Literature Review

LITERATURE REVIEW Amul is one of the most successful Indian business firm. It provides various milk products in which its main brand product Amul Butter is also present. Amul begins with just little group of milk producing villagers and now become largest milk producing cooperative society in India. It had started with two village cooperatives with 250 liters milk producing capacity and now it collects daily a 6.5 million (average) of milk from a very large no of Indian villages. It has become a hope for poor villagers who were exploiting by middlemen before the origin of Amul or Gujarat milk marketing federation or Kaira union. By originated Amul got its first chairman Shri Tribhuvandas Patel who through his integrity had favor of villagers and understands the needs of cooperative society. Through their interpersonal faith and cooperation Amul got this success history besides facing various difficulties.

Gujarat Milk Marketing Federation is a cooperative society. It done a very good job in milk marketing, making way for poor villagers earnings. It not only provides effective returns to the farmers but also take cares of customers interests. It serves for customer on the basis of Indian ethics. They provide milk of better nutrients, better quality products regularly and help in meeting the country’s need of daily milk requirements. Some of the articles on Amul are as follows:“India report part 5: AMUL, India‟s number-one dairy brand”

Published: April 11, 2006

reference www.milk production.com

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On 14 December 1946 the predecessor of the Gujarat Milk Marketing Federation, better known as the AMUL dairy cooperative, was founded in Kaira (Gujarat state).

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The daily milk collection was 247 litres.

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Anno 2005 the 2.4 million members/ dairy farmers supplied AMUL daily with 5.9 million litres of milk.

According to Mr Khanna, an AMUL director ‘with special assignments’ – as his business card says – the milk supply to his co-operative is increasing all the time. In the 2003/04 financial year, the milk collection was up to 5.1 million litres per day, a rise of some 15.2%. By contrast, the cooperative’s turnover rose by just 1.4% in the financial year 2004/05, bringing it to INR 29.22 billion or EUR 584 million. This growth is lower than expected and due, believes Khanna, to the reduced milk supply in the latter months of 2004 and the poor increase in the price of basic products in the early months of 2005.

From what Khanna is saying, it is evident that AMUL is a co-operative operation without equal. The 2.4 million members/ dairy farmers in the state of Gujarat are grouped into 11,615 village co-operatives equipped with both testing equipment and a milk cooling tank. Some of the unpasteurised milk is sold to the villagers. The rest is transported by milk tankers twice a day to the 12 district Milk Unions in the state. These Milk Unions process the milk by using the services of 24 processing companies. The output of dairy products reflects the order submitted by the state’s marketing body, the Gujarat Co-operative Milk Marketing Federation. These

products are then sold throughout India under the AMUL and Sagar brand names.

Indian consumers are increasingly showing a preference for packaged dairy products, due to food safety concerns. This explains in part why the revenues of AMUL’s consumer range of packaged dairy products grew by 11.8% in the last financial year. The sales revenue of pasteurised drinking milk in plastic pouches under the AMUL brand rose in 2004/05 by no less than 36%. This rise was attributable chiefly to the successful introduction of AMUL milk more than a year ago in the Indian city of Kolkata (formerly Calcutta), home to millions of people. Thanks to this success, the pasteurised milk pouches are the biggest contributor to AMUL’s total turnover. In the 2004/05 financial year, this range brought in a turnover of INR 6.26 billion or EUR 125 million.

The turnover of UHT milk grew 23% in the last financial year compared to preceding year. The turnover of ice cream rose by 10%, consolidating AMUL’s position as market leader. And despite cut-throat competition, the sales of AMUL brand butter rose by 4.5%. The sales of cheese and cheese spreads rose by 21%. Cheese includes cheese for pizzas. And, says Kurien, other packaged products such as flavoured milk, fresh cream, paneer or cottage cheese also have the potential to become major products bearing the AMUL brand within a couple of years. As the country’s largest co-operative dairy, AMUL has developed a two-pronged strategy to address this issue and develop national presence. Firstly, last year AMUL expanded its distribution network to include some of India’s smaller cities. In so doing, the co-operative has responded quickly to rapidly changing market conditions.

Situated all over India, these smaller cities are now promising markets with great purchasing

power as the incomes of India’s middle class are rapidly rising and the better-off rural families are migrating to these developing cities. In the last financial year AMUL has introduced some 900 food wholesalers in these smaller cities to its product range. ‘This initiative has already started yielding results. AMUL products are increasingly available in smaller cities throughout India. This initiative, which we’ll be continuing for the time being, is generating additional turnover,’ says Kurien. Director Khanna describes the second prong of AMUL’s expansion plan. ‘We expect that the milk production in our procurement area, the state of Gujarat, will increase by 5% or more per year in the coming period. That’s the first source of growth. As not only the dairy market but also the market for farm milk has been liberalised, we are now collecting milk in six other places in India milk.

What is new that we would like to talk to other co-operative dairy companies. Most of them are also organised by state following the Anand model. Our standpoint is clear. They know about milk processing and we know about marketing. They can continue to produce dairy products that we will sell under our strong AMUL and SAGAR brands. In this way, our partners will be able to piggy-back on the success of AMUL’s ever expanding distribution network.’ He foresees a future in which the players in India’s co-operative dairy world increasingly cooperate to offer the Indian consumer a wide range of dairy products. It is completely obvious to him that AMUL will be a driving force in shaping this new future. ‘AMUL is India’s oldest dairy brand.

But it is more than a brand. It is also a question of belief. Belief in the co-operative, in a dairy world owned by the dairy farmers.That is important because they and the rest of the population in the villages must be pulled up to a higher standard of living,’ says AMUL director Khanna, speaking

straight

from

the

heart.

Mithaee is an example of Indian sweets made with sweetened condensed milk. As AMUL delivers this product in cans, it has a shelf life of nine months and can be stored outside the cooling chain.

Article from India Dossier, ZuivelZicht - 14 december 2005 “INDIA‟S TOP BRANDS” “AMUL‟S ADVERTISING AND MARKETING SPEND HAS NEVER EXCEEDED 1% OF ITS REVENUES”

By Rajeshwari Sharma

Sat, Aug 25 2007. 3:30 AM

IST

SUMMARY: „Media‟, brand consultancy Asian Integrated Media Ltd and market research company Synovate done this survey on the top brand in Asia, among this Amul comes one of the most successful Indian business firm. It is because Amul‟s strategy of using “umbrella branding” has paid off. According to R.S. Sodhi, chief general manager, GCMMF. “Our strength comes from consistency, trust and relevance of our products.” Sodhi claimed that Amul‟s advertising and marketing spend has never exceeded 1% of its revenues. Most other food companies

spend

6-7%

of

revenues

on

advertising

and

marketing, he added. “They (GCMMF) are not big spenders compared to Britannia or Nestle. Despite a limited budget, Amul‟s

creatives—in the form of billboards or the Taste of India campaign—have always managed to evoke a larger-than-life brand feel, consistency and spirit of Indian culture in a contemporary way,” said Shashi Sinha, executive director, FCB Ulka, GCMMF‟s advertising agency. „We may end up touching a turnover of Rs20,000 cr by 2015‟ Wed, Oct 3 2007. 12:21 AM IST

by Sunil Raghu

Bharat M. Vyas has been the managing director of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), the owner of brand Amul, for more than 12 years. In an interview with Mint, BM, as Vyas is referred to by many, discusses the business strategy of India‟s biggest cooperative firm, which finds itself under increasing pressure from nimbler private sector rivals.