ANALYSIS OF AMUL

REPORT

SUBMITTED FOR THE PROJECT IN

MARKETING MANAGEMENT-1
 ACKNOWLEDGEMENT

We take this opportunity to express our sincere thanks to Prof. V. Giridhar for giving us an
opportunity to be involved in this activity and gain insights of the marketing strategies of the brand
Amul.

This activity not only helped us to enhance our knowledge about Amul but also helped us to
understand the importance of team work and group activity. This also made us familiar with the
process of collecting and analyzing data.

Thanking You!
Group A1

Registration
No. Name
PGP/1103/06 Abhinaw Anand
PGP/1115/06 Ayushi Sand
PGP/1118/06 Chirag Gupta
PGP/1126/06 Hemant
PGP/1135/06 Lagnajita Dash
PGP/1138/06 Montrina sharma
PGP/1167/06 Sri Lekha Budigina
Amul Introduction
Amul is a company that needs no introduction. Its name itself is enough for those catchy jingles
to start ringing within our minds. It had an ad that portrayed women in a village as the primary
producers of milk. They were shown to be happy seeing milk products being used across the
country by various people. Also, Amul showed us all its old ads when Ramayan & Mahabharat
were being televised again. Such advertisements and strategic tactics are precisely how Amul
deeply connects with its audience on different levels.

Overall Assessment of Amul

Amul was incorporated to safeguard milk producers and consumers from the exploitation of
mediators. Since then, it has developed from a small scale dairy cooperative into a valuable and
iconic brand that is highly trusted across the country. It hardly faces competition in staying the
largest manufacturer of milk and dairy products in India.

Amul: Sales v/s Advertising expenditure

We sourced some financial data of Amul, from ProwessIQ. We have compared the trend of
Amul’s Sales with its Expenditure on Advertising. The blue line represents Sales in billion
rupees. The orange line represents Advertisement Expenditure in a million rupees. As we can
see, Amul’s Sales have kept on rising year after year from 2013 to 2018. We can also see the rise
in Ads expenditure. But an exciting deviation can be seen for the year 2018, where despite
spending less on its advertising, Amul still had an increase in sales compared to the previous
 years. Although there are various reasons that are in play in the background to explain this, one
prominent contributor is the recognition and brand image of Amul.

Marketing Mix Of Amul

1. Product

Amul has a diverse and innovative product range in its marketing mix, which has ensured its
market leadership in the Dairy and FMCG industry. Its product line and brands encompass Amul
Milk, Amul Bread Spreads (Amul Lite, Amul Butter, etc.), Amul Ice-creams, Amul Chocolates,
Amul Beverage range (Amul Kool Koko, Amul Kool Cafe, Amul Masti Spiced Buttermilk, etc.),
Amul milk powder, Amul Cheese, Amul Paneer, Amul Dahi, Amul Fresh Cream, Amul Ghee,
Amul Mithai Mate, Amul Happy Treats, Amul PRO, Amul Bakery Products, Amul Puffles,
Amul Mithai Range, Amul Cattle Feed, Amul Recipes, Amul Sour Cream, Amul Roti softener,
Amul Pancahmrit.

Their excellent product positioning strategy can be seen in offering India’s first pro-biotic
wellness ice-cream and sugar-free delights, providing low priced ice-cream and giving a stiff
competition to its competitors, branding chocolate milk branded under Amul Kool Koko, which
is targeted at teens and youth and its entry into the branded snacks market under the brand
Munch Time. Product overlap can also be seen in the instance of Sagar vs Amulya, Amul
Processed Cheese vs Cheese spread, Nutramul energy drink vs Amul Koko. Though they have
led to minor incidences of cannibalism, they have unitedly provided stiff competition to the
competitors. Product diversification can be seen by the brand providing both dairy and non-dairy
products.

Customer-based segmentation of its products can be seen on the following basis:

Kids- Amul Kool, Amul Chocolates, Amul Ice-cream, Nutramul, Amul Milk

Youth- Amul Chocolates, Amul Ice-cream, Amul Pizza, Amul Cheese Spread, Amul Butter
Spread

Women-Amul Calci+

Health Conscious- Nutramul, Amul Shakti, Amul PRO

Calorie Conscious- Amul Lite, Amul Sugar-free range, Skimmed milk powder

2. Price

With a vision to provide the best quality dairy products at a low cost to consumers of all market
segments, Amul has followed the low pricing strategy in their marketing mix. Products which
covers a vast market segment and are used on a daily basis like milk, ghee, ice-cream, cheese,
butter were provided to the consumers at a lower rate in compared to the products which were
of niche segment like Amul spray, prolite, milk powder, etc. which are competition oriented.
The pricing of the products depends on various factors like raw materials, labour cost,
distributors margin, farmers’ profit, administrative and manufacturers overhead, demand and
supply of products, competitors’ prices, transportation cost, packaging cost, government taxes,
etc. Regardless, Amul has always provided quality products and a fair and affordable price in
comparison to other brands in the industry, which is directly reflected in its popularity and
positive brand image.

3. Place

GCMMF is the Cooperative under whom more than 2.8 million farmers of 12 districts are
operational, and they look after the marketing, distribution, and the entire management of the
Amul brand name. There are two distinct logistics channels in Amul: Acquisition Channel which
is in charge of gathering of milk through dairy co-agents where works up with farmers then to
village co-operative society then it goes to manufacturing units than to company depots,
wholesale distributors and finally to retailers. This channel also consists of carrying and sending
specialists who help in minimising administrative and transportation costs. The other is the
distribution channel which is in charge of circulating the concluded item to the end clients. In the
acquisition channel Amul There is also one more channel which consists of.

It has retail visibility as one of the best among the FMCG brands. E.g., even if Amul products are
stacked behind other brands in a retail shop, customers search for it and take Amul butter even
though other alternatives were clearly available at convenience. There also an online Amul App
to deliver products to e-commerce users.

4. Promotion

The Amul girl as a promotional character is one of the longest and most successful campaigns.
The campaign uses the current news scenario in its promotion and portrays it in a very sarcastic
manner that entertains and connects with the users, and that too at a comparatively low
investment in advertising. Keeping in mind the pricing strategy and a top brand position, Amul
doesn’t spend more than 1% of its revenue on promotion. Amul has a prominent presence in
both print and digital media.

5 Cs

1. Company
Their diverse product range comprises milk, cheese, pizza, ice cream, butter, paneer, chocolates,
traditional Indian sweets, etc. Therefore, a good product portfolio. Amul is the market leader in the
butter segment. Product differentiation is less because people can quickly shift to other brands that
are readily available. Amul has excellent brand equity; a high market share in ice creams is a
competitive advantage. It has good quality management, and there are seldom complaints about its
products. The Amul girl in the print ads with trending topics every time and all the tagline “Utterly
Butterly Delicious” reminds everyone of Amul. Amul maintains its brand image by its good
advertising strategy. But not all Amul products are successful. The chocolate segment failed to
attract consumers. And consumers prefer local brands compared to Amul. Amul does not believe
in customer segmentation, and their products are consumed by everyone irrespective of social
status. Amul follows the sell-profit-reinvest cycle.
2. Collaborators
The raw materials are procured directly from the farmers (Dairy farmers) so that there is no
involvement of middlemen so that the farmers gain remunerative returns. Gujarat Cooperative
Milk Marketing Federation Ltd. (GCMMF) daily procures milk of approx. Twenty-three million
lit per day from 18600 village milk cooperative societies. They operate through 61 sales offices
and have a dealer network of 10000 dealers and 10 lakh, retailers. GCMMF is India’s largest
exporter of dairy products. Amul has collaborated with the e-commerce platform Amazon to sell
its products online. They have also collaborated with Sbi and Indian Railways.

3. Customers
Since milk and other dairy products are a daily necessity, Amul doesn’t target a specific customer
base. Everyone who consumes milk is their target customer. Amul’s customer and operation base
are mostly offline; they buy the products from the nearby retail stores. Even in the pandemic, Amul
sales have increased by 20%. The extensive advertising campaign with Amul girl has created more
awareness about the brand among the public.

4. Competitors
Amul's top 12 competitors are Mother Dairy, Prabhat Dairy, Osam Dairy, and all the local dairy
brands. Mother dairy and some other companies are established, competitors. Baskin Robbins,
Havmor, Vadilal are the new competitors in the ice-cream range. Amul’s competitor Mother Dairy
has a fruit and vegetable arm. Safal is the fruit and vegetable arm of Mother Dairy. It operates a
large number of fruit and vegetable stores in the NCR and also has a significant presence in
Bengaluru. Safal also has a plant in Bengaluru, which produces around 23,000 MT of aseptic fruit
pulp and concentrates annually. It supplies food processing companies such as Coca-Cola, Pepsi,
Unilever, Nestle, etc. It exports Fresh Fruits & Vegetables (Grapes, Banana, Gherkin, Onion, etc.),
Fruit Pulp & Concentrate, Frozen Fruits & Vegetables, etc. Mother Dairy is also present in the
edible oil segment under the brand name Dhara whereas Amul recently launched its edible oil
segment named “Janmay”. Mother Dairy opens the first restaurant 'Café Delights' in Noida and
plans more outlets in Delhi.

5. Context
The outbreak of pandemic and the subsequent lockdown measures have increased consumer
demands, and Amul has met the needs of the customers. The sales increased by 20% even in a
pandemic when everything is running at a loss. Economic slowdown- increase in milk procurement
costs. According to our primary survey, the Majority of the consumers felt that Amul is lagging in
capturing new customers.
Segmentation, Targeting and Positioning
“Amul’s competition isn’t multinational bran; it’s the regional and city brands”
-RS Sodhi (Managing director, GCMMF)

SEGMENTATION POSITIONING TARGETING

Amul is consumed by millionaires living in big Stable but almost stagnant NIL
cities as well as by autorickshaw drivers living growth- in Cash Cow Phase
in small towns. The perception of the brand is Can utilise more product launch
like that—no segmentation based on status or E.g. Amul café pan India with
income. on-site preparation
Amul sugar substitute

Generation Z Needs improvement in Social AGE GROUP

Media Presence- in Question 10-20
Phase
Most millennials prefer social
media references, hence
expected to have tremendous
commercial success if executed
well

Generation Y and Couples · Young Adults and couples AGE GROUP

need quick dealings. 25-45
· Recognition in this sector
will give the significant
“word of mouth.”

Old people In cash cow phase AGE GROUP

Needs attention 51-70
Since Amul is “known” for milk
majorly, this sector can be
specially targeted
SEGMENTATION
Segmentation is generally done on the basis of income or power to purchase matrices.

 Milk is a commodity which is amongst the basic needs.

 Milk along-with its products is needed by everyone, from an auto-rickshaw driver to a
multi-millionaire.
 For Amul, we need to segment it based on Generation and follow Generational
Marketing.

Amul currently does not adhere with any segmentation tactic as stated by R.S. Sodhi (Managing
Director, GCMMF) in an interview,
“Typically, marketers segment the market and then decide on the product positioning; at Amul, we
don’t believe in segmentation…” This might be the reason why Amul has reached a stagnant Cash
Cow Phase.

TARGETING

BOOMERS: “True Friends”

 50+ age group people, the boomers, are the most brand-loyal people.
 Amul should target this generation because only (approx.) 10% of competitors take this
generation into consideration while building a strategy.
 Ironically, they are estimated to spend and use cashback cards (like Credit Cards to ensure
longevity) the most.
MILLENNIALS/GEN-Y: “Butterflies-True Friends”
 This generation is influenced the most by internet presence and peer-to-peer learning

POSITIONING
Improve Amul positioning by:
· Improved social media presence
· More efforts in reaching out to Boomers due to their increased loyalty
· Presence of kiosks/cafés pan India
· Mobile Amul
· Improved mobile and desktop app

The above steps will help target all the generations alike.
BCG Matrix
BCG matrix is used to determine the permutations of the type of growth and market share
possible. The detailed BCG Matrix of AMUL is as follows,
Amul Advertisement Strategy
Amul takes pride in its advertisement strategy; Amul always comes up with different types of
unique advertisements which connect to the common man and make them feel at home. The
basic strategy of Amul can be classified as follows,

o They launched the Amul girl, which became instantly famous and they came up with
taglines which were simple yet effective, like ‘utterly butterly delicious’, ‘Amul the taste of
India’
o The Amul Girl was sketched by art director Eustace Fernandes. Her first ad described the
product as "utterly butterly delicious,"
o They do a great job in selecting a trending topic and make an ad about it. Amul has a
history of being brave.
o Amul classic ads during the lockdown brought the feeling of nostalgia.
o Amul portrays their idea in a subtle manner, no matter how severe the topic is, with the
right amount of humour, they successfully execute their task.

COVID19 Strategy
During COVID Amul focused on Supply Chain, Farmers, Advertisement and Sales & New
Products. Focus on these four areas and especially maintain the effectivity and efficiency of
supply chain helped Amul to perform very well during this period.

1. Supply Chain

Amul focused a lot on supply chain during COVID. Amul has a very robust supply chain which
connects 3.6 million milk producers with crores of people across India. Amul Supply chain
management starts to form Farmers—Village Cooperative Societies—Member unions--Gujarat
Cooperative Milk Marketing Federation—Retailers—End consumers. As the milk comes under
essential items, Amul ensured efficiency in its supply chain is maintained. It was confirmed that
Supply of milk doesn’t get affected and for this, it provided the efficient movement of vehicles.
Amul was able to collect 15 % more milk daily than usual during the lockdown.

2. Farmers

Amul approximately has 1,000 (Marketing Arm) and 36 lakh Milk producing members which
include more than 18,000 villages. Therefore, it is evident that Farmers form the backbone of
Amul as it is entirely depended on them. Due to COVID, the lockdown was implemented which
affected farmers adversely, Amul put Rs. Eleven thousand crores for the farmers in the Rural
Economy, which solved the cash crisis up to a large extent and ensured a smooth supply of milk.
Also, many farmers were facing trouble in their village after they were coming back from
supplying milk. Amul provided PPE kits to them.

3. Advertisement
 Advertisement plays a vital role in shaping the consumer’s decision. During the lockdown,
most of the people were at home, and there was a nostalgic feeling due to re-telecast of
famous serials like Ramayana & Mahabharata. Amul sensed the consumer’s mood and
started telecasting its old adds, which connected very quickly with the audience while
watching these serials. It got ten times more viewership than the Indian Premier League at
one-tenth of the cost. #Simplehomemaderecipes campaign increased its audience reach.

4. Sales & New Products

Amul sold approximately 255 to 260 litres of milk every day in April during the lockdown,
which is 15% higher than April 2019. There was a roughly 50% rise in sales of other Amul
products during the lockdown. It launched ‘Ginger’ and ‘Tulsi’ milk variants in mid-June -
ayurvedic drinks touted to boost immunity. Amul made history by launching 33 new products
in a single quarter during the lockdown.

Amulya – The moving Store

Based on the survey conducted, it was found out that one of the significant challenges that Amul
is facing is to capture new customer base. To address this issue, we propose to introduce “Amulya-
The moving store”. Amulya is a mobile van model to supply Amul products directly in the societies
in a periodic interval. Pandemic has changed the buying habit of consumer, and even after it ends,
it will be complicated for consumers to visit stores in large numbers. In this scenario, Amulya Van
will be accommodating. Vans will stop at pre-decided common points, and Amul products will be
sold there. A mobile store will help to increase the customer base as during pandemic period people
prefer not to go out of their societies due to fear of the virus.

More people will be attracted as they will be able to save both time and money by not going into
malls or stores. Also buying behaviour is influenced by a neighbour so that it will help Amul.

Mobile application: Amul’s response to COVID19

To tackle the Covid19 situation, we have another solution which is already existing but hasn’t
been properly implemented on a wide-scale. We believe that there should be an enhanced focus
on a mobile application for online home delivery. There’s already an app by Amul for the same,
but it’s in pretty bad shape. The overall idea would be based on the need of the customers to get
Amul products at their doorsteps. These products can be delivered from the nearest Amul store or
an affiliate store, once a customer orders it on the app, without having to go out in public places
themselves.

Conclusion

Amul is one of the biggest and leading companies in the FMCG Sector. It has an excellent market
position and brand loyalty. Even with the increase in competitors, it withheld its place as the market
leader in the industry. It found success by following the co-operative business model and is the
only big dairy company in India that has its own Cow to Consumer (C2C) supply chain. Even in
the trying pandemic times, when all other industries are running on losses, Amul identified the
customer needs and increased its production and distribution accordingly, which resulted in profits
even during the lockdown.

Today, the brand has enabled farmers to be entrepreneurs and earn their living. The Amul brand
has proved that it is not just a product but a movement that represents the economic freedom of
farmers. Amul in all its sense has proved that it is Amulya, i.e. ‘Priceless’ for our nation and that
we must preserve it.

“We must build on the resources represented by our professionals and by our nation’s farmers.
Without their involvement, we cannot succeed. With their involvement, we cannot fail”

~Dr. Verghese Kurien

References

 https://www.amul.com/index.php
 https://en.wikipedia.org/wiki/Amul
 https://prowessiq.cmie.com/
 https://ajuniorvc.com/amul-story-milk-cooperative-revolution-kurien-fmcg-startup/
 https://www.business-standard.com/article/companies/amul-launches-milk-card-in-
collaboration-with-sbi-115011201146_1.html
 https://www.thebetterindia.com/120784/amul-indian-railways-collaborate/
 https://www.thedollarbusiness.com/magazine/india-is-a-priority-market-for-
amul/46144
 https://brandequity.economictimes.indiatimes.com/news/advertising/how-amul-has-
stayed-ahead-in-the-game/70753246
 https://en.wikipedia.org/wiki/Mother_Dairy
 https://www.financialexpress.com/industry/amul-janmay-make-in-india-pm-modi-
atmanirbhar-bharat-farmers-edible-oil-fmcg/2019303/
 https://economictimes.indiatimes.com/markets/expert-view/there-is-no-slowdown-in-
dairy-industry-says-amul-md/articleshow/71478022.cms?from=mdr
 https://www.financialexpress.com/economy/dairy-sector-to-produce-1-2-cr-jobs-in-
next-10-years-amul-chief-reveals-why-indian-farmers-remained-poor/2066269/