A Project Report on Organizational Study of Amul

Acharya’s Bangalore B- School

Submitted by-

Ms. Anshu Rastogi

Mr. Ashish Rastogi

Introduction

The Amul revolution was started as awareness among the farmers. It grew and matured into a protest movement that was channeled towards economic prosperity. It is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 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 one of the largest milk producers in the world. It is also the world's biggest vegetarian cheese brand.

Amul's product range includes milk powders, milk, butter, ghee, cheese, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others.

Amul is the largest food brand in India with an annual turnover of US $868 million. Currently Amul has 2.41 million producer members with milk collection average of 5.08 million litres/day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, 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.

Branding

The first products with the Amul brand name were launched in 1955. Since then, they have been in use in millions of homes in all parts of India, and beyond. There is something more, though, that makes the Amul brand special and that something is the reason for the commitment to quality and value for money. Amul is the brand name of 2 million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat. This is the heart of Amul, it is what gives strength to Amul, and it is what is so special about the Amul saga.

The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has made India one of the largest milk producers in the world.

Amul, therefore, is a brand with a difference. That difference manifests itself in a larger than life purpose. The purpose – freedom to farmers by giving total control over procurement, production and marketing.

Our commitment to the producer and our contract with the consumer is the reasons we are confident that cooperative brands, like Amul, will have an even bigger role to play in the next fifty years.

Marketing Function

Gujarat Co-operative Milk Marketing Federation (GCMMF)

GCMMF was the first co-operative to be set up under operation flood. GCMMF’S

dairy plant commissioned in 1994 is one of the most modern and largest plants. It

can handle up to 1million litres of milk per day. The plant also has facilities for

pasteurizing and packing. It was funded by NDDB. GCMMF’s milk is sold under

its flagship brand Amul.

GCMMF was formed in 1973. As an apex marketing federation of 12 district milk

unions of Gujarat to operate own marketing and distribution network in India and

abroad.

GCMMF sales turnover grew by 21% Rs. 15.5 billion to Rs. 18.8 billion including

consignment sales of Rs. 3.7 billion sale of Amul milk in Gujarat and Maharastra

increased by 11% and 16% respectively. Dairy product turnover registered a 19%

growth. Amul butter registered 18% growth. The sale of Amul & Sagar Ghee

increased by 47%. Amul Cheese registered 60% value growth.

GCMMF’s sales to the defense services were Rs.233 million during the year, were

mainly to Burma, Uganda and West Africa. The company plans to expand its

export markets in Saudi Arabia and other Middle East countries.

During 1999, launching it in 8 states and 2 union territories extended the Amul ice-

cream brand franchise. Amul ice creams have become India’s 2nd largest brand.

Recently it has commissioned a dairy at Kolkata.

New products launched during the early 2000 were Amul Pizza, Cheese and Amul

slice cheese, Amul paneer and Amul Mithaee range. Safal mango drink has been

launched by Strategic alliance with Safal (A union of NDDB). The product range

to be launched under the Safal brand will include fruit drinks, squashes, pickles,

jams, and ketchup and mango pulp.

Amul ice-cream brand franchise was extended with launch in 8 states & 2 union

territories. Amul ice cream has become the 2nd largest brand in the country & has

garnered major share in its existing markets in a short time span of 3 years. Amul’s

main ice-cream manufacturing facility is located at Gandhinagar which is Asia’s

largest and most modern integrated ice-cream manufacturing plant and uses world

renewed refrigeration units and an efficient cold chain. GCMMF has become very

popular because of its excellent marketing strategy. GCMMF marketing strategy is

to understand the consumer needs, develop products that provide superior value at

fewer prices. GCMMF has shown a tremendous commitment to the floodwater

situations. GCMMF has never stopped the supply of milk and other milk products.

And unlike other competitors, it has never taken wrong benefits in these kinds of

situations. It has developed an excellent distribution channel to provide its products

to the consumers. It has made its products available in each part of Gujarat &

India.

Distribution Of Products The products change hands for three times before it reaches to the final consumer.

First of all the products are stored at the Agents end who are mere facilitators in

the network. Then the products are sold to wholesale dealers who then sell to

retailers and then the product finally reaches the consumers.

AMUL PARLORS

Amul has come out with a unique concept of Amul Parlours. They have classified

them under four types namely:

Center for excellence

On the Move

Amul Parlours

Amul Preferred Outlets

Center for Excellence: These Amul Parlours are specifically at a place,

which has a class of excellence of its own. We can find such parlors at the

Infosys, IIMA, NID Ahmedabad etc.

On the Move: These parlors are at the railway stations and at different state

bus depots across different cities.

Amul Parlours: These parlors can be seen at different gardens across

different cities. These are fully owned by Amul.

Amul Preferred Outlets: These are the private shops that keep the entire of

product range of Amul. They also agree not to keep any competitor brands

in the outlets. They can keep other brands that are in the non-competitor

category.

Amul has more than 200 such outlets right now. It wants to have 1,00,000

parlors by the end of the year 2010.

Conclusion

Amul has given a new dimension to marketing. It showed that a democratically

owned and managed farmer organisation can successfully develop national market,

but by doing this Amul provided virtually guaranteed marketing service to the milk

producer at his door step. Amul has displayed dynamic initiative at a time when its

multinational competitors were merely content to use depreciated machinery.

Following factors have given us the insight to conclude, why Amul is thriving with

success today:

Emphasis on Quality: All the products of Amul are of

highest grade. Consumers were very quick to perceive this and

the sales success that followed reflected the public’s stamp of

approval.

Modern marketing: A good product alone cannot succeed

unless backed by innovative marketing, including packaging,

price and promotion. Amul’s advertising campaigns created a

splash in the market that eventually led to a tidal wave that

rocked the competition.

Management: The judicious handling of people,

recognition of performance and encouragement for a good try

has gone a long way to build a sound foundation of people. All

the basic components of management that is production,

marketing, finance and organisation behavior are nicely arrayed

at Amul.

The co-operative concept: The fundamental thesis

underlying the Anand model is that the rural producer must

own and enjoy the assets they have helped to create. The model

has inspired the creation of hundreds of other Anand.

The system has succeeded mainly because of involvement of people on such a

large scale, providing assured market at remunerated prices for milk producers,

enables the consumers access to high quality milk and milk products, ploughing

back the profit to the members, part of the profit is used by the society for common

good and community development.

Amul is doing everything in the best possible manner. Just look at its product

quality, packaging, advertising and nation wide marketing network. This has given

Amul an edge over its competitors.