project report on marketing of Amul

Amul was formally registered on December 14, 1946. 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). The Amul revolution was started as awareness among the farmers. It grew and matured into a protest movement that was channeled towards economic prosperity. It is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milk producers in Gujarat, India[1]. It is based in Anand town of Gujarat and has been a sterling example of a co-operative organization's success in the long term. 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 [2]. Amul's product range includes milk powders, milk, butter, ghee, cheese, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others. 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 [3]. Amul is the largest food brand in India with an annual turnover of US $868 million (2005-06) [4]. 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 [5]. Other potential markets being considered include Sri Lanka.

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Composition: • • • • • • • • •

Total fat Cholesterol Sodium Carbohydrate Dietary fiber Vitamin A Vitamin C Calcium Iron

32% 2% 2% 7% 9% 2% 2% 8% 4%

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Market segmentation is the process in marketing of grouping a market (i.e. customers) into smaller subgroups. These markets are often termed niche markets or specialty markets. These segments are fairly homogeneous in their attitudes about certain variables. Because of this intra-group similarity, they are likely to respond somewhat similarly to a given marketing strategy. That is, they are likely to have similar feeling and ideas about a marketing mix comprised of a given product or service, sold at a given price, distributed in a certain way, and promoted in a certain way. The purpose of segmentation is to identify and target prime customer groups (eg the 20% that account for 80% of your sales) so that you get the maximum return from a limited marketing budget (the most bang for your buck).

Market Segmentation Of Amul CHOCO CRUNCH • • • • •

Homogeneity within the segment Heterogeneity between segments Segments are measurable and identifiable Segments are accessible and actionable Segment is large enough to be profitable.....

These criteria can be summarized by the word SADAM: • • • • •

S Substantial: the segment has to be large and profitable enough A Accessible: it must be possible to reach it efficiently D Differential: it must respond differently to a different marketing mix A Actionable: you must have a product for this segment M Measurable: size and purchasing power can be measured .

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The Process-Data Model Of Marketing Segmentation Above given is a generic process-data model is given for the whole process of segmenting and positioning as a basis of deciding on the most effective marketing strategy and marketing mix. This model consists of the three main activities: segmenting, targeting and positioning. It shows the chronological dependency of the different activities. On the right side of the model the concepts resulting from the activities are showed. The arrows show that one concept results from one or more previous concepts; the concept can not be made when the previous activities have not taken place. Below the three main activities are shortly described as well as their role as a basis for the next step or their dependency on the previous step.

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After the most attractive segments are selected, a company should not directly start targeting all these segments. The attractiveness of the segments is also depending on other important factors. In the main activity of defining a target market, four sub activities are given which are the bases for deciding on which segments will actually be targeted.

AGE GROUP TARGETED 60 50 40 30

Target

20 10 0 7 - 20 yrs

21 - 40 yrs

40 - 50 yrs

The four sub activities performed by Amul while targeting are:•

Defining the abilities of the product and resources needed to enter a market

•

Analyzing competitors on their resources and skills

•

Considering the company’s abilities compared to the competitors’

•

Deciding on the actual target markets.

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The first three sub activities are described at the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the information made available when comparing the companies abilities to the competitors’. This analysis leads to a list of segments which are most attractive to target and have a good chance of leading to a profitable market share. Obviously, targeting can only be done when segments are predefined; there have to be segments to analyze the competitors which are in this market. When the process of targeting is ended, the markets to target are selected, but the way to use marketing in these markets is not yet defined. To decide on the actual marketing strategy, knowledge of the differential advantages of each segment is needed. When positioning a product, the segments are first analyzed, this process is described next.

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The major marketing management decisions can be classified in one of the following four categories: • PRODUCT • PRICE • PLACE • PROMOTION These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market. The marketing mix is portrayed in the following diagram:

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The Marketing Mix

PRODUCT

POSITION

TARGET MARKET

PROMOTION

PRICE

The firm attempts to generate a positive response in the target market by blending these four marketing mix variables in an optimal manner. Now, lets see the marketing mix for new launch of AMUL’S CHOCO CRUNH i.e., their products, price, place and promotion.

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Competition Based Pricing Setting the price based upon prices of the similar competitor products. Amul’s new launch Choco Crunch Pricing is based on three types:1) Product is lasting distinctiveness from competitor's product. here we can assume a) The product has low price elasticity. b) The product has low cross elasticity. c) The demand of the product will rise. 2) Products have parishable distinctiveness from competitor's product, assuming the product features are medium distinctiveness. 3) Products have little distinctiveness from competitor's product. assuming that: a) The product has high price elasticity. b) The product has some cross elasticity. c) No expectation that demand of the product will rise. Price is the factor that beats out all other choclates in the competition. Such as Cadbury. If you have been you must have seen that Amul and Cadbury frenchise are right next to each other. But if given the choice people would prefer Amul products and not Cadbury as the prices of Amul product is quite cheap as compared to their competitors like Cadbury and this has worked as an advantage for Amul since most of the customers prefer amul product over cadbury’s product, due to this price factor. The prices for an average milk product ranges between Rs. 20 and Rs. 35.

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Comparing Prices Of AMUL and CADBURY: Product Dry fruit Choco

AMUL

CADBURY

(Rs.)

(Rs.)

80

100

Crunch (pack of 20pcs) By comparing the prices of the products of Amul and cadbury, we can see that the prices offered by Cadbury are on the higher side as compared to Amul. Thus we can see that cadbury’s target customers are professionals, working couples and families in the sec- a and sec-b categories that detest the loud ambience of Amul and who are willing to pay higher prices. Whereas Amul’s typical customers are between the age of 07-50 years, which shows that these include children’s, youngsters and also aged people’s or are from the upper middle class or middle class families, who can afford these prices and looking at these target customers the company has designed its outlet to look young and trendy with vibrant colors such as brownie, black current(purple) and Butter scotch predominating the outlets.

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A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional strategy can consist of:

Advertising: Is any non personal paid form of communication using any form of mass media?

Public relations: Involves developing positive relationships with the organisation media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.

Sales promotion: Commonly used to obtain an increase in sales short term. Could involve using money off coupons or special offers.

Promotion Budget COST SHEET **

SCHEDULE ‘A’

PARTICULARS Mascot (Mooh) Television Advertisements Radio Jingles Banners and Hoardings Print Advertisements (Newspapers) Print Advertisements(Magazines) World Cup Promotional Activity Payment to brand ambassador

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Rate 100/day

Total Cost 10,000 90,000 6,045.45 58,000 60,000 45,500 -Nil 3,50,000

Above A Pull Strategy (Left) Push Strategy (Right). Communication by the manufacturer is not only directed towards consumers to create demand. A push strategy is where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product. A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail. The product is pushed onto the retailer, hence the name. A pull strategy is based around the manufacturer promoting their product amongst the target market to create demand. Consumers pull the product through the distribution channel forcing the wholesaler and retailer to stock it, hence the name pull strategy. Organisations tend to use both push and pull strategies to create demand from retailers and consumers.

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ADVERTISING:-

An Amul butter ad on Pakistan's Kargil War fiasco. The image shows the "Amul baby" in between George Fernandes and Vajpayee. Its advertising has also started using tongue-in-cheek sketches starring the Amul baby commenting jovially on the latest news or current events. The pun in her words has been popular. The Amul ads are one of the longest running ads based on a theme, now vying for the Guinness records for being the longest running ad campaign ever. Sylvester daCunha, was the managing director of the advertising agency, ASP, that created the campaign in 1967 whose charm has endured fickle public opinion, gimmickry and all else.

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BANNERS:-

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A strong emphasis on target costing, design-to-cost, value engineering, and design for manufacturability. Minimum product variety. Significant manufacturing and accounting involvement in development. Suppliers are well-integrated into Cost the development process. Factory uses high volume equipment specifically oriented to the product; automated material handling. A disciplined and rigorous product development process. Strong focus on understanding customer needs and providing products Quality / that meet those needs. Use of techniques like FMEA, FTA, Reliability / FRACAS, DOE, Taguchi Methods, poke-yoke, and reliability Heavy emphasis on testing and qualification. Dependability prediction. Processes are oriented to self-checking and adjustment and use of computer- aided inspection and test equipment. Use of modular design approaches. Sufficient resources to undertake development processes underway. Continuous surveillance of the marketplace and understanding of customer Time-to- needs. Well-defined development processes based on tightly integrated design automation tools. Well-planned and managed Market programs with clear definition and acceptance of responsibilities. Process equipment to handle a wide range of work envelopes; FMS; quick set-up and changeover. A technology plan and roadmap based on the business and product strategy and plan. Effective technology management. Process to review new technologies developed outside for internally. Effective process to deploy n ew Innovativeness applicability technology to development programs. State-of-the-art design / Technology and analysis tools to support requirements of new technology. Policies to invest in training and development of personnel to master new technology. Culture open to new ideas and taking risks. Investment in new process technology. A starting point is to define and understand the company's marketplace, customer needs and competition. Based on this assessment, the company's primary competitive dimensions can be selected and a strategy defined to develop and enhance these competitive dimensions. Once this is done, product and process design based on IPD can be oriented to implement this strategy.

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When the list of target markets is made, a company might want to start on deciding on a good marketing of a product. But an important step before developing the marketing mix is deciding on how to create an identity or image of the product in the mind of the customer. Every segment is different from the others, so different customers with different ideas of what they expect from the product.

The Process Of Positioning The Product Of A Company: 1. Identifies the differential advantages in each segment 2. Decides on a different positioning concept for each of these segments. This process is described at the topic positioning, here different concepts of positioning are given. The process-data model shows the concepts resulting from the different activities before and within positioning. The model shows how the predefined concepts are the basis for the positioning statement. The analyses done of the market, competitors and abilities of the company are necessary to create a good positioning statement. When the positioning statement is created, one can start on creating the marketing mix.

B2C and B2B The process described above can be used for both business-to-customer as well as business-to-business marketing. Although most variables used in segmenting the market are based on customer characteristics, business characteristics can be described using the variables which are not depending on the type of buyer. There are however methods for creating a positioning statement for both B2C and B2B segments. One of these methods is MIPS: a method for managing industrial positioning strategies by Muhlbacher, Dreher an Gabriel-Ritter (1994).

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In order to ensure a continuous & efficient distribution, an approximate figure has to be arrived at for getting the initial orders & to ensure adequate supply so that any delays or resultant losses are avoided. For this purpose, the company adopted the consumer response hierarchy model so that, it is ensured that all the company enters the market with a bang avoiding any problems of late or inadequate supplies. This is highly essential to support the huge promotional budget, since if the supplies aren’t at the right time, all other effort can be in vain. As Per The Consumer Response Hierarchy Model; The Calculations Are Like Below:

Repurchase

5% of Trial 10% of Preference Preference 20% of Liking

Trial Preference

40% of Knowledge 60% of Awareness 80% of Targeted Population

Liking Knowledge Awareness

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Studying The Demographic Conditions Of INDIA • It is expected that 80% of this targeted population will get aware about the products with the help of the sales promotion, advertising and other marketing tactics. • Out of the People being aware of the products & the company, 60% will have somewhat exact knowledge of the product. • It is expected that out of the people having the knowledge of the product, with the product features and the requirement of milk in the country, 40% will develop a liking for the products. • 20% of the target audience who have developed a liking, will opt for the company’s product as against the products they are using for daily consumption. • 10% of the people who might prefer the product, will actually try it for the first time. • 5% of the people who have tried it for the first time, might be convinced to purchase the product again • Thus, adding up the people trying the product and the re-purchaser of the products, it comes up to 624960 people.

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Market research is discovering what people want, need, or believe. It can also involve discovering how they act. Once that research is complete it can be used to determine how to market your specific product. Whenever possible, try to reduce risks at the earliest possible stage. For example you could carry out market research early on and not wait until you are almost ready to enter the market. If early market research reveals that your business idea has real potential, you can use this information in planning the build-up of your business. [Ilar 1998] For starting up a business there are a few things should be found out through market research in order to know if your business is feasible. These are things like:

Market Information Market information is making known the prices of the different commodities in the market, the supply and the demand. Information about the markets can be obtained in several different varieties and formats. The most basic form of market information is the best quotation and last sale data, including the number of shares, with respect to a particular security at a given time. [Market research 2006]

Examples Of Market Information Questions Are:

• Who are the customers? • Where are they located and how can they be contacted? • What quantity and quality do they want? • What is the best time to sell? • What is the long-term or historical price data over a number of years? • What is the expected production in the country? • Is there more demand for one product or another? Etc.

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Competition will never end so let's not avoid it but face it confidently, "For a chief executive, unless he knows where he is going no one can take him there". What's the use of Marketing & Advertising if it does not reach the right people and yield desired results? Therefore it is necessary for every individual who has something to sell but no one to buy, to detect the problem areas and try to solve them. But for this, knowing the right problem is extremely essential otherwise hitting the target in dark means nothing. Therefore, it is rightly said that a "well defined problem is half done". Once you know your drawbacks only then you can correct it. Therefore, to know your drawbacks you need to conduct a survey and get information right from the ultimate users of your product. They should be asked to bring out your drawbacks. This will help you to not only know your pitfalls but also what your customers want and their likes and dislikes and while doing so build a good rapport with your customers. While conducting such surveys you can also advertise your products among those customers who are not much aware of it. "There are three ways of doing a thing—- the wrong way, the right way and our way" whichever may be your way the ultimate aim is to achieve the results and implement them to maximize customer satisfaction we all know competition is intense then why not take it positively so that it helps us to improve our product quality, makes customers loyal to us, helps us know our shortcomings and rectify them. The best way to overcome your competitors is to give your customers what they expect or probably more than that. To know the customers expectations towards Amul, I had conducted a market Research of the existing customers, which helped me to know the satisfaction, awareness and liking among customers for the products of Amul and analyse the situation and provide them suggestion to improve the situation. These suggestions if implemented would definitely yield results and

"Ultimately the results matter, how and who does it is immaterial".

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