Competition: Competitiveness among the Indian FMCG players is
high. With more MNCs entering the country, the industry is highly fragmented.
Advertising spends continue to grow and marketing budgets as well as
strategies are becoming more aggressive. Private labels offered by retailers at
a discount to mainframe brands act as competition to undifferentiated and weak
brands.
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MAJOR PLAYERS MARKET SHARE
19
20
CLUSTER MAPPING
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INTRODUCTION
Fast Moving Consumer Goods is the 4th largest growing sector in Indian Economy.
FMCG has three segments:
1. Food and Beverages-19%
2.Healthcare-31%
3.Households and personal care-50%
The growth of FMCG company from 2011 to 2018 is 60%, and it is expected to grow
at a compound rate of 20.6 % every year. The new investment FMCG is looking for is
in energy efficient plant so that it benefits the society and lower the cost in long term.
Indian FMCG Companies are ITC, Godrej consumer products ltd, Britannia, Emami,
Amul, Dabur, Etc.
The brand name Amul means “AMULYA”. This word derived from the Sanskrit word
“AMULYA” Which means “PRICELESS”. A quality control expert in Anand had
Suggested the Brand name “AMUL”. 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. (The total sale is Rs. 6 billion
in 2005). Today Amul is a symbol of many things like of the high-quality products sold
at reasonable prices, of the genesis of a vast co-operative network of the triumph of
indigenous technology of the marketing savvy of a farmer’s organization. And have a
proven model for dairy development (Generally Known as “ANAND PATTERN”)
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Anand Milk Union Limited or Amul is an Indian dairy cooperative, based at Anand in
the state of Gujarat.
Amul spurred India's White Revolution, which made the country the world's largest
producer of milk and milk products.
The white revolution was spearheaded by Tribhuvandas Patel under the guidance of
Sardar Patel and Varghese Kurien. As a result, Kaira District Milk Union Limited was
born in 1946. Tribhuvandas became the founding chairman of the organization and
led it until his death. He hired Dr. Kurien three years after the white revolution. He
convinced Dr. Kurien to stay and help with the mission.]
Kurien, founder-chairman of the GCMMF for more than 30 years (1973–2006), is
credited with the success of Amul. Amul has become the largest food brand in India
and has ventured into markets overseas. Amul products are now available in more
than 20 countries.
Amul brand of milk and milk products has been recognised as best Indian FMCG
Company by International Advertising Association (IAA). Amul is marketed by Gujarat
Co-operative Milk Marketing Federation Ltd (GCMMF). Amul is India’s largest food
brand with annual turnover of Rs.38000 Crore.
Amul is currently procuring 180 Lakh litres per day through 18600 village dairy
cooperative societies. Amul has very vast product range Milk, Cheese, Paneer, Butter,
Beverages, Etc.
Internet survey on all the products of Amul, the result is Amul Chocolate does not have
much product mix depth and even its turnover and sales growth over these years are
not growing comparatively. The reason for this study is to find out people’s behaviour
regarding Amul Chocolate & the advertisement medium most preferred for advertising
the Amul chocolate to increase its awareness in the market.
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HISTORY & EVOLUTION OF THE COMPANY:
Amul is an Indian Dairy Cooperative, based at Anand, Gujarat. Amul started India’s
White Revolution, which than leaded India to became world’s largest producer of milk
and milk products. This white revolution was started by Tribhuvandas Patel, as a result
Kaira district Milk Union Limited was born in 1946.
Within a short span of time, GCMMF opened five union in another district that were –
Baroda, Mehsana, Banaskantha Sabarkantha, Surat. GCMFF is the largest food
products marketing organization of India.
In the year 1946 the first milk union was established. This union was started with 250
litres of milk per day.in the year 1955 AMUL was established. In the year 1946 the
union was known as KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’
UNION. This union selected the brand name AMUL in 1955.
In the early 40’s, the mains sources of earning for the farmers of Kaira district were
farming and selling of milk. That time there was high demand for milk in Bombay. The
main supplier of the milk was Polson dairy limited, which was a privately-owned
company and held monopoly over the supply of milk at Bombay from the kaira district.
This system leads to exploitation of poor and illiterates ‘farmers by the private traders.
The traders used to beside the prices of milk and the farmers were forced to accept it
without uttering a single word.
However, when the exploitation became intolerable, the farmers were frustrated. They
collectively appealed to sardar Vallabhbhai Patel, who was a leading activist in the
freedom movement. Sardar Patel advised the farmers to sell the milk on their own by
establishing a co-operatives union, Instead of supplying milk to private traders.
Sardar Patel sent the farmers to Shri Morarji Desai to gain his co-operation and help.
Shri desai held a meeting at Samarkha village near Anand, on 4th January 1946.He
advised the farmers to form a society for collection of the milk.
These village societies would collect the milk themselves and would decide the prices
at which they can sell the milk. The district union was also formed to collect the milk
from such village co-operative societies and to sell them.it was resolved that the
government should be asked to buy milk from the union
However, the govt did not seem to help farmers by any means.it gave the negative
response by turning down the demand for the milk.to respond to this action of govt.
The farmers of Kaira district went on a milk strike. For 15 days not, a single drop of
milk was sold to the traders. AS a result, the Bombay Milk scheme was severely
affected. The milk Commissioner of Bombay then visited Anand to Assess
the situation. Having seemed the condition, he decided to fulfil the farmers demand.
Thus, their cooperative unions were forced at the village and district level to collect
and sell milk on a cooperative basis, without the intervention of Government Mr.
VerghesKurien showed main interest in establishing union who was supported by Shri
TribhuvandasPatel who lead the farmers in forming the co-operative unions at the
24
village level. The Kaira District Milk Producer’s Union was thus established in ANAND
and was registered formally on 14th December 1946.Since Farmers sold all the milk in
Anand Through a co-operative union, it was commonly resolved to sell the milk under
the brand name AMUL.
At the Initial stage only 250 litres of milk were collected every day. But with the growing
awareness of the benefits of the cooperativeness, the collection of milk increased.
Today Amul collect 11 lakhs litres of milk every day. Since milk was a perishable
commodity it becomes difficult to preserve milk flora longer period. Besides when the
milk was to be collected from the far places, there was a fear of spoiling of milk. To
overcome this problem the union thought out to develop the chilling unit at various
junctions, which would collect the milk and could chill it, to preserve it for a longer
period. thus, today Amul has more than 150 chilling centres in various villages. Milk is
collected from almost 1073 societies.
With the financial help from UNICEF, assistance from the govt. of New Zealand under
the Colombo plan, of Rs. 50 million for factory to manufacture milk powder and butter
was planned. Rajendra Prasad, the president of India laid the foundation on November
15, 1954.Shri Pandit Jawaharlal Nehru, the prime minister of India declared it open at
Amul Dairy on November 20,1955.
25
PEOPLE POWER: AMUL’S SECRET OF SUCCESS
Looking back on the path traversed by Amul, the following features make it a pattern
and model for their socio-economic elsewhere.
Amul has been Able to:
Produce an appropriate Blend of the Policy Ma kerns Farmers Board of
Management And the professionals: each group appreciating its routes and
limitations,
Bring at the command of the rural milk producers the best of the technology
and harness its fruit for betterment.
Provide a support system to the milk producers without disturbing their agro-
economics system,
Plough back the profits, by prudent use of men, material and machines, in the
rural sector for the common good and betterment of the member producers and
Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense. Amul is an example par excellence, of an
intervention for rural change.
The Union looks after policy formulation, processing and marketing of milk, provision
of technical inputs to enhance milk yield of animals, the artificial insemination service,
veterinary care, better feeds and the like-all through the village societies. Basically,
the union and cooperation of people brought Amul into fame i.e. AMUL (ANAND MILK
UNION LIMITED), a name which suggest THE TASTE OF INDIA.
26
AMUL AS AN ORGANIZATION :
6,94,271
Number of Producer Members
1713
27
PRODUCT PORTFOLIO:
Amul mainly produces dairy product which falls under nondurable goods category but
also produces durable goods
28
29
SALES GROWTH HISTORY:
30
Sales Turnover Rs (million) US$ (in million)
(source:-amul.com)
31
MARKET SHARES, COMPETITORS MARKET
SHARES
Its branded consumer products registered growth of 14% over the previous year,
with products such as cheese, butter, milk beverages, paneer, cream, buttermilk and
dahi having expanded 20-40%.
The group turnover of Amul brand has crossed Rs 41,000 crores which is 10%
higher.
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Competitors Market Share:
Amul has some good competitors who have entered the market in the last decade and
growing strong steadily. Most of these ice creams entered regionally but then held on
to the regional market share. Thus, even though individually these brands might not
be a worthy adversary, combined and with their total net aggregate, all of them
together are giving a very tough competition to Amul. Some of these competitors
are Kwality walls, Vadilal, Havmore, Dinshaws, Arun Ice cream, Baskin Robbins,
London dairy and others. Many of these ice cream products have their own niche
or geographic targets. Arun ice cream is strong in the south whereas havmor and
Vadilal are strong in the west.
Besides these organized players, there are many unorganised local players who also
give competition to Amul by having their own outlets and their own variants of ice
cream. However, the competition in Butter and Cheese and other dairy products is far
lesser.
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Total Man Power, organizational structure
Organizational design is a formal, guided process for integrating the people, form of
the organization as closely as possible to the purpose of an organization. It is used to
match the organization seek to achieve. Through the design process, organizations
act to improve the probability that the collective efforts of members will be successful.
Organizational design involves the creation of roles, processes and formal reporting
relationships in an organization.
34
BCG MATRIX:
Amul brand is a renowned name in the dairy industry in India, supplying milk, butter
and other dairy related products to the Indian population. The application of BCG
Matrix on the brand can provide information about the products that are a source of
revenue for the organization. Moreover, it can also help in pointing out the products
that hold no prominent growth chances in the future due to industry trends and market
share.
The BCG matrix for Amul is given below:
Stars:
Leader in the market, Consumes a lot of Cash and Generated lot of revenue. There
are some products which have high market share and have the potential to grow more
in the future. The industry dynamics are also supportive of the growth as the industry
is in the phase of development as well. These products have the potential of being
positioned as cash cows owing to the growth prospects. As far as star is concerned,
ice creams manufactured by the company and ghee are the two key products which
have the potential to grow taking benefit from the growth opportunities presented by
the industry. The health-conscious consumers have been targeted by the ice cream
providing them with the option of ice creams that do not contain sugar. The ice cream
with probiotics is another indication of the way the sweet milk-based dessert has
helped the company to achieve a high market share. The brand of Amul ghee has also
been a star for the company
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Cash Cows:
Generate a lot of cash for the company, When the market share of a product is high
and it is being sold in an industry that had developed to such an extent that no
significant growth is expected in future, then the product can be deemed as a Cash
cow. Organizations use the cash cows to bring in revenues, while taking the benefit of
the low investment needed to sustain the profitability of those products. The market
share of these products is not likely to experience massive gains either, but the current
position makes them a high revenue generator. There are two main products of Amul
which can be placed in the category of cash cow, fresh milk and butter.
Dogs:
Low Growth and low market share. Dogs are those products that have low market
share and at the same time have limited likelihood of growing into a profitable business
unit for an organization. The low chances of success suggest that the management
needs to be careful with the decision of investing resources in such a product since it
offers no significant benefit to the organization. These products can be regarded as
cash traps due to the low chances of becoming a significant source of profitability for
the company. Investment in these businesses is not likely to yield much profits,
therefore they are not seen as a useful source of earning. Amul has few products
which have not been able to generate the expected sales and revenues. One of the
notable examples in this regard is Amul chocolate, which has experienced a demand
of 3500 tons of chocolate. This situation indicates some development in the business
position of the chocolate brand, but the competitors make it difficult to increase the
market share to a significant degree that could make this product become a source of
sustainable revenues. The modified strategy of managing the chocolate brand is
expected to bring an increase in the market share of the product in the coming years,
which suggests that the chocolate brand can become a star if profitability targets are
achieved. Another product that is underperforming for the company is Amul pizza.
Question Mark:
Business usually at start-up and can consume lot of cash. With proper focus they can
became Star or Cow. The products that have some likelihood of overcoming the
challenges and grow the market share in future have been termed as question marks
in the BCG matrix. One of the reasons why this category is labelled as question mark
is that these products can either become a success in the form of taking the position
of a star, or become a source of continued loss for the company. The industry has
growth potential, thus making it possible for the products to have room for growth if
the pertinent issues are effectively managed. However, ineffective management of
these issues can make it difficult to expand the market share of the product. There are
some products being managed by Amul that can be identified as a question mark as
their potential as a source of profitability remains uncertain. Amul lassi has been
marketed with the aim to increase the market share and compete with the other
beverages available to the market.
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SWOT ANALYSIS MATRIX OF AMUL:
37
PORTER’S FIVE FORCE MODEL FOR
COMPETITION
The success of the national and local competitor’s brands includes effectives
distribution system, advertising, good pricing policy etc. the factors ascribed by
porter are.
Threats of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Rivalry among competitors
Threats from substitutes
38
Threats of new Entrants
Economies of Scale: GCMMF enjoys economies of scale, which is difficult to
match by any other competitor. It is because of his reasons that no regional
competitor has grown to a national level.
Inability to much the technology and specialized know- how of firms already in
the industry: The technology used by Amul is imported from Denmark. It is a
state of art technology in India, a firm would require a huge amount of
resources.
Capital Requirements: the total investments required in the industry is huge and
is a decision worth considering even for MNC‟s. The investments decision
cover the processing costs as well as marketing costs. To compete with the
brand Amul in India is difficult as Amul is synonymous to Quality.
There is appropriate bargaining power of the supplier. In olden days there were
not any kind of cooperative societies as the farmer was exploited. But,
nowadays the farmer’s rights are protected under the cooperative rules and
regulation, which ultimately results in moderate power of bargaining from the
supplier.
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Bargaining power of buyers
Cost of switching to competitor brands: The switching of brand is seen
very much in products such as ice cream, curd, milk powders, milk additives
etc. but it can be seen comparatively less in liquid milk category. Even if the
buyers shift to the other brands of milk, the value that they get is less than they
would get from consuming Amul.
Large no. of buyers: Milk is a necessity product and hence is a mass product.
It has a considerable share of the rupee spent by any Indian. Moreover, the
buyers are spread evenly over the country and do not have any bargaining
power.
Threats of Substitute:
Availability of attractive priced substitutes: Different substitutes are available
for different category of products. There is ample availability of low priced
substitutes from local vendors retailers. This is a front where GCMMF is still
finding hard to combat.
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AMUL STRENGTH & WEAKNESS ON ITS
VALUE CHAIN
Strength
Weakness:
41
BUSINESS STRATEGY OF AMUL COMPANY
1.Supply Chain: Because of the large numbers of dairy suppliers, Amul has a
tremendous strength and reliability in its supply chain. Hence it is able to produce such
high volumes.
2.High Product Portfolio: Due to this it can run Amul Shoppe’s and also have its
products present in retail.
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THE RESEARCH PROBLEM:
RESEARCH PROBLEM:
To Find the performance of Amul Chocolate Viz-a-Viz other brands.
To know consumer Psyche and their behavior towards Amul Chocolate
RESEARCH OBJECTIVE:
To Gauge Awareness of people towards Amul Chocolate.
To Find Out which segment chocolates are mostly liked/preferred.
To understand which advertisement medium must Amul use.
To know the perception of Amul Chocolates in comparison to other brands.
INFORMATION REQUIRED:
Information about all the competitors present in the chocolate segment.
Information about the comparative packs and prices of all the competitors
existing in the market
RESEARCH INSTRUMENTS:
Primary Research:
Questionnaire
Secondary Research:
Internet
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FORMULATION OF HYPOTHESIS:
Design Questionnaire:
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6. What type of chocolate do you prefer?
o Milk chocolate
o Dark chocolate
o White chocolate
o Fruit and nuts
o Caramel
o Other
8. Do you prefer the same brand of chocolate every time at a particular event?
o Yes
o No
o Maybe
45
13. To what extent each of the following impact your purchase decision?
o Flavor
o Taste
o Quality
o Quantity
o Packaging
o Brand
o Calories
o Ingredients
46
ANALYSIS:
47
48
49
50
51
52
53
54
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CONCLUSION:
• It turns out people are aware of Amul but they do not prefer it into the
Chocolates so much as people take Amul as a milk brand and is highly attached
to it.
• 12 is the highest number of people who are aware about Amul Chocolates.
• Amul should brand its chocolates through emotional attachment connecting
teenagers
• Amul should brand its product through the Indian festivals and its touch with
celebrity endorsements and should include range category with its different
flavors
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REFERENCE:
https://en.wikipedia.org/wiki/Amul
https://www.scribd.com/doc/28134383/Product-Mix-Amul
https://www.ijser.org/researchpaper/A-CASE-STUDY-OF-AMUL-
COOPERATIVE-IN-INDIA-IN-RELATION-TO-ORGANIZATIONAL-
DESIGN-AND-OPERATIONAL-EFFICIENCY.pdf
//economictimes.indiatimes.com/articleshow/63583079.cms?utm_s
ource=contentofinterest&utm_medium=text&utm_campaign=cppst
https://www.scribd.com/doc/83825076/Amul-Strategy
https://en.wikipedia.org/wiki/Fast-moving_consumer_goods
http://reports.dionglobal.in/actionfinadmin/reports/fdr0108201343.pdf
https://www.scribd.com/doc/248600592/Pestel-Analysis-on-Fmcg-Industry-
Economics-Essay
https://www.omicsonline.org/open-access/a-study-on-consumer-behavior-towards-
fmcg-products-among-the-rural-suburban-hhs-of-ernakulam-2375-
4389.1000127.pdf
http://economictimes.indiatimes.com/industry/cons-products/fmcg/domestic-
fmcg-firms-log-more-revenue-than-mncs-in-fy16-
report/articleshow/55153280.cms
6)http://www.thehindubusinessline.com/economy/indian-fmcg-sector-poised-
to-grow-at-1314-in-next-few-years/article8004697.ece
7)http://economictimes.indiatimes.com/industry/cons-products/fmcg/fmcg-
sales-see-12-per-cent-growth-in-rural-markets-7-per-cent-rise-in-food-and-
beverages-category-in-july/articleshow/60520017.cms
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