DB09154 Sales Assignment Project in PBM

8/9/2019 DB09154 Sales Assignment Project in PBM

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Post Graduate Course in Business Management

Name : Param saxena

SMS ID / SID : 2405915/DB09154

Name of the center : IIFT Building, Bistupur,Jamshedpur

Batch : PGCBM-16

Faculty : Prof.Sanjay Patro

Sector :Food

Concept :AMUL- the taste of India


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Contents

Chapter Page number

1. Intorduction : The AMUL story 3

2. Market Segmentation Of AMUL products 7

3. Positioning 16

4. Pricing 18

5. Promotion 19

6. Product strategy 21

7. Positioning 22

8. Distribution 23

9. Conclusion 24


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Project Outline for Sales and Brand Management Course

Sector : Food products

Company : Gujarat Cooperative Milk Marketing Federation (GCMMF)

The AMUL Story

The AMUL story started with the formation of The Kaira DistrictCooperative Milk Producers Union Limited on December 14, 1946 tocounter the exploitation of petty milk producers in the city of Anand inKaira district of Gujarat by middlemen or traders. These villagers had totravel long distances to deliver milk to the only dairy, the Polson Dairy in

Anand resulting in often milk becoming sour, particularly in the summerseason.The prices and the off-take from the farmers were dictated by thesemiddlemen and ofter the poor milk producers were at the receiving end.Milk is a commodity that has to be mulched regularly twice a day fromeach cow/buffalo. Thus producers were either left with surplus unsoldmilk or had to sell it at very low prices.The producers of Kaira district took advice of the nationalist leaders,Sardar Vallabhbhai Patel, who advised the farmers to form a

Cooperative and supply directly to the Bombay Milk Scheme instead ofselling it to Polson, who did the same but gave much lower prices to theproducers. Thus the Kaira District Cooperative was established to collectand process milk in the district of Kaira. Milk collection was alsodecentralized as most producers were marginal farmers who woulddeliver 1-2 litres of milk per day. Village level cooperatives wereestablished to organize the marginal milk producers in each of thesevillages. The first modern dairy of the Kaira Union was established atAnand with the name of Anand Milk-producers Union Limited (AMUL).

AMUL also meant priceless from the Sanskrit word Amoolya.

50 years down the time tunnel the dairy industry in India and particularlyin the State of Gujarat looks very different. India for one has emerged asthe largest milk producing country in the world. Gujarat emerges as themost successful State in terms of milk and milk product productionthrough its cooperative dairy movement. AMUL becomes the focal pointof dairy development in the entire region and emerged as one of themost recognized brands in India, ahead of many international brands.


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Starting with a single shared plant at Anand and two village cooperativesocieties for milk procurement, the dairy cooperative movement in Stateof Gujarat had evolved into a network of 2.12 million milk producers whoare organized in 10,411 milk collection independent cooperatives

(Village Societies). These Village Societies (VS) supply milk to thirteenindependent dairy cooperatives (called Unions). AMUL is one suchUnion. Milk and milk products from these Unions are marketed by acommon marketing organization called Gujarat Cooperative MilkMarketing Federation (GCMMF), which is India's largest food productsmarketing organization. It is state level apex body of milk cooperatives inGujarat which aims to provide remunerative returns to the farmers andalso serve the interest of consumers by providing quality products.

CRISIL, India's leading Ratings, Research, Risk and Policy Advisorycompany, has assigned its highest ratings of "AAA/Stable/P1+" to thevarious bank facilities of GCMMF.

AMUL has become household name in India, when one thinks of AMULone gets reminded of AMUL butter with its polka dotted butter girl,famous for its longest running advertisement campaign utterly butterlydelicious AMUL.

Besides India, AMUL has entered overseas markets such as Mauritius,UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and afew South African countries

First hoarding of AMUL was put up in 1967 in Mumbai after the conceptwas conceived by Sylvester daCunha, then the managing director of theadvertising agency, ASP, clinched the account for AMUL butter. Sincethen AMUL is consistent in targeting its customers. Positioning of AMULis Taste of India.

Most of AMULs communication is based on latest happenings in thecountry. That is why its ads are termed different from what is that of its

nearest rival, Mother dairy. Most of Mother dairy ads are directly targetedto children where as AMULs ad are on current affairs, in which adultsare also involved.

AMUL has high brand equity and umbrella branding of AMUL has helpedthe company in bigger sense. AMULss brand name has helped its otherbrands also like Mitahi made, AMUL Ice creams, chocolates, AMUL Kooletc. So umbrella Brand, AMUL is used to build and offer value tocustomers in bigger sense. In literal sense, a company has high brandequity if it has multi dimensions. AMUL has explored various available

opportunities to reach to mass customers. It has opened a communityon public forums like orkut, sponsored events like AMUL voice of India


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etc. The brand value of AMUL will surely help company to maintain thestatus of largest food brand in India at least for sometime in future.

AMUL is the biggest brand in the pouched milk sector in the world and inIndia it is the biggest food brand. AMUL's range of products includes

milk, ghee, milk powders, curd, ice cream, paneer, cream, chocolate,cheese, butter, and shrikhand. The various brands of AMUL's breadspreads are AMUL Lite, AMUL Butter, and Delicious Table Margarine.The Brand AMUL's milk drinks are sold under various names such asAMUL Kool, AMUL Kool Cafe, Kool Koko, AMUL Kool Chocolate Milk,and AMUL Masti Spiced Buttermilk. AMUL's powder milk are sold undermany names like AMULya Dairy Whitener, Sugar Tea CoffeeWhitener,Sugar Skimmed Milk Powder, and AMUL Instant Full Cream MilkPowder. The brand's cheese are also sold under various names such as

Gouda Cheese, AMUL Cheese Spreads, and AMUL Emmental Cheese.AMUL Brand's desserts are sold under many names like AMUL Basundi,AMUL Lassee, Gulab Jamun Mix, AMUL Shrikhand, and AMUL IceCreams. AMUL has around 2.6 million producer members and the totalcapacity for handling milk is around 10.16 million liters every day. Thebrand's capacity for milk drying is around 594 Mts. each day and itscapacity for cattle feed manufacturing is about 2640 Mts. each day.

The Brand AMUL has been recipient of various awards such as theRamkrishna Bajaj National Quality Award in 2003, Award International

Cio 1000 for Resourcefulness, and also the Rajiv Gandhi NationalQuality Award in 1999. AMUL exports its products to various countriessuch as USA, Australia, Mauritius, China, Hong Kong, Singapore, UAE,and Bangladesh. The sales turnover of the Brand AMUL amounted toRs. 29225 million in 2004- 2005, in 2005- 2006 the figure stood at Rs.37736 million, and in 2006- 2007 the figure increased to Rs. 42778million.

AMUL has Competitive sustainable advantage (CSA) over itscompetitors. AMULs CSA lies in its procurement part ,the ability to

collect 447,000 litres of milk every day from 2.12 million farmers ,convertthem into goods worth Rs 6 crore and distribute them to 5,00,000retailers across country. No other dairy in India has such a sustainableprocurement network.

AMUL Rated No. 1 Indian Brand in Asia-Pacific

The Media Magazine published from Hong Kong and Singapore has

ranked AMUL as the No. 1 Dairy Products brand of Asia-Pacific ahead


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of Kraft, Dutch Lady, Dumex, Walls, Anchor, Magnolia, Everyday andseveral other leading brands of the region.

It has also ranked AMUL as the 83rd Best Brand in its ranking of Top

1000 brands of Asia-Pacific based on a consumer survey conducted inAustralia, China, India, Japan, Korea, Hong Kong, Malaysia, Singapore,Taiwan and Thailand. Its rank has jumped from 180th Rank in 2008 to83rd in Asia Pacific this year.

There is no other Indian brand in the list of Top 1000 brands ahead ofAMUL (#83). The other Indian brands ranked as per the survey areKingfisher (# 158), ICICI Bank (# 173), Tata (# 225) and Big Bazaar (#239) to name a few.

As per the rankings published for INDIA Market, the top 4 out of the top5 brands are MNCs viz. Sony (#1), LG (#2), Samsung (#3), AMUL (#4)and HP (# 5). Thus, the Indian consumers too have given AMUL a toprank in the Food and FMCG category.

Asia Pacifics Top 1000 brand listing is based on a proprietary surveyco-funded by Media Magazine. Ten markets were included in the sixthround of survey: Australia, China, India, Japan, Korea, Hong Kong,Malaysia, Singapore, Taiwan and Thailand.


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Market Segmentation Of AMUL products

The purpose of segmentation is to identify and target prime customergroups so that returns are maximized. Some of the attributes ofsegmentation are as follows:

1. Homogeneity within the segment2. Heterogeneity between various segments3. Segments are measurable and identifiable4. Segments are easily accessible and actionable5. Segment should be large enough to be profitable.....

Since the product range of AMUL is in food category, the market

segmentation essentially targets various food groups like


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Bread spreads


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Milk Drinks


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Dairy whitener


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Fresh Milk


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Cheese products


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Fast Foods

Sweets


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Cooking media

Ready to eat food


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Chocolates

Health Drinks

From the above array, it is clear that the products are carefully chosenand segmented to individual customer preference. Product range catersneeds from morning breakfast needs to after dinner deserts and includesmedia to cook food also. Health drinks are another segment targeted tourban mother, who is worried about the nutrition and growth of her

children.


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Positioning

After the most attractive segments are selected, a company should notdirectly start targeting all these segments. The attractiveness of thesegments is also depending on other important factors. In the mainactivity of defining a target market, four sub activities are given which arethe bases for deciding on which segments will actually be targeted.

In all three age groups are targeted namely children (7-20 years of age),Adults (21-40 years of age) and seniors (40-60 years of age) on thebasis of their specific product preferences and taste

The four sub activities performed by AMUL while targeting are:-

1. Defining the abilities of the product and resources needed to enter amarket segment

2. Analyzing competitors on their resources and skills3. Considering the companys abilities compared to its competitors.4. Deciding on the actual target markets.

This analysis lead to a list of segments which are most attractive to

target and have a good chance of leading to a profitable market share.

Marketing MixThe major marketing management decisions can be classified in one ofthe following four categories:

1. Product

2. Price

3. Place

4. Promotion

These variables are known as the marketing mix or the 4 P's ofmarketing. They are the variables that marketing managers can controlin order to best satisfy customers in the target market. The marketingmix is portrayed in the following diagram:


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These strategies in terms of their products, price, place and promotionare discussed below:

TARGET

MARKET

PRODUCT POSITION

PRICEPROMOTION


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Pricing strategy

AMUL products pricing is based upon prices of the similar competitorproducts. For example, AMULs new launch Choco Crunch Pricing is

based on three types:-1) Product is lasting distinctiveness from competitor's product.Assumptions are

a) The product has low price elasticity.b) The product has low cross elasticity.c) The demand of the product will rise.

2) Products have low perishable distinctiveness from competitor'sproduct, assuming the product features are medium distinctiveness.3) Products have little distinctiveness from competitor's product.

Assumptions are :a) The product has high price elasticity.b) The product has some cross elasticity.c) No expectation that demand of the product will rise.

Price is the factor that beats out all other chocolates in the competition.Such as Cadburys. In many a cases AMUL and Cadbury frenchise areright next to each other. But if given the choice people would preferAMUL products and not Cadbury as the prices of AMUL product ischeaper as compared to their competitors like Cadbury and this hasworked as an advantage.

The price of AMUL and Cadbury dry fruit Coch crunch is Rs 80 vs. Rs.100 for a pack of 20 pcs. By comparing the prices of the products ofAMUL and cadbury, it can be seen that that the prices offered byCadbury are on the higher side as compared to AMUL. Thus it may beconcluded that cadburys target customers are professionals, workingcouples and families in the categories that prefer multinational brand andwho are willing to pay higher prices. Whereas AMULs typical customersare from the upper middle class or middle class families, who can affordthese prices and looking at these target customers the company has

designed its outlet to look young and trendy with vibrant colors such asbrownie, black current(purple) and Butter scotch predominating theoutlets.


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Promotion Strategy

A successful product or service will mean nothing unless the benefit ofproduct are communicated clearly to the target market. An organizations

promotional strategy can consist of:

1. Advertising:2. Public relations:3. Sales promotion:

AMUL hoarding has been one of the most talked about Friday changesapart from new movie releases.Its advertising has also started using tongue-in-cheek sketches starring

the AMUL baby commenting jovially on the latest news or currentevents. The pun in her words has been popular.The AMUL ads are one of the longest running ads based on a theme,now vying for the Guinness records for being the longest running adcampaign ever whose charm has endured fickle public opinion,gimmickry and all else.


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AMUL has been using various channels to promote the brand. AMULHoardings are already a legend, besides various print advertisementsand sponsorship of various television programs,Corporate social activities have also been cleverly used to promotebrand such as AMUL vidyashree awards, AMUL vidyabhushan award,AMUL Maharani awards, AMUL disaster relief fund, online contests,treeplantation drive etc


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Product Strategy:

Cost

Strong emphasis on targeting cost saving by utilizing value engineering,minimum product variety, integration of suppliers into the supply chain,usage of high volume equipments automation to optimize production,quality and cost, and automated material handling equipments to addthe cutting edge to remain cost competitive.

Quality/ Reliability

Disciplined product development process is employed with specific focus

on customer needs. Use of modern manufacturing techniques andstringent quality controls ensure that products are of top quality andmeet customers expatiations completely. Computer aided inspectionand testing equipments are deployed to check the quality of productsand control process to ensure minimum waste/ rejection.

Time to Market

Continuous surveillance of the market and profound understanding ofcustomer needs. Well planned and managed programs with clearly laid

out definitions and roles and responsibilities.

A starting point is to define and understand the company's marketplace,customers needs and competition. Based on this assessment, thecompany's primary competitive dimensions can be selected and astrategy defined to develop and enhance these competitive dimensions.Once this is done, product and process design can be oriented toimplement this strategy.


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Positioning

With the list of target markets in hands, next step is to start on decidingon a good marketing of a product.

The Process of Positioning the Product:

1. Identify the differential advantages in each segment2. Decides on a different positioning concept for each of these

segments.3. When the positioning statement is created, one can start on

creating the marketing mix.

All AMUL products are cleverly positioned to cater to the needs ofmiddle to upper middle class customers, who form the bulk of clientele ofthe product range AMUL products have been placed in. By pricing theproducts cheaper than the competitor (Cadbury for chocolates, Vadilal &Quality for ice creams, and Bornvita and Complan for health drinks etc),attractive packaging appealing to the target customer segment theyhave been able to carve out a market for their products and retain theircustomers.


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Distribution Strategy

In order to ensure a continuous & efficient distribution, AMUL haslaunched multiple strategies to ensure that products are made availableto the customers. AMUL products are available at various stores, friendlyneighborhood grocer, specialty stores, exclusive outlets, parlors atrailway stations, scooping parlors and even ordered thru net. AMUL hasembarked on standardizing their retail outlets and have set followingconditions:

The criteria for selection of APOs would be -a. Visibility - How prominent is the location of shop?

b. Shop area: 100 - 300 sq. ft.

c. Good Business potentiald. Exclusive AMUL outlet - no other products

e. Willingness to sell the entire range of AMUL Products

f. Creditworthiness and past business experience

Field force would visit the proposed site, who would fill the APO proposal form.

Required documents are:

i. Shops and Establishment license

ii. Layout of the shop and frontage - The layout of the shop designed by a

local architect/local contractor.

iii. 2 Passport size photographs

Renovation Work of the Shop to give it a standard look- would be done to

meet the design and specifications at vendors cost. The cost of renovation of a typical

shop would normally be between Rs. 60,000 to Rs. 1 lac.

Branding- The APOs would be branded as "Amul Utterly Delicious". The cost of

the signage fabrication and installation would be borne by GCMMF office operating

in your region.

Equipment- Following equipments are required to be bought:

a. 1or 2 deep freezers can be purchased through Hamara Apna Deep

Freezer Scheme

b. 1 Refrigerator through Hamara Apna Refrigerator Scheme

c. 1 pizza ovend. 1 Chest Milk Cooler for Pouch Milk


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Conclusion

It has been a pleasure to undertake a journey thru time tunnel whileresearching material on AMUL. The journey took some pages from myown childhood and made understand many strategies hithertounexplained as to why that chubby girl keep changing on every Fridayin the hoarding next to the market. The journey for AMUL has beenlong starting off as a cooperative for villagers and ultimately emergingas a corporate ready to take on multinationals on their home turf and beproud to be a truly Indian entity. While negotiating the journey in thegrowth path, GCMMF has created value for its stake holders,generated confidence among the members and made white revolution

a reality in India. The saga was well captured by noted director ShyamBenegal in his movie Manthan.

AMUL has emerged as a brand, India can be proud of, and in bringingthe brand to this status, many strategies relating to segmentation,positioning, promotion and distribution have been put to use sinceinception and by being a continually proactive player in the market,AMUL has emerged into a success story. Some of the strategies havebeen discussed here and they have provided a deeper understanding

of product and brand management and also, gave hands onexperience. Also, it provided the insight that product and brandmanagement can be used in our daily operations, and thus, is a usefulaid in the marketing of different products.

I am extremely thankful to Dr. Sanjay Patro for providing with anopportunity to this very insightful study which has helped understandproduct and brand management better.


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Bibliography

www.AMUL.com www.wikipedia.org www.thehinhubusinessline.com http://www.brandstoday.in/2009/06/11/AMUL-rated-no-1-

%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/
http://www.amul.com/http://www.amul.com/http://www.wikipedia.org/http://www.thehinhubusinessline.com/http://www.brandstoday.in/2009/06/11/amul-rated-no-1-%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/http://www.brandstoday.in/2009/06/11/amul-rated-no-1-%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/http://www.brandstoday.in/2009/06/11/amul-rated-no-1-%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/http://www.amul.com/http://www.wikipedia.org/http://www.thehinhubusinessline.com/http://www.brandstoday.in/2009/06/11/amul-rated-no-1-%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/http://www.brandstoday.in/2009/06/11/amul-rated-no-1-%E2%80%9Cindian%E2%80%9D-brand-in-asia-pacific/


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Annexure 1:

Some memorable AMUL Hoardings
http://groups.yahoo.com/group/bogelindah/http://groups.yahoo.com/group/bogelindah/


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http://groups.yahoo.com/group/bogelindah/http://groups.yahoo.com/group/bogelindah/http://groups.yahoo.com/group/bogelindah/


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http://groups.yahoo.com/group/bogelindah/

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DB09154 Sales Assignment Project in PBM