1. A STUDY ON
CONSUMER BUYING PATTERN TOWARDS AMUL MILK
Dissertation Submitted to the
Padmashree Dr. D.Y. Patil University
in partial fulfilment of the requirements for the award of the Degree
of
MASTERS IN BUSINESS ADMINISTRATION
Submitted by:
ROHAN.P.NAIK)
(Roll No.MBA-CORE-C-011179)
Research Guide:
Prof Vinod Dumbre
Department of Business Management
Padmashree Dr. D.Y. Patil University
CBD Belapur, Navi Mumbai
1

2. DECLARATION
I hereby declare that the dissertation “CONSUMER BUYING PATTERN
TOWARDS AMUL MILK” submitted for the MBA Degree at Padmashree Dr.
D.Y. Patil University’s Department of Business Management is my original work
and the dissertation has not formed the basis for the award of any degree, associate
ship, fellowship or any other similar titles.
Place: Navi Mumbai
Date:
Signature of the
Student
1

3. CERTIFICATE
This is to certify that the dissertation entitled “CONSUMER BUYING PATTERN
TOWARDS AMUL MILK “is the bona fide research work carried out by
Mr. ROHAN .P. NAIK student of MBA, at Padmashree Dr. D.Y. Patil University’s
Department of Business Management during the year 2011 -2013, in partial
fulfilment of the requirements for the award of the Degree of Master in Business
Management and that the dissertation has not formed the basis for the award
previously of any degree, diploma, associate ship, fellowship or any other similar
title.
(Mr Vinod Dhumbre)
(Dr. R. Gopal,
Director,
Department of Business Mgt,
Padmashree Dr. D.Y. Patil University)
Place: Mumbai
1

4. Date:
ACKNOWLEDGEMENTS
In the first place, I thank the Padmashree Dr. D. Y. Patil University, Department of
Business Management, Navi Mumbai for giving me an opportunity to work on this
project. I would also like to thank Mr. Vinod Dhumbre, Lecturer, Department of
Business Management, Padmashree Dr. D.Y. Patil University, Navi Mumbai for
having given me his valuable guidance for the project. Without his help it would
have been impossible for me to complete the project.
I would be failing in my duty if I do not acknowledge with a deep sense of gratitude
the sacrifices made by my parents and thus have helped me in completing the
project work successfully.
Place: Navi Mumbai
Date:
Signature of the student
1

5. TABLE OF CONTENTS
1

6. CHAPTE
R NO.
Title Page
No
1 GENERAL INFORMATION
1.1
1.2
1.3
INTRODUCTION AND HISTORY
INDUSTRY PROFILE
OBJECTIVE OF THE RESEARCH
9
22
25
1.4 LITERATURE REVIEW 26
2
2.1
2.2
About the Topic
Consumer Behaviour
Consumer Satisfaction
46
50
3 Marketing Research 51
4 Research Methodology 56
5 Data Analysis And Interpretation 61
6 SWOT Analysis 71
7 News Articles 73
8 GCMMF Overview: 79
9 Conclusion of (Amul milk) 111
10 Comparative Study 114
11 Annexure:
a)Bibliography & Webliography
b) Questionnaire
125
127
1

7. 1

8. PREFACE
Today the business environment is rapidly changing in this competitive
environment the popular trend is also striving for maintaining its positions therefore
it become essential for the companies that they should know about their preference
& taste. Regarding a particular product it is of almost necessary to know the
consumers satisfaction to the value offered by the company in case of
dissatisfactory result it is essential to ascertain whether the dissatisfaction is for
entire product or part of it is and what value do the consumers expect from it?
The research will provide the relevant information to the organization about
consumer’s attitude towards their products & services.
The research work is sincere effort to find out the ultimate requirement of
consumers for the betterment of research as well as the organization.
1

9. Executive Summary
This final project was undertaken with the objective of “CONSUMER BUYING
PATTERN TOWARS AMUL MILK”
In the year 1946 the first milk union was established. This union was started with
250 liters of milk per day. In the year 1955 AMUL was established. In the year
1946 the union was known as KAIRA DISTRICT CO-OPERATIVE MILK
PRODUCERS’ UNION. This union selected the brand name AMUL in 1955.
The brand name Amul means “AMULYA”. This word derived form the
Sanskrit word “AMULYA” which means “PRICELESS”. A quality control
expert in Anand had suggested the brand name “AMUL”. 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. (The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many
things like of the high-quality products sold at reasonable prices, of the genesis of a
vast co-operative network, of the triumph of indigenous technology, of the
marketing savvy of a farmers' organization. And have a proven model for dairy
development (Generally known as “ANAND PATTERN”).
1

10. 1

11. INTRODUCTION AND HISTORY
In the year 1946 the first milk union was established. This union was started with
250 liters of milk per day. In the year 1955 AMUL was established. In the year
1946 the union was known as KAIRA DISTRICT CO-OPERATIVE MILK
PRODUCERS’ UNION. This union selected the brand name AMUL in 1955.
The brand name Amul means “AMULYA”. This word derived form the
Sanskrit word “AMULYA” which means “PRICELESS”. A quality control
expert in Anand had suggested the brand name “AMUL”. 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. (The total sale is Rs. 6 billion in 2005). Today Amul is a symbol of many
things like of the high-quality products sold at reasonable prices, of the genesis of a
vast co-operative network, of the triumph of indigenous technology, of the
marketing savvy of a farmers' organization. And have a proven model for dairy
development (Generally known as “ANAND PATTERN”).
In the early 40’s, the main sources of earning for the farmers of Kaira
district was farming and selling of milk. That time there was high demand for milk
in Bombay. The main supplier of the milk was Polson dairy limited, which was a
privately owned company and held monopoly over the supply of milk at Bombay
from the Kaira district. This system leads to exploitation of poor and illiterates’
farmers by the private traders. The traders used to beside the prices of milk and the
farmers were forced to accept it without uttering a single word.
1

12. However, when the exploitation became intolerable, the farmers were
frustrated. They collectively appealed to Sardar Vallabhbhai Patel, who was a
leading activist in the freedom movement. Sardar Patel advised the farmers to sell
the milk on their own by establishing a co-operative union, Instead of supplying
milk to private traders. Sardar Patel sent the farmers to Shri Morarji Desai in order
to gain his co-operation and help. Shri Desai held a meeting at Samarkha village
near Anand, on 4th
January 1946. He advised the farmers to form a society for
collection of the milk.
1

13. These village societies would collect the milk themselves and would decide the
prices at which they can sell the milk. The district union was also form to collect the
milk from such village co-operative societies and to sell them. It was also resolved
that the Government should be asked to buy milk from the union.
However, the govt. did not seem to help farmers by any means. It gave
the negative response by turning down the demand for the milk. To respond to this
action of govt., the farmers of Kaira district went on a milk strike. For 15 whole
days not a single drop of milk was sold to the traders. As a result the Bombay milk
scheme was severely affected. The milk commissioner of Bombay then visited
Anand to assess the situation. Having seemed the condition, he decided to fulfill the
farmers demand.
Thus their cooperative unions were forced at the village and district level to
collect and sell milk on a cooperative basis, without the intervention of
Government. Mr. Verghese Kurien showed main interest in establishing union
who was supported by Shri Tribhuvandas Patel who lead the farmers in forming
1

14. the Co-operative unions at the village level. The Kaira district milk producers union
was thus established in ANAND and was registered formally on 14th
December
1946. Since farmers sold all the milk in Anand through a co-operative union, it was
commonly resolved to sell the milk under the brand name AMUL.
1

15. At the initial stage only 250 litres of milk was collected everyday. But
with the growing awareness of the benefits of the cooperativeness, the collection of
milk increased. Today Amul collect 11 lakhs litres of milk everyday. Since milk was
a perishable commodity it becomes difficult to preserve milk flora longer period.
Besides when the milk was to be collected from the far places, there was a fear of
spoiling of milk. To overcome this problem the union thought out to develop the
chilling unit at various junctions, which would collect the milk and could chill it, so
as to preserve it for a longer period. Thus, today Amul has more than 150 chilling
centres in various villages. Milk is collected from almost 1073 societies.
With the financial help from UNICEF, assistance from the govt. of New
Zealand under the Colombo plan, of Rs. 50 millions for factory to manufacture milk
powder and butter was planned. Dr.Rajendra Prasad, the president of India laid
the foundation on November 15, 1954. Shri Pandit Jawaharlal Nehru, the prime
minister of India declared it open at Amul dairy on November 20, 1955.
1

16. 1

17. ACHIEVEMENTS:
Amul : Asia’s largest dairy co-operative was created way back in1946 to
make the milk producer self-reliant and conduct milk- business with pride. Amul
has always been the trend setter in bringing and adapting the most modern
technology to door steps to rural farmers.
Amul created history in following areas:
a) First self motivated and autonomous farmers‟ organization comprising of
more than 5000000 marginal milk producers of Kaira District.
b) Created Dairy co-operatives at village level functioning with milk
collection centres owned by them.
c) Computerized milk collection system with electronic scale and
computerized accounting system.
d) The first and only organization in world to get ISO 9000 standard for its
farmer’s co-operatives.
e) First to produce milk from powder from surplus milk.
Amul is the live example of how co-operation amongst the poor marginal
farmers can provide means for the socio-economic development of the under
privileged marginal farmers
1

18. AWARDS:
Amul a co-operative society and its co-operation has led many different
awards in its favor.
Magsaysay award for community leadership presented in manila,
Philippines to Shri Tribhuvandas Patel, Shri D N Khurody and Shri V.
Kurien
1964: “Padmabhusan” award given to Shri T.K. Patel
1965: “Padmshri awarded was given to V. Kurien, general manager, by
the president of India
1987: “Best Productivity” awarded by national productivity council for
the year 1985-86 awarded to Amul dairy.
1988: “Best Productivity” awarded for the second successive year 1986-
87 by the president of India, Mr. R. Venkatrao to kaira union.
1993: “ICA” Memenoto towards genuine and self sustaining co-
operative worldwide ICA regional office for Asia and pacific, New Delhi,
1996.
1999: G.B.Birla award.
Moreover the Amul union has achieved the prestigious ISO 9001-2000 and
HACCP Certificate and effects are got to obtain ISO 14000.
1

19. Amul in abroad:
Amul is going places. Literally. After having established its presence in China,
Mauritius and Hong Kong, Gujarat Cooperative Milk Marketing Federation
(GCMMF), India‟s largest milk cooperative, is waiting to flood the Japanese
market.
Then, GCMMF is also looking at Sri Lanka as one of its next export destinations.
Amul products are already available on shelves across several countries, including
the US, China, Australia, West Asian countries and Africa.
GCMMF recorded a turnover of Rs 2,922 crore last fiscal. Its products include
pouch milk, ultra heat treated (UHT) milk, ice-cream, butter, cheese and buttermilk.
PEOPLE POWER: AMUL'S SECRET OF SUCCESS
The system succeeded mainly because it provides an assured market at
remunerative prices for producers' milk besides acting as a channel to market the
production enhancement package. What's more, it does not disturb the agro-system
1

20. of the farmers. It also enables the consumer an access to high quality milk and milk
products. Contrary to the traditional system, when the profit of the business was
cornered by the middlemen, the system ensured that the profit goes to the
participants for their socio-economic upliftment and common good.
Looking back on the path traversed by Amul, the following features make it a
pattern and model for emulation elsewhere.
Amul has been able to:
• Produce an appropriate blend of the policy makers farmers board of
management and the professionals: each group appreciating its rotes
and limitations,
• Bring at the command of the rural milk producers the best of the
technology and harness its fruit for betterment.
• Provide a support system to the milk producers without disturbing their
agro-economic systems,
• Plough back the profits, by prudent use of men, material and machines,
in the rural sector for the common good and betterment of the member
producers and
The Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the
1

21. village societies. Basically the union and cooperation of people brought Amul into
fame i.e. AMUL (ANAND MILK UNION LIMITED), a name which suggest
THE TASTE OF INDIA.
Plants:
First plant is at ANAND, which engaged in the manufacturing of milk,
butter, ghee, milk powder, flavoured milk and buttermilk.
1

22. Second plant is at MOGAR, which engaged in manufacturing chocolate,
nutramul, Amul Ganthia and Amul lite.
Third plant is at Kanjari, which produces cattelfeed
1

23. Fourth plant is at Khatraj, which engaged in producing cheese.
Today, twelve dairies are producing different products under the brand name
Amul. Today Amul dairy is no. 1 dairy in Asia and no. 2 in the world, which is
matter of proud for Gujarat and whole India.
1

24. 1

25. PRODUCT PROFILE:-
S.No. NAME TYPE FAT SOLID NATURAL
FATS
1. Tazaa Toned Milk 3.0% min. 8.5% min.
2. Slim &
Trim
Double Toned Milk 1.5% min. 9% min.
3. Gold Full Cream Milk 6% min. 9% min.
1

26. Industry Profile:-
The World Dairy Situation:
According to a report published by International Dairy Federation (IDF)
on the World Dairy Situation 2007 the worldwide milk production is
expected to grow at a slower pace in 2007-08 and is estimated at 655
million tonnes, only 9 million tonnes more than the production of 2006
– 2007. The strongest growth would be in Asia, notably in China and
India. Milk production is projected at36 million tonnes in China and
94.60 million tonnes in India. India would continue to be the largest milk
producer, followed by the US, with projected production of 82.60 million
tonnes.
Major changes are not expected in dairy products basket. World butter
production increased for two years, in 2004 and 2005 and then
declined in 2006-07. It is expected to decline again in
2007-08. Industrial cheese production is continuing to grow. The major
cheese producing regions are Europe and North America and both areas
are expected to have a faster growth rate.
1

27. The production of condensed and evaporated milks is subject to a
declining trend for many years in the developed market. It has been
replaced by many other dairy products, especially liquid milks of UHT
type, coffee cream and coffee whitener including some of the non-dairy
origin.
World trade in dairy products after a period of relative stagnation,
started recovery in the second half of 2006-07 and it continued in
the first half of 2007-08. The recovery is due to prosperity resulting
from economic demand. However, the bullish price situation is not
likely to continue long and would level down.
Export of butter and butter-oil recovered in 2006-07 and this recovery continued
in early2007-08.
The total volume of the world trade in cheese has accelerated and this trend is
likely to continue in the year 2008.
The outlook for the trade in dairy commodities for 2007-08 appears
bright. However, since the new market equilibrium, in respect of
prices has to be found, the question is whether international trade
in dairy products will continue its growth in 2007-08 at the same
momentum as in previous years. Because of the price situation in 2007-
08, one may ask whether demand can follow the expected trends, but it
would be premature to expect stagnation in the trade. In established
markets, the potential for demand to reduce slightly can release the
additional supplies, which are needed to maintain the growth of trade.
1

28. IndianDairIndustry—
A Profile:
India’s dairy sector is expected to triple its production in the next 10
years in veiw of expanding potential for export to Europe and the
West. Morever with WTO regulations expected to come into force in
coming years all the develope countries which are amoung big
exporters today would have to withdraw the support and subsidy to
their domestic milk product sector. Also India today is the lowest cost
producer of per litre of milk in the world, at 27 cents, compared with the
US’
63 cent. Also to take advantage of this lowest cost of milk production
and increasing production in yhe country multinational companies are
planning to expand their activities here. Some of those milk producers
have already obtained quality standard certificates from the
authorities. This will help them in marketing their products in foreign
countries in processed form.
The urban market for milk products is expected to grow at an accelerated pace of
around33% per annum to around Rs.83, 500 crores by year 2010.
This growth is going to come from the greater emphasis on the
processed food sector and also by increase in the conversation of milk
into milk products. By 2010, the value of Indian dairy produce is
expected to be Rs 10, 00,000 million.Presently the market is valued at
around Rs7, 00,000mn.
1

29. OBJECTIVE OF THE RESEARCH
 To know awareness of people towards Amul products
 To know the preference of Amul products with comparison to
other competitive brands.
 To know the factors which affects consumer’s buying behaviour while
purchase milk.
 Swot analysis of Amul
 To study various factors such as quality, price, easy available etc. Is
influencing lot and influences positively
 Ideas about to increase the sale of the “Amul
1

30. 1

31. LITERATURE REVIEW
Abstract
In this paper we describe a case study of a dairy cooperative, AMUL, in western
India that has developed a successful model for doing business in large emerging
economy. It has been primarily responsible, through its innovative practices, for
India to become world’s largest producer of milk. This paper draws various lessons
from the experiences of AMUL that would be useful to cooperatives globally as
well as firms that are interested in doing business in large emerging markets like
India and China.
Many of these economies have underdeveloped markets and fragmented
supply bases. Market failures for many of these small producers are high. On the
other hand, the size of both, markets and the suppliers is large. As a result, firms
that identify appropriate business strategies that take into account these
characteristics are more likely to succeed in these markets. The following are some
key message from AMUL’s success: firms in these environments need to
simultaneously develop markets and suppliers to synchronize demand and supply
planning, develop or become a part of network of producers (i.e., cooperatives in
this case) to obtain scale economies, focus on operational effectiveness to achieve
cost leadership to enable low price strategy. In addition, a central focus to bring the
diverse element together and a long-term approach are required.
In emerging economies different industrial sectors may be at different stages
of development. In some of the sectors all of the above environmental
characteristics faced may not hold. However, a subset of strategies followed by
AMUL would still be very useful. Thus, firms that are contemplating addressing
large undeveloped markets or have an intention of taking advantage of extensive but
1

32. marginal supplier base would still benefit.
Introduction
Since the turn of 19th
century, Cooperatives have existed as dominant forms
of organization in the dairy industry around the world. Sometimes they have played
the role of developing infant industry while at other times they have been used to
strengthen weak production bases in an environment where market failures tend to
be higher for marginal producers. In some other cases, a network of small producers
have organized themselves to better market their products. Management of these
cooperatives have also led to some interesting managerial insights for managers in
emerging as well as developed economies.
Large emerging economies, e.g., India and China, have complexities that
range from development of markets (where the largest segment of population is the
one which has low purchasing power) to integration of low cost suppliers who are
predominantly very small. For firms that aspire to conduct substantial business in
such markets, such complexities have to be recognized and then overcome. The
challenge is to understand the linkages between markets and the society. This would
also require development of a new business model that helps a firm grow in such
environments. This paper is about one such successful model. The Kaira District
Milk Cooperative Union or AMUL in India is an example of how to develop a
network of firms in order to overcome the complexities of a large yet fragmented
market like those in emerging economies by creating value for suppliers as well as
the customers. AMUL has led the milk dairy revolution in India that has now
emerged as one of the largest milk producers in the world.
In this article we will describe the breakthrough vision that led to the
simultaneous development of the market and supply side through a process of
social development and education at AMUL. Clearly, implementation of this vision
1

33. in a competitive environment and maintaining sustained growth and profitability
requires development of competitiveness on several dimensions and operational
effectiveness. This article provides insights into management of very large supply
chains by adapting and integrating a variety of strategies and techniques. This
includes building networks, developing trust & values in the network, developing
fair mechanisms for sharing benefits across the supply chain, coordination for
operational effectiveness, innovation and new technology for gaining
competitiveness. It is noteworthy that these successes were achieved within the
framework of a network of cooperatives organized in a hierarchical manner. There
are many lessons in AMUL’s success not only for the cooperative sector but also
for firms who intend to do business in emerging markets.
The AMUL Story
The Kaira District Cooperative Milk Producers’ Union Limited was established on
December 14, 1946 as a response to exploitation of marginal milk producers in the
city of Anand (in Kaira district of the western state of Gujarat in India) by traders or
agents of existing dairies. Producers had to travel long distances to deliver milk to
the only dairy, the Polson Dairy in Anand – often milk went sour, especially in the
summer season, as producers had to physically carry milk in individual containers.
These agents decided the prices and the off-take from the farmers by the season.
Milk is a commodity that has to be collected twice a day from each cow/buffalo. In
winter, the producer was either left with surplus unsold milk or had to sell it at very
low prices. Moreover, the government at that time had given monopoly rights to
Polson Dairy (around that time Polson was the most well known butter brand in the
country) to collect milk from Anand and supply to Bombay city in turn (about 400
1

34. kilometers away). India ranked nowhere amongst milk producing countries in the
world in 1946.
The producers of Kaira district took advice of the nationalist leaders, Sardar
Vallabhbhai Patel (who later became the first Home Minister of free India) and
Morarji Desai (who later become the Prime Minister of India). They advised the
farmers to form a cooperative and supply directly to the Bombay Milk Scheme
instead of selling it to Polson (who did the same but gave low prices to the
producers). Thus the Kaira District Cooperative was established to collect and
process milk in the district of Kaira. Milk collection was also decentralized, as most
producers were marginal farmers who would deliver 1-2 litres of milk per day.
Village level cooperatives were established to organize the marginal milk producers
in each of these villages. The first modern dairy of the Kaira Union was established
at Anand (which popularly came to be known as AMUL dairy after its brand name).
The new plant had the capacity to pasteurise 300,000 pounds of milk per day,
manufacture 10,000 pounds of butter per day, 12,500 pounds of milk powder per
day and 1,200 pounds of casein per day. Indigenous R&D and technology
development at the Cooperative had led to the successful production of skimmed
milk powder from buffalo milk – the first time on a commercial scale anywhere in
the world. The foundations of a modern dairy industry in India had just been laid as
India had one of the largest buffalo populations in the world.
We move to year 2000. The dairy industry in India and particularly in the
State of Gujarat looks very different. India has emerged as the largest milk
producing country in the world (see Table 1). Gujarat emerges as the most
successful State in terms of milk and milk product production through its
cooperative dairy movement. The Kaira District Cooperative Milk
1

35. Producers’ Union Limited, Anand becomes the focal point of dairy development in
the entire region and AMUL emerges as one of the most recognized brands in India,
ahead of many international brands1
.
Starting with a single shared plant at Anand and two village cooperative
societies for milk procurement, the dairy cooperative movement in the State of
Gujarat had evolved into a network of 2.12 million milk producers (called farmers)
who are organized in 10,411 milk collection independent cooperatives (called
Village Societies). These Village Societies (VS) supply milk to thirteen independent
dairy cooperatives (called Unions). AMUL is one such Union. Milk and milk
products from these Unions are marketed by a common marketing organization
(called Federation). Figure 1 gives the hierarchical structure of this extensive
network of cooperatives. Gujarat Cooperative Milk Marketing Federation or
GCMMF is the marketing entity for products of all Unions in the State of Gujarat2
.
GCMMF has 42 regional distribution centers in India, serves over 500,000 retail
outlets and exports to more than 15 countries. All these organizations are
independent legal entities yet loosely tied together with a common destiny! (In a
recent survey GCMMF was ranked amongst the top ten FMCG firms in the country
while AMUL was rated the second most recognized brand in India amongst all
Indian and MNC offerings). Interestingly, the Gujarat movement spread all over
India and a similar structure was replicated (all are at different levels of
achievement but their trajectory appears to be quite similar). Two national
organizations, the National Dairy Development Board (NDDB) and the National
Co-operative Dairy Federation of India (NCDFI) were established to coordinate the
dairy activities through cooperatives in all the States of the country. The former
provides financing for development while the latter manages a national milk grid
and coordinates the deficit and surplus milk and milk powder across the states of
India. In the early nineties, AMUL was asked by the Government of Sri Lanka to
1

36. establish a dairy on similar lines in Sri Lanka. Interestingly, while Polson folded up
sometimes in 1960s, the cooperatives are faced with new competition in liberalizing
India – from multi-national corporations (MNCs) that brought in new and improved
product portfolio, international network and immense financial support. The
Cooperatives face new challenges that test the robustness of their approach and their
commitment to the movement and a new style of management thinking.
Today AMUL is a symbol of many things. Of a promise to member farmers
who are assured a guaranteed purchase of all the milk that they produce at pre-
determined prices. Of high-quality products sold at reasonable prices to consumers.
Of developing and coordinating a vast co-operative network. Of making a strong
business proposition out of serving a large number of small and marginal suppliers.
Of the triumph of indigenous technology. Of the marketing savvy of a farmers'
organisation.
In the remaining part of the paper, we first review the role that cooperatives have
played in the development of dairy industry globally and how is this sector
adjusting to new global challenges. Next, we look at AMUL within this context and
highlight their journey towards excellence. Specifically, we study how AMUL
achieved this exalted status, what were the ingredients of its success, how did the
belief in cooperation transform the business environment and the lives of people,
and what lessons does it hold for other businesses.
1

37. Cooperatives and the Global Dairy Industry
Three broad questions have intrigued researchers and practitioners on cooperatives3
:
what are the objectives of cooperatives, what determines the success and failure of
cooperatives and how do cooperatives act as organizations of social and economic
change. While most of the observations are based on normative judgments of what
the cooperatives are supposed to do, some studies reflect the true behavior of agents
within a cooperative framework thereby making the debate on cooperatives more
complex but also interesting. To these themes we add another question that reflects
in some ways our own enquiry through this paper: are mechanisms of cooperation
that cooperatives employ any different from those used by other industrial
organizations?
Traditionally, cooperatives have been established to serve the needs of its
members in order to maximize their returns. Governments have usually seen these
organizations as effective mechanisms for delivering their own programmes (e.g.,
sector development or poverty reduction, etc.). Researchers have looked at
cooperatives as channels for re-distributing wealth, improving the opportunities for
the weaker sections of the society, alternative institutions for property ownership,
efforts in democratic and participative governance of organizations4
etc. (this
discussion draws from Shah, 1995). In that, the cooperatives have often sought
protection of sorts from uncertainties in the market place. Globally, modern day
cooperatives are agglomeration of many such small groupings that serve some of
the above objectives but have now moved from being protected entities to becoming
market driven. This makes such cooperatives an interesting organizational
alternative to traditional business enterprises (i.e., investor owned firms) in terms of
concern for shareholders, distributional effectiveness and ability to provide
product/service variety5
.
In emerging economies, cooperatives have been used as institutions to
1

38. organize marginal producers thereby providing scale effects to a network of such
producers. Sometimes, it is the government that organizes these marginal producers
and may also manage the collective (as in
various cooperatives in former Soviet Union and Africa). On other occasions,
producers themselves come together to produce and distribute their own products
(as in the case of AMUL, majority of cooperatives in North America etc6
.). While
control and subsidies from the government distort the performance of former,
producer-driven cooperatives have to develop systems and processes that respond to
market requirements and be competitive. In that, the determinants of success for this
kind of cooperatives are no different from those of other commercial organizations.
Moreover, they recognize that in order to optimize the objective function of the
marginal producers, they have to serve the market very effectively7
. Cooperatives
are, however, different from other commercial organizations in one respect – they
are bound to serve the suppliers (i.e., the producers of goods & services who happen
to be the members of the cooperatives) in good and bad times. In that, they present
an interesting model to other commercial organizations on strategic management of
resources and their conservation.
Globally, cooperatives have played the role of preventing market failures for small
producers especially in the dairy industry8
. Traditionally, a large number of these
cooperatives have had small membership and produced predominantly raw products
(i.e., fluid milk) or products with some value addition (i.e., dry powder, butter etc.).
This situation has been changing dramatically in the last decade and especially in
the last three years. There has been a spate of mergers all around the world to create
1

39. fewer but larger dairy cooperatives. In many cases, these cooperatives look very
different from the merged entities. Cooperative dairies that operate with small
membership have retained a certain focus (i.e., geographical or product related) in
their offerings9
. There have been several factors driving the restructuring of the
dairy business (which has chiefly been organized around cooperative principles).
These include efficiencies in managing fewer large plants versus a number of under-
utilized small plants, need for more milk supply (and declining membership), need
to offer wide variety, improvements in trucking & milk handling thereby facilitating
long hauls, opening of new international markets (also markets for new products),
seeking marketing clout and need to bring investment from outside the cooperatives.
In USA, for instance, there were 592 cooperatives (with a membership of 281,065
producers) that marketed milk to plants and handlers in 1973. This number reduced
to 226 (with 87,938 members) in 1997. However, the share of milk delivered by the
cooperatives increased by 9 percent during this period though the share of dairy
sales of small cooperatives reduced from 43.8 percent in 1975 to about 30 per cent
in 1998 (Blayney and Manchester, 2000)10
. The two largest dairy cooperatives in the
US, Dairy Farmers of America and Land O’Lakes had annual sales of US$ 7.9 and
5.1 billion respectively11
.
1

40. Dairy Farmers of America was formed by the merger of four large cooperatives in
the US in 1998. It consists of 25,499 members across 45 states of USA12
.
Consolidation in cooperatives during the last five years was also in anticipation of
(and reaction to) the consolidated Federal Milk Marketing Order of 2000 which
removed geographical anomalies in minimum support prices for dairy products
hence reduced the need to locate spatially distributed processing centers to take
advantage of varying prices. It helped dairy cooperatives to forge alliances with
firms in various regions.
European (and especially Scandinavian) dairy cooperatives have also seen
tremendous consolidation. Danish cooperatives, mostly producers’ cooperatives,
have often faced difficulties in raising capital internally for investment (though
government support has been quite strong on this count) and have been re-
structuring since mid-70s (Hansen et al. 1980). Dairy coops in Denmark have
reduced to 45 units in 2002 from 1500 in 1930s with one large dairy processing 90
per cent of the available milk. The Danish Dairy Board, however, invests in R&D,
allots quota for milk supply to individual farms, regulates prices and quality, and
supports the efforts of the cooperatives in international markets. It believes that its
competition is from dairies outside Denmark13
. Similar has been the experience of
dairy farmers in other parts of Europe with a higher involvement of government in
reshaping the structure of the industry. Many Irish cooperatives have, however,
converted to non-cooperative forms (Hamm, 2001). Outside Europe and USA, the
experience of dairy cooperatives in New Zealand is instructive. The New Zealand
Dairy Board (NZDB) zealously guards the structure of the industry, which had an
annual worldwide sale of NZ$3.5 billion in 1996. Dairy cooperatives collect milk
from individual farmers and sell processed products in the domestic markets and to
1

41. NZDB for exports14
. Akoorie and Scott-Kennel (1999) argue that this structure
looks more like strategic partnership between producers and the board (the global
marketing arm) with the later providing capital for growth and innovation.
Interestingly, the form that a producing organization should take and the
relationship that it should have with its marketing has been the center of debate in
managing dairy cooperatives. AMUL in India has learnt from many of these
experiences and has been influenced by practices in dairies around the world
especially in its formative years. It has, however, formed it own organizational
structure (i.e., AMUL is a cooperative of village cooperatives) to bring about a
change in the lives of marginal farmers of India.
in the region of the cooperative, the sociology of cooperation, interface of the dairy
cooperative and the rural power structure, relation of the State and the Cooperative
and the role of government in its growth (interestingly, AMUL has successfully
managed to exercise its independence from the government unlike other
cooperatives in India), elements & replicability of the cooperative movement at
Anand, cost effectiveness of subsidies to AMUL (in its initial years) etc.15
A few studies have evaluated the operational effectiveness of the operations at
AMUL16
. Studies have reported usage of mobile veterinary dispensaries, wireless
sets to link mobile units to service centers as early 1951, developing a programme
of cross breeding of cows in early 1970s etc. that have led to a phenomenal rise in
productivity of milk (Patel, 1988).
We have, however, not come across any research paper or study that looks at the
entire supply chain to understand the role of managerial practices in achieving its
objectives successfully. There have been no studies that look at managerial
practices, efficiency and performance of cooperatives either. We now present, how
1

42. AMUL developed a robust organization based on sound values and commercial
interests.
AMUL’s Journey towards Excellence
AMUL’s journey towards excellence is marked by some critical understanding of
the business environment in large emerging economies like India where markets
have to be developed by combining efficiency related initiatives with increasing the
base of marginal suppliers and consumers. The essence of AMUL’s efforts were as
follows:
• It combined market and social development in an emerging economy. It
recognized the inter-linkages between various environments that governed the
lives of marginal milk farmers and the unmet needs of consumers. It also
changed the supply chain paradigm in order to reduce the cost to the consumer
while increasing the return to the supplier.
• It realized that in order to achieve their objectives, it had to benefit a large
number of people – both suppliers and consumers. While large scale had the
danger of failure due to poor control and required more resources, it also had the
advantage of creating a momentum that would be necessary to bring more
people into the fold and thereby help more suppliers and consumers.
• It also realized that its goal could only be achieved in the long run and this
required developing values in people and processes that were robust, replicable
and transparent.
It also realized that the cooperative would not be independent and viable in the face
of competition if it were not financially sound. This implied that AMUL had to
1

43. develop distinct capabilities that would deliver competitive advantage to its
operations.
Leadership
While Kaira Union (or AMUL) had the support of national leaders who were at the
forefront of the Indian independence movement, its local leaders were trained in
Gandhian simplicity17
and had their feet rooted firmly amongst people whom they
had mobilized – the poor farmers of Anand. The foremost amongst them was
Tribhuvandas Patel18
who had led the movement for the formation of cooperatives
of small and marginal farmers in order to compete against investor owned
enterprises on one hand, and keep bureaucracy away on the other hand.
Tribhuvandas was the first Chairman of the cooperative. His skills lay in organizing
the village producers, in making them believe in the power of cooperation and their
rights towards improvement of human condition. He is remembered as fair and
honest person whose highest sense of accountability to the members of the union
laid the foundation of trust between network members19
. Another important aspect
of his remarkable management style was his gentleness and ability to repose trust in
people – he gave complete autonomy to managers of the union and earned complete
commitment from them20
. Verghese Kurien21
was one such manager who would,
first, shape the destiny of the Union and then the milk movement throughout the
country.
1

44. Kurien emerged as the father of the dairy movement in India. He managed to keep
the government and bureaucrats away from the cooperative22
and gave shape to the
modern structure of the cooperative, worked tirelessly to establish the values of
modern economics, technology and concern for farmers within the cooperative. He
interfaced with global financing agencies to build new projects at AMUL. He
worked with the Unions to bring the best of technology to the plants. He worked
with marginal village farmers to create systems that would increase milk yields. He
understood that without meeting the needs of customers he would not be able to
satisfy his obligations to the farmers. In short, Kurien shaped the destiny of the milk
movement in India through NDDB (as its Chairman) and particularly at GCMMF
and cooperatives in Gujarat. He helped build a modern organization with
professional management systems that would support the aspirations of farmers and
customers.
Several young people left better paying jobs to help create a dream of making
India the milk capital of the world. Kurien had learnt the persuasive charm of
Tribhuvandas through plain speaking and had soon created a cadre of highly
capable managers to whom he had delegated both management as well as
commitment. These leaders were created at the village, district and state levels in
different organizations of the network.
He was charismatic in his communication and committed in his effort. Over a
period of time, he developed a very close link with the poor farmers who, as he
always says, “were his employers” at the cooperative. He would travel through the
villages along with Tribhuvandas and work out the details of how the milk
collection cooperative would work, how trucks would pickup milk from village
1

45. societies, how the cattle would have to be taken care of and how all of this would
help the poor milk farmer come out of poverty and the clutches of the middleman.
Operational details were meticulously planned and executed. And then, he along
with two of his close associates would work on the design of the dairy plant
including conducting experiments to create powder out of buffalo milk – a task that
was ridiculed by all who heard of it including the international aid agencies in the
dairy industry. Tribhuvandas and Kurien were able to convince the government also
of the value of his efforts and secured funding for several projects of the
cooperative. He was slowly laying the foundation of a modern dairy industry in
India. Membership of the cooperative started to increase, professional managers
started to join AMUL and production capacity at AMUL started to expand (and this
expansion was done through innovative changes to processes at the plant and
through equipment designed and fabricated in-house). Kurien had transformed
AMUL from a dream into a major industrial entity – a network of plants,
cooperative societies, research centers, an institute for training future managers in
rural management, secondary services like veterinary/artificial insemination
expertise/feed factory etc. Kurien’s biggest strength lay in his ability to convince
people that the cause of rural farmers was important thus establishing an important
shared value. Subsequently, he could convince the government to replicate the
AMUL model in almost all states of the country.
Strategy
AMUL’s business strategy is driven by its twin objectives of (i) long-term,
sustainable growth to its member farmers, and (ii) value proposition to a large
customer base by providing milk and other dairy products a low price. Its strategy,
which evolved over time, comprises of elements described below.
Simultaneous Development of Suppliers and Customers: From the very early stages
1

46. of the formation of AMUL, the cooperative realized that sustained growth for the
long-term was contingent on matching supply and demand. Further, given the
primitive state of the market and the suppliers of milk, their development in a
synchronous manner was critical for the continued growth of the industry. The
organization also recognized that in view of the poor infrastructure in India, such
development could not be left to market forces and proactive interventions were
required. Accordingly, AMUL and GCMMF adopted a number of strategies to
assure such growth. For example, at the time AMUL was formed, the vast majority
of consumers had limited purchasing power and was value conscious with very low
levels of consumption of milk and other dairy products. Thus, AMUL adopted a low
price strategy to make their products affordable and guarantee value to the
consumer. The success of this strategy is well recognized and remains the main
plank of AMUL's strategy even today. The choice of product mix and the sequence
in which AMUL introduced its products is consistent with this philosophy.
Beginning with liquid milk, the product mix was enhanced slowly by progressive
addition of higher value products while maintaining desired growth in existing
products. Even today, while competing in the market for high value dairy products,
GCMMF ensures that adequate supplies of low value products are maintained.
On the supply side, as mentioned earlier, the member-suppliers were typically small
and marginal- farmers had severe liquidity problems, were illiterate and had no prior
training in dairy farming. AMUL and other cooperative Unions adopted a number of
strategies to develop the supply of milk and assure steady growth. First, for the short
term, the procurement prices were set so as to provide fair and reasonable return.
Second, aware of the liquidity problems, cash payments for milk supply was made
with minimum of delay. For the long-term, the Unions followed a multi-pronged
1

47. strategy of education and support. For example, only part of the surplus generated
by the Unions is paid to the members in the form of dividends. A substantial part of
this surplus is used for activities that promote growth of milk supply and improve
yields. These include provision of veterinary services, support for cold storage
facilities at the village societies etc. In parallel, the Unions have put in place a
number of initiatives to help educate the members.
To summarize, the dual strategy of simultaneous development of the market
and member farmers has resulted in parallel growth of demand and supply at a
steady pace and in turn assured the growth of the industry over an extended period
of time.
Cost Leadership: AMUL’s objective of providing a value proposition to a large
customer base led naturally to a choice of cost leadership position. Given the low
purchasing power of the Indian consumer and the marginal discretionary spending
power, the only viable option for AMUL was to price its products as low as
possible. This in turn led to a focus on costs and had significant implications for
managing its operations and supply chain practices (described later).
Focus on Core Activities: In view of its small beginnings and limited resources, it
became clear fairly early that AMUL would not be in a position to be an integrated
player from milk production to delivery to the consumer23
. Accordingly, it chose a
strategy to focus on core dairy activities and rely on third parties for other
complementary needs. This philosophy is reflected in almost all phases of AMUL
network spanning R&D, production, collection, processing, marketing, distribution,
retailing etc. For example, AMUL focused on processing of liquid milk and
conversion to variety of dairy products and associated research and development.
On the other hand, logistics of milk collection and distribution of products to
customers was managed through third parties.
1

48. However, it played a proactive role in making support services available to its
members wherever it found that markets for such services were not developed. For
example, in the initial stages, its small and marginal member farmers did not have
access to finance, veterinary service, knowledge of basic animal husbandry etc.
Thus to assure continued growth in milk production and supply, AMUL actively
sought and worked with partners to provide these required services. In cases where
such partnerships could not be established, AMUL developed the necessary
capabilities and provided the services. These aspects are elaborated later in this
section.
These include logistics of milk collection, distribution of dairy products, sale of
products through dealers and retail stores, some veterinary services etc. It is worth
noting that a number of these third parties are not in the organized sector, and many
are not professionally managed. Hence, while third parties perform the activities,
the Unions and GCMMF have developed a number of mechanisms to retain control
and assure quality and timely deliveries (see the sub-section on Coordination for
Competitiveness later in the paper for more details). This is particularly critical for a
perishable product such as liquid milk.
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 may thus be characterized by two elements: (a) retention of
surplus to fund growth and development, and (b) limited/ no credit, i.e., all
1

49. 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 to mention
that many of the above approaches were at variance with industry practices of both
domestic and MNC competitors of AMUL.
1

50. Organization
AMUL is organized as a cooperative of cooperatives (i.e., each village society, a
cooperative in itself, is a member of the AMUL cooperative) thereby deriving the
advantage of scale and uniformity in decision making. The founders of Kaira Union
realized that to fulfill their objectives, a large number of marginal farmers had to
benefit from the cooperative – a network of stakeholders had to be built. And once
built, it had to grow so as to draw more rural poor to undertake dairy farming as a
means of livelihood. The network had to have several layers – the organizational
network where the voice of the owners governed all decisions, a physical network
of support services and product delivery process and a network of small farmers that
could deliver the benefit of a large corporation in the market place. More
importantly, a process had to be put in place to build these networks.
Building an organizational network that would represent the farmers and the
customers was the most complicated task. A loose confederation was developed
with GCMMF representing the voice of the customers, the Unions representing the
milk processors and the village societies representing the farmers. Competition in
the markets ensured that the entire network was responding to the requirements of
the customers at prices that were very competitive. The task of ensuring that returns
to the farmers was commensurate with the objectives with which the cooperatives
were setup was achieved through representation of farmers at different levels of
decision making throughout the network – the board of directors of societies,
Unions and the Federation comprised farmers themselves. In order to ensure that
most returns from sales went to the producers, the intermediaries had to operate
very effectively and on razor thin margins. This turned out to be a blessing in
disguise – the operations remained very “lean” and started to provide cost based
advantage to the entire network.
1

51. AMUL established a group to standardize the process of organizing farmers
into village societies. In addition to establishing the criteria for selecting members,
the group had to train the VS to run the cooperative democratically, profitably and
with concern for its members. This included establishing procedures for milk
collection, testing, payment for milk purchased from member farmers and its
subsequent sale to the union, accounting, ensuring timely collection and dispatch of
milk on milk routes established by the union, etc. The Village Societies Division at
AMUL acts as the internal representative of village societies in their dealings with
the Union. Cooperative development programmes at the village level for educating
& training its members have become an important part of the strategy to build this
extensive network.
Milk procurement activity at AMUL comprises development and servicing of
village societies, increasing milk collection, procurement of milk from societies &
its transport to the chilling locations, and resolving problems of farmers and village
societies. Their stated objective is to ensure that producers get maximum benefits.
The Village Societies Division coordinates these activities. Milk collection takes
place over a large number of pre-defined routes according to a precise timetable.
The field staff of this division also help village societies interface with the Union on
various issues ranging from improvement of collection, resolving disputes, repair of
equipments to obtaining financing for purchase of equipment etc. In addition, they
are also responsible for the formation of new societies, which is an important
activity at AMUL.
In essence, the organization structure of AMUL allows effective utilization of
resources without losing the democratic aspiration of individual members. It is
obvious that such a system needs charismatic leadership to achieve consensus
1

52. across issues – a process that has long-term benefits for any organization.
1

53. ABOUT THE TOPIC:-
CONSUMER BEHAVIOUR:-
 It is defined as all psychological, social and physical behavior of potential
customers as they become aware, evaluate, purchase, consume, and tell to
others about product and services.
 Buying behavior involves both individual ( psychological) and group
process.
 Buyer behavior is reflected from awareness right through post
purchase evaluation indicating satisfaction and non satisfaction , from
purchaser
 Buyer behavior includes communication, purchasing and consumption
behavior
 Consumer behavior is basically social in nature hence the social factors
play important roles in shaping buying behavior
 Buyer behavior includes both customer and industrial behavior.
“Hence consumer behavior is an orderly process whereby the consumer
interacts with the environment for making a purchase decision on products “
1

54. CONSUMER BEHAVIOR AND MARKETING MANAGEMENT
Marketing managements work around consumers which is actually the market
for them
 Understanding their behavior is very vital in every segment to plan marketing
activities accordingly.
 Both industrial and individual customers are vital in marketing
management
DIVERSITY OF CONSUMER BEHAVIOR:-
 customer and consumer words are referred as synonyms but the
difference exists
 customer - the purchaser of product or service , may or may not be the
end user
 consumer- the end user , may or may not be the purchaser
 New age of business demands differentiation of customers by individual
differences in consumer expectations, preferences and influences.
1

55.  Firms need to go into deep of consumer behavior to analyze and act to
achieve objectives
CONCEPT & NEED FOR STUDYING CONSUMER BEHAVIOR:-
Consumer behaviour can be said to be the study of how individual make decision on
how to spend their available resources (time, money, effort) on various
consumption related items. This simple definition of consumer behaviour tells the
markets to resolve every activity around the ultimate consumers & gauge their
behaviour by specially focusing on:
 Who buys products or services?
 How do they buy products or services?
 Where do they buy them?
 How often they buy them?
 Why do they buy them?
 How often they use them?
These questions will help in understanding better what factors influences the
decision making process of the customers. The decision making process identifies
the number of people who are involve in this process & describes a role to them
like users, decides, influences & buyers.
1

56. It is believed that consumers or customers make purchase decision on the basis of
receipt of a small number of selectivity chosen pieces of information. Thus it will
be very important to understand what & how mush them to evaluate the goods &
services offerings.
CONSUMER DECISION MAKING PROCESS:-
 Stimuli- need, reasons, influences, gathering information
 Information processing- process , analyze information about product
 Decision making - on the basis of analysis , decision to go for
 Response- response to buy without any prejudice
 For industrial buyers the process is almost similar only with addition of
re-buy, modified re buy or new task.
FACTOR INFLUENCING BUYING BEHAVIOR:-
 Individual factors
 Cognitive thinking process – perception , attitudes , Needs/motives
 Personal characteristics – demography, lifestyles ,personal traits
1

57.  Environmental factors
 Culture- values ,beliefs, sub cultural / cross cultural factors
 Social class- social class , society
 Influence groups – family, opinion leaders, reference group
 Situational variables – purchase occasion , market communication,
shopping behavior, price , sales influence , product position
CONSUMER SATISFACTION:-
All business firms have realized that marketing is a core element of management
philosophy & the key to its success lies in focusing more & more on the customers.
That is, it will be the customer who will decide where the firm is heading. Thus the
challenge before the marketer is to ensure that they should satisfy every customer.
Satisfaction is an important element in the evaluating stage. Satisfaction refers to
the buyers state of being adequately rewarded in a buying situation for the sacrifices
he has made one the customer purchase & use the product they may then become
either satisfy or dissatisfied.
The result of satisfaction to customer form the purchase of the product or services is
that more favourable post-purchase attitude, higher purchase intention & brand
loyalty to be exhibited that the same behaviour is likely to be exhibited in a similar
purchasing situation. The term ‘consumer’ is a typically used to refer to someone
who regularly purchase from a particular store or company.
1

58. Customers are people who are happy with the product & services & are willing to
come back & pay for it again.
Today the firms aim to give satisfaction to the customer through marketing
concepts. The firm try to help the buyers in the solving the problem then
competitors. The marketers must see that consumers with purchasing power
constitute a potentials buyers are identified. It is essential for the marketer to carry
out the business in such a way that they give satisfaction to consumers needed.
When a firm markets a product or service it should aim to enjoy consumer’s
satisfaction & profit maximization.
CONSUMER RESEARCH:-
Consumer research is the methodology used to study consumer behavior research
offer set diverse to identify consumer needs it is used to identify both felt & unfelt
needs, to learn how consumers. Perceive product & brand & stores. What their
attitudes are before and after promotional campaigns & how & why they make their
consumption decision.
MARKETING RESEARCH:-
Marketing research plays an important role in the process of marketing. Starting
with market component of the total marketing talks. It helps the firm to acquire a
better understanding of the consumers, the competition and the marketing
environment.
1

59. DEFINITION
“Marketing research is a systematic gathering, recording and analysis marketing
problem to facilitate decision making.”
- Coundiff & Still.
“Marketing research is a systematic problem analysis, model building and fact
finding for the purpose of important decision making and control in the marketing
of goods and services.
- Phillip Kotler.
MAIN STEPS INVOLVED IN MARKETING RESEARCH
Defining the Marketing Problem to be tackled and identifying the market
research problem involved in the task.
(1)Define the problem and its objectives.
(2)Identify the problem.
(3) Determine the information needed.
(4)Determine the sources of information.
(5)Decide research methods.
(6)Tabulate, Analyze and interpret the data.
1

60. (7)Prepare research report.
(8)Follow-up the stud
1) Define the problem and its objectives :- This includes an effective job in
planning and designing a research project that will provide the needed information.
It also includes the establishment of a general framework of major marketing
elements such as the industry elements, competitive elements, marketing elements
and company elements.
2)Identify the problem :- Identifying the problem involves getting acquainted with
the company, its business, its products and market environment, advertising by
means of library consultation and extensive interviewing of company’s officials.
3)Determining the specific Information needed :- In general the producer, the
manufacturer, the wholesaler and the retailer try to find out four things namely :-
(1) What to sell
1

61. (2) When to sell
(3) Where to sell
4) Determine the sources of information :-
Primary Data :- Primary datas are those which are gathered
specially for the project at hand, directly – e.g. through questionnaires &
interviews. Primary data sources include company salesman, middleman,
consumers, buyers, trade association’s executives & other businessman & even
competitors.
Secondary Data :- These are generally published sources, which
have been collected originally for some other purpose. Source are internal
company records, government publication, reports & publication, reports &
journals, trade, professional and business associations publications & reports.
5) Decide Research methods for collecting data: - If it is found that the secondary
data cannot be of much use, collection of primary data become necessary. Three
widely used methods of gathering primary data are :-
A) Survey
B) Observation
C) Experimentation
A) Survey Method: - In this method, information gathered directly from individual
respondents, either through personal interviews or through mail questionnaires or
telephone interviews.
1

62. B) Observation Method: - The research data are gathered through observing and
recording their actions in a marketing situation. This technique is highly accurate. It
is rather an expensive technique.
C) Experimental Method: - This method involves carrying out a small scale trial
solution to a problem, while at the same time, attempting to control all factors
relevant to the problem. The main assumption here is that the test conditions are
essentially the same as those that will be encountered later when conclusions
derived from the experiment are applied to a broader marketing area.
1

63. D) The Panel Research:- In this technique the same group of respondents is
contacted for more then one occasion; and the information obtained to find out if
there has been any in their taste demand or they want any special quality, color,
size, packing in the product.
 Preparation of questionnaire
 Presetting of questionnaire
 Planning of the sample
6) Tabulate, Analysis and Interpret the Data:-
The report must give/contain the following information:-
a) The title of research
b) The name of the organization for which it has been Conducted
c) The objectives of research
d) The methodology used
e) Organization and the planning of the report
f) A table of contents along with charts and diagrams used in the reports
g) The main report containing the findings
h) Conclusion arrived at end recommendations suggested
i) Appendices (containing questionnaire / forms used sample design, instructions.)
1

64. 7) Follow-up the study :-
The researchers, in the last stage, should follow up this study to find if his
recommendations are being implemented and if not then why.
RESEARCH METHODOLOGY:-
RESEARCH PROBLEM
 Seek the general perception of consumer towards Amul Milk.
 To know the consumer psyche and their behaviour towards Amul Milk .
OBJECTIVE OF THE RESEARCH
 To know the relationship of sales with the advertisement.
 To know awareness of people towards Amul Milk.
 To know which advertisement tool is mostly preferred by people.
 To know the preference of Amul Milk with comparison to
Other competitive brands .
 To know the factors which affects consumer’s buying behaviour to purchase
milk.
1

65. 1

66. Information requirement
• First, I had to know about all the competitors present in the Milk
segment (Reputed and well established brands as well as Local brands).
• Before going for the survey I had to know the comparative packs and
prices of all the competitors existing in the market.
• Since Milk is a product that used daily hence I had to trace the market and
segment it, which mainly deals with people of various age groups.
• The main information needed is the various types of brands available in the
market, their calorific value and various other facts.
• As Amul milk advertisements are mainly done through hoardings but on
television the advertisement is being telecasted timely and on the proper time
or not.
130

67. RESEARCH DESIGN
A Research design specifies the methods and procedures for conducting a particular
study. It is a map (or) blue print to which the research is to be conducted.
Descriptive research design has been considered as a suitable methodology for
present study and for data analysis.
SAMPLING DESIGN
The sampling design used was Convenience sampling, which is a non-probability
sampling method. The convenience factors were the availability and approachability
of the respondents.
POPULATION
All types of outlets that stock and sell Amul milk in the markets. The outlets have
been classified into as follows
 Convenience stores: All kinds of shops including bakeries
 Eateries: all kinds of eating joints
130

68. SOURCES OF DATA
Primary sources
The primary data was collected through questionnaires. They were filled using the
scheduled method of data collection by the researcher.
Secondary sources
The secondary sources were used only for collecting information regarding the
sample; they were however not used for analysis
LIMITATIONS OF THE RESEARCH :-
The limitations of the research were as follows
1. Lack of proper experience on the part of the researcher in conducting such studies
in the past.
2. Time frame required was not enough to survey more number of outlets.
ANALYSIS TECHNIQUES
Quantitative analysis is performed using the data collected at each outlet to
estimate the presence of Amul milk. Tools Utilized
 Percentage Analysis
130

69.  Graph Chart
SAMPLING
1. Sampling Technique: Non probability sampling
(A non probability sampling technique is
that in which each element in the
population does not have an equal
chance of getting selected)
2. Sample Unit : People who buy milk available
in retail outlets, superstores, etc
3. Sample size : 50
4. Method : Direct interview through questionnaire.
5. scale : Dycpnomic scale and likent scal
130

70. DATA ANALYSIS AND INTERPRETATION:-
The collected data were not easily understandable, so I like to analyze the collected
data in a systematic manner and interpreted with simple method.
The analysis and interpretation of the data involves the analyzing of the
collected data and interpretation it with pictorial representation such as bar charts,
pie charts and others.
Which milk do you consume?
a. Pouch milk
b. Loose milk
c. Both
Options No of Responded % of Responded
Pouch mik 20 40
Loose milk 20 40
Both `10 20
130

71. Are you satisfied with the milk you are consuming?
a) Yes
b) No
RESPONSE
NO.
OF RESPONDED
%
OF responded
YES 32 64
NO 18 36
130

72. What do you like?
a) Quality b) Taste
c) Price d) Availability
Factors No. of Respondents Percentage %
quality 20 40
taste 15 30
price 10 20
availability 5 10
130

73. Do you get milk pouch at…………..
a)Doorstep
b) From retailer
RESPONDED NO.OF responded % OF responded
Door step 30 60
retailer 20 40
130

74. What is total consumption of milk in a day?
a) Pouch milk in litre……
b) Loose milk in litre……
RESPONDED NO.OF responded % OF responded
Pouch milk in
litre……
30 60
b)Loose milk in
litre……
20 40
130

75. What is your monthly expenditure in milk (in Rs.)?
a)) 500-1000
b) 1000-1500
c) 1500 and above
RESPONSE NO.
OF RESPONDED
%
OF CONSUMERS
500-1000 25 50
1000-1500 15 30
1500 and above 10 20
130

76. In pouch milk which brand do you prefer?
a)AMUL
b) MOTHER DAIRY
c) GOKUL
d) MAHANANDA
e) WARANA
f) OTHERS
RESPONSE NO.
OF RESPONDED
%
OF CONSUMERS
amul 15 30
Mother dairy 10 20
mahananda 10 20
Gokul 5 10
Warana 5 10
others 5 10
130

77. Do you think the price of the product is high/low compared to competitors product?
a) Strongly agree
b) Strongly disagree
c) Agree
d) Neither
RESPONSE NO.
OF RESPONDED
%
OF CONSUMERS
Strongly agree
15 30
Strongly disagree 10 20
agree 15 30
Neither 10 20
130

78. If you buy AMUL milk pouch which pack you purchase?
a) AMUL Gold
b) AMUL Taaza
c) AMUL Slim & Trim
RESPONSE NO.
OF RESPONDED
%
OF CONSUMERS
AMUL Gold 25 50
AMUL Taaza 15 30
AMUL Slim & Trim 10 20
130

79. CONSUMER’S OPINION TOWARDS PRODUCT
rating No of respondent % of consumer
poor 15 30
average 25 15
good 7 14
excellent 3 6
130

80. SWOT ANALYSIS
Strengths
The company is having Indian origin thus creating feeling of oneness in the mind of
the customers.
It manufactures only milk and milk products, which is purely vegetarian thus
providing quality confidence in the minds of the customers
It is aiming at rural segment, which covers a large area of loyal customers, which
other companies had failed to do.
130

81. People are quite confident for the quality products provided by Amul.
Amul has its base in India with its butter and so can easily promote chocolates
without fearing of loses.
Weaknesses
There are various big players in the chocolate market, which acts as major
competitors restricting their growth.
Lack of capital invested as compared to other companies.
Improper distribution channel in India.
Opportunities
There is a lot of potential for growth and development as huge population stay in
rural market where other companies are not targeting.
The chocolate market is at growth stage with very less competition so by
introducing new brand and intensive advertising there can be a very good scope in
future.
Threats
130

82. The major threat is from other companies who hold the majority share of consumers
in Indian market i.e. Cadburys and Nestle.
There exists no brand loyalty in the chocolate market and consumers frequently
shift their brands.
New companies’ entering in Indian market like Fantasie fine poses lot problems for
Amul.
130

83. Newsarticles
VergheseKurienlaidfoundationforco-opdairymovement
Anand(Gujarat), Sep 9: The architect of 'white revolution', Verghese Kurien, who
led 'Operation Flood' to transform India from a milk-deficient country to the world's
biggest milk producer, is credited with laying the foundation of the nation's co-
operative dairy model. Hailed as the undisputed 'Milkman of India', who created the
billion dollar brand Amul, Kurien, who passed away this morning at the age of 90,
had received both national and international recognition. The Indian government
had conferred on him the Padma Vibhushan while he was also the recipient of
World Food Price, Ramon Magsaysay award for Community Leadership, Carnegie-
Wateler World Peace Prize and International Person of the Year award from US.
Born in Kozhikode, Kerala on November 26, 1921, Kurien had graduated in science
from Loyola College in Chennai (1940) and obtained his degree in engineering from
the Guindy College of Engineering in Chennai. After a stint at TISCO, Jamshedpur,
Kurien got the Government of India's (GoI) scholarship to study dairy engineering.
130

84. 130

85. On his return to India, Dr Kurien was assigned to join Government Creamery
located at Anand in Gujarat to serve his bond period. By the end of 1949, Kurien
got release orders from his job at the creamery. Kurien joined Kaira District
Cooperative Milk Producers' Union Limited in 1949, on the request of
Tribhuvandas Patel, the then dairy chairman. The dairy was formed at the
initiative of Sardar Vallabhabhai Patel. Later, Patel asked Kurien to help set up a
dairy processing plant, which saw the birth of Amul. Amul's co-operative model
became a success and it was replicated throughout Gujarat. The different dairy
unions were later brought under the banner of Gujarat Co-operative Milk
Marketing Federation (GCMMF). Dedicating his professional life to
empowering the Indian farmers through co-operatives, Kurien, served GCMMF
from 1973 to 2006, and Institute of Rural Management (IRMA) from 1979 to
2006. Kurien's tenure at Anand changed the destiny of Indian dairy industry. He
began helping the fledgling dairy co-operative. The first dairy co-operative
union in Gujarat was formed in 1946 with two village dairy co-operative
societies as its members. The number of member societies has now increased to
16,100, with 3.2 million members pouring milk. Kurien is also credited with
being the first one to produce powder from buffalo milk, when elsewhere in the
130

86. world, cow milk was used to produce milk powder. Impressed by the success of
Amul, then Prime Minister Lal Bahadur Shastri established the National Dairy
Development Board (NDDB) to replicate the Amul model across the country
and Kurien was made its chairman. NDDB launched 'Operation Flood' in 1970,
making India the largest milk producer in the world. He served as chairman of
NDDB for 33 years from 1965 to 1998. The Board ensured replication of Amul
model across India. It played an instrumental role in increasing the milk
production of the country significantly. India's milk procurement increased from
20 million metric tonnes (MMT) per year in the 60s to 122 MMT in 2011. Dr
Kurien's main contribution was in designing of systems and institutions, which
enabled people to develop themselves, as he believed the development of man
can best be achieved by putting in his hands the instruments of development.
Interestingly, the 'milkman' of India did not consume milk himself. He used to
say, "I do not drink milk as I don't like it."
130

87. Mother Dairy vs Amul in Delhi
TNN Jul 12, 2003, 02.30am IST
NEW DELHI: Read between the lines, however, Ms Patel's proposal entails
marketing of the milk products sourced from NDDB under the Mother Dairy brand
across the country, instead of the present arrangement where different state
federations market them under their own respective brands, for example, Verka in
Punjab and Milma in Kerala. Not only would this put Mother Dairy in direct
competition against Amul, but it would also cannibalise the state brands under
which milk is currently marketed.
The Amul Vs Mother Dairy competition is already being felt in Delhi. Amul has
launched its ice-cream here, while Mother Dairy has hit back by launching its
butter. Besides, Mother Dairy is now no longer buying the nearly 1 lakh litres of
milk from GCMMF, nor are its outlets here selling Amul products. So ugly has the
competition become that even the senior bosses at Amul and NDDB have been
washing their dirty linen in public.
Source: Economic times
130

88. Amul Secret Of Success:
The system succeeded mainly because it provides an assured
market at remunerative prices for producers' milk besides acting as a
channel to market the production enhancement package. What's more,
it does not disturb the agro-system of the farmers. It also enables the
consumer an access to high quality milk and milk products. Contrary to
the traditional system, when the profit of the business was cornered
by the middlemen, the system ensured that the profit goes to the
participants for their socio-economic upliftment and common good.
Looking back on the path traversed by Amul, the following
features make it a pattern and model for emulation elsewhere.
Amul has been able to:
Produce an appropriate blend of the policy makers farmers
board of management and the professionals: each group
appreciating its rotes and limitations.
Bring at the command of the rural milk producers the best of the technology
and harness its fruit for betterment.
 Provide a support system to the milk producers without disturbing their
agro-economic systems.
130

89.  Plough back the profits, by prudent use of men, material and machines, in
the rural sector for the
 common good and betterment of the member producers
 Even though, growing with time and on scale, it has
remained with the smallest producer members. In that sense,
Amul is an example par excellence, of an intervention for rural
change.
The Union looks after policy formulation, processing and
marketing of milk, provision of technical inputs to enhance milk yield
of animals, the artificial insemination service, veterinary care, better
feeds and the like - all through the village societies. Basically the
union and cooperation of people brought Amul into fame i.e. AMUL
(ANAND MILK UNION LIMITED), a name which suggest THE
TASTE OF INDIA.
Amul (Anand milk union ltd.) is based on four hands, which are
coordinated with each other. The actual meaning of this symbol is co-
ordination of four hands of different people by whom this
union is at the top position in Asia.
 First hand is of farmers, without whom the organization would not have
existed.
 Second hand is of processors, who process the row material (milk) into
finished goods.
 Third hand is of marketer, without whom the product would have not reached
the customers.
130

90.  Fourth hand is of customers, without whom the products would have not
carried on.
GCMMF Overview:
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's
largest food products marketing organisation. It is a state level apex
body of milk cooperatives in Gujarat which aims to provide
remunerative returns to the farmers and also serve the interest of
consumers by providing quality products which are good value for
money.
Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is
the largest Organisation in FMCG industry engaged in marketing of
milk & milk products under the brand names of AMUL and SAGAR
with an annual turnover exceeding Rs 5000 crores.
GCMMF is a unique organisation. It's a body created by
Farmers, managed by competent professionals serving a very
competitive and challenging consumer market. It is a true testimony of
synergistic national development through the practice of modern
management methods.
GCMMF will be an outstanding marketing organization, with
specialization in marketing of food and dairy products both fresh and
long life with customer focus and IT integrated. The network would
consist of over 100 offices, 7500 stockiest covering at least every
130

91. Taluka. Head quarter servicing nearly 10 lakh outlets with a turnover of
Rs.10,000 Cr and serving several co-operatives. GCMMF shall also
create markets for its products in neighbouring countries.
130

92. The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the
largest food products marketing organisation of India. It is the apex organization of
the Dairy Cooperatives of Gujarat. This State has been a pioneer in organizing dairy
cooperatives and our success has not only been emulated in India but serves as a
model for rest of the World. Over the last five and a half decades, Dairy
Cooperatives in Gujarat have created an economic network that links more than
2.8 million village milk producers with millions of consumers in India and abroad
through a cooperative system that includes 13,141 Village Dairy Cooperative
Societies (VDCS) at the village level, affiliated to 13 District Cooperative Milk
Producers’ Unions at the District level and GCMMF at the State level. These
cooperatives collect on an average 7.5 million litres of milk per day from their
producer members, more than 70% of whom are small, marginal farmers and
landless labourers and include a sizeable population of tribal folk and people
belonging to the scheduled castes.
The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It markets
the products, produced by the district milk unions in 30 dairy plants, under the
renowned AMUL brand name. The combined processing capacity of these plants is
11.6 million litres per day, with four dairy plants having processing capacity in
excess of 1 million Litres per day. The farmers of Gujarat own the largest state of
the art dairy plant in Asia – Mother Dairy, Gandhinagar, Gujarat – which can handle
2.5 million litres of milk per day and process 100 MTs of milk powder daily. During
the last year, 3.1 billion litres of milk was collected by Member Unions of GCMMF.
Huge capacities for milk drying, product manufacture and cattle feed manufacture
have been installed. All its products are manufactured under the most hygienic
conditions. All dairy plants of the unions are ISO 9001-2000, ISO 22000 and
HACCP certified. GCMMF (AMUL)’s Total Quality Management ensures the
quality of products right from the starting point (milk producer) through the value
chain until it reaches the consumer
130

93. Ever since the movement was launched fifty-five years ago, Gujarat’s Dairy
Cooperatives have brought about a significant social and economic change to our
rural people. The Dairy Cooperatives have helped in ending the exploitation of
farmers and demonstrated that when our rural producers benefit, the community and
nation benefits as well.
The Gujarat Cooperative Milk Marketing Federation Ltd. cannot be viewed simply
as a business enterprise. It is an institution created by the milk producers themselves
to primarily safeguard their interest economically, socially as well as
democratically. Business houses create profit in order to distribute it to the
shareholders. In the case of GCMMF the surplus is ploughed back to farmers
through the District Unions as well as the village societies. This circulation of
capital with value addition within the structure not only benefits the final
beneficiary – the farmer – but eventually contributes to the development of the
village community. This is the most significant contribution the Amul Model
cooperatives has made in building the Nation.
The Three Tier Amul Model
The Amul Model is a three-tier cooperative structure. This structure consists of a
Dairy Cooperative Society at the village level affiliated to a Milk Union at the
District level which in turn is further federated into a Milk Federation at the State
level. The above three-tier structure was set-up in order to delegate the various
functions, milk collection is done at the Village Dairy Society, Milk Procurement &
Processing at the District Milk Union and Milk & Milk Products Marketing at the
State Milk Federation.
This helps in eliminating not only internal competition but also ensuring that
economies of scale is achieved. As the above structure was first evolved at Amul in
Gujarat and thereafter replicated all over the country under the Operation Flood
130

94. Programme, it is known as the ‘Amul Model’ or ‘Anand Pattern’ of Dairy
Cooperatives.
Responsible for Marketing of Milk & Milk Products Responsible for Procurement
& Processing of Milk Responsible for Collection of Milk Responsible for Milk
Production.
Village Dairy Cooperative Society (VDCS)
The milk producers of a village, having surplus milk after own consumption, come
together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy
Cooperative is the primary society under the three-tier structure. It has membership
of milk producers of the village and is governed by an elected Management
Committee consisting of 9 to 12 elected representatives of the milk producers based
on the principle of one member, one vote. The village society further appoints a
Secretary (a paid employee and member secretary of the Management Committee)
for management of the day-to-day functions. It also employs various people for
assisting the Secretary in accomplishing his / her daily duties. The main functions of
the VDCS are as follows:
 Collection of surplus milk from the milk producers of the village & payment
based on quality & quantity
 Providing support services to the members like Veterinary First Aid,
Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder
& fodder seed sales, conducting training on Animal Husbandry & Dairying, etc.
 Selling liquid milk for local consumers of the village
 Supplying milk to the District Milk Union
Thus, the VDCS in an independent entity managed locally by the milk producers
and assisted by the District Milk Union.
130

95. 130

96. District Cooperative Milk Producers’ Union (Milk Union)
The Village Societies of a District (ranging from 75 to 1653 per Milk Union in
Gujarat) having surplus milk after local sales come together and form a District
Milk Union. The Milk Union is the second tier under the three-tier structure. It has
membership of Village Dairy Societies of the District and is governed by a Board of
Directors consisting of 9 to 18 elected representatives of the Village Societies. The
Milk Union further appoints a professional Managing Director (paid employee and
member secretary of the Board) for management of the day-to-day functions. It also
employs various people for assisting the Managing Director in accomplishing his /
her daily duties. The main functions of the Milk Union are as follows:
 Procurement of milk from the Village Dairy Societies of the District
 Arranging transportation of raw milk from the VDCS to the Milk Union.
 Providing input services to the producers like Veterinary Care, Artificial
Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder
seed sales, etc.
 Conducting training on Cooperative Development, Animal Husbandry &
Dairying for milk producers and conducting specialised skill development &
Leadership Development training for VDCS staff & Management Committee
members.
 Providing management support to the VDCS along with regular supervision
of its activities.
 Establish Chilling Centres & Dairy Plants for processing the milk received
from the villages.
 Selling liquid milk & milk products within the District
 Process milk into various milk & milk products as per the requirement of
State Marketing Federation.
 Decide on the prices of milk to be paid to milk producers as well on the prices
of support services provided to members.
130

97. State Cooperative Milk Federation (Federation)
The Milk Unions of a State are federated into a State Cooperative Milk Federation.
The Federation is the apex tier under the three-tier structure. It has membership of
all the cooperative Milk Unions of the State and is governed by a Board of Directors
consisting of one elected representative of each Milk Union. The State Federation
further appoints a Managing Director (paid employee and member secretary of the
Board) for management of the day-to-day functions. It also employs various people
for assisting the Managing Director in accomplishing his daily duties. The main
functions of the Federation are as follows:
 Marketing of milk & milk products processed / manufactured by Milk
Unions.
 Establish distribution network for marketing of milk & milk products.
 Arranging transportation of milk & milk products from the Milk Unions to
the market.
 Creating & maintaining a brand for marketing of milk & milk products (brand
building).
 Providing support services to the Milk Unions & members like Technical
Inputs, management support & advisory services.
 Pooling surplus milk from the Milk Unions and supplying it to deficit Milk
Unions.
 Establish feeder-balancing Dairy Plants for processing the surplus milk of the
Milk Unions.
 Arranging for common purchase of raw materials used in manufacture /
packaging of milk products.
 Decide on the prices of milk & milk products to be paid to Milk Unions.
130

98.  Decide on the products to be manufactured at various Milk Unions (product-
mix) and capacity required for the same.
 Conduct long-term Milk Production, Procurement & Processing as well as
Marketing Planning.
 Arranging Finance for the Milk Unions and providing them technical know-
how.
 Designing & Providing training on Cooperative Development, Technical &
Marketing functions.
 Conflict Resolution & keeping the entire structure intact.
Wemove to the year 2008. The dairy industry in India and particularly in the State
of Gujarat looks very different. India for one has emerged as the largest milk
producing country in the World. Gujarat has emerged as the most successful State in
terms of milk and milk product production through its cooperative dairy movement.
The Kaira District Cooperative Milk Producers’ Union Limited, Anand has become
the focal point of dairy development in the entire region and AMUL has emerged as
one of the most recognized brands in India, ahead of many international brands.
Today, we have around 176 cooperative dairy Unions formed by 1,25,000 dairy
cooperative societies having a total membership of around 13 million farmers on the
same pattern, who are processing and marketing milk and milk products profitably,
be it Amul in Gujarat or Verka in Punjab, Vijaya in Andhra Pradesh or a Nandini in
Karnataka. This entire process has created more than 190 dairy processing plants
spread all over India with large investments by these farmers’ institutions. These
cooperatives today collect approximately 23 million kgs. of milk per day and pay an
aggregate amount of more than Rs.125 billion to the milk producers in a year.
Impact of The Amul Model
The effects of Operation Flood Programme are more appraised by the World Bank
in its recent evaluation report. It has been proved that an investment of Rs.
130

99. 20 billion over 20 years under Operation Flood Programme in 70s & 80s has
contributed in increase of India’s milk production by 40 Million Metric Tonne
(MMT) i.e. from about 20 MMT in pre- Operation Flood period to more than
60 MMT at the end of Operation flood Programme. Thus, an incremental return of
Rs. 400 billion annually have been generated by an investment of Rs. 20 billion
over a period of 20 years. This has been the most beneficial project funded by the
World Bank anywhere in the World. One can continue to see the effect of these
efforts as India’s milk production continues to increase and now stands at 90 MMT.
Despite this fourfold increase in milk production, there has not been drop in the
prices of milk during the period and has continued to grow.
Due to this movement, the country’s milk production tripled between the years 1971
to 1996. Similarly, the per capita milk consumption doubled from 111 gms per day
in 1973 to 222 gms per day in 2000. Thus, these cooperatives have not just been
instrumental in economic development of the rural society of India but it also has
provided vital ingredient for improving health & nutritional requirement of the
Indian society. Very few industries of India have such parallels of development
encompassing such a large population.
These dairy cooperatives have been responsible in uplifting the social & economic
status of the women folk in particular as women are basically involved in dairying
while the men are busy with their agriculture. This has also provided a definite
source of income to the women leading to their economic emancipation.
The three-tier ‘Amul Model’ has been instrumental in bringing about the White
Revolution in the country. As per the assessment report of the World Bank on the
Impact of Dairy Development in India, the ‘Anand Pattern’ has demonstrated the
following benefits:
• The role of dairying in poverty reduction
• The fact that rural development involves more than agricultural production
• The value of national ‘ownership’ in development
130

100. • The beneficial effects of higher incomes in relieving the worst aspects of
poverty
• The capacity of dairying to create jobs
• The capacity of dairying to benefit the poor at low cost
• The importance of commercial approach to development
• The capacity of single-commodity projects to have multi-dimensional impacts
• The importance of getting government out of commercial enterprises
• The importance of market failure in agriculture
• The power & problems of participatory organisations
• The importance of policy
Achievement of the Amul Movements
1. The phenomenal growth of milk production in India – from 20 million MT to
100 million MT in a span of just 40 years – has been made possible only
because of the dairy cooperative movement. This has propelled India to
emerge as the largest milk producing country in the World today.
2. The dairy cooperative movement has also encouraged Indian dairy farmers to
keep more animals, which has resulted in the 500 million cattle & buffalo
population in the country – the largest in the World.
3. The dairy cooperative movement has garnered a large base of milk producers,
with their membership today boasting of more than 13 million member
families.
4. The dairy cooperative movement has spread across the length and breadth of
the country, covering more than 125,000 villages of 180 Districts in 22
States.
130

101. 5. The dairy cooperatives have been able to maintain democratic structure at
least at the grass-root level with the management committee of the village
level unit elected from among the members in majority of the villages.
6. The dairy cooperatives have also been instrumental in bridging the social
divide of caste, creed, race, religion & language at the villages, by offering
open and voluntary membership.
7. The dairy cooperatives have been successfully propagating the concepts of
scientific animal husbandry & efficiency of operations, which has resulted in
low cost of production & processing of milk.
8. The movement has been successful because of a well-developed procurement
system & supportive federal structures at District & State levels.
9. Dairy Cooperatives have always been proactive in building large processing
capacities, which has further propelled growth of milk production.
10.The dairy cooperatives are among those few institutions in India, which still
cherish a strong Cooperative identity, values and purpose. They still boast of
idealism & good will of members and employees.
11.The dairy cooperatives have removed the poor farmers of India from the
shackles of agents & middlemen and provided an assured market for their
produce. As these are the institutions run by farmers themselves, it has also
resulted in fair returns to the members for their produce
12.Dairy cooperatives have been able to create a market perception of honesty &
transparency with their clean management
Achievements of the GCMMF
 2.8 million milk producer member families
 13,759 village societies
 13 District Unions
130

102.  8.5 million liters of milk procured per day
 Rs. 150 million disbursed in cash daily
 GCMMF is the largest cooperative business of small producers with an
annual turnover of Rs. 53 billion
 The Govt. of India has honoured Amul with the “Best of all categories Rajiv
Gandhi National Quality Award”.
 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
 Winner of APEDA award for nine consecutive years
130