Preface

The first real insight of an organization for management student comes only during his

preparation of project work because student first interacts with real practical work. This is first

introduction to industry and its working. This project work synthesize the theoretical concept learn in

the class room and its practical orientation in organization.

In my project I have studied the “Customer satisfaction and market analysis of Amul milk and

Amul Product.”

FIRST CHAPTER:-

The First chapter deals with the introduction of the topic, It also describes the profile and history of

Impact of Globalization and objective, scope and importance.

SECOND CHAPTER:-

Dealt with Research Methodology. The process of carrying out the whole research is defined in it. It

constrains information about the methods of data collection, sampling, sample design.

THIRD CHAPTER:-

Data analysis & interpretation, Table, Graph and chart also included in this chapter

FOUR CHAPTERS:-

Is finding and recommendation. Contains the findings and recommendation of the study. This based

on the data analyzed and interrelated in previous chapters. This is the most important section of the

report, for repot is evaluated on the validity and correctness of its findings.

depicted recommendation which concludes the whole repot, that is, gives a brief description of the

process employed so far. It also showed annexure which contains a format of the questionnaire used

for the purpose of data collection.

FIVE CHAPTERS:-
One title conclusion contains the list of sources from where the matter and information is collected

this chapter is Bibliography. It contains the list of books, author, volume number, issue year, publisher

etc.

Asad Ayaz
 Acknowledgement

This Is To Acknowledge To Something About Those People Who Have Cooperated Me To Reach

At The Edge Of My Training Work. I Wish To Place A Close Profound Indeptness And Deep

Sense Of Gratitude To Head of department Dr. Neetu singh (Project Guide), Ms. Piyushi Sharma

(Placement Advisor), Prof. Dr. Neetu singh (Faculty) And All Professors For Providing And

Guiding Me To Get Training In Amul Industry.

I Am Grateful To Respected Mr. Awadhesh Singh (TSM) Sanjay Patil (Jr. Sales Executive) Of

Lucknow And Vishal D’souza (Executive Sales) In Fresh Product Department.

Completing the work assigned by a single hand is not always possible. The same was here and this

is an opportunity to thank all of them who directly or indirectly shared their efforts to complete

task give to me.

I would like to express my heartfelt thanks to Dr. Neetu Singh (HOD Department of Business

Administration), Ghazipur.

This research report could not have been taken shape without the able guidance given by

Mr. Rahul Anand Singh Assistant Professor, T.E.R.I. P.G College Ghazipur.
Lastly, I would like to express my thanks to my parents & friends for their encouragement &

support throughout the duration of Research.

31August Asad Ayaz

MBA 3nd semester

Department of Business Administration
Technical Education & Research Institute
P.G. College, Ghazipur
 INDEX
SR.NO PARTICULARS

1 Executive summary

2 Introduction and history

 History

 Introduction to Indian dairy industry

3 Literature review & problem statement:-

 Literature review and problem statement

 Market size and growth

 Major players

 Packaging technology

 Regulatory framework

 Company profile

 Amul in abroad

 GCMMF

 Birth of Amul

Data processing & analysis:-

 Data analysis for retailers

 Data analysis for customers

 Process description
  Product mix of Amul

 Amul plant

 The channel network

 Procurement channel

 Anand Patten

 SMC and market logistic

 Amul parlor's

 Selection, motivation and evaluation of channel members

 Conflict and cooperation among channel members

4 Process description:

 Product information

 Sales and profit

 Distribution channel of Amul

 Transportation method

 Competitors analysis

6 Learing & findings and suggestions

7 Conclusion and bibliography

8 Appendix
 EXECUTIVE SUMMARY

In today’s competitive world while entering in the market it is very necessary to have good
knowledge of the potential of a particular market. The growth of a company is invariably
determined not just by its strategy, but on how it responds to the challenges it encounters. Over
the decades AMUL has successfully countered several challenges that have come its way with
innovative responses and continuous improvement, which have enabled it to remain stable and
even convert some of these challenges into opportunities. It is the culture of endurance that has
accorded AMUL the insight and focus to deal with the current economic environment. Drawing
from its inner strength and beliefs, AMUL responded by launching several initiatives across all its
operations in various geographies that are helping the group achieve growth even in current times.
It is also this very strategic culture that will propel AMUL to continue on its growth trajectory in
years to come.

The report provides a comprehensive insight into the company and also about the company’s
SWOT analysis. This report mainly studies in detail the various product mix strategies of the
company and also focuses on the segmentation of both company based and industry based and
helps in analysing the company’s competitive advantage and the reason behind its success.
HISTORY

In early 1940’s a farmer in Kaira district, as elsewhere in India, derived his income almost entirely
from seasonal crops. The income from milk was paltry and could not be depended upon. The main
buyers were milk traders of Polson Ltd.-a privately owned company that enjoyed monopoly for

supply of milk from Kaira to the Government Milk Scheme Bombay. The system leads to
exploitation of poor and illiterate farmers by the private traders.

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 cooperative union, instated
of supplying milk to private traders. Sardar Patel sent the farmer to Shri Morarji Dasai in order to
gain his Co-operation and help. Shri Dasai held a meeting at ‘Samrkha’ village near Anand, on
January 4, 1946. He advised the farmers to from a society for collection of the milk.These village
societies would collect the milk themselves and also decided prices for that which would be
profitable for them. The district union was also from to collect the milk from such village
cooperative societies and to sell them. It was also resolved that the government should asked to
buy milk from the union.
However, the government did not seem to help farmer by any means. It gave the negative response
by turning down the demand for the milk. To respond to this action of government, farmer of Kaira
district went on a milk strike. For 15 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. Finely he decided to fulfill the farmers demand.

Thus their cooperative unions were forced at village and district level to collect and sell milk on a
cooperative basis, without the intervention of government. Mr. Verghese Kurien had main interest
in establishing union who was supported by Shri Tribhuvandas Patel who convinced farmers in
forming the cooperative unions at thevillage level. ‘The Kaira District Co-operative Milk
Producers’ Union’ was thus established in Anand and was registered formally under section 10 of
Bombay Act VII of 1925 on December 14, 1946. Since then farmers are selling all the milk in
Anand through cooperative union. In 1955 it was commonly decided the sell milk under the brand
name ‘Amul’

At the initial stage only 250 liters of milk was collected everyday. But with the growing
awareness of the benefits of the co-operative-ness the collection of milk increased. Today Amul
collect 50, 00,000 liters of milk everyday. As the milk is perishable commodity it became difficult
to preserve milk for a longer period. Besides when the milk was to be collected from the far places
there was a fear of spoiling of milk. To over come this problem the union thought to develop the
chilling unit at various junctions, which would collect the milk and could chill so as preserve it a
for a longer period. Thus, today Amul has more than 168 chilling centers in various villages. Milk
is collected from almost 1097 societies.

With the financial help from UNICEF, assistance from the government of New Zealand
under the Colombo plan, of Rs. 50 million for factory to manufactory milk powder and butter. Dr.
Rajendara Prasad, the president of India laid the foundation on November 50, 1954. Shri Pandit
Jawaharlal Nehru, the prim minister of India declared it open at Amul dairy on November 20,
1955.
 A plant to manufacture balanced cattle feed was formally commissioned on October 31,
1964 by Shri Lalbahadur Shastri, the Prime Minister of India. At the request of the government of
India, a new dairy with a capacity to manufacture 40 tons of milk powder and 20 tons of butter a
day was completed in 1963. This was meant to meet the requirement of India’s defense forces.
The dairy was declared open by ShriMorarji Desai in April, 1965. in 1974, the Kaira Union setup
a plant to manufacture high-protein weaning food, chocolate and malted food at Mogar, about 8
km south of Anand.

In September, 1981, the second cattle feed plant at ‘Kanjari’ were started. The succesion
of the co-generation project on September 11, 1985, marked a milestone on the energy front when
two gas turbine generators of 1.5 MW each based on natural gas, were commissioned. On October
31, 1992, Dr. V. Kurien chairman, National Dairy Development Board, laid the foundation of
Kaira Union’s third dairy with a processing capacity of 6.5 lakh liters of milk a day. Work on the
third dairy and cheese plant at ‘Khatraj’ with capacity for 20 Metric Ton of cheese per day, began
in February, 1994. Also in 1994, Kaira Union put up bread spread plant at ‘Mogar’ with the
assistance from National Dairy Development Board.
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products
marketing organization. It is a state level apex body of milk cooperatives in Gujarat which aims
to provide remunerative returns to the farmers and also serve the interest of consumers by
providing quality products which are good value for money.
Members: 13 district cooperative milk producers'
Union
No. of Producer Members: 2.6 million
No. of Village Societies: 12,792
Total Milk handling capacity: 10.16 million litres per day
Milk collection 2.38 billion litres
Milk collection 6.5 million litres
Milk Drying Capacity: 594 Mts. per day
Cattle feed manufacturing Capacity: 2640 Mts per day
About Machinery

In AMUL – 3 production of powder, Butter and Milk are being done continuously.
These productions are done by latest machineries equipped with computer system and it
is handled by one technicians.

- The Milk pasteurizer machines belong to Alfa level company of Pune

- Powder plant machineries belong to L & T Larson and Turbo company of India
- Butter production machineries belong to S.G.company of switrzland and other
- Butter manufacturing production machineries belong to Simon Feres com.of
France
LITERATURE REVIEW & PROBLEM STATEMENT:-

ORGANISATION STRUCTURE OF AMUL

Board of Director

CHAIRMAN

MANAGING CHAIRMAN

GENERAL MANAGER

ASSISTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER
 SENIOR EXECUTIVE

SENIOR OFFICER

SENIOR ASSITANT

WORKERS

Grade ( Ato E)

.
INTRODUCTION TO THE INDIAN DAIRY INDUSTRY

The world's biggest dairy producing country is growing fast and looking to become an
export powerhouse despite major quality problems...

A Note to our Readers: the following information on India's dairy sector is reproduced from India
Infoline.com. India is the world's largest milk producing country and is growing fast, with an eye
toward becoming a major dairy exporter. This article is helpful reading for anyone interested better
understanding.

CONSUMER HABITS AND PRACTICES

Milk has been an integral part of Indian food for centuries. The per capita availability of
milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and 203 gm
in 1998-99.This is expected to increase to 212gms for 2008. However a large part of the population
cannot afford milk. At this per capita consumption it is below the world average of 285 gm and
even less than 220 gm recommended by the Nutritional Advisory Committee of the Indian Council
of Medical Research.

There are regional disparities in production and consumption also. The per capita availability in
the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day.
This disparity is due to concentration of milk production in some pockets and high cost of
transportation. Also the output of milk in cereal growing areas is much higher than

elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which have
a high food value for milky animals.

In India about 46 per cent of the total milk produced is consumed in liquid form and 47 per
cent is converted into traditional products like cottage butter, ghee, paneer, khoya, curd, malai,
etc. Only 7 per cent of the milk goes into the production of western products like milk powders,
processed butter and processed cheese. The remaining 54% is utilized for conversion to milk
products. Among the milk products manufactured by the organized sector some of the prominent
ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed milk infants
foods etc. Of these ghee alone accounts for 85%.
 It is estimated that around 20% of the total milk produced in the country is consumed at
producer-household level and remaining is marketed through various cooperatives, private dairies
and vendors. Also of the total produce more than 50% is procured by cooperatives and other
private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is used
for manufacturing processed value added dairy products; for private dairies only 45% is marketed
in fluid form and rest is processed into value added dairy products like ghee, makhan etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due to the
strong perception that loose milk is fresh. Also, the current level of processing and packaging
capacity limits the availability of packaged milk.

The preferred dairy animal in India is buffalo unlike the majority of the world market,
which is dominated by cow milk. As high as 98% of milk is produced in rural India, which caters
to 72% of the total population, whereas the urban sector with 28% population consumes 56% of
total milk produced. Even in urban India, as high as 83% of the consumed milk comes from the
unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded pasteurized
milk, valued at about Rs.8, 000 crores. Quality of milk sold by unorganized sector however is
inconsistent and so is the price across the season in local areas. Also these vendors add water and
caustic soda, which makes the milk unhygienic.
Market Size and Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT valued at
Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus
states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra
Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these
milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil
Nadu and Gujarat together account for 58% of national production.

Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under
Operation Flood, production growth increased significantly averaging over 5% pa.

About 75% of milk is consumed at the household level which is not a part of commercial
dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by most
consumers. In reality however, it poses a higher risk of adulteration and contamination.

The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk & cheese stood at 3.07 lakh MT in 2008. Production of milk powder
including infant milk-food has risen to 2.25 lakh MT in 2008, whereas that of malted food is at
65000 MT. Cheese and condensed milk production stands at 5000 and 11000 MT respectively in
the same year.

Major Players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative Milk
Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives have their
local brands (For e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in Punjab, Vijaya
in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J K Dairy, Heritage
Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a leading player in the sector
has turned bankrupt and is facing liquidation.
Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-operatives
initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over the
years, several developments in packaging media have taken place. In the early 80's, plastic pouches
replaced the bottles. Plastic pouches made transportation and storage very convenient, besides
reducing costs. Milk packed in plastic pouches/bottles have a shelf life of just 1-2 days, that too
only if refrigerated. In 1996, Tetra Packs were introduced in India. Tetra Packs are aseptic laminate
packs made of aluminum, paper, board and plastic. Milk stored in tetra packs

and treated under Ultra High Temperature (UHT) technique can be stored for four months without
refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab

and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7 compared
to plastic pouches. In 2008-00 Nestle launched its UHT milk. Amul too relaunched its Amul Taaza
brand of UHT milk. The UHT milk market is expected to grow at a rate of more than 10-12% in
coming years.
Regulatory Framework

The dairy industry was de-licensed in 1991 with a view to encourage private investment
and flow of capital and new technology in the segment. Although de-licensing attracted a large
number of players, concerns on issues like excess capacity, sale of contaminated/ substandard
quality of milk etc induced the Government to promulgate the MMPO (Milk and Milk Products
Order) in 2008. Milk and Milk Products Order (MMPO) regulates milk and milk products
production in the country. The order requires no permission for units handling less than 10,000
litres of liquid milk per day or milk solids up to 500 TPA. MMPO prescribes State registration to
plants producing between 10,000 to 75,000 litres of milk per day or manufacturing milk products
containing between 500 to 3,750 tones of milk solids per year. Plants producing over 75,000 litres
per day or more than 3,750 tones per year of milk solids have to be registered with the Central
Government. The stringent regulations, government controls and licensing requirements for new
capacities have restricted large Indian and MNC players from making significant investments in
this product category. Most of the private sector players have restricted themselves to manufacture
of value added milk products like baby food, dairy whiteners, condensed milk etc.

All the milk products except malted foods are covered in the category of industries for
which foreign equity participation up to 51% is automatically allowed. Ice cream, which was

earlier reserved for manufacturing in the small-scale sector, has now been de-reserved. As such,
no license is required for setting up of large-scale production facilities for manufacture of ice
cream.

Subsequent to de-canalization, exports of some milk based products are freely allowed provided
these units comply with the compulsory inspection requirements of concerned agencies like:
National Dairy Development Board, Export Inspection Council etc. Bureau of Indian standards
has prescribed the necessary standards for almost all milk-based products, which are to be adhered
to by the industry.
Proposal to Amend the MMPO

A proposal to raise the exemption limit for compulsory registration of dairy plants, from
the present 10,000 litres a day to 20,000 litres, is being considered by the Animal Husbandry
Department. The 75,000-litre limit is likely to be raised either to 100,000 litres or 125,000 litres
in the amended order. The new order would also do away with the provision for re-registration.

Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in India. All
India penetration of butter/ margarine is only 4%. This is also largely represented by urban areas,
where penetration is higher at 9%. In rural areas, butter/ margarine have penetrated in 2.1% of
households only. The use of these products in the large metros is higher, with penetration at 15%.

Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per capita
consumption even among the cheese-consuming households is a poor 2.4kg pa as compared to
over 20kg in USA. The lower penetration is due to peculiar food habits, relatively expensive
products and also non-availability in many parts of the country. Butter, margarine and cheese
products are mainly manufactured by organized sector.

Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to

31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is 24.1%.
In relative terms, penetration of ghee is significantly higher in North and West, which are milk
surplus regions. North accounts for 57% of ghee consumption and West for 23%, South & East
together account for the balance 20%. A large part of ghee is made at home and by small/ cottage
industry from milk. The relative share of branded products in this category is very low at around
1-2%.

Milk powder and condensed milk have not been able to garner any significant consumer
acceptance in India as indicated by a very low 4.7% penetration. The penetration is higher at

8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively higher in
medium sized towns at 8.5% compared to 7.7% in large metros.
Export Potential

India has the potential to become one of the leading players in milk and milk product
exports. Location advantage: India is located amidst major milk deficit countries in Asia and
Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong, Singapore,
Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all located close to
India.

The major export products: - The products of Amul is being exported in the 40 countries of
the world . Many of the products are now available in the U.S.A , Gulf countries and Singapore.
Amul products are being exported to the Singapore since last three decades . undoubtedly , Amul
is the preferred taste of Indians in the Gulf countries.

Low Cost of Production:

Milk production is scale insensitive and labour intensive. Due to low labour cost, cost of
production of milk is significantly lower in India.

Concerns in export competitiveness are Quality: Significant investment has to be made in

milk procurement, equipments, chilling and refrigeration facilities. Also, training has to be
imparted to improve the quality to bring it up to international standards.

Productivity: To have an exportable surplus in the long-term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee, paneer,
shrikhand, rasagulas and other ethnic sweets to the large number of Indians scattered all over the
world.
Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as

Makkhan - unsalted butter. Ghee - butter oil prepared by heat clarification, for longer shelf life.
Kheer - a sweet mix of boiled milk, sugar and rice. Basundi - milk and sugar boiled down till it
thickens. Rabri - sweetened cream. Dahi - a type of curd. Lassi - curd mixed with water and sugar/
salt. Channa/Paneer - milk mixed with lactic acid to coagulate. Khoa - evaporated milk, used as a
base to produce sweet meats. The market for indigenous based milk food products is difficult to
estimate as most of these products are manufactured at home or in small cottage industries catering
to local areas.

Consumers while purchasing dairy products look for freshness, quality, taste and texture, variety
and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are perishable products
with a shelf life of less than a day. These products are therefore manufactured and sold by local
milk and sweet shops. There are several such small shops within the vicinity of residential areas.
Consumer loyalty is built by consistent quality, taste and freshness. There are several sweetmeat
shops, which have built a strong brand franchise, and have several branches located in various
parts of a city.

Branding Of Traditional Milk Products

Among the traditional milk products, ghee is the only product, which is currently marketed, in
branded form. main ghee brands are Sagar, Milkman (Britannia), Amul (GCMMF), Aarey (Mafco
Ltd), Vijaya (AP Dairy Development Cooperative Federation), Verka ( Punjab Dairy
Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt).

With increasing urbanization and changing consumer preferences, there is possibility of

large scale manufacture of indigenous milk products also. The equipments in milk manufacturing
have versatility and can be adapted for several products. For instance, equipments used to
manufacture yogurt also can be adapted for large scale production of Indian curd products (dahi
and lassi). Significant research work has been done on dairy equipments under the aegis of NDDB.
 Mafco Limited sells Lassi under the Aarey brand and flavored milk under the Energee
franchise (in the Western region, mainly in Mumbai). Britannia has launched flavored milk in
various flavors in tetra packs.

GCMMF has also made a beginning in branding of other traditional milk products with the
launch of packaged Paneer under the Amul brand. It has also created a new umbrella brand "Amul
Mithaee", for a range of ethnic Indian sweets that are proposed to be launched the first new product
Amul Mithaee Gulabjamun has already been launched in major Indian markets.

Western Milk Products

Western milk products such as butter, cheese, yogurt have gained popularity in the Indian market
only during the last few years. However consumption has been expanding with increasing
urbanization.

Butter

Most Indians prefer to use home made white butter (makkhan) for reasons of taste and
affordability. Most of the branded butter is sold in the towns and cities. The major brands are
Amul, Vijaya, Sagar, Nandini and Aarey. Amul is the leading national brand while the other
players have greater shares in their local markets. The latest entrant in the butter market has been
Britannia. Britannia has the advantages of a wide distribution reach and a strong brand recall.

Priced at par with the Amul brand, it is expected to give stiff competition to the existing players.
In 2008-00 the butter production is estimated at 4 lakh MT of this only 45K MT is in the white
form used for table purposes rest all is in the yellow form.
 COMPANY PROFILE

AMUL means "priceless" in Sanskrit. A quality control expert in Anand suggested the brand
name “Amul,” from the Sanskrit “Amoolya,” Variants, all meaning "priceless", are found in
several Indian languages. Amul products have been in use in millions of homes since 1946. Amul
Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul Chocolates, Amul
Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food
brand in India. (Turnover: Rs. 25 billion in 2002). Today Amul is a symbol of many things. Of
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.

AMUL IN ABROAD

. 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 did not succeed, but now it has fresh plans entering the Japanese markets
[6]. Other potential markets being considered include Sri Lanka.
 GCMMF

The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food
products marketing organization 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 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. 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.
 GCMMF: An overview

Members: 13 district cooperative milk producers'

Union

No. of Producer Members: 2.9 million

No. of Village Societies: 15,322

Total Milk handling capacity: 13.07 million litres per day

Milk collection (Total - 2009-10): 3.32 billion litres

Milk collection (Daily Average 9.10 million litres

2009-10):

Milk Drying Capacity: 647 Mts. per day

Cattlefeed manufacturing 3740 Mts per day

Capacity:
 BIRTH OF AMUL

The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the
country. The Kaira District Cooperative Milk Producers’ Union Limited was registered on
December 14, 1946 as a response to exploitation of marginal milk producers by traders or agents
of existing dairies in the small town named Anand (in Kaira District of Gujarat). Milk Producers
had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand . Angered
by the unfair and manipulative trade practices, the farmers of Kaira District approached Sardar
Vallabhbhai Patel (who later became the first Deputy Prime Minister and Home Minister of free
India) under the leadership of the local farmer leader Tribhuvandas Patel. Sardar Patel advised the
farmers to form a Cooperative and supply milk directly to the Bombay Milk Scheme instead of
selling it to Polson (who did the same but gave low prices to the producers). He sent Morarji Desai
(who later became Prime Minister of India) to organize the farmers. In 1946, the farmers of the
area went on a milk strike refusing to be further oppressed. Thus the Kaira District Cooperative
was established to collect and process milk in the District of Kaira in 1946. Milk collection was
also decentralized, as most producers . were marginal farmers who were in a position to 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 Cooperative was further developed & managed by Dr. V
Kurien along with Shri H M Dalaya . in 1973, the Gujarat Co-operative Milk Marketing Federation
was established. The Kaira District Co-operative Milk Producers’ Union Ltd. which had
established the brand name AMUL in 1955 decided to hand over the brand name to GCMMF
(AMUL). With the creation of GCMMF (AMUL), we[who?] managed to eliminate competition
between Gujarat’s cooperatives while competing with the private sector as a combined stronger
force. GCMMF (AMUL) has ensured remunerative returns to the farmers while providing
consumers with products under the brand name AMUL.
Customer satisfaction

Customer satisfaction (often abbreviated as CSAT, more correctly CSat) is a term frequently used

in marketing. It is a measure of how products and services supplied by a company meet or

surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of

total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds

specified satisfaction goals."[1]

The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of

classes of measures that appear in Marketing Metrics as part of its ongoing Common Language in Marketing

Project.[2] In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer

satisfaction metric very useful in managing and monitoring their businesses.[1]

It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a

competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key

differentiator and increasingly has become a key element of business strategy.[3]

Purpose

A business ideally is continually seeking feedback to improve customer satisfaction.

"Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty." [1] "Customer

satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use

is twofold:" [1]
 1. "Within organizations, the collection, analysis and dissemination of these data send a message about

the importance of tending to customers and ensuring that they have a positive experience with the

company's goods and services."[1]

2. "Although sales or market share can indicate how well a firm is performing currently, satisfaction is

perhaps the best indicator of how likely it is that the firm’s customers will make further purchases in

the future. Much research has focused on the relationship between customer satisfaction and

retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the

extremes."

On a five-point scale, "individuals who rate their satisfaction level as '5' are likely to become return customers

and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to

recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would

recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to

friends, relatives and colleagues. This can be a powerful marketing advantage.) "Individuals who rate their

satisfaction level as '1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative

comments about it to prospective customers. Willingness to recommend is a key metric relating to customer

satisfaction."
Theoretical Ground

In literature antecedents of satisfaction are studied from different aspects. The considerations extend from

psychological to physical and from normative to positive aspects. However, in most of the cases the

consideration is focused on two basic constructs as customers expectations prior to purchase or use of a product

and his relative perception of the performance of that product after using it.

Expectations of a customer on a product tell us his anticipated performance for that product. As it is suggested

in the literature, consumers may have various "types" of expectations when forming opinions about a product's

anticipated performance. For example, four types of expectations are identified by Miller (1977): ideal, expected,

minimum tolerable, and desirable. While, Day (1977) indicated among expectations, the ones that are about the

costs, the product nature, the efforts in obtaining benefits and lastly expectations of social values. Perceived

product performance is considered as an important construct due to its ability to allow making comparisons with

the expectations.

It is considered that customers judge products on a limited set of norms and attributes. Olshavsky and Miller

(1972) and Olson and Dover (1976) designed their researches as to manipulate actual product performance, and

their aim was to find out how perceived performance ratings were influenced by expectations. These studies

took out the discussions about explaining the differences between expectations and perceived performance." [4]

In some research studies, scholars have been able to establish that customer satisfaction has a strong emotional,

i.e., affective, component.[5] Still others show that the cognitive and affective components of customer

satisfaction reciprocally influence each other over time to determine overall satisfaction.[6]

Especially for durable goods that are consumed over time, there is value to taking a dynamic perspective on

customer satisfaction. Within a dynamic perspective, customer satisfaction can evolve over time as customers

repeatedly use a product or interact with a service. The satisfaction experienced with each interaction

(transactional satisfaction) can influence the overall, cumulative satisfaction. Scholars showed that it is not just

overall customer satisfaction, but also customer loyalty that evolves over time.[7]
The Disconfirmation Model[edit]

"The Disconfirmation Model is based on the comparison of customers’ [expectations] and their [perceived

performance] ratings. Specifically, an individual’s expectations are confirmed when a product performs as

expected. It is negatively confirmed when a product performs more poorly than expected. The disconfirmation

is positive when a product performs over the expectations(Churchill & Suprenant 1982). There are four

constructs to describe the traditional disconfirmation paradigm mentioned as expectations, performance,

disconfirmation and satisfaction." [4] "Satisfaction is considered as an outcome of purchase and use, resulting

from the buyers’ comparison of expected rewards and incurred costs of the purchase in relation to the anticipated

consequences. In operation, satisfaction is somehow similar to attitude as it can be evaluated as the sum of

satisfactions with some features of a product." [4] "In the literature, cognitive and affective models of satisfaction

are also developed and considered as alternatives(Pfaff, 1977). Churchill and Suprenant in 1982, evaluated

various studies in the literature and formed an overview of Disconfirmation process in the following figure:" [4]

Construction[edit]

Organizations need to retain existing customers while targeting non-customers.[8] Measuring customer

satisfaction provides an indication of how successful the organization is at providing products and/or services

to the marketplace.

"Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level.

It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate

their experience with its front desk and check-in service, with the room, with the amenities in the room, with the

restaurants, and so on. Additionally, in a holistic sense, the hotel might ask about overall satisfaction 'with your

stay.'"[1]

As research on consumption experiences grows, evidence suggests that consumers purchase goods and services

for a combination of two types of benefits: hedonic and utilitarian[9]. Hedonic benefits are associated with the

sensory and experiential attributes of the product. Utilitarian benefits of a product are associated with the more

instrumental and functional attributes of the product (Batra and Athola 1990).[10]

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of

satisfaction will vary from person to person and product/service to product/service. The state of satisfaction

depends on a number of both psychological and physical variables which correlate with satisfaction behaviors
such as return and recommend rate. The level of satisfaction can also vary depending on other options the

customer may have and other products against which the customer can compare the organization's products.

Work done by Parasuraman, Zeithaml and Berry (Leonard L)[11] between 1985 and 1988 provides the basis for

the measurement of customer satisfaction with a service by using the gap between the customer's expectation of

performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap"

which is objective and quantitative in nature. Work done by Cronin and Taylor propose the

"confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry

as two different measures (perception and expectation of performance) into a single measurement of

performance according to expectation.

The usual measures of customer satisfaction involve a survey[12] using a Likert scale. The customer is asked to

evaluate each statement in terms of their perceptions and expectations of performance of the organization being

measured.[1][13]

Good quality measures need to have high satisfaction loadings, good reliability, and low error variances. In an

empirical study comparing commonly used satisfaction measures it was found that two multi-item semantic

differential scales performed best across both hedonic and utilitarian service consumption contexts. A study by

Wirtz & Lee (2003),[14] found that a six-item 7-point semantic differential scale (for example, Oliver and Swan

1983), which is a six-item 7-point bipolar scale, consistently performed best across both hedonic and utilitarian

services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error

variance across both studies. In the study,[14] the six items asked respondents’ evaluation of their most recent

experience with ATM services and ice cream restaurant, along seven points within these six items: “pleased

me to displeased me”, “contented with to disgusted with”, “very satisfied with to very dissatisfied with”, “did a

good job for me to did a poor job for me”, “wise choice to poor choice” and “happy with to unhappy with”.

A semantic differential (4 items) scale (e.g., Eroglu and Machleit 1990),[15] which is a four-item 7-point bipolar

scale, was the second best performing measure, which was again consistent across both contexts. In the study,

respondents were asked to evaluate their experience with both products, along seven points within these four

items: “satisfied to dissatisfied”, “favorable to unfavorable”, “pleasant to unpleasant” and “I like it very

much to I didn’t like it at all”.[14] The third best scale was single-item percentage measure, a one-item 7-point

bipolar scale (e.g., Westbrook 1980).[16] Again, the respondents were asked to evaluate their experience on both

ATM services and ice cream restaurants, along seven points within “delighted to terrible”.[14]
Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale

anchors.[14] Affective measures capture a consumer’s attitude (liking/disliking) towards a product, which can

result from any product information or experience. On the other hand, cognitive element is defined as an

appraisal or conclusion on how the product’s performance compared against expectations (or exceeded or fell

short of expectations), was useful (or not useful), fit the situation (or did not fit), exceeded the requirements of

the situation (or did not exceed).

Recent research shows that in most commercial applications, such as firms conducting customer surveys, a

single-item overall satisfaction scale performs just as well as a multi-item scale.[17] Especially in larger scale

studies where a researcher needs to gather data from a large number of customers, a single-item scale may be

preferred because it can reduce total survey error.[18]

Methodologies[edit]

American Customer Satisfaction Index (ACSI) is a scientific standard of customer satisfaction. Academic

research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth,

and an even stronger predictor of Personal Consumption Expenditure (PCE) growth.[19] On

the microeconomic level, academic studies have shown that ACSI data is related to a firm's financial

performance in terms of return on investment (ROI), sales, long-term firm value (Tobin's q), cash flow, cash

flow volatility, human capital performance, portfolio returns, debt financing, risk, and consumer

spending.[20][21]Increasing ACSI scores have been shown to predict loyalty, word-of-mouth recommendations,

and purchase behavior. The ACSI measures customer satisfaction annually for more than 200 companies in 43

industries and 10 economic sectors. In addition to quarterly reports, the ACSI methodology can be applied to

private sector companies and government agencies in order to improve loyalty and purchase intent.[22]

The Kano model is a theory of product development and customer satisfaction developed in the 1980s by

Professor Noriaki Kano that classifies customer preferences into five categories: Attractive, One-Dimensional,

Must-Be, Indifferent, Reverse. The Kano model offers some insight into the product attributes which are

perceived to be important to customers.

SERVQUAL or RATER is a service-quality framework that has been incorporated into customer-satisfaction

surveys (e.g., the revised Norwegian Customer Satisfaction Barometer[23]) to indicate the gap between customer

expectations and experience.

J.D. Power and Associates provides another measure of customer satisfaction, known for its top-box approach

and automotive industry rankings. J.D. Power and Associates' marketing research consists primarily of consumer

surveys and is publicly known for the value of its product awards.

Other research and consulting firms have customer satisfaction solutions as well. These include A.T. Kearney's

Customer Satisfaction Audit process,[24] which incorporates the Stages of Excellence framework and which helps

define a company’s status against eight critically identified dimensions.

For B2B customer satisfaction surveys, where there is a small customer base, a high response rate to the survey

is desirable.[25] The American Customer Satisfaction Index (2012) found that response rates for paper-based

surveys were around 10% and the response rates for e-surveys (web, wap and e-mail) were averaging between

5% and 15% - which can only provide a straw poll of the customers' opinions.

In the European Union member states, many methods for measuring impact and satisfaction of e-

government services are in use, which the eGovMoNetproject sought to compare and harmonize.[26]

These customer satisfaction methodologies have not been independently audited by the Marketing

Accountability Standards Board (MASB) according to MMAP (Marketing Metric Audit Protocol).

Recently there has been a growing interest in predicting customer satisfaction using big data and machine

learning methods (with behavioral and demographic features as predictors) to take targeted preventive actions

aimed at avoiding churn, complaints and dissatisfaction[27][28].

Market analysis

A market analysis studies the attractiveness and the dynamics of a special market within a special industry. It

is part of the industry analysis and thus in turn of the global environmental analysis. Through all of these

analyses, the strengths, weaknesses, opportunities and threats (SWOT) of a company can be identified. Finally,

with the help of a SWOT analysis, adequate business strategies of a company will be defined.[1] The market

analysis is also known as a documented investigation of a market that is used to inform a firm's planning

activities, particularly around decisions of inventory, purchase, work forceexpansion/contraction, facility

expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.

Market segmentation

Market segmentation is the basis for a differentiated market analysis. Differentiation is important. One main

reason is the saturation of consumption, which exists due to the increasing competition in offered products.

Consumers ask for more individual products and services and are better informed about the range of products

than before. As a consequence, market segmentation is necessary.[2] Segmentation includes a lot of market

research, since a lot of market knowledge is required to segment the market. Market research about market

structures and processes must be done to define the “relevant market”. The relevant market is an integral part of

the whole market, on which the company focuses its activities. To identify and classify the relevant market, a

market classification or segmentation has to be done.[3]

Market segmentation is an important way to find competitive advantage with its differentiation in market

analysis. Market segmentation concentrates on market energy and power to gain competitive advantage. In other

words, market segmentation is the concept tool to get the force (Thomas, 2007). In market analysis, market

knowledge is required to analyze market structure and process. Since segmentation requires a lot of market

research, various information can be extracted from it. Market segmentation can identify customer needs and

wants and develop products to their satisfaction. Market segmentation can identify different products for
different groups, better match customer wants and product benefits, maximize the use of available resources and

focus marketing expenditures and competitive advantages (Karlsson,2012).

There is no specific way to segment market. However, businesses can follow generalized rules like geographic,

demographic, psychographic, and behavioral. A good market segmentation should be sustainable, accessible,

actionable, measurable, and differentiable (Karlsson,2012).

Dimensions of market analysis[edit]

David A. Aaker outlined the following dimensions of a market analysis:[4]

 Market size (current and future)

 Market trends

 Market growth rate

 Market profitability

 Industry cost structure

 Distribution channels

 Key success factors

 Key success details

Market analysis strives to determine the attractiveness of a market, currently and in the future. Organizations

evaluate future attractiveness of a market by understanding evolving opportunities, and threats as they relate to

that organization's own strengths and weaknesses.

Organizations use these findings to guide the investment decisions they make to advance their success. The

findings of a market analysis may motivate an organization to change various aspects of its investment strategy.

Affected areas may include inventory levels, a work force expansion/contraction, facility expansion, purchases

of capital equipment, and promotional activities.

Elements[edit]

Market size[edit]

The market size is defined through the market volume and the market potential. The market volume exhibits the

totality of all realized sales volume of a special market. The volume is therefore dependent on the quantity of

consumers and their ordinary demand. Furthermore, the market volume is either measured in quantities or
qualities. The quantities can be given in technical terms, like GW for power capacities, or in numbers of items.

Qualitative measuring mostly uses the sales turnover as an indicator. That means that the market price and the

quantity are taken into account. Besides the market volume, the market potential is of equal importance. It

defines the upper limit of the total demand and takes potential clients into consideration. Although the market

potential is rather fictitious, it offers good values of orientation. The relation of market volume to market

potential provides information about the chances of market growth.[5][6]The following are examples of

information sources for determining market size:

 Government data

 Trade association data

 Financial data from major players

 Customer surveys

Market trends[edit]

Market trends are the upward or downward movement of a market, during a period of time. The market size is

more difficult to estimate if one is starting with something completely new. In this case, you will have to derive

the figures from the number of potential customers, or customer segments.

Besides information about the target market, one also needs information about one's competitors, customers,

products, etc. Lastly, you need to measure marketing effectiveness. A few techniques are:

 Customer analysis

 Choice modelling

 Competitor analysis

 Risk analysis

 Product research

 Advertising the research

 Marketing mix modeling

 Simulated Test Marketing[5]

Changes in the market are important because they often are the source of new opportunities and threats.

Moreover, they have the potential to dramatically affect the market size.
Examples include changes in economic, social, regulatory, legal, and political conditions and in available

technology, price sensitivity, demand for variety, and level of emphasis on service and support.

Market growth rate[edit]

A simple means of forecasting the market growth rate is to extrapolate historical data into the future. While this

method may provide a first-order estimate, it does not predict important turning points. A better method is to

study market trends and sales growth in complementary products. Such drivers serve as leading indicators that

are more accurate than simply extrapolating historical data.

Important inflection points in the market growth rate sometimes can be predicted by constructing a product

diffusion curve. The shape of the curve can be estimated by studying the characteristics of the adoption rate of

a similar product in the past.

Ultimately, many markets mature and decline. Some leading indicators of a market's decline include market

saturation, the emergence of substitute products, and/or the absence of growth drivers.

Market opportunity[edit]

See also: business opportunity

A market opportunity product or a service, based on either one technology or several, fulfills the need(s) of a

(preferably increasing) market better than the competition and better than substitution-technologies within the

given environmental frame (e.g. society, politics, legislation, etc.).

Market profitability[edit]

While different organizations in a market will have different levels of profitability, they are all similar to

different market conditions. Michael Porter devised a useful framework for evaluating the attractiveness of an

industry or market. This framework, known as Porter five forces analysis, identifies five factors that influence

the market profitability:

 Buyer power

 Supplier power

 Barriers to entry

 Threat of substitute products

 Rivalry among firms in the industry[citation needed]

Industry cost structure[edit]

The cost structure[7] is important for identifying key factors for success. To this end, Porter's value chain model

is useful for determining where value is added and for isolating the costs.

The cost structure also is helpful for formulating strategies to develop a competitive advantage. For example, in

some environments the experience curve effect can be used to develop a cost advantage over competitors.

Distribution channels[edit]

Examining the following aspects of the distribution system may help with a market analysis:

 Existing distribution channels - can be described by how direct they are to the customer.

 Trends and emerging channels - new channels can offer the opportunity to develop a competitive

advantage.

 Channel power structure - for example, in the case of a product having little brand equity, retailers have

negotiating power over manufacturers and can capture more margin.

Success factors[edit]

The key success factors are those elements that are necessary in order for the firm to achieve its marketing

objectives. A few examples of such factors include:

 Access to essential unique resources

 Ability to achieve economies of scale

 Access to distribution channels

 Technological progress

It is important to consider that key success factors may change over time, especially as the product progresses

through its life cycle.

Environmental analysis

The environmental analysis can be divided into two parts which are external and internal factors. External

factors. Political issues, social potential force, and local economy called external environmental factors. Internal

environmental factors belongs to company's internal position such as employees, department structure, budget

and so forth (Christina, n.d.). How environmental effect markets. According to the Parry, the government limit
pollution emission, they mention environmental taxes to prevent company which produce pollution substance.

In other words, the government drives the organization. On the contrary, the cost of products increase due to the

environmental taxes. It means that company may take measure of reducing production which may grow

unemployment rate by emission tax. Therefore, the environmental taxes leads a income equality. It is not an

excuse ignore our serious environmental problem. Even though the higher income group also can benefit from

windfall gains(Parry, 2002).

Competitive analysis

According to the Christina, competitive analysis is that company must know their competitors which have the

same common services and products. The business can use like product cost, operational efficiency, brand

recognition and market Dimensions of market analysis

Except for David A. Aaker's 7 main dimension of a market analysis including market size, market growth rate,

market profitability, industry cost structure, distribution channel, market trends, and key success factor, there is

another analysis of dimension market analysis. Based on Christina Callaway, dimension of market analysis can

be divided into four parts which is environmental analysis, competitive analysis, target audience analysis, and

SWOT analysis. The market analysis is to help company to illustrate current trend in the market and may affect

the profitability ( Christina, n.d.). At the same time, market analysis is also to determine the attractiveness in the

market. A good marketing analysis can improve organization investment decision accurately, they can based on

the attractiveness to change investment tactical.

The market analysis is to help company to illustrate current trend in the market and may affect the profitability

for the business(Thomas,2007). It can be seen as a part of industry analysis with using global environmental

analysis. Company can identify strengths, weakness, opportunities and threats so that the business can define

the business strategy. The market analysis is also reference for company's activity , like decisions of inventory,

purchase, work force, facility expansion and many aspects of company.

penetration to find the difference or competitive advantages between two similarly companies(Christina, n.d).

How can we find the competitive advantage? Kevin (2016) says that "Anticipating and reading market needs

can help business leaders take significant steps towards changing the game and obtaining competitive

advantage."(p. 70). How can we sustain competitive advantages? In terms of Richard research, The company

should focus on sustaining competitive advantage due to the swift growth global competition. Therefore,

Business practice management is the follow principle to maintain competitive advantage(Richard,2006).

Target audience analysis

In the Christina contribution, target audience is for company to target their customer group who most likely to

buy their products(Christina, n.d.). The group can be classified with location, age, gender, income, ethnicity,

and behaviors. And people who make a decision of purchase can also be divided in the target audience. How

identify market in accordance with Women's enterprise centre the market can be classified in three types which

are consumer market, industrial market, and reseller market. The company segment their market, research

market, and identify why customer would like to buy their products (women's enterprise centre, 2011 ).

SWOT analysis

SWOT is strengths, weakness, opportunities, and threats. It matches internal strengths and weaknesses up against

opportunities and threats (Christina, n.d.). Strengths and weakness are internal factors which we can control.

And opportunities and threats are external factors that businesses can't control, but can however impact on. When

using strengths and weakness, businesses need to collect raw data to get information. Businesses can get

information by customer feedback, employee surveys. Furthermore, businesses also can identify the capability

if it is weakness or strengths, resources and process. Opportunities and threats are the external factors. Business

can get information from secondary data like environmental information, industry information and competitive

data. The purpose of the business use the SWOT analysis is to get the information from it and match each other

to develop the ideas and get into goal statement to form strategic development (Olsen, 2008).

Market communication has significant impact on building and maintaining the relationship of stakeholders.

Market analysis elements is to form a strategic planning and the information is responsiveness, intelligence

generation, and dissemination(Mike, Sandra& Felix, 2005). Besides, market communication provide the

information focus on the customer needs and competitive advantage. At the same time, these information spread

to customers means the company spread its brand value so that customer can make awareness of the company's

products. It is the communication channel between business and customers(Mike, Sandra& Felix, 2005).

Market Segmentation

Market segmentation is one of the important ways to find competitive advantage with its differentiation in

market analysis. Market segmentation concentrates on market energy and power to gain competitive advantage.

In other words, market segmentation is the concept tool to get the force(Thomas,2007). In the market analysis,

we need a lot of market knowledge to analyse market structure and process. Since segmentation needs to do a

lot of market research so that we can get the information from it. Market segmentation recommends the market
strategy. Market segmentation can identify customer needs and wants and develop products to satisfy them.

Market segmentation can identify different products for different groups, better match between customer wants

and product benefits, maximize the use of available resources, focuse marketing expenditures and competitive

advantages (karlsson,2012).

There is no perfect way to segment market but business can follow some rules like geographic, demographic,

psychographic, and behavioral. A good market segmentation should be sustainable, accessible, actionable,

measurable, and differentiable (karlsson,2012).

Global market segmentation

Since the globalization more and more developed, the global market become indispensability part of the business

thinking. In order to explore global market, how market segmentation can be used in the global market. There

are some aspects of defining the global market so which is more efficient to segment global market. Some

researchers mention about Cross-National and Cross-Cultural Approach to segment global market. To

differentiate country and culture, the company have to identify two areas which is vertical market segment

existing internal area. Another area is external market segments which a group of countries has relationship of

each other and share their characteristics. Compared with cross- cultural approach and cross-national approach,

cross-cultural approach has its cultural stability of traditional values. cultural stability has a wide range of shared

national-cultural values features, due to group solidarity, interpersonal harmony and so forth(Agarwal, Malhotra

& Bolto, 2010). However, cross-cultural approach has challenge of environmental changes, cultural change and

some other unstable factors(Agarwal, Malhotra & Bolto, 2010). Therefore, the main principle of looking at

cross-cultural approach and cross- national approach base on perceive service quality. In the global service

marketing, the marketing manager face a challenge of international services on account of the intangibility of

services, unification standardizing services across national borders and difference of preference for customized

services in different countries and culture. Therefore, it is significance for business to have a deep understanding

service quality in facing across different countries, regions and cultures( Agarwal, Malhotra & Bolto, 2010).

In the software market, the trend of software is the price is high and coverage is low. In order to improve the

trend, there is some problems of software market. Zhang (2014) mention that“ (1) What possibly discourages

product differentiation in such a competitive market? (2) Why is versioning absent here? (3) How does the

presence of free alternatives in this market impact its structure?”(p. 589). In order to improve these problems,

Zhang mention that quality competition and market segmentation apply to the software market. In Zhang's

research, the software company lack of developed the method of quality competition, market segmentation, and
versioning. In terms of market segmentation, software company think segmentation consumer market is not

useful. Therefore, even though versioning is the least costless way of spread product information, the company

still ignore it(Zhang, 2014).

The relationship between market segmentation and communication in marketing is interaction. For example,

market segmentation is important in the social media. There is three perspectives supplier perspectives,

interaction perspectives, and buyer perspectives. In order to balance these three relationships, business must do

segment well. Otherwise, the buyer perspective and supplier perspective cannot interact very well may lead loss

of promotion (Oxfordlearninglab, 2009). Therefore, social media is important method of communication in the

market and market segmentation also unnecessary before the business use social media channel.
The Three-tier "Amul Model"

The Amul odel is a three<tier cooperati&e structure. This structure consistsof a ;airy
5ooperati&e Society at the &illage le&el affiliated to a ilk *nionat the ;istrict le&el which in
turn is further federated into a ilk ederation atthe State le&el. The abo&e three<tier structure
was set<up in order to delegatethe &arious functions, milk collection is done at the illage ;airy
Society, ilk Procurement B Processing at the ;istrict ilk *nion and ilk B ilk Products
arketing at the State ilk ederation. This helps in eliminating
notonly internal competition but also ensuring that economies of scale isachie&ed. As the abo&e
structure was first e&ol&ed at Amul in 8u9arat
andthereafter replicated all o&er the country under the -peration loodProgramme, it is known as
the CAmul odel or CAnand Pattern of
;airy5ooperati&es.0esponsible for arketing of ilk B ilk Products 0esponsible for Procureme
nt B Processing of ilk 0esponsible for 5ollection of ilk 0esponsible for ilk Production.

Village Dairy Cooperative Society VDCS!

The milk producers of a &illage, ha&ing surplus milk after own consumption,come together and
form a illage ;airy 5ooperati&e Society ( ;5S). The illage ;airy 5ooperati&e is the primary
society under the three<tier structure.'t has membership of milk producers of the &illage and is
go&erned by anelected anagement 5ommittee consisting of # to 1 elected representati&esof
the milk producers based on the principle of one member, one &ote. The&illage society further
appoints a Secretary (a paid employee and member secretary of the anagement 5ommittee)
for management of the
day<to<dayfunctions. 't also employs &arious people for assisting the Secretary inaccomplishing
his D her daily duties.The main functions of the ;5S are as followsE

5ollection of surplus milk from the milk producers of the &illage B payment based on uality B
uantity

Pro&iding support ser&ices to the members like eterinary irst

Aid,Artificial 'nsemination ser&ices, cattle<feed sales, mineral mi!turesales, fodder B fodder see
d sales, conducting training on Animal6usbandry B ;airying, etc.

Selling li uid milk for local consumers of the &illage.

•
Supplying milk to the ;istrict ilk *nion Thus, the ;5S in anindependent entity managed locally
by the milk producers and assisted by the ;istrict ilk *nion.

Di"trict Cooperative #il$ Producer"% &nion #il$ &nion!

The illage Societies of a ;istrict (ranging from @2 to M%2F per ilk

*nion in8u9arat) ha&ing surplus milk after local sales come together and form a;istrict ilk

*nion. The ilk *nion is the second tier under the threetier structure. 't has membership of illage

;airy Societies of the ;istrict and isgo&erned by a Goard of ;irectors consisting of # to H elected

representati&esof the illage Societies. The ilk *nion further appoints a professional anaging

;irector (paid employee and member secretary of the Goard) for management of the day<to<day

functions. 't also employs &arious people for assisting the anaging ;irector in accomplishing his

D her daily duties.

The main functions of the Milk *nion are as followsE.

•Procurement of milk from the Village ;airy Societies of the ;district

•Arranging transportation of raw milk from the 5S to the milk

•Pro&iding input ser&ices to the producers like eterinary 5are,Artificial 'nsemination ser&ices,

cattle<feed sales, mineral mi!turesales, fodder B fodder seed sales, etc.

•5onducting training on 5ooperati&e ;development, Animal

6usbandryB ;airying for milk producers and conducting specialised skillde&elopment B

leadership ;development training for ;5S staff B management 5ommittee members.

•Pro&iding management support to the ;5S along with regular super&ision of its activities.

•establish 5hilling 5entres B ;airy Plants for processing the milk received from the &villages.

•Selling liquid milk B milk products within the ;district

•Process milk into &arious milk B milk products as per the re uirementof State marketing

ederation.
•decide on the prices of milk to be paid to milk producers as well on the prices of support

services provided to members.

DATA PROCESSING & ANALYSIS:-

Data Analysis For Retailers:-

1) Number of retailers stocking Amul milk.

Answer No. of Percentage

respondents
Yes 55 20%

No 114 80%

Yes
33%

Yes
No

No
67%

Interpretation:

 The above graph indicates that only 1/3rd of the retailers are selling Amul milk. 

 It shows that Amul milk brand is not popular among the retailers. 
 2) Sizes of Amul milk packets retailers preferred to store.
(Out of 169 retailers only 55 were buying Amul milk.)

Answer No. of
respondents
250ml 0

500 ml 32

1 Ltr 23
5 Ltr 0

5 Ltr 0

1 Ltr 23

500 ml 32

250ml 0

0 5 10 15 20 25 30 35

No. of respondents

Interpretation:

 The above graph shows that most of the retailers preferred to stored 500 ml and 1 Ltr pouch of
Amul milk as per the customer demand. 

 In case of 5 Ltr. Pouch there was no customers demand. 

 250 ml pouches were not available to retailers. 
 3) Reasons for Amul milk not stored by retailers.

(Out of 169 retailers 114 were not buying Amul milk.)

No. of
Answer
respondents
Absence of packaging date 6

Low margin 75

No replacement for leakage 20

No distribution 13

No distribution 13

No replacement for
20
leakage

Low margin 75

Absence of packaging
6
date

0 10 20 30 40 50 60 70 80

No. of respondents

Interpretation:

 From above graph it is clear that half of the retailers were not satisfied with Amul replacement
and margin policy. 

 Some retailers responded about absence of packaging date. 

 Very less retailers complained about distribution network 
 4) Preference of retailer’s to milk brand.

BRANDS RESPONDENTS
Amul 15
Mother
dairy 77
manali 45
Tabala
milk 6
Others 26

Others 26

tabala 6

manali 45

motherdry 77

Amul 15

0 10 20 30 40 50 60 70 80 90

RESPODENT
.
Interpretation:
 The above graph shows that the motherdairy is most preferable brand in all. 

 Some retailers also prefers tabala and others brands. 
 5) Sources from where retailers get Amul milk

(Out of 169 retailers only 55 were buying Amul milk.)

Answer No. of Percentage

respondents
Distributors 52 95 %

Other suppliers 3 5%

Interpretation:
 Almost all retailers said that they purchased milk from Amul distributors. 
 6) Retailer’s satisfaction with Amul distributor.

(Out of 169 retailers only 55 were buying Amul milk)

Answer No. of Percentage

Respondents
Yes 34 62 %
No 21 38 %

No
38%

Yes

Yes No
62%

Interpretation:

 Graph shows that most of the retailers were satisfied with the service provided by the Amul
distributors. 
 7) Awareness among retailers about different Sales Promotional activities for Amul milk.
(Out of 169 retailers only 55 were buying Amul milk.)

Activities Aware Not aware

Price off 37 18
Free samples 13 42
Credit facility 16 39
Advertisement 49 6
P-O-P Displays 41 14
Coupons 50 5

60
50 6 14 5
18
40
42 39
30
49 50
20 37 41
10 16
13
0
Price off Free samples Credit facility Advertisement P-O-P Coupons
Displays

Aware Not aware

Interpretation:

 The graph shows that retailers were aware about the sales promotion activity that Amul carried
out, but some respondents were unaware about various activities. 

 Most of the retailers were aware about advertisement and coupons scheme during festivals. 

 Credit facility and free samples were not provided to single retailers. 
 8) Interest of retailers in wholesale distribution of Amul milk.

Answer No. of Percentage

respondents
Yes 27 16 %

No 142 84 %

Yes
16%

Yes
No

No
84%

Interpretation:

 Graph represents the interest of the retailers to start Amul milk distribution .The questions
asked to increase the retail coverage. 

 Most of the retailers were not interested. 

 Only 16% of the retailers were ready to start Amul distribution. 
 9) Awareness among retailers for Amul Parlor (APO) and its benefits. (Out of
169 retailers only 118were questioned as they had large store.)

Answer No. of Percentage

respondents
Yes 70 59 %
No 48 41 %

No
41%

Yes
No

Yes
59%

Interpretation:

 APO is the outlet where you get Amul milk and milk products and it helps to increase the
market share. This question asked to the retailers who were strong enough in capital. 

 From graph it can be interpreted that the awareness about APO is very low. 
 10) Interest of retailers in opening an Amul Parlor (APO).
(Out of 169 retailers only 118 were questioned as they had large store.)

Answer No. of Percentage

respondents
Yes 15 13 %

. No 103 87 %

Yes
13%

Yes

No

No
87%

Interpretation:

 The graph represent that very less number of retailers were interested to start APO. 
 11) Consumer’s expectation from Amul milk.
(Out of 169 retailers only 55 were buying Amul milk.)

ATTRIBUTE RESPONDENTS
Good quality 7

Clear packaging date 23

Availability 25

Availability 25

Clear packaging date 23

Good quality 7

0 5 10 15 20 25 30

RESPODENT

Interpretation:

 The question asked to the retailers where the Amul milk is being sale, and tried to collect
feedback of customers about Amul milk. 

 More customers were having complaints about the clear date of packaging and availability. 

 Some customers were not happy with quality of milk. 
 12) Ratings from retailers for attributes of Amul milk.
(Out of 169 retailers only 55 were questioned as they buying Amul milk.)
Attribute
Brand
Rating Quality Availability Packaging Margin
image

Very good 37 48 34 5 0
Good 13 7 15 2 0
Average 5 0 0 48 0
Bad 0 0 6 0 0
Very bad 0 0 0 0 55
Total 55 55 55 55 55

60
0 0 0 0
50 5 7 6
0

13 15
40

30 48
55
48
20 37 34
10
2
0 5 0
Quality Brand image Availability Packaging Margin

Very good Good Average Bad Very bad

Interpretation:
From the above graph it can be concluded that

 QUALITY: Most of the retailers were satisfied with Amul milk quality. 
  BRAND IMAGE: The graph shows that Amul is having good brand image. 
 AVAILABILITY: Most of the retailers were satisfied with the Amul milk distribution. 

 PACKAGING DATE: Most of the retailers were not satisfied about not printing of packaging
 date and they were facing a problem regarding same. 
 MARGIN: All retailers were not satisfied with the margin policy given by Amul.
6.2 DATA ANALYSIS FOR CUSTOMERS:-

1) Number of customers purchasing Amul milk.

Answer No. of Percentage

respondents
Yes 30 32%

No 65 68%

Yes
32%

Yes

No

No
68%

Interpretation:

 The above graph indicates that only 32% of the customers are purchasing Amul milk. 

 It shows that Amul milk brand is not popular among the customers. 
 2) Ratings from customers for attributes of Amul milk.
(Out of 95 customers only 30 were questioned as they buying Amul milk.)
Attribute
Brand
Rating Quality Availability Packaging Price
image

Very good 18 25 16 5 6
Good 9 5 9 2 13
Average 3 0 0 15 11
Bad 0 0 5 8 0
Very bad 0 0 0 0 0
Total 30 30 30 30 30

35
30 0 0 0 0 0
3 5 5
8
25 0 11
9
20 9

15 15
25 13
10 18 16
5 2
5 6
0
Quality Brand image Availability Packaging Price

Very good Good Average Bad Very bad

Interpretation:
From the above graph it can be concluded that

 QUALITY: Most of the customers were satisfied with Amul milk quality. 
  BRAND IMAGE: The graph shows that Amul is having good brand image. 
 AVAILABILITY: Most of the customers were satisfied with the Amul milk distribution. 

 PACKAGING DATE: Most of the customers were not satisfied about not printing of
 packaging date and they were facing a problem regarding same. 
 PRICE: Some customers were not satisfied with the price given by Amul. 
 3) Preference of retailer’s to milk brand.

BRANDS RESPONDENTS
Amul 15
motherdairy 44
manali 11
tabala 8
Others 17

17
Others

8
tabala

11
manali

44
motherdairy

15
Amul

0 5 10 15 20 25 30 35 40 45

RESPODENTS
.
Interpretation:
 The above graph shows that the motherdairy is most preferable brand in all. 

 Some customers also prefers tabala and others brands. 
 1. Data Analysis for Sales Promotion Activity:-
We carried sales promotion activity at two places of nallasopara city
1. Shri prastra
2. Apna nagar

Store name Sales(Ltr)

Initially Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7
Sai 0 10 5 5 5 5 5 5
Vaishali 0 15 15 15 15 15 15 15
New hanuman 5 20 15 15 15 15 15 15
Hanuman 15 30 25 25 25 25 25 25
Durga 5 10 10 8 8 8 8 8

Sales (Ltr)
35

30 30

25 25 25 25 25 25 25
sai
20 20
vaishali
15 15 15 15 15 15 15 15 15 hanuman

10 10 new
8 8 8 8 8 8 hanuman
5 5 5 5 5 5 5 5 Durga

0 0
initially Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7

Interpretation:

 Most of the retail outlets were not interested in Amul milk selling, but after launching
coupons scheme, not only sales shoot up by considerable amount initially but also
remain constant for next days. 

 In case of Sai and Vaishali retail outlet they were not interested in Amul milk selling
but now they are selling 20 Ltr of milk daily. And they said if response will remain
same they will increase milk order. 
PROCESS DESCRIPTION:

PRODUCT MIX OF AMUL

Breadspreads:

 Amul Butter
 Amul Lite Low Fat Breadspread

Cheese Range:

 Amul Pasteurized Processed Cheddar Cheese

 Amul Processed Cheese Spread
 Amul Mozarella Cheese
 Amul Emmental Cheese
 Amul Gouda Cheese
 Amul Malai Paneer (cottage cheese)
 Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

 Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

 Amul Amrakhand
 Amul Mithaee Gulabjamuns
 Amul Mithaee Gulabjamun Mix
 Amul Mithaee Kulfi Mix

UHT Milk Range:

 Amul Taaza 3% fat Milk

 Amul Gold 4.5% fat Milk
 Amul Slim-n-Trim 0% fat milk
 Amul Chocolate Milk
 Amul Fresh Cream
 Amul Snowcap Softy Mix

Pure Ghee:

 Amul Pure Ghee

  Sagar Pure Ghee

Infant Milk Range:

 Amul Infant Milk Formula 1 (0-6 months)

 Amul Infant Milk Formula 2 ( 6 months above)
 Amulspray Infant Milk Food

Milk Powders:

 Amul Full Cream Milk Powder

 Amulya Dairy Whitener
 Sagar Skimmed Milk Powder
 Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

 Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:

 Amul Taaza Toned Milk 3% fat

 Amul Gold Full Cream Milk 6% fat
 Amul Shakti Standardised Milk 3% fat
 Amul Smart Double Toned Milk 1.5% fat

Curd Products:

 Amul Masti Dahi (fresh curd)

 Amul Butter Milk

Amul Icecreams:

 Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)

 Nut-o-mania range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival,
Badshahi Badam Kulfi, Shista Pista Kulfi)
 Utsav Range (Anjir, Roasted Almond)
 Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate)
 Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black
Currant)
  Sundae Range (Mango, Black Currant, Chocolate, Strawberry)
 Millennium Icecream (Cheese with Almonds, Dates with Honey)
 Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi, Shahi
Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)
 Cool Candies (Orange, Mango)
 Cassatta
 Tricone Cones (Butterscotch, Chocolate)
 Megabite Almond Cone
 Frostik - 3 layer chocolate Bar
 Fundoo Range - exclusively for kids
 SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango, Pineapple)

Chocolate & Confectionery:

 Amul Milk Chocolate

 Amul Fruit & Nut Chocolate
 Amul Eclairs

Brown Beverage:

 Nutramul Malted Milk Food

 AMUL PLANTS

1. First plant is at ANAND, which engaged in the manufacturing of milk, butter, ghee,
milk powder, flavored milk and buttermilk.

2. Second plant is at MOGAR, which engaged in manufacturing chocolate, nutramul,

Amul Ganthia and Amul lite.

3. Third plant is at Kanjari, which produces cattelfeed.

4. Fourth plant is at Khatraj, which engaged in producing cheese.

THE CHANNEL NETWORK

Procurement Channel (Upstream flow)

Distribution GCMMF

Head office

MU…1 MU...n

VCS…1 VCS…n

Village…1 Village…n
THE ANAND PATTERN
 Distribution channel

GCMMF Manufacturing

Head office

First leg(from manufacturing units)

Depot...1 Depot...n

Second leg

WD…1 WD…n

Third leg

Retail...n
Retail…1

Downstream flow
 Downstream Channel, it is the distribution part of the supply chain, from the manufacturing
units to the retailers.

• First leg of transport is from the manufacturing unit to the company depots. This is done using
9 and 18 MT trucks any lesser quantity will be uneconomical to the company there for is some
time the quantity ordered is lesser then club loading is done which means that the product
ordered is supplied with some other products.
• Frozen food the temperature of these trucks is kept below -18˚C
• Dairy wet the temperature of these trucks is kept between 0-4˚C

• Second leg is from the depot to the WD’s, this transport is carried out in insulated 3 and 5
MT TATA 407’s here a permanent dispatch plan (PDP) is prepared where the distributor plans
out the quantity of various products to be ordered on a particular date.

• Third leg this is the flow of good from WD’s to retailers, a beat plan is prepared and
transportation is done on auto-rickshaws, rickshaws and bicycles.

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. All GCMMF branches engage in route scheduling and have dedicated
vehicle operations Depots with dry and cold warehouses to buffer inventory of the entire range
of products

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.
 Policy regarding unsold/spoilt goods

• If product crosses the shelf life, the retailer bears the costs.
• If the product gets spoilt during the transportation or if there is any customer complaint, Amul
bears costs.
• Unsold goods are not returned to the manufacturer.
• No reverse logistics.
SCM AND MARKET LOGISTICS
 THE BUSINESS MODEL

The strategy, design and practices in AMUL’s network are strongly driven by the objective of
establishing and operating an efficient supply chain from milk production and procurement to
product delivery to customers. Management of this network is built around two key elements
–

1. Coordination of the diverse elements of the network and

2. Use of appropriate technology that includes product, process and information technology and
managerial practices and systems.

Simultaneous Development of Suppliers and Customers: From the very early stages of the
formation of AMUL, the cooperative realized that sustained growth for the long-term was
contingent on matching supply and demand. The member-suppliers were typically small and
marginal farmers with severe liquidity problems, illiterate and untrained. 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 the milk supply was made with
minimum of delay.
For the long-term, the Unions followed a multipronged strategy of education and support. 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 of veterinary 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.
 Managing Third Party Service Providers:

Well before the ideas of core competence and the role of third parties in managing the supply
chain were recognized and became fashionable, these concepts were practiced by GCMMF
and AMUL. From the beginning, it was recognized that the core activity for the Unions lay in
processing of milk and production of dairy products. Accordingly, the Unions focused efforts
on these activities and related technology development. Marketing efforts (including brand
development) were assumed by GCMMF. All other activities were entrusted to third party
service providers. These include logistics of milk collection, distribution of dairy products,
sale of products through dealers and retail stores, some veterinary services etc.

Coordination for Competitiveness

Robust coordination is one of the key reasons for the success of operations involving such an
extensive network of producers and distributors at GCMMF. Some interesting mechanisms
exist for coordinating the supply chain at GCMMF. These range from ensuring fair share
allocation of benefits to various stakeholders in the chain to coordinated planning of production
and distribution. More importantly, the reason for setting up of this cooperative is not amiss to
anyone in this large network organization. Employees, third part service providers, and
distributors are constantly reminded that they work for the farmers and the entire network
strives to provide the best returns to the farmers, the real owners of the cooperative. It may be
r emembered that coordination mechanisms have to link the lives and activities of 2.12
million small suppliers and 0.5 million retailers!

There appear to be two critical mechanisms of coordination that ensure that decision making
is coherent and that the farmers gain the most from this effort.

These mechanisms are:

 Inter-locking Control: - The objective for developing such an inter-locking control

mechanism is to ensure that the interest of the farmer is always kept at the top of the agenda
through its representatives who constitute the Boards of different entities that comprise the
supply chain. This form of direct representation also ensures that professional managers and
farmers work together as a team to strengthen the cooperative. This helps in coordinating
 decisions across different entities as well as speeding both the flow of information to the
respective constituents and decisions.
 Coordination Agency: Unique Role of Federation:- In addition to being the marketing and
distribution arm of the Unions, GCMMF plays the role of a coordinator to the entire network
within the State – coordinating procurement requirements with other Federations (in other
states), determining the best production allocation for its product mix from amongst its Unions,
managing inter-dairy movements, etc. It works with two very clear objectives:
1. To ensure that all milk that the farmers produce gets sold in the market either as milk or as
value added products and
2. To ensure that milk is made available to increasingly large sections of the society at affordable
prices.

Supplier Enhancement and Network servicing:- Their objective is to ensure that producers
get maximum benefit and to resolve all their problems. They manage the procurement of milk
that comes via trucks & tankers from the VS’s. They negotiate annual contracts with truckers,
ensure availability of trucks for procurement, establish truck routes, monitor truck movement
and prevent stealing of milk while it is being transported.

Technology for Effectiveness:-

Technology or knowledge that was embodied in products, processes, and practices became an
important factor in delivering effectiveness to the network of cooperatives. One distinguishing
feature of AMUL (in comparison with other similar cooperatives globally) is the large variety
in their product mix. Most of its plants are state of art and automated.

AMUL’s innovations in the areas of energy conservation and recovery have also contributed
to reduction in cost of its operations. AMUL also indigenously developed a low cost process
for providing long shelf life to many of its perishable products.

The extent of IT usage includes a B2C ordering portal, an ERP based supply chain planning
system for the flow of material in the network, a net based dairy kiosk at some village societies
(for dissemination of dairy related information), automated milk collection stations at village
societies and a GIS based data network connecting villages societies to markets. Milk
collection information at more than 10,000 villages is available to all dairies (or Unions) to
enable them make faster decisions in terms of production & distribution planning, and disease
control in more than 6,700,000 animals. This is linked with information at all 45 distribution
offices and 3900 distributors. This network is being extended to cover all related field offices
in the network. The GCMMF cyber store delivers AMUL products at the doorsteps of the
consumers in 125 cities across the country.

Now, going back to the supply chain of Amul, Amul has gone the e- commerce way. The 1st

initiatives taken for an ERP system was in ’94. Tata Consultancy Services was hired to
guide in

its implementation. The implementation project was named as Enterprise- wise Integrated

Application System (EIAS). Automatic Milk Collection System units (AMCUS) at village
societies

were installed in the first phase to automate milk producers logistics. Amul also connected its
zonal

offices, regional offices and member’s dairies through VSATs for seamless exchange of

information. Amul is also using Geographic Information Systems (GIS) for business
planning and

optimization of collection processes. Indian Institute of Management – Ahmedabad

supplemented

Amul’s IT strategy by providing an application software – Dairy Information System

Kiosk(DISK)

to facilitate data analysis and decision support in improving milk collection. There are plans
to

introduce features like Internet banking services and ATMs which will enable the milk
societies to

credit payments directly to the seller’s bank account. Distributors can place their orders on
the

website www.amul2b.com especially meant for accepting orders from stockists and
promoting

Amul’s products via e-commerce

 TQM (Total quality management) at the grassroots has been a strong movement to develop
leadership, operational and strategic capabilities in the entire network – farmers, village
cooperatives, dairy plants, distributors and wholesalers and retailers. Key elements of this
TQM movement have been:

 Friday Departmental Meetings : Each Friday, at a prescribed time, everyone in the network
(from the farmers to the carry & forwarding agents) joins their respective departmental meeting
to discuss quality initiatives and share policy related information.
 Training for Transformational Leadership so that individuals are able to control their
thoughts, feelings and behavior and take more responsibility in one’s life and surrounding
environment.
 Application of Hoshin Kanri principles to bring about a bottom-up setting of objectives –
aligning policies for effective management of Unions & village societies on hand with those
of channel member on the other hand. ISO/HACCP certification was obtained for all the
Unions and each village society is in the process of obtaining the same.
 Training for farmers and their families emphasizing the need for good health care for not
only cattle during its pregnancy and feeding but also for expecting and feeding mothers and
the whole family. This effort has brought about a significant social change towards such issues
in villages that have cooperative milk societies.
 Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000) to evaluate
customer perceptions and distribution efficacy of their network. This is being done by
wholesalers in their respective territories at their own cost. This information is used for policy
deployment exercise.
 THE NETWORK

Milk is procured from the villages and collected at Village Cooperative Societies (VCS), from
there the milk is taken to manufacturing units where the milk is processed into various
products.

The products are then transporters to the company Depots located in various parts of the
country. The products are then sent to Wholesale Distributors (WD) and from there to the
retailers.

THE FACT SHEET

 Milk is procured twice a day from 2 million from Gujarat alone

 The payment is made under twelve hours of procurement
 There are 10000 village cooperative societies
 There are 3600 wholesale distributors in the country
 45 depots
 The C&F agents are not fixed and are decided by the local company offices
 There are aproxx. 4,50,000 retailers spread all over India
 Total house hold consumers covered are 100,000
 The milk procured per day is 5 million liters
 Where the total capacity of operation is 7 million liters per day
 The peak processing till date has been 6 million liters per day
 These co operative societies are bound to supply there produce only to GCMMF
 Amul products are available in over 500,000 retail outlets across India through its of over
3,500 distributors.
 47 depots with dry and cold warehouses to buffer inventory of the entire range of products
 AMUL PARLOURS (DIRECT DISTRIBUTION)

With products being highly perishable, the supply chain ought to have to maintain correct
temperature, humidity etc and the chain should move fast.

To reach out its consumers more directly and let them the total brand experience, Amul has
come up with Amul parlors. These are called “Utterly delicious parlors”. They have come up
in major cities like Ahmadabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and Surat
already, and many more starting up real soon. Till date there are about 400 Amul parlors across
the country. These parlors are set at prominent locations such as campuses of Infosys, Wipro,
IIM-A, IIT-B, temples, Metros etc.

Amul has franchisee plans in regards of the Amul parlors. This might start pretty soon, since
the talk is almost at the end.

Facts

– 2300 Amul Parlors in 2007-08

– Goal of setting up 10,000 outlets by March 2010
 Selection, Motivation & Evaluation of Channel Members

Selection:

The company takes into consideration a host of factors while selecting the channel members.
This is because GCMMF believes that selection of channel members is a long run decision &
the rest of the decision regarding the supply chain depends upon the efficiency & coverage by
the channel members. The following are the host of factors considered by the company in
selecting the channel members:

 Authentication is required by the regarding the identity of the channel members, which
includes the name & address, photograph of the location.

 Proof of solvency which requires name & address of the channel member’s bankers

 Safety of the inventory, which means that the distributor/ dealer should get the stock of the
company insured.

 Inventory or the perishable goods kept by the distributor/ dealer should be in good condition
which means a detail of storage space & Refrigeration facility is to be provided. Refrigeration
system should have deep freezers, cold room & walk in coolers.

 Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3
Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the vehicle
needs to be furnished to the company.

 GCMMF acknowledges the fact that it needs to be sensitive to the market demands. For this it
requires that a number of salesmen needs to be present on the field. The salesmen too are
divided into various categories like the Field salesmen & Counter salesmen. Also the details
 of Clerical Staff & Mazdoors are to be provided. The technical competence of the salesmen
needs to be mentioned

 Details of the product kept of other companies have to be provided. The annual sales of these
products too have to be mentioned. Also details of complementary products & product lines
need to be mentioned.

 Dealers of the company must carry a good reputation. This is due to the fact that the company
believes reputation of the dealer affects the clientele.

 Market coverage by the distributors needs to be defined which includes details of Geographic
coverage & Outlets per market area.

 The company also requires the dealers to furnish any Advertising & Sales initiative undertaken
by them on behalf of the company.
 Motivation of Channel Members

GCMMF strongly believes in maintaining a good relationship with the channel members so
that they are genuinely motivated to work for the company. Also if the channel members are
motivated, they can also initiate advertising & sales promotion schemes on behalf of the
company. However to keep the channel members motivated to work, the company has to incur
certain costs but the benefits of it are felt in the long run. The following are the motivation
programs run by the company:

Distributors

 One of the main factors, which keep the distributors motivated, is the margin. Usually the
margins offered by the company are 8% & it is raised to 8.5%. Volume wise this comes out to
be a big figure since Amul’s product has a good demand in the market. However compared to
the other companies the margins are still lower since the new players in the market offer a
much higher margin. But the very fact that Amul’s products have good demand in the market
motivates the distributors to stock it.

 Amul being a cooperative cannot afford to give heavy monetary incentives. Amul’s products
are considered to be value for money since the company does not believe in charging high
margins. In fact all monetary incentives are just the short run means to promote the company’s
product. In order to keep the Channel members motivated in the long run, Amul builds on the
concept of “Trade Marketing” which makes the dealers & the distributors believe that the
company’s products are worthy of being pushed in the market.

 The company is organizing various Total Quality Management initiatives & workshops. Here
various counseling measures are undertaken by the company to improve the overall working
of the distribution network.
 Vision and mission statement: the company cascades down the vision to the various channel
members, this is done through various events organized by the company at different locations
where the values of the company are made clear and enforced to the channel members. Also
the fact that Amul being a cooperative society cannot afford to spend exorbitantly on such
events therefore it has a very traditional way of organizing these get together which leaves an
impact on the members.

 Amul yatras: this includes taking the channel members on a guided tour of the manufacturing
and procuring facilities in Gujarat. So that the channel members can have an experience of the
working of the company and can pick up some quality measures that can help them to
synchronize and improve their own functioning at various levels. This in turn help the company
to co ordinate the entire value chain, as the channel members understand the various constraints
and liberties the company goes through. The company has already got the Rajiv Gandhi
award for quality.

The Retailers

 Trade schemes: these are undertaken by the company only for the hard selling items e.g. Ice
creams, flavored milk etc. for these the company raises the margins by 2%, also schemes like
good packaging incase of butter and cheese is undertaken by the company. However this is
only a short-term initiative to push the products of the company.

 Glow boards: the company puts up glow boards at the retailer and pays the major portion of
the cost.

 Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre
estimate the quantities of the various products needed.

 Infrastructure facilitation: the company facilitates the retailers to buy freezers and fridges
by formulating an easy payment program and a commitment to buy back the equipment at a
reasonable price when the value of the equipment has depreciated.
 Evaluation of channel members

 Beat plan: this plan is generated for the various product categories i.e. diary dry, diary wet,
Dhara and ice cream. A weekly schedule is prepared for various markets and the retailers the
turnover for each of the product is calculated for the wholesale dealers.

 Cumulative performance: the performance of the dealers is averaged out over a period of
three years where a comparison is made of the present performance vis-à-vis the previous ones.

 Target versus achievement: the performance and the targets are compared and therefore the
gaps are identified which help in evaluating the WD and planning for the next year as well.
This is done for each of the product category.

 Other criterion

o Details of the bank guaranty

o Photographs of the offices
o Details of the WD salesmen and the product lines he deals in
o The computerization facility available
o The storage space
o Refrigeration facility with photograph
o Details of the delivery vehicle with photograph
o Summary of the monthly potential sales of markets
o Summary of the product wise monthly sales potential of institutions
 Conflicts And Co-Operation Among Channel Members

Conflicts

 Ownership of assets: Previously the company used to give the cooling equipment on lease to
the retailers, when the company wanted the stuff back; the retailer disagreed to comply and
created issues of ownership.

 Stocking issues: The company doesn’t want the retailers to stock the competing brand in the
company leased fridges, which at times s hard to manage as retailers tend to do it often.

 Replacement of products: The deterioration in the product calls for fail in replacement by the
company this major issue of vertical conflict.

 Credit policy: Compared to the market, the company’s credit period is less that specially
incase of institutional sales is very important.

 Packaging: The channel members for easy storing demand a better quality of packaging.

 Replenishment: The replenishment of the stocks is not prompt in case of amul cheese and all
hard selling items.

 Margins: The Company provides least margins to all the channel members. For e.g. The
retailer’s margin in case of butter is 8% as compared to Britannia’s 12%
 CO-OPERATION AMONG CHANNEL MEMBERS

 Amul quality circles: The members of the local channel meet together every month to share
issues and the achievements of the channel members. This is an ongoing activity facilitated by
the company offices in different locations; this enables the channel members to learn together
and reduces the horizontal conflicts among the WDs.

 Pilot salesmen scheme: To reduce the financial burden of the distributors this scheme is run
whereby half the cost of the salesmen is born by the company and the rest half by the distributor

 Scheduling of sales: The WD’s provides Schedule of the distributor’s sales men to the retailers
so that the retailers can plan out and place the orders in advance.

 Agreement defining rights: The company makes the distributors sign an agreement where
the areas of operation for each of the distributors are defined, therefore avoiding any conflict
amongst the distributors regarding their areas of operation.

PRODUCT INFORMATION
PRODUCT-AMUL GOLD PASTEURISED FULL CREAM MILK

WEIGHT- 500 ml Nett

PRICE- Rs. 16

FAT-6.0 AND SNF-9.0

NUTRITIONAL INFORMATION

Serving size 200 ml

Amount per 100 ml

Energy 87 kcal

Energy from fat 54 kcal

Total fat :6g Phosphorus :130 mg

Saturated fat : 3.7g Sodium :50 mg

Cholesterol :16 mg Thiamine :42 mcg

Total carbohydrate :5.0g Rivoflavin :120mcg

Added sugar :0g Niacin :100mcg

Protein :3.3g Folic acid :7.5 mcg

Calcium :150mg Vita(retinol) :85mcg

 VOLUME PURCHASED

Total volume distributed by distributer to dealers in Badarpur Bodor-800-1000 liter

Total volume purchased by each dealers- 160-180 liters (i.e. total no of packets of amul gold
milk purchased by each dealer)- 320-360

Total volume purchased by each retailers-10-12 liter (20-25 packets)

SALES AND PROFIT

 Sales and profit for Distributer

Total volume of milk distributed by distributer -800-1000 liters(i.e. total no of packets

distributed 400-450 approx)

Profit margin for distributer per liter-60 paise

Total profit for each distributer- 480-600 Rs

Sales and profit for dealers

Total sale done by each dealer- 160-180 liters

Profit margin for each dealer per liter-40paise

Total profit generated by each dealer-64-72 Rs

Sales and profit for retailers

Total sales done by each retailers-10-12 liters

Profit margin for retailers per litre-50paise

Profit generated by each retailers- 5-6 Rs

DISTRIBUTION CHANNEL OF AMUL MILK

 MANUFACTURED UNIT

PACKING AND LABELLING

DISTRIBUTORS

DEALERS

RETAILERS

CUSTOMERS

STOCK REPLENISHMENT CYCLE

Since milk is a fast moving consumer goods daily used by each household in India. So Amul
gold pasteurised full cream milk is supplied by distributer everyday to dealers and retailers.
Stock is purchased within 24 hours (early in the morning).

TRANSPORATION METHODS

They manage the procurement of milk that comes via trucks & tankers from the VS’s to
manufacturing unit and then to distributers and dealers .They negotiate annual contracts with
truckers, ensure availability of trucks for procurement, establish truck routes, monitor truck
movement and prevent stealing of milk while it is being transported.
 COMPETITOR ANALYSIS

The main competitor of Amul is Mother dairy in Delhi. Most of the market share is captured
by mother dairy products (55% (approx) market of pasteurized full cream milk is covered by
Mother dairy

product % of market share

Amul 30
Mother dairy 55
others 15

market share

15

mother dairy
amul
55 others
30
AMUL PESTEURIZED FULL CREAM VS MOTHER DAIRY
PASTEURISED FULL CREAM MILK

VS

AMUL MOTHER DAIRY

Price 16Rs 17Rs
Weight 500 ml 500 ml
Margin for distributors’ 60paise/liter 60paise/liter
Margin for dealers 40paise/liter 40paise/liter
Margin for retailers 50paise/liter 50paise/liter
 Sales and profit of Mother dairy pasteurized milk

Mother diary full cream milk is purchased in more quantity as compared to Amul full cream
pasteurized milk.

For distributor

Total quantity of mother dairy full cream pasteurized milk is distributed by distributor at -
2300-2500 liters

Profit margin for distributer-60paise/liter

Total profit generated by distributer- 1380Rs-1500

For dealers

Total quantity purchased by each dealer at 400-500 liters

Profit margin for dealers-40paise/liter

Total profit generated by dealers-160-200Rs

For retailers

Total quantity purchased by each retailer at Badarpur Boder-25-30 liters

Profit margin for retailers- 50paise/liter

Total profit generated by retailer-12.5-15Rs

 Table of total Sales done each channel member

Channel member Amul (in liters) Mother dairy(in liters)

By distributer 800-1000 2300-2500
By dealers 160-180 400-500
By retailers 12-15 25-30

Table of profit generated by each member per day

Channel member Amul(in Rs) Mother dairy(in Rs)

For distributor 480-500 1380-1500
For dealers 64-72 160-200
For retailers 10-12 12-15

As compared to amul, mother dairy has more market share and more quantity of mother dairy
full cream pasteurized milk is distributed and supplied by channel members. Hence more profit
is generated by each channel member inspite of having equal margin on each product.

LEARINGS
It was a great opportunity to carry a research project on such a reputed organization which
gave me a good learning experience and knowledge about the products and industry.

Another very crucial area that needs mention is the experience I gained while talking to and
interacting with people. This has been a truly enriching experience because interacting with
people with varied profile helped in enriching my communication skills

FINDINGS
 Lack of Awareness in consumers. Many people are not know about Amul chocolates
specially children and teenagers.

 As I found that the main product of Amul is Milk and company firstly wants to
capture maximum market share in milk market which is approx. 66%, after it Amul is
concentrating upon butter & cheese which has market share of approx. 88%, so it is not
concentrating upon chocolates.

 There is lack of Sales Promotional Activities i.e. free tattoo, extra weight, toys, quiz
contest etc.

 Cadbury is main competitor and strategically better performer then Amul.

 I find the main thing is that “Amul” brand name has very good image in consumer’s
mind and they consider it as Pure & Good Product.

 People who have tasted Amul Chocolate are not ready to purchase the same again.

SUGGESTIONS
  First and foremost Amul should take proper action in order to improve service,
because although being on a top slot in Butter and milk supplies it does not get the
sales in chocolate, which it should get.

 Company should use brand ambassador which attracts each age segment i.e. Saniya
Mirza, Shaktimaan, Amitabh Bacchan, Superman, Krrish, Jadoo etc.

 Amul should give local advertisements apart from the advertisements given at the
national level. Local advertisement must mention the exclusive Amul shops of the
city.

 Try and change the perception of the people through word of mouth about Amul in
advertisements, because they are the best source to reach Children and families.

 Though Amul chocolate advertisements are rarely shown on television yet many
people could recall it as per the data of research. It shows that there is only need to
give advertisement only to rememorize customers. Because Amul is very strong
brand name.

 Company should launch chocolate in new attractive packing to change image of

Amul chocolate in consumers mind.

 Company should introduce sales promotion schemes like free weight, pranky,
tattoo, contest, free gifts etc.

 Advertisement can be done with the help of animations that attracts children and
teenagers because chocolates are consumed largely in this segment.

CONCLUSION
  As Amul is a very huge organization' it has maximum market share in milk
 The company must make policy for replacment of product's
 The company must call a meeting of retailers time to time
 Amul should look Oberlin towards the increment in profit margin of distributors and
retailers
 Amul should provide credit facilities for retailers and distributors
 The overall management of Amul is so superior that they manage the overall system
in 750 employees
 Amul must come up with new promotional activities such that the people become
aware of Amul milk like Tazza n Gold

BIBLIOGRAPHY
Books:

i. Marketing Management (12th Edition) – Philip Kotlar

ii. Research Methodology – C. R. Kothari

Websites:

i. www.google.co.in

ii. www.wikipedia.com

iii. www.amul.com.

iv. www.marketresearch.com

v. www.dairy.com

ANNEXURE
QUESTIONNAIRE:-

(Retailer Survey)

Name of the shop: __________________________________________________

Retailer Name: ____________________________________________________
Address: __________________________________________________________

1) Do you stock Amul milk? a) Yes

b) No

2) If yes, what is the size of Amul milk packets do you preferred to store?
a) 250 ml
b) 500 ml
c) 1 Ltr
d) 5 Ltr.

3) If No, Why?
a. Absence of packaging date
b. Low margin
c. No replacement for leakage
d. Low distribution

4) Which is the most preferable brand of packaged milk that you stock?
 Amul
 motherdairy
 manali
 tabala
 Others
5) From where do you get Amul milk?

a) Distributors b)
Other suppliers

6) Are you satisfied with Amul distributor?

a) Yes
b) No

7) Do you know which Sales promotional activities does the company undertake for Amul
milk?

a) Price off d) Free samples

b) Credit facility e) Coupons
c) Advertisement f) P-O-P Displays

8) Are you interested in distribution of Amul milk?

a) Yes
b) No

9) Are you aware of Amul Parlor (APO) and its benefits?

a) Yes
b) No

10) Are you interested in opening an Amul Parlor (APO)

a) Yes
b) No
11) What is consumer’s expectation from Amul
milk? a) Good quality
b) Packaging c)
Availability

12) Give your ratings to following attributes of Amul milk.

Very good Good Average Bad Very bad

a) Quality
b) Brand image
c) Availability
d) Packaging
e) Margin
QUESTIONNAIRE:-

(Customer survey)

Name of the shop: __________________________________________________

Retailer Name: ____________________________________________________
Address: __________________________________________________________

1) Do you know about Amul?

Yes No

2) What are the products of Amul you use very frequently?

Butter Cheese Shrikhand Milk Powder

Dahi Milk Ice-Cream Butter Milk

3) Do you regularly get the Amul Milk?

Yes No
4) Which brand’s milk do you like most?

Amul Katraj Chitale Gokul

Other (Specify)……………………..

5) Do you know about Amul God and Taaza?

Yes No

6) How is the taste of Amul milk?

Poor Satisfactory Excellent

7) How is the taste of Amul Tazza?

Poor Satisfactory Excellent

8) What about the price of Amul milk?

Low Average High

9)Do you like the home delivery scheme of Amul Milk?

Yes No

10) Give your ratings to following attributes of Amul milk.

Very good Good Average Bad Very bad

f) Quality
g) Brand image
h) Availability
i) Packaging
j) Price

11)Any suggestion about Amul milk:

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