Consumer buying pattern towards amul milk

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A
COMPREHENSIVE PROJECT REPORT
ON
“CONSUMER BUYING PATTERN TOWARDS AMUL MILK”
SUBMITTED TO
INDUS INSTITUTE OF MANAGEMENT STUDIES
IN PARTIAL FULLFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDENCE OF
Dr. SAMIR GOPALAN
SUBMITTED BY
SAGAR MAKANI – IU1555550015
INDUS INSTITUTE OF MANAGEMENT STUDIES
M.B.A PROGRAMME
AHMEDABAD
MAY – 2017

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PREFACE
This project provides an opportunity to demonstrate application of my knowledge, skill and
competencies required during the financial session. This project helps me to devote my skill to
analyse the problem to suggest alternative solutions and to evaluate them.
I have worked on the topic is “CONSUMER BUYING PATTERN TOWARDS AMUL MILK”.
I have put my level best to prepare my project an error free project every effort has been made to
offer the most authenticate position with accuracy.

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CERTIFICATE
To whom it may concern
This is to certify that Mr. SAGAR K. MAKANI Enrolment No. IU1555550015 of MBA are
Bonafide regular student of Indus Institute of Management Studies, Indus University Ahmedabad
for the session 2015-17.
They have completed the functional project report entitled “Consumer Buying Pattern Towards
AMUL Milk” as a part fulfillment for the award of MBA degree under Indus University,
Ahmedabad.
(Dr. SAMIR GOPALAN)
Faculty Guide

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ACKNOWLEDGEMENT
I would like to express my profound gratitude to all those who have been instrumental in the
preparation of this report which has been prepared in partial fulfilment of Comprehensive Project in
the Semester IV of an MBA programme.
This project could only be completed with the assistance of Dr. Samir Gopalan having being a
valued guide.
Finally i would like to thank my Parents, Family, Friends and God almighty for their unending
inspiration and encouragement.
Place: Ahmedabad Sagar K. Makani
(IU1555550015)
Date:

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DECLARATION
I, Sagar K. Makani, hereby declare that the report for “Comprehensive Project” entitled “Consumer
Buying Pattern Towards AMUL Milk” is the result of my own work and my indebtness to other
work publications, references, if any, have been duly acknowledged.
Place: Ahmedabad Sagar K. Makani
(IU1555550015)
Date:

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Table Content
PREFACE...............................................................................................................................................ii
CERTIFICATE......................................................................................................................................iii
ACKNOWLEDGEMENT.......................................................................................................................iv
DECLARATION.................................................................................................................................... v
1. INTRODUCTION........................................................................................................................... 1
1.1 INTRODUCTION AND HISTORY.......................................................................................... 2
1.2 ABOUT THE TOPIC............................................................................................................... 7
1.3 OBJECTIVE OF THE RESEARCH.........................................................................................11
1.4 PEOPLE POWER: AMUL'S SECRET OF SUCCESS ..............................................................11
1.5 INDUSTRY PROFILE.........................................................................................................15
2. LITERATURE REVIEW................................................................................................................19
3. MARKETING RESEARCH............................................................................................................35
3.1 MAIN STEPS INVOLVED IN MARKETING RESEARCH.....................................................37
4. RESEARCH METHODOLOGY.....................................................................................................40
4.1 RESEARCHPROBLEM.........................................................................................................41
4.2 INFORMATION REQUIREMENT.........................................................................................41
4.3 RESEARCH DESIGN.............................................................................................................41
4.4 SAMPLING DESIGN.............................................................................................................41
4.5 POPULATION.......................................................................................................................42
4.6 SOURCES OF DATA.............................................................................................................42
4.7 LIMITATIONS OF THE RESEARCH.....................................................................................42
4.8 ANALYSIS TECHNIQUES....................................................................................................43
4.9 SAMPLING ...........................................................................................................................43
5. DATA ANALYSIS AND INTERPRETATION ...............................................................................44
5.1 HYPOTHESIS........................................................................................................................55
6. SWOT ANALYSIS........................................................................................................................57

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7. NEWS ARTICLES.........................................................................................................................60
7.1 Amul Secret of Success:.........................................................................................................62
7.2 GCMMF Overview .................................................................................................................64
7.3 The Three Tier Amul Model....................................................................................................66
7.4 Village Dairy Cooperative Society (VDCS) ..............................................................................66
7.5 District Cooperative Milk Producers’ Union (Milk Union).........................................................67
7.6 State Cooperative Milk Federation (Federation) ........................................................................68
7.7 Impact of The Amul Model......................................................................................................69
7.8 Achievement of the Amul Movements ..................................................................................70
7.9 Achievements of the GCMMF...............................................................................................71
7.10 Amul Brand Building ..............................................................................................................72
7.11 Operations & Supply Chain Management .................................................................................82
8. CONCLUSION..............................................................................................................................89
9. ANNEXURE ................................................................................................................................... i
10. BIBLIOGRAPHY........................................................................................................................... v

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1.1 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.
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.

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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 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

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sold all the milk in Anand through a co-operative union, it was commonly resolved to sell the milk
under the brand name AMUL.
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.

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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.RajendraPrasad, 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.
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.

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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
AWARDS:
Amula 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.

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1.2 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 “

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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.
 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?

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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.
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
 Environmental factors
 Culture- values ,beliefs, sub cultural / cross cultural factors
 Social class- social class , society

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 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.
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.

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1.3 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
1.4 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 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 up liftment 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.

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 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.
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.
Plants:
First plant is at ANAND,which engaged in the manufacturing of milk, butter, ghee, milk powder,
flavoured milk and buttermilk.

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Second plant is at MOGAR, which engaged in manufacturing chocolate, nutramul, Amul
Ganthia and Amul lite.

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Third plant is at Kanjari, which produces cattelfeed
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.

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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.
1.5 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

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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.
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.

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Indian DairyIndustry
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.

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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

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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 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

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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 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.

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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 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.

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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.
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 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

24
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.
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.).

25
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 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 invarious 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

26
world to create 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.
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,

27
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 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 AMUL developed a robust organization based on sound values and
commercial interests.

28
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 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

29
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.
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

30
village 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 of the
formationof 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

31
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 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 ofveterinary 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.

32
Cost Leadership:AMUL’s objective of providing a value proposition to a large customer base
lednaturally 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 clearfairly
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.
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.

33
Financial Strategy:AMUL’s finance strategy is driven primarily by its desire to be self-reliant
andthus 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 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.
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

34
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.
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 across issues – a process that has long-term benefits for
anyorganization.

36
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.
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.

37
3.1 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.
(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:- Identifyingthe 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 :-
a. What to sell
b. When to sell
c. Where to sell

38
4.Determine the sources of information:-
i. 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.
ii. 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 Researchmethods 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
D) Panel
a) Survey Method: - In this method, information gathered directly from individual
respondents, either through personal interviews or through mail questionnaires or
telephone interviews.
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

39
essentially the same as those that will be encountered later when conclusions derived
from the experiment are applied to a broader marketing area.
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.
I. Preparation of questionnaire
II. Presetting of questionnaire
III. 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.)
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.

41
4.1 RESEARCH PROBLEM
 Seek the general perception of consumer towards Amul Milk.
 To know the consumer psyche and their behaviour towards Amul Milk .
4.2 INFORMATION REQUIREMENT
 First, I had to know about all the competitors present in the Milksegment (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
mainlydeals 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.
4.3 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.
4.4 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.

42
4.5 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
4.6 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.
4.7 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.

43
4.8 ANALYSIS TECHNIQUES
Quantitative analysis is performed using the data collected at each outlet to estimate the presence
of Amul milk. Tools Utilized
 Percentage Analysis
 Graph Chart
4.9 SAMPLING
1. Sampling Technique: Non probability sampling
a. (A non probability sampling technique is
b. that in which each element in the
c. population does not have an equal
d. chance of getting selected)
2. Sample Unit : People who buy milk available
i. in retail outlets, superstores, etc
3. Sample size : 50
4. Method : Direct interview through questionnaire.
5. scale : Dyspnoeic scale and liken scale

44
5. DATA ANALYSIS AND
INTERPRETATION

45
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
40
40
20
Sales
pouch milk
loose milk
others

46
 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
64
36
0
percentage
yes
no

47
 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
40
30
20
10
0
5
10
15
20
25
30
35
40
45
qulaity taste price avalibility
Column1
percentage
colum1

48
 Do you get milk pouch at…………..
a)Doorstep
b) From retailer
RESPONDED NO.OF responded % OF responded
Door step 30 60
retailer 20 40
60
40
percentage
yes
no

49
 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
60
40
0
Column1
pouch milk in lit
loose milk in lit

50
 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
50
30
20
0
10
20
30
40
50
60
500-1000 1000-1500 1500 and above
% of consumers
% of consumers

51
 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
30
20 20
10 10 10
0
5
10
15
20
25
30
35
amul mother dairy mahananda gokul warana others
Column3

52
 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
30
20
30
20
% of consumer
strongly agree
strongly disagree
agree
neither

53
 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
50
30
20
0
0 0
amul gold
amul taaza
amul slim and trim

54
 CONSUMER’S OPINION TOWARDS QUALITY AND PACKGING PRODUCT
Rating No of respondent % of consumer
poor 15 30
average 25 15
good 7 14
excellent 3 6
0
5
10
15
20
25
30
excellent good average poor
30
15 14
6
Column2
Column1
percentage

55
5.1 HYPOTHESIS
AIM:- To test the opinion of respondents towards quality and packaging of Amul Milk.
Packaging/
Quality
Highly
Satisfied
Satisfied Average Dissatisfied Highly
Dissatisfied
Total
YES 13 43 21 6 3 86
NO 0 2 3 4 5 14
TOTAL 13 45 24 10 8 100
Solution:-
Null hypothesis (Ho):-
There is no significance difference between the opinion of respondent towards quantity and
packaging.
Alternative hypothesis (H1):-
There is significant difference between quantity and packaging.
Level of significance:- 0.05
Observed
Frequency
(O)
Expected
Frequency
(E)
(O - E) (O - E)2 (O - E)2/E
13 11.18 1.82 3.31 0.29
43 38.25 4.75 22.56 0.58
21 20.64 0.36 0.12 5.81
6 8.60 -2.6 6.76 0.78
3 6.88 -3.88 15.05 2.18
0 1.82 -1.82 3.312 1.81
2 6.3 -4.3 18.49 2.93
3 3.36 -0.36 0.129 0.03
4 1.40 2.6 6.76 4.82
5 1.12 3.88 15.05 13.43
32.66
E = row total * column total / grand total

56
Ѱ2 = ∑(O-E)2/ E = 32.66
From 4 degree of freedom at 5% level of significance from table
ꟹ2 = (r - 1) (c - 1), (2 - 1) (5 - 1), 1*4 = 4
Table value is 9.488
Calculated value is 32.66
Conclusion:-
The table value (9.488) is less than calculated value (32.66)
So, we Accept Alternative Hypothesis and Reject Null Hypothesis
Inference:-
Thus we can say that there is significant difference between the opinion of respondents towards
quantity and packaging.

58
 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.
 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.

59
 Threats
 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.

61
Verghese Kurien laid foundation for co-op dairy movement
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.
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,

62
when elsewhere in the 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."
7.1 Amul Secret of Success:
The system succeeded mainly because it provides anassured 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 the irsocio-
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 policymakers farmers board of management
and the professionals each group appreciating its routes and limitations.
Bring at the command of the rural milk producers the best of the technology and harness its
fruit for betterment.
.

63
 Provideasupportsystemtothemilkproducerswithoutdisturbingtheiragro-economicsystems.
 Ploughbacktheprofits,byprudentuseofmen,materialandmachines,intheruralsectorforthe
 Common good and betterment of the member producers
 Eventhough, growing with time and on scale ,it has remained with the small
estproducer 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 feed sand the like-all through the village societies.Basically the
union and cooperation of people brought Ambulant of ame i.e. AMUL(ANAND
MILKUNIONLIMITED), a name which suggest THETASTEOFINDIA.
Amul (Anand milk union ltd) is based on four hands, which are coordinated with each
other. The actual meaning of this symbolic-ordination of fourhands of different people
by whom this union is at the toppositionin 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.
 Fourth hand is of customers, without whom the products would have not carried on.

64
7.2 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 ereturns 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 brandnames of AMUL and SAGAR with anannual turnoverexceedingRs5000crores.
GCMMF is a unique organisation. It's abody 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 Taluka. He ad quarter servicing nearly 10 lakh outlets with a turnover of
Rs.10,000 Crand servings ever Alco-operatives. GCMMF shall also create markets
forits products in neighbouring countries.
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

65
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
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 have made in building the Nation.

66
7.3 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 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.
7.4 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

67
 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.
7.5 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.

68
7.6 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.
 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.
We move 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.

69
Today, we have around 176 cooperative dairy Unions formed by 1,25,000dairy 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.
7.7 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. 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:

Consumer buying pattern towards amul milk

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