Amul began the dairy cooperative movement in India and formed an apex cooperative

organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today
is jointly owned by some 2.2 million milk producers in Gujarat, India. Amul was formally
registered on December 14, 1946.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. (The total sale is Rs. 6 billion in 2005).
The Amul Pattern has established itself as a uniquely appropriate model for rural
development. Amul has spurred the White Revolution of India, which has made India one of
the largest milk producers in the world. It is also the world's biggest vegetarian cheese brand.
Success of Kaira District Co-operative Milk Producers' Union Limited and setting up of
District Co-operative Milk Producers' Unions needed a state-level organization for entire
Gujarat.

RANGE OF PRODUCTS:Amul's product range includes milk powders, milk, butter, ghee, cheese,
chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and
others. . Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya In January
2006, Amul plans to launch India's first sports drink Stamina, which will be competing with
Coca Cola's Powerade and PepsiCo's Gatorade.
COMPETITION AND EXPORT:In January 2006, Amul plans to launch India's first sports drink Stamina,
which will be competing with Coca Cola's Powerade and PepsiCo's Gatorade Amul is the
largest food brand in India with an annual turnover of US $868 million (2005-06). Currently
Amul has 2.41 million producer members with milk collection average of 5.08 million
litres/day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA,
Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its

bid to enter Japanese market in 1994 had not succeeded, but now it has fresh plans of
flooding the Japanese markets. Other potential markets being considered include Sri Lanka.

What is Amul all about?

BUSINESS needs ideas, not merely money. Ventures run on just money, but starved of
ideas, would eventually fall prey to competition and perish. And, if ideas are available in
abundance, business can overcome other handicaps, including its relative weaker money
power, compared to that of its rivals. The success story of the Gujrat Co-operative Milk
Marketing Federation (GCMMF) proves this point.
Amul follows a unique business model, which aims at providing 'value for money'
products to its consumers, while protecting the interests of the milk-producing farmers
who are its suppliers as well as its owners. Despite being a farmers' co-operative, Amul
has given multinationals a run for their money.

The Amul Pattern has established itself as a uniquely appropriate model for rural
development. Amul has spurred the White Revolution of India, which has made India
the largest producer of milk and milk products in the world. It is also the world's
biggest vegetarian cheese brand.

Amuls is Indias largest diary producing company with over half the market leading
other national companies such as Mother Diary and multinational food product
companies such as Nestle India and Hindustan Lever Ltd.

Amul demonstrates how careful and consistent product stewardship combined with a
deep and intimate understanding of the market leads to consistent growth and success.
The company can process nearly 10 million litres of milk each day.

The company started as the Gujarat Cooperative Milk Federation in 1946,collecting just
250 litres of milk a day. The company was formed to give farmers their due and protect
them from unscrupulous middlemen. Since then the company has come a long way . but
one thing is still the same . that time also it was by and for the farmers and today also its
the same .

In the mid 1950s Amul looked for ways to utilize the surplus milk by manufacturing
Butter, Milk,Cheese and other milk derived products.

It is integrated into the fabric of Indian society ,from its roots in representing small
farmers and struggler or the poor and impoverished in difficult circumstances.

The brand name Amul, sourced from the Sanskrit word Amoolya, means priceless. It was
suggested by a quality control expert in Anand. Some cite the origin as an acronym to
(Anand Milk Union Limited)

Amul, a brand owned by the 26 lakh milk producers of Gujarat has once again demonstrated
that when farmers are given the instruments of development in their hands, they can work
wonders. The billion dollar Gujarat Co-operative Milk Marketing Federation, the apex body of
13 district milk producers unions has been instrumental in making Amul a brand to reckon
with.

AMULs Journey towards Excellence

AMULs 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 AMULs efforts was as follows:

1
2
3
4

5
6
7

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.
Thus this is a brief overview of Amul The taste of India .

REVOLUTIONARY WORK:In 1996 Amul was one of the first major organizations in India to have a website. This site
has been used both to develop an intranet of Amul distributors as well as a cyber-store for
consumers, one of the first examples of e-commerce activity in India. The CEO of Amul, Mr.
B M Vyas, recently said, "Amul is not a food company, it is an IT company in the food
business". He was recognizing that the most efficient way of building links between milk
producers and consumers so as to provide the best returns for both is through IT innovation.
Amul has been able to withstand the onslaught of private and foreign players in the dairy
industry and has also been able to export products in limited quantities. The success of Amul
resulted in similar organizations being setup by state governments throughout India, most of
which had reasonable success.
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 federated into a milk federation at the state level. Milk collection is done at the village
dairy society, milk procurement and processing at the District Milk Union and milk products
marketing at the state milk federation. The structure was 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.
The main functions of the village development committee(VDC)S are:

Collection of surplus milk from the producers of the village and payment based on
quality and quantity,

Providing support services to the members like veterinary first aid, artificial
insemination services, cattle-feed sales, mineral mixture sales, fodder and fodder seed
sales, conducting training on animal husbandry and dairying,

Selling liquid milk for local consumers of the village,

Supplying milk to the District Milk Union.

The Amul model has helped India to emerge as the largest milk producer in the world. More
than 15 million milk producers pour their milk in 1,44,500 dairy cooperative societies across
the country. Their milk is processed in 184 District Co-operative Unions and marketed by 22
State Marketing Federations, ensuring a better life for millions

Members:

12 district cooperative milk producers' Union

No. of Producer Members:

2.5 million

No. of Village Societies:

11,962

Total Milk handling capacity:

9.91 million litres per day

Milk collection (Total - 2005-06):

2.28 billion litres

Milk collection (Daily Average 2005-06):

6.3 million litres

Milk Drying Capacity:

511 metric Tons per day

Product Portfolio

Category

Market Share

Market Position

Butter, Ghee

85%

Milk Powder

40%

Cheese

50%

Ice-cream

24.75%

Sweets

50%

Chocolate Drink

90%

Chocolate

10%

To improve further Amul can try out the following ideas:

I) Amul can venture out on new products like Toned milk, Condensed milk that can be
used for sweets, Baby food products,
II) There are certain product like Amul basundi, gulab jamoon, choclates etc which
are not as popular as Amul ice cream. Amul must try to understand the cause of this through
thorough market research and work on improving these products
III) Though Amuls hoardings are a huge success, it can penetrate even better in the
rural areas by advertising through the media viz cable channels and newspapers. Sponsoring
shows in TV, sports events can be of great help.

Amuls Competitive Edge:

Developing Demand
At the time Amul was formed, consumers had limited purchasing power, and modest
consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price
strategy to make its products affordable and attractive to consumers by guaranteeing them
value for money.
Introducing higher value products
Beginning with liquid milk, GCMMF enhanced the product mix through the progressive
addition of higher value products while maintaining the desired growth in existing products.
Despite competition in the high value dairy product segments from firms such as Hindustan
Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in
which Amul introduces its products is consistent with the core philosophy of providing milk
at a basic, affordable price.
The distribution network
Amul products are available in over 500,000 retail outlets across India through its network of
over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory
of the entire range of products.
GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the
cheque system adopted by other major FMCG companies. This practice is consistent with
GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it
also minimizes dumping.
Wholesale dealers carry inventory that is just adequate to take care of the transit time from
the branch warehouse to their premises. This just-in-time inventory strategy improves dealers'
return on investment (ROI). All GCMMF branches engage in route scheduling and have
dedicated vehicle operations.
Managing the supply chain
Even though the cooperative was formed to bring together farmers, it was recognized that
professional managers and technocrats would be required to manage the network effectively
and make it commercially viable.
Coordination
Given the large number of organizations and entities in the supply chain and decentralized
responsibility for various activities, effective coordination is critical for efficiency and cost
control. GCMMF and the unions play a major role in this process and jointly achieve the
desired degree of control.
Buy-in from the unions is assured as the plans are approved by GCMMF's board. The board

is drawn from the heads of all the unions, and the boards of the unions comprise of farmers
elected through village societies, thereby creating a situation of interlocking control.
The federation handles the distribution of end products and coordination with retailers and
the dealers. The unions coordinate the supply side activities.
These include monitoring milk collection contractors, the supply of animal feed and other
supplies, provision of veterinary services, and educational activities.
Managing third party service providers
From the beginning, it was recognized that the unions' core activity lay in milk processing
and the production of dairy products. Accordingly, marketing efforts (including brand
development) were assumed by GCMMF. All other activities were entrusted to third parties.
These include logistics of milk collection, distribution of dairy products, sale of products
through dealers and retail stores, provision of animal feed, and veterinary services.
It is worth noting that a number of these third parties are not in the organized sector, and
many are not professionally managed with little regard for quality and service.
This is a particularly critical issue in the logistics and transport of a perishable commodity
where there are already weaknesses in the basic infrastructure.

Segmentation, targeting, positioning in the Marketing strategy of Amul The

segmentation of Amul is the mass population and in general, you will find people of all
different age groups and demography enjoying Amul products. This is because Amul is not
only present in Ice cream, but also in Milk, Butter, Cheese and other such products. As it has
a very deep product portfolio, it does not differentiate in its customers but uses a mass
marketing principle. And till date, this principle has worked very well for the marketing
strategy of Amul. Similarly, the target audience are the regular middle class people. This is
because higher end customers do have a lot of high end products as an alternative in ice
cream. However, for other products like Butter and cheese, both high end and low end
customers are the target. In terms of positioning, Amul has top of the mind positioning
because it is the first brand which comes in mind when talking of Ice cream, milk, cheese,
butter or any other milk based products.
Marketing mix Refer this article for the marketing mix of Amul.
SWOT analysis Refer this article for the SWOT analysis of Amul.
Mission We the motivated and dedicated workforce at amul are committed to produce
wholesome and safe foods of excellent quality to remain market leader
throughdevelopment of quality management system, state of art technology, innovation and
eco-friendly operations to achieve delightment of customers and milk producers.
Vision Amul has a vision to provide more and more satisfaction to the farmers, employees
and distributors.

Tagline The taste of India.

Competitive advantage in the Marketing strategy of Amul There are two major
competitive advantages of Amul over other brands. First and foremost is the supply chain.
Because of the large numbers of dairy suppliers, Amul has a tremendous strength and
reliability in its supply chain. Hence it is able to produce such high volumes. The second
competitive advantage is the wide product portfolio due to which it can run Amul shoppes
and also have its products present in retail. The product portfolio is such that products like
Butter and Ice cream are cash cows for the company.
BCG Matrix in the Marketing strategy of Amul When we plot the BCG matrix, Amul
has certain products which are stars whereas others are cash cows. And in fact, Amul
chocolates are question marks because they have very low market share in a growing market.
Amul ice cream and Amul butter can clearly be said to be a cash cow because they have very
high market share and the market in itself is growing with the increase in population. On the
other hand, Dairy products like Milk, buttermilk, cheese, lassi, amul kool etc have a lot of
direct and indirect competition in their niche. However, when compared with the same type
of product, then Amul has a high market share. Thus, these products are stars for Amul.
Distribution strategy in the Marketing strategy of Amul Like any FMCG company,
Amul concentrates on breaking the bulk. It supplies in huge amounts to its C&F, who is
required to have the right arrangements to store Amul products in bulk. This C&F then
transfers the products to distributors who in turn give it to retailers. Furthermore, Amul has a
direct sale team too which sells to modern retail. Besides this, the company has exclusive
Amul stores which sell all products of Amul brand. Thus, in the marketing strategy of Amul,
distribution is another strength of the brand.
Brand equity in the Marketing strategy of Amul Because of the excellent products, the
top of the mind positioning, the fantastic distribution and supply chain channels and finally
the point of purchase branding and advertising of the Amul girl, Amul finds itself in a very
strong position where its brand equity is concerned. Amul brand is worth $3.2 billion as per
the 2013 brand equity report. Furthermore, most analysts say that Amul would have touched
the $4 billion mark, but the dropping value of the rupee is what caused the difference.
Competitive analysis in the Marketing strategy of Amul Amul has some good
competitors who have entered the market in the last decade and growing strong steadily. Most
of these ice creams entered regionally but then held on to the regional market share. Thus,
even though individually these brands might not be a worthy adversary, combined and with
their total net aggregate, all of them together are giving a very tough competition to Amul.
Some of these competitors are Kwality walls, Vadilal, Havmore, Dinshaws, Arun Ice cream,
Baskin Robbins, London dairy and others. Many of these ice cream products have their own
niche or geographic targets. Arun ice cream is strong in the south whereas havmor and
Vadilal are strong in the west. Besides these organized players, there are many unorganised
local players who also give competition to Amul by having their own outlets and their own
variants of ice cream. However, the competition in Butter and Cheese and other dairy
products is far lesser.
Market analysis in the Marketing strategy of Amul The FMCG market is highly
competitive in nature and is known to have a combination of organized players as well as
unorganized players. Similarly, in FMCG, direct competition is equally important as indirect

competition. For example During winters, ice cream and cold milk products will not sell,
whereas butter and cheese will sell equally well. But on the other hand, during summers the
demand of ice cream shoots up so much so that companies are not able to meet demands.
Thus, when we analyse the market of Amul, in some cases Amul is the clear market leader,
whereas in other products it is a competitor in the market.
Customer analysis in the Marketing strategy of Amul The typical customers of Amul
belong to the Sec B and Sec C segment wherein they are either middle class or lower class.
Amul in general uses mass marketing and therefore it targets these 2 classes majorly. The
high end customers are more likely to prefer a Naturals, a Baskin robbins, or any other such
brand which meets their taste and status.

HISTORY OF THE COMPANY

The story of AMUL inspired 'Operation Flood' and heralded the 'White Revolution' in India.
It began with two village cooperatives and 250 liters of milk per day, nothing but a trickle
compared to the flood it has become today. Today Amul collects processes and distributes
over a million liters of milk and milk products per day, during the peak, on behalf of more
than a thousand village cooperatives owned by half a million farmer members. Amul has
become a symbol of the aspirations of millions of farmers; creating a pattern of liberation and
self-reliance for every farmer to follow.
In the early 40s, the main sources of earning for the farmers of Kaira district were
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. Shri
Morarji Desai held a meeting at Samarkha village near Anand, on 4th January 1946 and He
advised the farmers to form a society for collection of the milk. 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.
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 sold all the milk in Anand through a co-operative union, it was
commonly resolved to sell the milk under the brand name AMUL.