Amul: the brand building challenge
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Amul: the brand building challenge

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This case study discusses the brand building challenges of Amul;

This case study discusses the brand building challenges of Amul;

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  • 1. The Brand Building Challenge Amul Prepared and Submitted by Paresh Ashara (S11MMMMM00440) Ranjeet Shriwastva (S11MMMMM00452) Manoj Kaushik (S11MMMMM00453) Sudip Kumar Das (S11MMMMM00765) Vivek Wamorkar (S11MMMMM00416) SMP07, NIIT Imperia Bangalore Center Feb 28, 2011
  • 2. The Brand Building Challenge – AmulTable of Contents of Contents1. Introduction ........................................................................................................ 32. rsonality, and Symbolism ............................................ 43. Strategic decisions taken to build the brand ............................................. 64. Consumer Insights ............................................................................................ 85. Brand Positioning .............................................................................................. 96. Role of Advertisement ..................................................................................... 107. Brand Drivers...................................................................................................... 128. Future Steps for Brand Consolidation .......................................................... 139. References ........................................................................................................... 14
  • 3. The Brand Building Challenge - AmulIntroductionCompany HistoryAmul was set up in 1946 and its full form is Anand Milk- producers Union Ltd. TheBrand Amul is a movement in dairy cooperative in India. The management of thebrand name is done by the Gujarat Cooperative Milk Marketing Federation Ltd(GCMMF) which is a cooperative organization.Gujarat Cooperative Milk Marketing Federation (GCMMF) is Indias largest foodproducts marketing organization. It is a state level apex body of milk cooperatives inGujarat which aims to provide remunerative returns to the farmers and also serve theinterest of consumers by providing quality products which are good value for money.Amul is located in the town Anand which is in the state of Gujarat and it has set upitself as a model for development in the rural areas. The Amul Brand has started theWhite Revolution in India which has helped to make the country the biggestmanufacturer of milk and its by-products in the whole world. Amul has around 2.9million producer members covering 15,322 village societies and the total capacityfor handling milk is around 13.07 million liters every day. The brands capacity formilk drying is around 647 Mts. each day and its capacity for cattle feedmanufacturing is about 3740 Mts. each day[1].AchievementsAmul has always been the trend setter in bringing and adapting the most moderntechnology to door steps to rural farmers.  GCMMF bags Agricultural and Processed Food Exports Development Authority (APEDA) AWARD for 11th year in a row in 2006-07  Amul Pro-Biotic Ice-cream receives No. 1 Award At World Dairy Summit in 2007  GCMMF emerged as the top scorer in the service category of the prestigious IMC Ramkrishna Bajaj National Quality Award - 2003  Amul - The Taste Of India (GCMMF) Receives International CIO 100 Award For Resourcefulness in 2003  Rajiv Gandhi National Quality Award - 1999Amul is the live example of how co-operation amongst the poor marginal farmerscan provide means for the socio-economic development of the under privilegedmarginal farmers.Amul Brand Umbrella caters several products under broad categories of butter, milk,cheese, ghee, milk powder, curd, ice cream, flavored milk, health beverage,condensed milk, sweets, chocolates and confectionary.Amul’s sales turnover for the past 16 years has been depicted in the chart below. Ithas grown at a CAGR of 11% over the past 16 years achieving the turnover ofRs.80,053 million in FY2009-10.[1] Source: http://www.amul.com/organisation.html; Data as of FY2009-10 (3) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 4. The Brand Building Challenge - Amul CAGR = 11% Figure 1: Amul - Sales TurnoverAMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit"Amoolya," was suggested by a quality control expert in Anand. Amul has fetched a greater mileage for itself by introducing ‘The Taste of India’ campaign after the liberalization of the Indian economy in 1991. Since 1967 Amul has successfully built the brand personality with a cute little moppet girl wearing a polka-dotted frock as its mascot (symbol) and made her a part of our lives. Amul continues to show the same six-year-old girl in the “Utterlybutterly delicious” advertisement of Amul butter, which reflects that the brand nevergets old. She just comes in so casually each time with an all new dimension tosomething already existing, either making fun of it or mocking at it, each timeminimizing the impact of the event & people mentioned but highlighting andemphasizing only and only “UTTERLY BUTTERLY DELICIOUS.. AMUL”The Amul brand is not built as a product but as a movement to make India thelargest producer of milk in the world. It is representation of the economic freedom ofdairy farmers. The core values of the company are: - To provide remunerative returns to the farmers - Give the best quality product to the consumer - and the best possible price (4) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 5. The Brand Building Challenge - AmulAmul as an umbrella brand is presently used for sub branding for the differentproducts manufactured by Amul; like Amul Gold and Taaza in the milk categoryamongst other products, which includes Amul butter, Amul ice-creams and the like. Pride Available Variety Food Value Taste Quality Indian Figure 2: Brand Personality (5) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 6. The Brand Building Challenge - AmulStrategic decisions taken to build the brandThe strategic decisions that developed Amul as a brand can be classified in thefollowing broad categories: 1. Technology 2. Pricing 3. Quality 4. Product Portfolio 5. Distribution Network1. Technology Strategy:  The technology, packaging and Amul’s approach to marketing is based on the changing taste buds of the consumers. The technology strategy is characterized by four distinct components:  new products  process technology  complementary assets to enhance milk production  e-commerce  Few dairies of the world have the wide variety of products produced by the Gujarat Cooperative Milk and Marketing Federation (GCMMF) network. Village societies are encouraged through subsidies to install chilling units. Automation in processing and packaging areas is common, as is Hazard Analysis Critical Control Point (HACCP) certification.  Amul actively pursues developments in embryo transfer and cattle breeding in order to improve cattle quality and increase in milk yields.  GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies to implement business to consumer (B2C) commerce. Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon receipt.  Another e-initiative underway is to provide farmers access to information relating to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages.  GCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk collection as well as the marketing process. Farmers now has better access to information on the output as well as support services while providing a better planning tool to marketing personnel.2. Pricing Strategy At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money. (6) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 7. The Brand Building Challenge - Amul3. Quality Amul has not changed its core values –give the best quality product to the customer.  A key source of competitive advantage has been the enterprises ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel (TQM activities).  A regular Friday meeting is conducted that has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a process check at the end to record how the meeting was conducted. Similar processes are in place at the village societies, the unions and even at the wholesaler and C&F agent levels as well. Examples of benefits from recent initiatives include - o reduction in transportation time from the depots to the wholesale dealers, o improvement in ROI of wholesale dealers, o implementation of Zero Stock Out through improved availability of products at depots and o implementation of Just-in-Time in finance to reduce the float  Kaizen at the unions have helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizen are highly focused projects, reliant on a structured approach based on data gathering and analysis.) For example, Sabar Unions records show a reduction from 2.0% to 0.5% in the amount of sour milk/curd received at the union.4. Enhance Product Portfolio Amul’s strategy of umbrella branding has also helped establish its brand firmly in people’s minds. The network follows an umbrella branding strategy. Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk.5. Distribution Network Amul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products. GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMFs philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations. (7) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 8. The Brand Building Challenge - AmulConsumer InsightsAt the time Amul was formed, consumers had limited purchasing power, and modestconsumption levels of milk and other dairy products. Thus Amul adopted a low-costprice strategy to make its products affordable and attractive to consumers byguaranteeing them value for money. Amul milk enjoys 86% market share in India.Amul have time to time used several marketing research data and consumer insightsfor following customer aspects and have defined their market segmentationaccordingly. Behavioral • User status , Usage rate Demographic • Income , Age , Sex , Family Psychographic • Activities and lifestyle Geographic • International , Regional Buying condition • Purchase location , Who buys , Type of buyThe Amul Model narrowed the gap between the producer and the consumer,connecting the dairy farmer to the consumer through its organic network. Thesuccess of this model ignited interest across India, where this model was replicated,in essence leading to the White Revolution.Despite competition in the high value dairy product segments Amul ensures that theproduct mix and the sequence in which Amul introduces its products is consistentwith the core philosophy of providing butter at a basic, affordable price to appeal thecommon masses. This helped AMUL BUTTER to create its brand image in thehousehold sector of the society. MRP Rs.122 MRP Rs.25However, the main thing that has helped Amul sail smoothly is that they have notchanged their core values—give the best quality product to the consumer, and thebest possible price. It holds true in any era. In fact, it is not just the core values atAmul that have remained the same; the core team associated with the brand is stillthe same. Even the advertising agency hasn’t changed, and DaCunha and FCB Ulka, -have played a pivotal role in the growth of Amul. This has helped maintainconsistency in market communication. Amul strategy of umbrella branding has alsohelped establish their brand firmly in people’s minds. This, despite the fact thatAmul only spends than 1% of our turnover for marketing, compared with 7-8% (spent) (8) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 9. The Brand Building Challenge - Amulby most of the food and consumer product companies. From Utterly butterlydelicious Amul to The Taste of India, Amul continues to be the toast of the country. Striking out on its own, with Amul Outlets or parlours to deliver consumers total brand experience Launched in 2002, there are now 5000 Amul parlours across the country, which contributed 3% to the brand’s total turnover last year. High profile locations: Amul parlours are today present on campuses of Infosys, Wipro, IIM-A, IIT-B, Temples, Metro rail and railway stations in Gujarat.Brand PositioningLife begins at 60. Ask Amul synonymous for all things dairy. It focuses on Indiaslargest consumer segment, a.k.a. middle class society. This segment of consumers isurban and knowledgeable. They need a great taste but they are equally health andquality conscious.Amul is the oldest and the most established dairy brand in the country, with its firstproduct, Amul butter, being marketed since 1946. Today, the company has its rootsdeep in the dairy market and is increasingly focusing on the value added segmentthat includes health drinks, cheese and dairy based dessertsAmul has carefully cultivated its family based homely image.Brand positioning statement: “The taste of India” It has created a value for everyonein the value chain, be it a customer or the supply chain.Positioning Components: Emotional Component: Through the campaigns like “Gift for someone you loved” and “Taste of India” Functional attributes: Unique functional attributes of Amul are: o Value for money – The best quality diary product at the reasonable price o Product Availability – Amul has huge supply chain and distribution networks across India and has strong link back to the sourcing farmers. Descriptive Factor – Amul has become a family brand and it relates to its Homely image.Brand Consistency: Amul runs the Topical campaign for last 4 decades. It is one ofthe longest running advertisements in the worldTarget Market and segment: Amul has positioned variety of products for differentmarket segments e.g. To target teenager Amul launched products like, Amul Kool, chocolate milk, Neutramul Energy drink , “Munch Time” (9) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 10. The Brand Building Challenge - Amul In Nov 2007, Amul launched “Fresh Paneer” that claims to be Free from any harmful chemicals For Health conscious segment, Amul launched Pro-Biometic Wellness Ice cream & sugar free Delights for the diabetics For Women Amul Launched Amul Calci+Point of Differences (POD): Quality with affordability Amul is a Mass market player with no premium offering Sheer size and scale of operations Value additions to the customerPositioning Method:Impulse purchase: Simple memorable slogan message “A gift for someone you loved”Brand Re-positioning:For young people below the age of 20, Amul is now moving away from its carefullycultivated image of just a family brand popular with the homemaker. So while theponytailed Amul girl will continue to be the brand ambassador with her UtterlyButterly spoofs, the brand has started changing its lingo to cater to Generation X, Yand even Z. So the new television commercials, created by DCB Ulka, position theproducts on the Utterly Healthy platform where thin is in.Role of Advertisement64 years after it was first launched, Amuls sale figures have jumped from 1000 tonsa year in 1966 to over 9,30,200 tons a year in 2009-10. No other brand comes evenclose to it. All because a thumb-sized girl climbed on to the hoardings and put aspell on the masses.It all began in 1966 when Sylvester daCunha, then the managing director of theadvertising agency, ASP, clinched the account for Amul butter. The butter, which hadbeen launched in 1945, had a staid, boring image, primarily because the earlieradvertising agency which was in charge of the account preferred to stick to routine,corporate ads.Sylvester daCunha designed an advertisement campaign as series of hoardings withtopical ads, relating to day-to-day issues. Thus was born the Amul Moppet, a littlegirl who would warm her way into a housewife’s heart. Amul since then have beenfollowing different promotion and advertising campaigns with Amul moppet takingcentral role in the advertisement Uses a variety of media to communicate - Most famous is billboard campaign using Amul moppet and topical ads Call her the Friday to Friday star because Every Friday, since 1967, this little girl appears at billboards, strategically placed all over India, focusing on the item of the week – tongue in cheek, of course (10) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 11. The Brand Building Challenge - Amul Amul food festival, which has been held for the last four year between October and December in about 50,000 retail outlets The Chef Of India promo invites hotel chefs to come up with recipes using as many Amul products as possible, and is conducted at city, state and national level Figure 3: Advertisement Amul Topical (Amul Hits)There are no boundaries and nothing is off limits. From the political scene, toentertainment, from local news to international, from sports to stars, she has a linefor everything. Often said to be playing the role of a “social observer with evocativehumor”, the billboards became, and still are, a topic of conversation amongstmillions. With their “hing-lish” (a combination of Hindi and English) punch-lines, theyhave won the maximum number of awards in India for any ad campaign ever! Thislittle thumbelina seems to have the masses, right where she wants them – wanting (11) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 12. The Brand Building Challenge - Amulmore of her and of Amul. No other brand comes close to what Amul has been able toaccomplish.Brand DriversThe first lots of products with the Amul brand name were launched in 1955. Sincethen, 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 thatsomething is the reason for the commitment to quality and value for money. Amul isthe brand name of 2.9 million farmers, members of 15,322 village dairy cooperativesocieties throughout Gujarat. This is the heart of Amul, it is what gives strength toAmul, and it is what is so special about the Amul saga.The Amul Pattern has established itself as a uniquely appropriate model for ruraldevelopment. 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 alarger than life purpose. The purpose – freedom to farmers by giving total controlover procurement, production and marketing.In an interesting piece published in 2001, Varghese Kurien, the Father of WhiteRevolution in India and the architect of the decentralized and highly integrated dairycooperative model said that the brand name of the movement, Amul, serves the roleof a contract. “It is the assurance to the buyer that her specifications will be met. It isthe seller’s assurance that the quality is being provided at a fair price”. He furthersaid, “If Amul has become a successful brand – if, in the trade lingo, it enjoys brandequity – then it is because we have honored our contract with consumers for close tofifty years. If we had failed to do so, then Amul would have been consigned to thedustbin of history, along with thousands of other brands.”According to Kurien the major elements of Amul’s contract with its customers arequality, value for money, availability, and service. “Our commitment to the producerand our contract with the consumer is the reasons we are confident that cooperativebrands, like Amul, will have an even bigger role to play in the next fifty years.” saidKurien.Amul is excellent example of brand which demonstrates how each failure, eachobstacle, and each stumbling block can be turned into a success story. In the earlyyears, Amul had to face a number of problems. With every problem came opportunityand chance to turn a negative into a positive. Milk byproducts and supplementaryyield which suffered from the lack of marketing and distribution facilities becameencumbrances. Instead of being bogged down by their fate they were used asstepping stones for expansion. Also Backward integration of the process led thecooperatives to advances in animal husbandry and veterinary practice. Organizing market to excellent supply chain is critical to the success of market- based development Infrastructure investment is crucial to rural development From livelihood to wealth creation is equally important for rural development Wealth creation requires transforming community Closer to Nation and developing home grown entrepreneurs (12) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 13. The Brand Building Challenge - AmulThe journey from Co-operative to Corporate is not that easy. Still Amul did not forgetits Social Responsibilities. Initiatives like: Green Amul Green India, One Member OneTree, Amul Baby Growth Plan, Amul Relief Trust, Amul Shakti Vidyashree Award andmany more in the list are really impressing.Future Steps for Brand ConsolidationAmul enjoys a good brand recognition and high recall. It has ventured in to broadrange of diary based products in the last decade. However, there is still lot to do forAmul to continue garner the customer base and brand loyalty.Amul stood at rank 21st in the top 21 list of global milk processing companies in2009. With global market share of 0.4 percent as of year 2007 data, there is hugepotential to capture the unorganized sector (organized sector put together,accounted for only 21 percent of the market share globally).Recommendations: Focus on retail expansion in Indian cities, towns and villages – increase branded Amul parlours to capture the consumer attention and keep the competition at bay Amul can venture into offering low-fat versions of its products as it would help capture the hearts of second and third generation Indians in US & Global Market Amul can venture out on new products like dairy based sweets, baby food products Amul must try to understand the cause of certain products like Amul basundi, gulab jamoon, and chocolates etc not being very popular. Amul need to take up thorough market research and work on improving these products Though Amul’s hoardings are a huge success, it can penetrate even better in the rural areas by advertising actively through the media viz cable channels and newspapers. Sponsoring more shows on TV, sports events can be of great help. (13) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore
  • 14. The Brand Building Challenge - AmulReferences http://www.amul.com http://www.amul.com/story.html http://en.wikipedia.org/wiki/Amul http://www.indiainfoline.com/Markets/News/AMUL-Most-Trusted-among-Indias-Food-and- Beverage-Brands/5068333116 http://www.india-seminar.com/2001/498/498%20verghese%20kurien.htm http://www.scribd.com/doc/19978355/Amul-ppt-Presentation-Largest-Food-Brand-in- India-Asia http://www.indiadairy.com/ind_marketing_quality.html http://www.ibef.org/artdisplay.aspx?cat_id=60&art_id=23218 Contact Information Manoj Kaushik (kaushikmanoj@gmail.com) Paresh Ashara (paresh_a@yahoo.com) Ranjeet Srivastava (toranjeet@gmail.com) Sudip Kumar Das (dasu1232001@yahoo.com) Vivek Wamorkar (vivekvw@gmail.com) (14) Senior Management Program Batch 07, IIM Calcutta and NIIT Imperia Bangalore