An Analysis of the Marketing and Branding Strategies of Amul Butter in India

1. A Marketing Management-2 project
Marketing Report on
Amul Butter
under the guidance of Prof. Kartik Dave
(Group 06)
Dhruv Gupta (13DM066)
Gaurav Gupta (13DM070)
Gayathri Pravallika Lavu (13DM071)
Gunjan Kalita (13DM075)
Jigyasa Gautam (13DM087)
Kishlay Saurabh (13DM092)
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Contents
Page No
Introduction 3
Porter’s Five Force Model 3
SWOT Analysis 4
Marketing 4 P’s for Amul Butter 5
Product 5
Place 10
Price 12
Promotion 15
Branding 21
Market Survey 25
References 30
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Introduction
Formed in 1946, Amul is an Indian dairy cooperative with revenue of US$2.15 billion (2012–
13) and based at Anand in Gujarat, India. The brand name Amul means “AMULYA”. This
word is derived from the Sanskrit word “Amoolya” which means “ Priceless”. Brand Amul is
managed by Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF). Amul has
spurred the White Revolution of India, which has made India the largest produer of milk and
milk products in the world and the White Revolution has finally created a billion-dollar
brand. Today Amul dairy is No.1 in Asia and No.2 in the world, a matter of proud for whole
India. Amul has more than 150 chilling centres in various villages. The man behind the
success of Amul is Dr. Verghese Kurien, former chairman of the GCMMF.
Reasons For Success
1. Robust Supply Chain
2. Low Cost Strategy
3. Diverse Product Mix
4. Strong Distribution Network
5. Technology and e-initiatives
6. The Brand value of Amul (Quality, Value for Money, Availability and Service)
Porter’s Five Forces Model
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SWOT Analysis
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Marketing 4 P’s for Amul Butter
In the subsequent topics, we will look at the 4 P’s of Marketing – Product, Place, Price and
Promotion – in context to Amul Butter.
Product
PRODUCT MIX
PRODUCT
MIX Column1
CATEGORY PRODUCTS
Bread
spreads 1. Amul butter
2. Amul lite low fat breadspread
3. Amul cooking butter
Cheese
Range 1. Amul Pasteurized Processed Cheddar Cheese
2.Amul Processed Cheese Spread
3. Amul Pizza (Mozarella) Cheese
4.Amul shredded Pizza Chesse
5.Amul Malai Paneer (cottage cheese),Frozen, Refrigerated and Tinned
6.Utterly Delicious Pizza
7.Amul Emmental Cheese
Deserts Amul Shrikhand (Mango, Saffron, AlmondPistachio, Cardamom)
Amul Amrakhand
Amul Mithaee Gulabjamuns
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Amul Mithaee Gulabjamun Mix
Amul Mithaee Kulfi Mix
Avsar Ladoos
Fresh Milk
Amul Shakti 3% fat Milk
Amul Taaza 1.5% fat Milk
Amul Ganthiya
Amul Gold 4.5% fat Milk
Amul Lite Slim-n-Trim Milk 0% fat milk
Amul Shakti Toned Milk
Amul Fresh Cream
Amul Snowcap Softy Mix
For
Cooking Amul Pure Ghee
Sagar Pure Ghee
Amul Cow Ghee
Amul Malai Paneer
Mithai Mate
Pro-biotic Dahi
Masti Dahi Utterly Delicious Pizza
Powder Milk
Amul Infant Milk Formula 1 (0-6 months)
Amul Infant Milk Formula 2 (6 months above)
Amulspray Infant Milk Food
Amul Full Cream Milk Powder
Amulya Dairy Whitener
Sagar Skimmed Milk Powder
Sagar Tea and Coffee Whitener
Icecreams Amul Ice creamsRoyal Treat Range
(Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)
Nut-o-Mania Range
(Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival, BadshahiBadam Kulfi,
Shista Pista Kulfi)
Utsav Range
(Anjir, Roasted Almond)
Simply Delicious Ra
nge (Vanilla, Strawberry, Pineapple, Rose, Chocolate)
Nature's Treat
(Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black Currant)
Sundae Range
(Mango, Black Currant, Chocolate, Strawberry)
Millennium Ice cream
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(Cheese with Almonds, Dates withHoney)
Milk Bars
(Chocobar, Mango Dolly, Raspberry Dolly, ShahiBadam Kulfi, Shahi Pista Kulfi, Mawa
Malai Kulfi, Green PistaKulfi)
Cool Candies
(Orange, Mango)
CassattaTricone Cones
(Butterscotch, Chocolate)
Megabite
Almond Cone
Frostik - 3 layer chocolate Bar.
Fundoo Range
So we see the range of product of Amul you will notice it is everywhere it has made its
presence felt in each and every segment from milk to flavoured ice-cream it is gaining its
customer base in every nook and corner with passage of time it is penetrating deep in into
the market.
Market Share of different products of Amul
Category Market share Market position
Chocolate drink 90% 1
Butter ,ghee 85% 1
Cheese 50% 1
Sweets 50% 1
Milk Powder 40% 1
Ice –cream 24.75% 2
Chocolate 10% 3
Amul- Product Diversification
Seeking unfamiliar products or markets in the pursuits of growth with both dairy and non-
dairy products, Amul has come out with a lot of products at affordable price and most of
them are dominating in their particular segments.
Amul always had a secret philosophy behind its marketing strategy .
1. From the time of its existence Amul has made its entry into a lot of segments but at the
same it has maintained its growth in existing product line.
2. Despite market transition and foray into different segments, Amul never forgets its
principle of providing product at low cost price.
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Amul Butter
1. Amul butter’s core competency lie in the fact that they offer –they follow worked
standard methods like Quality Management in their operation .right from the beginning till
end they adopt Kaizan practices to ensure the quality of milk in term of acidity and its
sources.
2. Amul butter products advantage is not only restricted to the superior quality that it has
but also constant innovation that they undergo in their packaging. Right under their product
basket .Amul butter is available in following size.
500gm 100gm 50gm 20gm 10gm
3. As a move to target caterers and restaurants has put cases with 30 packs each 500gm
This pack is not meant for retail selling and are without the outer packing that one finds on
the retail package. This cuts down the cost for the High Consumption group as they are
priced much less than the retail packs.
4. With the introduction of Amul Lite which offers a low fat and is a no cholesterol table
margarine, it is targeting those group of customer who are health conscious.
5. With 86% market share and presence through more than 5, 00,000 retail outlets, it is the
biggest brand in India.
6. Right now it is in the maturity stage and thus, is making huge profits.
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Line Extension
Line extensions occur when a company introduces additional items in the same product
category under the same brand name, usually with new flavours, forms, colours, added
ingredients, package sizes, and so on.
Amul extended its Amul Butter line to the following items:
 Amul Unsalted Butter – without any added salt
 Amul Cooking Butter – specially for cooking purposes
 Amul Lite Breadspread – low-fat, low-calorie breadspead
 Amul Delicious Table Margarine – a butter-substitute, prepared specially from
vegetable oils and fats
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Place
How different can AMUL’s butter be, from butter offered by any other brand? Butter from
any brand, tastes more or less the same, offers similar nutrition and comes in similar
packaging. Yet, the customer, standing at the shop aisle, without any ambiguousness
chooses Amul over its competitors. That is a result of offering great value over a period; a
result of delivering great quality; result of powerful branding; and when all these come
together, you have consumers showing trust in brand, the ultimate prize that a marketing
company can hope to win.
Distribution Strategy:
Distribution is one of the prime factor for Amul’s success. Apart from being available at over
5,00,000 retail stores, Amul products can also be found at its own parlors located in various
cities. This large distribution network of Amul is the reason for easy availibility of its
products. In our survey of 53 consumers, over 95% consumers said that Amul butter was
available to them in near proximity.
With 6000 parlours across india, Amul already has a strong distribution network. Amul had
1000 parlours during 2010-11, but as chairman of GCMMF, Parthibhai G Bhatol, realised the
potential for growth, he and took the number of parlours to 6000 by 2013. These parlours
that retail the entire range of Amul products under one roof, have generated business of Rs
406 crore during the 2010-11 fiscal, growing by 37 per cent on a year-on-year basis.
Amul parlors run at conventional locations like residential and commercial areas,
educational institutions, railway stations, bus stands and other high traffic locations. This is
brilliant distribution strategy, as putting parlors in these areas not only increae sales but also
help in improving brand image. Amul already created 160 parlours at railway stations and
177 parlours at various centers of excellence.
Amul is now betting on quick service restuarants, that serves Pavbhaji, Amul pizzas, Amul
cheese burgers, sandwiches, ice-cream, sundaes and milk shakes, called Amul Cafes. Tasting
success with the two federation owned outlets of Amul Cafes at Ahmedabad, GCMMF is
eying to spread the network of cafes across the country in the coming two years. The
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federation now owns and operates two outlets in Ahmedabad, which have a turnover of Rs
1 lakh per day per outlet.
AMUL Supply Chain System
Strong supply chain network is one of the prime reasons for success of Amul. It has one of
the largest supply chain system in India, with over 2.8 million milk producer members.
Presently it has 10000 village cooperative societies, 3600 wholesale distributors, 45 depots
in India with over 5,00,000 retailers spread all over India.
Amul, has recently kicked off its largest distribution expansion exercise to take its chilled
products like butter, cheese, ice-cream and paneer to small towns and districts to
population of up to 5,000 people. Now Gujarat Cooperative Milk Marketing Federation,
owner of the Amul brand, will service these districts through feeder markets.
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Price
Amul’s Pricing Strategies
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya,"
was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are
found in several Indian languages. Amul products have been in use in millions of homes
since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made
Amul a leading food brand in India. (Turnover: Rs. 80.05 billion in 2009-10).
Today Amul is a symbol of:
 high-quality products sold at reasonable prices,
 the genesis of a vast co-operative network.
 the triumph of indigenous technology
 the marketing savvy of a farmers' organisation.
 And of a proven model for dairy development.
Pricing Strategy of Amul
 Cost Leadership: Objective of Amul’s objective of providing a value
proposition to a large customer base, led naturally to a cost leadership
position. As the Indian consumers’ purchasing power is low so its viable for
Amul to price its products as low as possible.
 Financial Strategy: AMUL’s finance strategy is driven primarily by its desire to
be self-reliant and thus depend on internally generated resources for funding
its growth and development. This choice was motivated by the relatively
underdeveloped financial markets with limited access to funds, and the
reluctance to depend on Government support and thus be obliged to cede
control to bureaucracy.
AMUL’s financial strategy is characterized by two elements:
(a) retention of surplus to fund growth and development, and
(b) limited/ no credit, i.e., all transactions are essentially cash only.
For example, payment for milk procured by village societies is in cash and
within 12 hours of procurement (most, however, pay at the same time as the
receipt of milk). Similarly, no dispatches of finished products are made
without advance payment from distributors etc. This was particularly
important, given the limited liquidity position of farmer/suppliers and the
absence of banking facilities in rural India. This strategy strongly helped
AMUL implement its own vision of growth and development. It is important
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to mention that many of the above approaches were at variance with
industry practices of both domestic and MNC competitors of AMUL.
 Value Pricing: Amul is always perceived as a low cost, value oriented brand.
Consumers prefer Amul because of their trust and belief in its quality. They
rate amul quite high on satisfaction mainly for it’s taste and good quality.
Due to low entry barriers many players have entered the dairy industry.
Goverdhan, Neutralite and our very old Mother Dairy , are some brands
which provide less costly substitutes to Amul products but due to immense
trust of consumers in Amul, and their affection with the brand ,Amul still
enjoys the market leader position. Amul enjoys huge share of heart and mind
of Indian consumers, so even a marginal increase in the prices of amul, make
consumers insensitive to its purchase.
Factors affecting Amul (Dairy products) consumption
India is the world leader in milk production with total volume of 115 milliontons. Driven by
steady population growth and rising income,milk consumption continuesto rise in India.
Dairy market is currently growing at an annual growth rate of around 7 per cent
in volume terms. The market size of Indian dairy industry stands at around US $45 billion.
Since India’s population is predominantly vegetarian, milk serves as an important part of the
daily diet. So the market is ever expanding.
Key facts:
 65 per cent of the milk is sold in “loose” form
 Only 5 per cent of the milk is sold through retail chains
 70 per cent is delivered to the homes by ‘milk agents’
 Carton milk or packaged milk has been growing at 24 per cent annually
 Most branded FMCG companies are keen on launching flavoured dairy
productswhose market size is pegged at US$ 16
Consumer Elasticity: In spite of marginal increase in Amul prices, on frequent basis,
consumers are not easily switching to less costly branded substitutes. Especially in case of
Butter and milk, where Amul has reached the position of category replacement.
Reasons of low price sensitivity for Amul products:
1. High perceived quality of Amul products
2. Mostly loyal customers with share of heart to amul
3. Taste preferences
4. Expenditure is small part of buyer’s total income
5. Enjoys prestige and exclusiveness as a brand
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6. Dairy products are consumer goods category items
7. Less switching due to Halo effect of Amul as a brand
8. Dairy products are in conjunction with previously brought items (e.g. bread)
9. Perishable and non-durable nature of dairy product makes them an item of
daily purchase
10. Brand has successfully achieved category replacement ,especially in case of
Butter.
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Promotion
In Kotler’s words, Customers and businesses, if left alone will ordinarily not buy enough of
the organizations products. The organization must therefore undertake an aggressive selling
and promotion effort. Companies cannot survivewithout an efficient sales force. In spite of
being a farmers' co-operative, Amul has remained the undisputed market leader since its
inception in 1955, by offering quality products at competitive pricesand superior
distribution with the help of innovative and cost effective promotion.Their target is mostly
the middle class of India, who make volume in their sales. They emphasize more on brand
than the single product.
Journey from 1960’ to 2013:
First show of Amul,’ Amul moppet campaign’ was launched in summer of 1967 at charni
road on a billboard in Mumbai. It is a premiere for the most deliciously funny creations that
introduced the concept of consumer humour i.e., serious things spoken in jest. Amul
moppet is a thumb sized six year old girl, in red polka dotted dress, blue hair, round eyed,
chubby cheeked and winking at onlookers has been loved by everyone. It is shown up on
hoardings and product wrappers with the equally recognizable tagline Utterly Butterly
Delicious Amul from that year. Sylvester daCunha, was the managing director of the
advertising agency, ASP that created the campaign. The utterly butterly Amul girl was born
and she has not grown an inch since.
From then, its advertising has also started using tongue-in-cheek sketches starring the Amul
baby commenting sarcastically on the latest news or current events. The pun in her words
has been popular. Amul communicates through amul girl. The Butter Girl Ad campaign is the
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longest ever ad campaign and has been running for over 40 years now which is based on a
single theme, now trying for the Guinness records.
Some of the adverts are
 Amul congratulates the success of the first test-tube baby
 Indian Railways introduces cushioned chairs in the first class compartments.
 Souyuz – Cosmonaut in space
 As MTNL increases rates for local calls
 Some other adverts
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The key elements of campaign success are,
 Simplicity in ideas and events.
 Humorous, topics may be serious or casual but they are with humour as base theme.
It is simple humour on something which everyone is thinking about, so it connects
well into the audience.
 Consistent with the theme and also the baseline, utterly butterly delicious. They are
unchanged for the last 45 years.
 Even during the current global crisis Amul didn’t bring down the frequency of the
advertisements which is another example of how to stay in touch with your
customers even when the amount of cash is decreasing around the planet.
 Message in terms of symbols, signs and image, so that it reaches to maximum
number of people, independent of their age, education or background.
 Evergreen incorporation of socio economic events, landmarks in sports, films and
every realm of life in India. A culture by itself, a tongue-in-check take on every
moment of significance of India.
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 The Amul ads have witty one-liners which capture relevant events that have caught
the fancy of the nation. This instantly creates a connect with the populace and helps
them to identify with the brand in a surrogate manner.
 The style of drawing is also very distinctive, and there is instant recognition of the
brand without even needing to take a close look. All in all, the Amul girl has become
iconic in Indian advertising.
 The punch line, jingle, the slogan “Truly the taste of india” connects with the people.
 Patriotic feeling, use of Hinglish in the adverts.
The billboard campaign has indeed done wonders for the Amul brand. The mascot was first
used for Amul butter. But in recent years in a second wave of ad campaign for Amul
products, she has also been for other product like ghee and milk. She is probably one of the
most enduring mascots in the world.
Amul has been ranked as the No. 1 Indian brand by Campaign magazine in its list of Top
1000 Brands of Asia for the third consecutive year in 2013.
PROMOTION THROUGH TV SHOW SPONSORSHIPS
Other than these ads, AMUL also sponsors TV shows like MasterChef India, Star Voice of
India, Music ka Maha Muqabla etc. Association with these TV shows helps Amul gain mass
media coverage and an opportunity to bind more with the youth.
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PROMOTION THROUGH SPORTS SPONSORSHIPS
Amul has done their promotional activities in the field of sports as well by sponsoring sports
teams and events. Amul sponsored the Sauber Formula 1 team in the 1st
edition of the Airtel
Indian Grand Prix. Amul also sponsored the Indian contingent in the 2012 London Olympics.
Amul also sponsored the Dutch National cricket team.
Amul parlors:
Amul has recently entered into direct retailing through "Amul Utterly Delicious" parlours
created in major cities Ahmedabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and
Surat. Amul has plans to create a large chain of such outlets to be managed by franchisees
throughout the country. They have created Amul Parlours at some prominent locations in
the country, which are run by the company or its wholesale dealers like Delhi Metro Rail
Corporation, The Somnath Temple, National Institute of Design, Infosys Technologies in
Bangalore, Mysore &Pune, Wipro campus in Bangalore, Ahmedabad Municipal Corporation,
Surat Municipal Corporation, Delhi Police,Gujarat State Road Transport Corporation.
In order to come closer to the customer, Amul have decided to create a model for retail
outlets, which would be known as "Amul Preferred Outlets"(APO).
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Promotional Expenditure
Amul spends very less on its advertising budget, but spends it very effectively. Because of its
brand mascot, the Amul girl, the co-operative has been able to get away with spending just
1% of its revenues on advertising. In contrast, its competitors spends anywhere between 7
to 10 per cent on advertising. Amul positioning is “Value for Money”. It uses the services of
Da Cunha Associates & FCB Ulka for its advertising efforts.
Amul has its presence in more than 40 countries till date. No doubt, with this so 'Indian' and
unique way of advertising and Brand building, Amul will always pose a stiff task for the
behemoths like HLL, Nestle, P&G etc.,
Problems:
 There is no continuity in previous TV campaigns other than topicals.
 Total add spend is even less than 1% of total revenue, when it is around 14% for
Unilever, 8% for nestle& Britannia and for Cadbury it is 10%. It is good to an extent,
but to sustain the competition in wide product ranges and popularize the new
products, expenditure on promotional activities should be increased.
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Branding
THE BRAND THAT IS ‘AMUL’
The Tagline/Slogan: “The taste of India”
The Jingle: “Utterly Butterly Delicious… Amul”
The Character/Mascot: The Amul moppet has been the mascot of Amul
since 1967, sporting a young girl in a red polka dot dress with the
accompanying “Utterly Butterly Delicious” jingle. The character holds the
Guinness World Record for longest running ad-campaign.
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Strategies for building the brand name
Amul has adopted the following 4 strategies to build their brand name all across the globe:
 Quality: No brand survives long if its quality does not equal or exceed what the
buyer expects. In the case of a food product like butter, this means that the brand
must always represent the highest hygienic, bacteriological and organoleptic
standards. It must taste good, and it must be good to consume.
 Value for money: Amul believes that one gets what they pay for, and more. Even
when adverse conditions have reduced supplies of products like butter, it has
resisted the common practice of raising prices, charging what the market would
bear. The prices are reasonably set for different pack sizes.
 Availability: A brand should be available when and where the customer wants it.
Amul has built what is probably the nation’s finest distribution network. They reach
hundreds of cities and towns through a cold chain that not only ensures that their
products are available, but they reach the customer at the farthest end of the
country with the same quality as one would find in Ahmedabad or Vadodara.
 Service: For Amul, every customer complaint must be heard – not just listened to.
And, every customer complaint must be rectified to the extent humanly possible. For
close to fifty years now, Amul has honored its contract with the consumer.
The contract that is symbolized by the Amul brand means quality. It means value for money.
It means availability. And it means service.
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Brand Identity of Amul
How a business wants a brand's name, communication style, logo and other visual elements
to be perceived by consumers. The components of the brand are created by the business
itself, making brand identity the way in which a business wants consumers to perceive its
brands, not necessarily how it is actually perceived.
Brand identity is different than brand image, which is what consumers actually think. It is
constructed by the business itself. A negative gap between brand identity and brand image
means a company is out of touch with market sentiment, which will make selling its
products more difficult.
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Sources of Brand Equity
Building a strong brand identity, awareness, and brand loyalty, leads to a strong brand
equity.
Brand equity is a set of assets linked to a brand’s name and symbol that add to the value
provided by a product or service to a customer.
Sources
of
Brand Equity
Product
Strategy
Distribution
Strategy
Pricing
Strategy
Communication
Strategy
 Outdoor media
 Broadcast media
 Internet
 First Mover
advantage
 Market Leader
 USP : Taste
 Network of 3500
distributors
 500,00 retail
outlets
 Amul parlors, cafes
 Low cost –
Affordability
 High quality
 Longtime survivors
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Market Survey
Methodology
We created a survey form in Google Docs to gather responses from consumers of Amul
Butter. We circulated the form on social networking sites (Facebook, Google+ etc). We also
collected personal responses from consumers in 4 different cities – Delhi, Bangalore, Guntur
and Surat – so as to create diversity in the response findings.
The snapshot below is an excerpt from the created survey form:
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Survey Findings:
1. 68% people agree that Amul Butter is
value for price product.
2. 67% consumers will not be affected by
increase in 20% price of Amul Butter.
3. Even if there is 40% increase in price,
51% consumers will remain unaffected.
This shows really low price sensitivity
among consumers.
4. 70% people consume Amul Butter for
its taste.
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5. 55% people believe Amul Butter has
nutritional butter.
6. 72% consumers prefer Amul Butter,
over its more nutritious product Amul
Lite.
7. Britannia is most strong competitor for
Amul Butter.
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8. 96% consumers say that Amul butter
is available to them in proximity. This
depicts strong distribution channel of
Amul.
9. TV advertisements are most appealing,
in comparison to creative posters,
sponsored events, and its other
promotional strategies.
10. 74% consumers were not aware of
Amul girl’s 3d campaign which means Amul
needs to promote it more aggressively.
11. 53% consumers Amul needs to come up
with new packing for Amul butter.
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12. 51% consumers are still not aware of
Amul’s creative posters, which form
backbone of Amul’s marketing strategies.
Amul can add such posters on its packing,
which would also add new packaging to
its product.
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REFERENCES
www.amul.com
http://en.wikipedia.org/wiki/Amul
http://www.digitalimpulse.in/insights/amul-the-taste-of-india/#.UqD-p8QW3D4
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