Development of Strategies for

Increasing Market Share of Amul Ice-

cream at Retail Level in Patna

Faculty Guide: Prof. Sudeep S Kumar

Prof. Simon George

Industry Guide: Mr. Manoj Prabhakar

Presented By

Tanvi Srivastava (10349)

Vishwajeet Narayan (10356)

Amul – An Overview

Started in 1946 in Anand, Gujarat

Amul(GCMMF) is the largest cooperative business of small producers with an annual turnover of 2.15 billion US $.

2.8 million milk producer member families with 13,759 village societies and 13 District Unions. 8.5 million liters of milk procured per day and Rs. 150 million disbursed in cash daily.

Largest milk handling capacity in Asia.

Largest Cold Chain Network.

48 Sales offices, 3000 Wholesale. Distributors, 5 lakh retail outlets.

Export to 37 countries worth Rs. 150 crores

Dr. Verghese Kurien, the World Food Prize and the Magsaysay Award winner, was the architect of India’s White Revolution, which helped India emerge as the largest milk producer in the world.

Currently, its headed by Mr Parthi Bhatol

Ice-cream Industry in India

The ice cream industry in India is worth Rs. 2,000 crores.

The industry can be divided into the branded market and the unbranded market. The branded market at present is 100 million liters per annum valued at Rs. 800 crores

In 2008-09, in the branded ice cream market, Amul held the number one spot, with a market share or 38%, followed by Kwality Walls at 14%, Vadilal at 12% and Mother Diary at 8%

The per capita consumption of ice cream in India is approximately 300 ml, as against the world average of 2.3 liters per annum.

Vanilla, Strawberry and Chocolate together constitute approximately 60% of the market.

NEED FOR THE PROJECT

0

500

1000

1500

2000

2500

355 400 450 455

493 493 500 500 575 616 672

850 1050

1325 1504

1700 2172

Sale

s Sales Turnover in US $ (in millions)

Amul Sales Turnover

Decreasing market-share in

Patna

0

0.5

1

1.5

2

2.5

3

3.5

4

2007 - 082008 - 09

2009 - 102010 -11

2.5

2.9 3.2

3.7

Sa

les(

in c

ro

res)

Amul Ice-cream Sales in

Patna

0

0.5

1

1.5

2

2.5

3

3.5

4

2010 -112009 - 10

2008 - 092007 - 08

4

3 3

2

Ma

rket

Po

siti

on

Market Position of Amul ice-

cream

Identification of problems in the distribution and supply chain that

adversely affect the sales of Amul Ice-cream at retail level.

Study the behavior of the ice-cream market in Patna region.

Strategies for improving market share of Amul ice-cream in retail

and push-cart segment.

Comparative study of different competitors vis-à-vis Amul in the

ice-cream sector

Major parameters to be considered in comparative study

I. Quality

II. Market-share

III. Brand value

Project Objectives

Scope & Limitations

PART – I: PROBLEM IDENTIFICATION

It was decided by the management that the project shall be focused

only on the decreasing sales of Amul ice-creams.

The region to be covered in the initial stage would be Kankarbag

colony and the whole Patna town at later stage.

The marketing of either Amul ice-creams or any other Amul

products shall be out of scope for the project.

The analysis shall cover the analysis of issues faced by

distributors, retailers and sales-man dealing with ice-creams

only.

The entire sales process, starting from stock supply to dealing with

margins to closing of sales, shall be in the scope of the project.

Scope & Limitations

PART-II: QUESTIONNAIRE BASED RESEARCH ON

DISTRIBUTORS, RETAILERS AND CUSTOMERS

The research shall focus on A/B/C/D type of shops dealing with ice-

creams or planning to do so, in future.

The research shall focus on the sales related variables only and not

include matters under the purview of the Human Resources

department.

Methodology

The project was approached in 4 phases:

Phase 1: The Silent Observation Phase

a. Total number of shops visited was 40.

b. Act as silent observers of the ice-cream market of Amul and its

competitors in the Patna city, at retail level.

c. Information regarding the behavior and perception of retailers as

well as customers was gathered.

Phase 2: The Retailer Survey Phase

a. Consisted of visiting various outlets(A/B/C/D shops) in different

geographic locations in the city.

b. Personal interviews with different distributors, salesman and the

retailers in the region.

c. Questionnaire was primarily based on the information gathered in

previous phase.

Methodology

Phase 3: The Consumer Survey Phase

a. Collection of information regarding the consumers’ buying

behavior and their perception of ice-creams and the related brands in

the Patna town.

b. General survey was conducted keeping in mind the fact that it was

beyond the scope of project.

Phase 4: Push-Cart Segment Survey Phase

a. Targeted the push-cart distributors and brands actively involved in

this segment.

b. Analyze the market and figure out reasons for Amul’s low presence

in this segment.

Research Analysis

The conclusions derived after each phase:

Phase 1: The Silent Observation Phase

a. Different brands of ice-cream present in the Kankarbag area were:

i. SnowBall

ii. Creambell

iii. Vadilal

iv. Amul

v. Golden

vi. Rollick

The graph below shows the customer’s preference in terms of taste and price

Choco-

bars

29%

Cups

40%

Cones

21%

Candies

10%

Taste

0

10

20

30

40

50

Less than

5Between 5

to 10Between

10 to 25Greater

than 25

10

35

46

4

No

. o

f cu

sto

mer

s(in

%)

Customer Preference

Research Analysis

Phase 2: The Retailer Survey Phase

a. The sampling method used here is stratified sampling.

b. The sample size was taken as 140 outlets for all strata.

c. The regions covered in this phase were:

i. Boring Road

ii. Belly Road

iii. Maurya Lok Complex

iv. Gandhi Maidaan

v. Kurjee( P&M Mall and Big Baazar)

Breakup of the number of stores covered of each class in % in the Kankarbag

region (Fig 1) and the whole Patna town (Fig 2).

A

8%

B

22%

C

70%

Kankarbag Region

A

16%

B

29%

C

55%

Patna Region

Research Analysis

0

10

20

30

40

AmulCream bell

Snow ballGolden

VadilalRollick

10

25

40

3

20

2

Phase 2: The Retailer Survey Phase Contd…

The ice cream market is estimated to be between Rs 35 crore and Rs 40 crore

The graph below depicts the current market share of different brands in the town.

Research Analysis

Phase 3: The Consumer Survey Phase

a. The sample size in this case was 300.

b. Customers are price-conscious and prefer the ice-creams in the range of

Rs 5 to Rs 25.

c. Most of customers are not brand-conscious and would go for any ice-

cream which is readily available.

d. Profile of respondents:

Home -

Maker

32%

Service

10% Self-

Employed

24%

Student

34%

Occupation

Male

44%

Female

56%

Sex

Research Analysis

Phase 3: The Consumer Survey Phase Contd…

a. Sales of ice-cream increases by almost 50% in the marriage season.

b. The major factors to be considered in this phase:

i. Availability

ii. Seasonality

iii. Awareness

c. Push-carts have major penetration among the customers.

d. Profile of respondents:

< 2 lakhs

9%

2 - 3 lakhs

20%

3 - 5 lakhs

34%

5 - 8 lakhs

22%

> 8 lakhs

15%

Income Level

< 20 yrs

32%

20 - 30 yrs

26%

30 - 40 yrs

16%

40 - 50 yrs

14%

> 50 yrs

12%

Age Group

Research Analysis

Phase 4: Push-Cart Segment Survey Phase

a. The biggest factor that has been affecting Amul’s presence in the market is its short

and poor supply.

b. Different players in the push-cart segment:

i. Vadilal

ii. Treat

iii. Golden

iv. Amul

v. Sudha

0%

10%

20%

30%

40%

Golden: On

cupsGolden: On

bricksTreat

VadilalAmul

38%

22%

40%

30% 30%

Margin Offered to Distributors

0%

5%

10%

15%

20%

25%20%

22%

16% 15%

17% 20%

Margin Offered to Vendors

Data Analysis

Bar-graph drawn below measures the over-all satisfaction level of retailers and

distributors separately on a scale of 1 to 5.

Amul Cream

bellSnow

ballGolden

VadilalRollick

3 3.5 4

3 3.5 3

Sati

sfact

ion

Lev

el

Satisfaction Level of

Retailers

AmulCream

bellSnow

ballGolden

VadilalRollick

3 3.5 4 3.5 3.5 3.5

Sati

sfact

ion

Lev

el

Satisfaction Level of

Distributors

Main factors affecting the satisfaction level of retailers are: Margins offered by the

companies and Replacement policy.

S. No. Brands Margins Offered to the Retailers Replacement Policy

1 Amul 17.5 % Conditional

2 Snow - ball 35 – 40 % None

3 Cream - bell 17 – 19% None

4 Vadilal 17 – 19% Conditional

5 Golden 30 – 40% None

6 Rollick 18 – 19% None

Data Analysis

Factor Analysis:

The different factors considered are:

a. Price

b. Quality

c. Availability

d. Packaging

e. Taste

f. Awareness

Three important factors on which

the sales of Amul ice-cream

depends in the Patna region.

Factor 1 Factor 2 Factor 3

Taste Price Availability

Awareness

Quality

Factor Analysis data sheet

Customer Response

Sheet

AMUL ice-cream’s SWOT Analysis

STRENGTHS

1. A well-known brand. respected for its quality, thus less effort required to market Amul ice-creams.

3. Huge demand from customers.

4. Ice-cream made up of fresh milk, unlike others which are made up of vegetable oils.

WEAKNESSES

1. Very poor supply.

2. Inability to provide the entire range of ice-creams during the peak season.

3. Low number of distributors.

4. Very low number of push-carts in the city.

5. No incentive of any kind by the company in the push-cart segment.

OPPORTUNITIES

1. Exploit its huge customer demand by maintaining its demand-supply equilibrium.

2. Increase in the number of push-carts will lead to increase in distributors and in turn will mean increase in sales.

3. There are areas which still need to be tapped. Ex Eco Park (near Strand Road).

THREATS

1. Tendency among the Amul push-cart vendors to switch to other brands.

2. Ice-cream buying behavior mainly depends on the availability in this region

3. Difficult to compete with the local players

Data Analysis

Push-cart supplied by Amul is manufactured by Voltas (currently by Rockwell) and is

shipped from Kolkata. The details of the price-list:

HAPC

Rockwell Voltas

Tricycle 38250 41384

Push-Carts - 39114

If purchased locally, the distribution of costs for a 200 litres push-

cart: Cost of tricycle i.e. framework : Rs 11000-11500

Cost of Western deep-freezer : Rs 24500 (for 200 ltrs, the actual capacity is 130 ltrs)

Miscellaneous expenses(inverter, tube-light etc) : 1500

Hence, the total cost comes up to Rs 37000 – 38000. This includes all the taxes and road

permit etc which is an addition of 13%.

The same when ordered locally (i.e. centrally purchasing) costs less as the taxes and

transportation costs are reduced. Hence the cost of one push-cart comes up to Rs 33000 –

34000.

Hence, one is able to save 4000 approx., significantly less than what Amul charges for the

same.

Conclusions

1. Amul ice-creams have a huge demand in the town.

2. A brand respected for its quality, hence less effort required to market.

3. Adheres to the norms of ‘ice-cream’ as against ‘frozen dessert’ made of pure

milk.

4. Local players very strong in the region.

5. Very poor supply.

6. Entire range of ice-creams absent in the retail stores.

7. Stock outs faced during peak season.

8. Very low number of push-carts in the town.

9. Very few distributors in the push-cart segment present.

10. No incentive in the push-cart segment.

11. Consumers mostly not brand biased while purchasing ice-creams.

12. Target setting done on an annual basis.

Recommendations

Increase the number of SKU’s.

Can put up a factory of the best selling items like cups and chocobars, in the

local vicinity.

Tap the areas in the town where there is huge sales potential.

Increase the number of distributors in the retail as well as the push cart

segment.

Recommendations

Decrease the cost of push-cart by buying it locally.

The target setting needs to be done on monthly basis rather than the annual

basis and it needs to be aggressive.

References

1. www.amul.com

2. www.wikipedia.org

3. http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-

industry-in-india.htm

Thank You