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Amul marketing

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amul milk and its marketing stratagies

amul milk and its marketing stratagies

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  • 1. Type : CooperativeFounded: 1946Headquarters: Anand, IndiaIndustry: DairyRevenue: $868 million USD (06-07)Employees: 2.41 million milk producers.HISTORYGujarat Cooperative Milk Marketing Federation (GCMMF) is Indias largest foodproducts marketing organisation. 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 moneyAmul (Anand Milk-producers Union Limited), formed in 1946, is a dairy cooperativemovement in India. The brand name Amul, sourced from the Sanskrit word Amoolya,means priceless. It was suggested by a quality control expert in Anand. It is a brand namemanaged by an apex cooperative organisation, Gujarat Co-operative Milk MarketingFederation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milkproducers in Gujarat, India[1]. It is based in Anand town of Gujarat and has been a sterlingexample of a co-operative organizations success in the long term. The Amul Pattern hasestablished itself as a uniquely appropriate model for rural development. Amul hasspurred the White Revolution of India, which has made India the largest producer of milkand milk products in the world. It is also the worlds biggest vegetarian cheese brand [2].Amuls product range includes milk powders, milk, butter, ghee, cheese, curd, chocolate,ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others.Situation of farmersOver five decades ago, the life of an average farmer in Kheda District was very much likethat of his/her counterpart anywhere else in India. His/her income was derived almostentirely from seasonal crops. The income from milk buffaloes was undependable. Milkproducers had to travel long distances to deliver milk to the only dairy, the Polson Dairyin Anand – often milk went sour, especially in the summer season, as producers had tophysically carry milk in individual containers. Private traders and middlemen controlledthe marketing and distribution system for the milk. These middlemen decided the pricesand the off-take from the farmers by the season. As milk is perishable, farmers werecompelled to sell it for whatever they were offered. Often, they had to sell cream andghee at throw-away prices. In this situation, the private trader made a killing. Moreover,
  • 2. the government at that time had given monopoly rights to Polson Dairy (around that timePolson was the most well known butter brand in the country) to collect milk from Anandand supply to Bombay city in turn (about 400 kilometers away). India ranked nowhereamongst milk producing countries in the world in 1946. Gradually, the realizationdawned on the farmers with inspiration from then nationalist leaders Sardar VallabhbhaiPatel (who later became the first Home Minister of free India) and Morarji Desai (wholater become the Prime Minister of India) and local farmer, freedom fighter and socialworker Tribhovandas Patel, that the exploitation by the trader could be checked only ifthey marketed their milk themselves. Amul was the result of the realization that theycould pool up their milk and work as a cooperative.PRODUCTAMUL BUTTER : ‘UTTERLY BUTTERLY DELICIOUS’AMUL BUTTER was the first product which was officially launched by AMUL in 1945.It has been a market leader during the last 4 decades.AMUL BUTTER is made from Butter, Common Salt, permitted natural colour- AnnattoComposition:Milk Fat 80%Moisture 16%Salt 2.5%Curd 0.8%Calorific Value:720 kcal./100gSpecial Features:Made from fresh cream by modern continuous butter making machines. Marketed inIndia since 4 decades.Product Specification:Meets AGMARK standard and BIS specifications No.IS:13690:1992PRICE: Amul Pricing StrategiesAt the time Amul was formed, consumers had limited purchasing power, and modestconsumption levels of milk and other dairy products. Thus Amul adopted a low-cost pricestrategy to make its products affordable and attractive to consumers by guaranteeing themvalue for money.Despite competition in the high value dairy product segments from firms such asHindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and thesequence in which Amul introduces its products is consistent with the core philosophy of
  • 3. providing butter at a basic, affordable price to appeal the common masses. This helpedAMUL BUTTER to create its brand image in the household sector of the society.Rs.87 Rs.18PLACE: A Global DistributorGCMMF is Indias largest exporter of Dairy Products. It has been accorded a "TradingHouse" status. GCMMF has received the APEDA Award from Government of India forExcellence in Dairy Product Exports for the last 9 years.Currently Amul has 2.41 million producer members with milk collection average of 5.08million litres/day. Besides India, Amul has entered overseas markets such as Mauritius,UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few SouthAfrican countries. Its bid to enter Japanese market in 1994 had not succeeded, but now ithas fresh plans of flooding the Japanese markets [6]. Other potential markets beingconsidered include Sri Lanka.PROMOTION: Initial Promotional StrategyThe butter, which had been launched in 1945, had a staid, boring image, primarilybecause the earlier advertising agency which was in charge of the account preferred tostick to routine, corporate ads. They didn’t help in creating a brand image of AMULbutter which was their then motive. The image they presented was, well, boring.A brand - Amul – A Taste of IndiaHowever, in 1966, a man named Sylvester daCunha, from the ad agency of ASP, tookover the Amul account. And in 1967 it began, innocently enough. In India, food wassomething one couldnt afford to fool around with. It had been taken too seriously, for toolong. Sylvester daCunha decided it was time for a change of image.Scott Bradbury, the marketing genius behind Nike and Starbucks, once said “ A great brand is a story thatis never completely told. A brand is a metaphorical story that’s evolving all the time. Stories create theemotional context people need to locate themselves in the larger experience” He could easily have beentalking about the Amul moppet.
  • 4. The moppet who put Amul on Indias breakfast tableThe year Sylvester daCunha took over the account, the country sawthe birth of a campaign whose charm has endured fickle public opinion,gimmickry and all else. The Amul moppet, the little girl who created a home in the hearts and mindsof millions and millions of Indians. No easy task. And to be there for almost 34 years!Call her the Friday to Friday star because Every Friday, since 1967, this little girl appearsat billboards, strategically placed all over India, focusing on the item of the week –tongue in cheek, of course. Round eyed, chubby cheeked, winking at you, fromstrategically placed hoardings at many traffic lights. She is the Amul moppet everyoneloves to love (including prickly votaries of the Shiv Sena and BJP). How often have westopped, looked, chuckled at the Amul hoarding and product wrappers with the equallyrecognisable tagline Utterly Butterly Delicious Amul that casts her sometime as the coy,shy Madhuri, a bold sensuous Urmila or simply as herself, dressed in her little polkadotted dress and a red and white bow, holding out her favourite packet of butter.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 line foreverything. Often said to be playing the role of a “social observer with evocative humor”,the billboards became, and still are, a topic of conversation amongst millions. With their“hing-lish” (a combination of Hindi and English) punch-lines, they have won themaximum number of awards in India for any ad campaign ever! This little thumbalina,seems to have the masses, right where she wants them – wanting more of her and ofAmul. No other brand comes close to what Amul has been able to accomplish.ADVERTISINGIts advertising has also started using tongue-in-cheek sketches starring the Amul babycommenting jovially on the latest news or current events. This formed a large chunk ofthe collective memory of us Indians. We grew with them as the ads grew with us. Theyare quirky, poke fun at no one in particular and are pure eye-candy! We almost admirethe speed with which the ad-people come up with copy and illustration for the ads, thatchange every few days!!From the Sixties to the Nineties, the Amul ads have come a long way. While most peopleagree that the Amul ads were at their peak in the Eighties they still maintain that theAmul ads continue to tease a laughter out of themThe Amul ads are one of the longest running ads based on a theme, now vying for theGuinness records for being the longest running ad campaign ever.
  • 5. Where does Amuls magic actually lie?Many believe that the charm lies in the catchy lines. That we laugh because the humour iswhat anybody would enjoy. They dont pander to your nationality or certain sentiments. Itis pure and simple, everyday fun.BRANDINGThe first products with the Amul brand name were launched in 1955. Since then, theyhave been in use in millions of homes in all parts of India, and beyond. There issomething more, though, that makes the Amul brand special and that something is thereason for the commitment to quality and value for money. Amul is the brand name of 2million farmers, members of 10,000 village dairy cooperative societies throughoutGujarat. This is the heart of Amul, it is what gives strength to Amul, and it is what is sospecial 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 a largerthan life purpose. The purpose – freedom to farmers by giving total control overprocurement, production and marketing.Our commitment to the producer and our contract with the consumer is the reasons weare confident that cooperative brands, like Amul, will have an even bigger role to play inthe next fifty years.MARKETING STRATEGIES4 MAIN STRATEGIESWhat goes into the ‘contract’ that is a brand name? First is quality. No brand survives long if its quality does not equal or exceed what thebuyer expects. There simply can be no compromise. That’s the essence of the contract. Inthe case of a food product, this means that the brand must always represent the highesthygienic, bacteriological and organoleptic standards. It must taste good, and it must begood.Second, the contract requires value for money. If our customer buys an Amul product,she gets what she pays for, and more. We have always taken pride in the fact that while
  • 6. we earn a good income for our owners – the dairy farmers of Gujarat – we don’t do it atthe cost of exploiting the consumer. Even when adverse conditions have reduced suppliesof products like butter, we have resisted the common practice of raising prices, chargingwhat the market would bear. Rather, we have kept prices fair and done our best to ensurethat retailers do not gain at the consumers’ expense.The third element of the contract is availability. A brand should be available when andwhere the customer wants it. There is no benefit achieved in creating a positive brandimage, and then being unable to supply the customer who wants to buy it. In our case,over the years we have built what is probably the nation’s finest distribution network. Wereach hundreds of cities and towns through a cold chain that not only ensures that ourproducts are available, but they reach the customer at the farthest end of the country withthe same quality as you would find in Ahmedabad or Vadodara.The fourth part of the contract is service. We have a commitment to total quality. But,occasionally, we may make a mistake – or, our customer may think we’ve made amistake, and the customer, as they say, is always right. That is why, for Amul, everycustomer complaint must be heard – not just listened to. And, every customer complaintmust be rectified to the extent humanly possible.For close to fifty years now, Amul has honoured its contract with the consumer. Thecontract that is symbolised by the Amul brand means quality. It means value for money.It means availability. And it means service.