This document discusses Amul's cooperative business model for milk production and sales. It summarizes that Amul pays farmers based on both the quality and quantity of milk produced, and provides additional profits annually based on sales of value-added dairy products. It then outlines Amul's large distribution network of over 10,000 dealers and 1 million retailers across India. Finally, it provides recommendations for Amul to improve its operations and sales in Madhya Pradesh, such as increasing warehouses and distributors, improving demand forecasting, and promoting itself as a healthy brand.

1. CASE STUDY: THE SASLES AND
DISTRIBUTION OF AMUL

2. MILK PRODUCTION & CONSUMPTION PATTERNS

3. • CO-OPERATIVE MODEL
• First tranche: Based on quality & quantity of milk,
payment within 15 days of procuring milk
• Second tranche: Based on the sale of various value-
added products manufactured during the year, profits
are paid back to farmers on the basis of their
shareholding in the cooperative.
• Eg: Amul, Mother Dairy
• FORWARD INTEGRATED PVT. COMPANY
• The company does not deal directly with the dairy
farmers and procures milk (processed/ unprocessed)
through other routes such as village collection centres,
franchisee chilling centres, bulk private coolers, district
union factories and regional cooperative federation
factories.
• Eg: DudhSagar, Schreiber Dynamic Dairy
BUSINESS MODELS IN THE DAIRY INDUSTRY

4. AMUL DISTRIBUTION SYSTEM STRUCTURE

5. SALES & MANAGEMENT AT AMUL

6. AMUL SUPPLY CHAIN AT DISTRIBUTOR
LEVEL

7. SALES MANAGEMENT PROCESS BY
DISTRIBUTOR

8. EXISTING SALES MANAGEMENT AT AMUL
• AMUL is also part of Global Dairy Trade (GDT) platform, where only the top 6 dairy players of the world sell their
products.
• GCMMF operates through 56 Sales Offices, has a dealer network of 10000 dealers and 10 lakh retailers. It has one
of the largest such networks in India.

9. SALES & MANAGEMENT AT AMUL

10. SALES MANAGEMENT FRAMEWORK

11. COMPARISON: AMUL V/S SANCHI

12. CONT.

13. RECOMMENDATIONS
• There is a huge demand for Amul Products in Madhya Pradesh and it becomes very difficult to
operate from a single point of sale i.e. warehouse only in Indore. Amul could look to increase
the number of Warehouses and Distributors so that it can have greater ease of operation and
at the same time increase its customer base.
• Goods incentives based on sales target are being currently being stopped by Amul which is
de-motivating the Amul retailers. Needs to offer a better Incentive than Amul Yatra which is
currently offered.
• Investment from company’s side is decreasing down the chain. So the company must focus on
various aspects of Promotion, Advertisements, and Providing incentives to retailers.
• The current demand forecasting system needs to be better managed and needs to be
redesigned as retailer and distributors are always in a fear of Stock out.
• It is unaware of the competition it is facing from local dairies. They have similar product lines
with no preservatives in their products. They can become a major competitor in the future.
Need to focus on them also.
• Use of IT systems should be made mandatory at both retailer and distributor level

14. CONT.
• Amul can also go for better deals with the supermarket chains and the unreached hypermarts which
• will help them to capture a larger consumer base.
• • Claims related to refund and return policies of the retailers and distributors needs to be looked at
because if the promises made by the company are not fulfilled it creates a lack of trust for them.
• • The company can focus on their entire system to help them grow in Indore and make an impact on
‘Make in India’ initiative
• • Amul could also build a perception in the mind of consumer and project itself as a more health-
focussed brand as consumers are increasingly becoming health conscious and looking for sources of
nutrition