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GUJARAT CO-OPERATIVE MILK M ARKETING FEDERATION LTD.
(GCMMF)
A Case Study……..
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Every morning, across India, millions wake up
to the taste of Amul, the flagship brandname for a variety of dairy products marketed
by the Gujarat Co-operative Milk Marketing
Federation (GCMMF).
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Background for GCMMF
• In the 1940s, farmers in Gujarat had to sell their milk either to privatemilk contractors or to the single private dairy - Polson's Dairy.
• Polson's used to collect, chill and supply milk to the Bombay Milk
Scheme(Distributer in Bombay).
• Polson's Dairy used its monopoly position and paid them very lowprices.
• In 1945, Nationalist leader Sardar Vallabhbhai Patel, TribhuvandasPatel, a farmer and social worker in Khaira District, beganorganizing dairy farmers into cooperatives, which sell directly to theBombay Milk Scheme.
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• In 1946, the milk producers formed KhairaDistrict Cooperative Milk Producers' Union Ltd
(KDCMPUL) to deal directly with the finalbuyer.
• KDCMPUL functioned at the district level and Village
Cooperative Societies(VCS) at the village level
• By June 1948, KDCMPUL started pasteurizing milk so
that it could be supplied to Bombay
• The milk collection in Khaira increased from 250 to5,000 liters a day.
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• In 1949, a dairy engineer, named Dr. Verghese Kurien
from Dairy Research Institute at Anand joined the
KDCMPUL.
• Firstly, the main activity was collection and processing of
the milk brought everyday by the member farmers to the
local office of the co-operative.
• But it was soon realized that it was not enough to act as
the collection and selling agents for the farmers. A
variety of support services were given to the farmers.
• But all these were strictly on payment basis: none of the
services were Free.
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• By now the corporative revolution moved out
from Khaira to all over Gujarat by following
Anand Pattern.• KDCMPUL is marketed their products under
the brand name of Amul (Priceless in Sanskrit)
•1954- ------Built first processing plant to makemilk powder and butter.
• 1958-------- Cheese and Baby food products
were added to the product line.
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Sardar Vallabhbhai Patel
Tribhuvandas Patel Dr. Verghese Kurien
GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD.
(GCMMF)
The district level milk unions became its shareholders.
250 litres per day in 1946 -------------- 4 million litres per day
by 1999 with 12 dairy plants all over the State of Gujarat.
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The Anand Pattern
• Three tiered structured……
Milk Producers[All milk producers in a village, 2.1 million in Gujarat, 9.31 million in India ]
Village Co-operative Societies[All villages in a district, 72,774 villages in India ]
District Milk Processing Unions
[Every district in the state ,12 district unions in Gujarat, 170 unions all overIndia]
State Marketing Federation
[All dairies in the State (GCMMF in Gujarat),22 State Federations in India]
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MD
GM(Mktng)
Mktng of dairy products,liquid milk, ice-cream
AGM
Manager
Commercial, export &liquid milk
GM (HRD)
Admin, Legal matters,New Opp, Edible oil
AGM
Manager
GM (Qlty)
Assuring quality
AGM
Manager
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India
ZonalMgr 1
ZonalMgr 2
ZonalMgr 3
ZonalMgr 4
ZonalMgr 5
BM
Sales officers/field sales persons
BM
Sales
officers/
field
sales
persons
BM
Sales
officers/
field
sales
persons
*There were 48 sales offices spread over the country(two were in Gujarat) and one overseas office, at Dubai
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Objectives & philosophy
• Main objective, “carrying out activities for the economic development of
agriculturists by efficiently organizing marketing of milk and dairy produce,veterinary medicines, vaccines and other animal health products,
agricultural produce in raw and/or processed form and other allied
produce”. This was to be done through:
Common branding
Centralized marketing
Centralized quality control
Purchases and
Pooling of milk efficiently
• GCMMF had declared, as its business philosophy, the following:
To serve the interests of milk producers
To provide quality products that offer the best value to consumers for
money spent.
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Diversification
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Diversification
• Non milk product diversification Edible oil (DHARA)
[60% of groundnut produced by Gujrat]
GCMMF marketed this oil on behalf of NDDB
Dhara, Shudh Dhara
Fruit Product (SAFAL)
GCMMF undertook distribution of fruit based product on behalf
of NDDB.[Mango drink,Tomato ketchup,Mixed fruit jam]
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• of 4.6 million liters of milk/day about 2.2 million liters were
sold as liquid milk and the rest as milk products.
Liquid Milk
15%
Edible Oil
17%
Butter
22%
Ice Cream13%
Rest
33%
% of GCMMF’s total income (Rs.18 billion )
(5.85 bn)
(2.75 bn)
(2.4 bn)(4.0 bn)
The share of processed fruits and vegetable items was still quite small
(3.0 bn)
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Market Share
• The nature of competition
varied among the different
products
• Amul brand was the market
leader in each and every one
of its products (except ice
creams, chocolate and
chocolate-based beverages)
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GCMMF: PRODUCT PORTFOLIO
Category Market Position
Liquid Milk 1
Butter 1
Milk Powder 1
Cheese 1
Sweets 1
Ice Creams 2
Chocolates 3
Chocolate Drinks 4
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SWOT Analysis………..
• The biggest strength of GCMMF was the trust it had created
in the minds of its consumers regarding the quality of its
products.
• Main objective
Common branding
Centralized marketing
Centralized quality control
Purchases and
Pooling of milk efficiently
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SWOT Analysis………..
• The profit margin in milk was generally low, due to the need
to keep down the price of this essential commodity.
• NDDB and GCMMF had, as one of their important objectives
promotion of milk consumption, especially by the poorer
people.
• Edible oils were also low margin items, their sales prices being
controlled rigidly by the government and input prices being
essentially set by the oil traders.
O
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SWOT Analysis………..
• The milk consumption in India in 1999 at about 225 grams per day was still
way below that in developed countries and even less than in many
developing countries.
•
It was expected that by the year 2011-12, the milk production in Indiawould reach 180.76 million tons.
• The variation in availability between rural and urban areas was strikingly
high: 121 grams vs. 400 grams per day.
• Opportunities abounded in the market, both domestic as well as export.
– GCMMF had been making major efforts to make its brand known in many countries,
including U.S.A., where it had entered into an alliance with Kanan Dairy .
– It had established offices and agencies in New Zealand, Gulf, Sri Lanka and Australia.
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SWOT Analysis………..
• Consumers were generally not very particular about the brand of liquid
milk.
• There was also competition from newly emerging private dairies that had
started supplying milk to the consumers as well as sweet makers.
• For butter and cheese, Britannia had introduced new forms of cheese such
as cheddar cheese slices, and supported its products with extensive
advertising campaigns.
• Other food companies such as Hindustan Unilever Ltd. (HUL), and Nestlé
had also entered into the business of ready made or near ready sweets .
These were advertised and heavily promoted through campaigns such as
through mail orders to housewives.
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Advertisement and Promotion
•
GCMMF had shown itself to be remarkably savvy inits advertisement and promotion campaigns.
• A campaign titled “The Taste of India” for all its
products, featuring Indian recipes and life style.
• It had coined truly memorable slogans such as the
one for butter: “Utterly Butterly Delicious Amul”; foredible oils: “Dhara, Shudh Dhara”, emphasizing its
purity
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• It was the first Indian company to put up advertisement
hoardings (bill boards) [started in 1967] based on a topical
and current news item that almost brought traffic to a stop.
• The hoardings,were changed weekly and every week it had a
current and a new theme
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• GCMMF sponsored television programmes as
well.
• GCMMF had sponsored two well-received
feature films
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GCMMF and Its Programme for
Management of Change
• They realized that, they had to become more
customer centered rather than merely being
farmer or supplier centered.
• This required paying close attention to the
customer needs and quality.
• Hence it launched a “Total Quality Management”
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“I am confident –in the next twenty
five years we will transform the lives of
millions more, opening for them the
door to an India ,that is the land of ourdreams.”
Dr. Verghese Kurien
Chairman, GCMMF
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Thank You…..