ASSIGNMENT

ON

THE VALUE ADDITION COURSE ON EPROCUREMENT

SUBMITTED BY

Deepanshu Tiwari

2019605677

MBA 3RD SEMESTER

L&SCM

PROFILE OF ANAND MILK UNION LIMITED

( AMUL )

(i) History and Growth of AMUL

Over six decades ago the life of a farmer in Kaira was very

much like that of farmers anywhere else in India. This income was

derived almost entirely from seasonal crops. Many poor farmers

faced starvation during off-seasons. Their income from milch

buffaloes was undependable. The milk marketing system was

controlled by contractors and middlemen. As milk is perishable,

farmers were compelled to sell their milk for whatever they were

offered. Often they had to sell cream and ghee at a throwaway

price.

[58]
 They were in general illiterate. But they could see that the

system under which contractors could buy their produce at a low

price and arrange to sell it at huge profits was just not fair. This

became more noticeable when the Government of Bombay started

the Bombay Milk Scheme in 1945. Milk had to be transported 427

kilometers, from Anand to Bombay. This could be done only if milk

was pasteurized in Anand.

After preliminary trials, the Government of Bombay entered

into an agreement with Polsons Limited to supply milk from Anand

to Bombay on a regular basis. The arrangement was highly

satisfactory to all concerned- except the farmers. The government

found it profitable, Polsons kept a good margin. Milk contractors

took the biggest cut. No one had taken the trouble to fix the price of

milk to be paid to the producers. Thus under the Bombay Milk

Scheme the farmers of Kaira District were no better off than ever

before. They were still at the mercy of milk contractors. They had to

sell their milk at a price the contractors fixed. The discontent of the

farmers grew. They went in deputation to Sardar Patel, who had

advocated farmers' co-operatives as early as 1942.

Sardar Patel reiterated his advice that they should market

their milk through a cooperative society of their own. This co-

operative should have its own pasteurization plant. His advice was

that the farmers should demand permission to set up such a co-

operative. If their demand was rejected, they should refuse to sell

their milk to middlemen.

[59]
 Sardar Patel pointed out that in undertaking such a strike

there would be some losses to the farmers as they would not be

able to sell their milk for some time. If they were prepared to put up

with the loss, he was prepared to lead them. The farmers'

deputation readily accepted his proposal.

Sardar then sent his trusted deputy. Mr. Morarjibhai Desai to

Kaira district to organise the milk co-operative and a milk strike if

necessary Mr. Desai held a meeting in Samarkha village on

January 4, 1946. It was resolved that milk producers' co-operative

societies should be organized in each village of Kaira District to

collect milk from their member farmers. All the milk societies would

federate into a Union which would own milk processing facilities.

The Government should undertake to buy milk from the Union. if

this was not done, the farmers would refuse to sell milk to any milk

contractor in Kaira District.

The Government turned down the demand. The farmers

called a 'milk strike'. It lasted 15 days. Not a drop of milk was sold

to the milk merchants. No milk reached Bombay from Anand, and

the Bombay Milk Scheme almost collapsed. After 15 days the milk

commissioner of Bombay, an Englishman, and his deputy visited

Anand, assessed the situation and accepted the farmers' demand.

Birth of AMUL

This marked the beginning of the Kaira District Co-operative

Milk Producers' Union Limited, Anand. It was formally registered on

[60]
December 14, 1946. Its objective was to provide proper marketing

facilities for the milk producers of the district. The Union began

pasteurizing milk in June 1948, for the Bombay Milk Scheme- just

a handful of farmers in two village cooperative societies producing

about 250 litres a day. Today Kaira Cooperatives are better known

as ANAND MILK UNION LIMITED (AMUL).

An assured market proved a great incentive to the milk

producers in the district. By the end of 1948, 432 farmers had

joined village societies, and the quantity of milk handled by the

Union had increased to 5000 litres a day.

In the early stages, rapid growth brought in its wake serious

problems. Their solution provided the stimulus for further growth.

For example, as the co-operative movement spread in the district, it

was found that the Bombay Milk Scheme could not absorb the

extra milk collected by the Union in winter, when buffaloes yielded

an average of 2.5 times their summer yield. Thus by 1953, the

farmer members had no regular market for the extra milk produced

in winter. They were again forced to sell a large surplus at low rate

to middlemen.

The only remedy was to set up a plant to process the extra

milk into products like butter and milk powder. The logic of this

step was readily accepted by the Government of Bombay and the

Government of India, except for a few doubting Thomases. The

Government of India helped the Union to get financial help from

[61]
UNICEF and assistance from the Government of New Zealand

under the Colombo Plan. Technical aid was provided by FAO. A Rs.

50 lakh factory to process milk powder and butter was blueprinted.

Its foundation stone was laid by the then President of India the late

Dr. Rajendra Prasad on November 15, 1954. The project was

completed by October 31 , 1955, on which day the late Pandit

Jawahar Lal nehru, the then Prime Minister of India, declared it

open. The new dairy provided a further fillip to the co-operative

movement among milk producers. The union was thus enabled to

organize more village cooperative societies and to handle more and

more milk each year.

In 1958, the milk products factory was expanded to

manufacture sweetened condensed milk. Two years later, a new

wing was added for the manufacture of 2500 tons of roller dried

baby food and 600 tons of cheese, the former according to a

formula jointly developed with the Central Food Technological

Research Institute, Mysore (Karnataka). It was the first time

anywhere in the world that cheese and baby food was being

processed from buffalo milk on a large commercial scale. The plant

was inaugurated in 1960 by Mr. Morarjibhai Desai who was then

India's Finance Minister. Another milestone was the completion of a

project to make balanced cattle feed. The plant was donated by

OXFAM under the Freedom from Hunger campaign of FAO. It was

formally commissioned on October 31, 1964, by the late Shri Lal

Bahadur Shastri, the then Prime Minister of India.

[62]
 To meet the requirements of the defence Services for milk

powder, the Kaira Union was asked by the Government of India in

1963 to set up additional milk drying capacity. A new dairy

capable of producing 20 tons of butter and 40 tons of milk powder

a day was speedily completed. It was declared open by Mr. Morarji

Desai in April 1965. The Anand Dairy complex could now handle

5,00,000 litres of milk a day. Further expansion of dairy's milk

handling capacity to 750000 litres a day came in 1973. The same

year the Union set up a plant to make weaning food, chocolate and

malted food, at Mogar on National High Way No.8 about 8

kilometers south of Anand.

Encouraged by the success of the Kaira Union, farmers in

other districts in Gujarat had formed milk co-operatives on the

Anand Pattern. In 1973 six district Unions- Baroda, Banaskantha,

Kaira, Mehsana, Sabarkantha, and Surat decided to form an apex

co-operative known as the Gujarat Co-operative Milk Marketing

Federation Limited, Anand. The Federation took over the marketing

of milk and milk products from these district Unions.

From two village societies with a handful of members the

Kaira union has grown to 880 village societies with 3,59,000

members by 1983-84 . Milk handled has gone up from 250 litres a

day to 7, 00,000 litres a day. The total turnover of the Union has

gone up to Rs. 103 crores in 1983-84.

The year 1990-91 saw new challenges with the change in

economic policies of the Government of India like delicensing,

[63]
liberalization and opening the Indian market to the world market.

In order to face these new challenges, one of the strategies was to

set up a state-of-the-art dairy plant. Dr. V. Kurien, the then

Chairman of National Dairy Development Board, Anand and the

Architect of White Revolution, laid foundation stone on 31 st October

1992 for the same and it was declared open by Shri H.D. Deve

Gowda, the then Prime Minister of India on October 31, 1996- the

golden jubilee year of Kaira Union. Similarly a plant for

manufacture of cheese was also set up at Kheda, towards north

and 42 km away from Anand. It has a capacity of 600 tones per

month and stands to be Asia's largest Cheese manufacturing plant.

This plant was declared open by Professor Madhu Dandavate, Dy.

Chairman, Planning Commission, Government of India on

November 26, 1996.

In 1994 Kaira Union initiated "Management of Change"

programme with the introduction of Total Quality Management

system in the organization and by 1999 it got accredited with ISO

9001 and HACCP, the first dairy co-operative in India to achieve

this goal. Kaira Union's quest for quality took this movement to the

grass root level and 50 societies were certified for ISO in the year

2000. Today almost all societies are accredited with ISO making a

history in the annals of Indian dairy cooperative movement. The

grass root level societies are today technologically well advanced

enabling them to make the payment on the spot to farmers testing

the quality and quantity of milk and capture the business

proceedings electronically. As part of this, the Union has introduced

[64]
Bulk Milk Cooling system at the village level in order to retain the

freshness of milk and better return to farmer members.

Kaira Union has now gone beyond the district and state of

Gujarat to set up units by setting up a new plant in 2004 at Pune

in Maharashtra, followed by Kolkata in West Bengal and Gangtok in

Sikkim creating a new leaf in the history of the Union.

Today Kaira Union manufactures wide range of products:

Butter, Reduced Salt Butter, Butter Blister pack, Amul Lite,

Delicious (Margarine), Ghee, Infant Milk Food, Spray Dried Milk

Powders - Full Cream Milk Powder, Dairy Whitener (Amulya), Skim

Milk Powder, Flavoured Milk in bottles and cans- Kool Cafe, Kesar,

Elaichi, Rose, Koko, Nutramul and Fruit based Strawberry, Mango

and Banana, Butter Milk, Masti Dahi, Lassi, Fresh Milk, various

types of Chhese Cheddar, Processed, Paneer, Emental, Gouda,

Pizza, Mozzarella, Amul Sandwich Bread, Whole Wheat Bread,

Fruity

Bread, Bun, Munch Time (extruded food), Chocolates, Nutramul,

Ice cream and many more new products are on the way to delight
national and international customers.

Kaira Union popularly known as "Amul Dairy" has grown to

1151 village societies with 6,35,599 members by 2009-10. Milk

handled has gone up from 250 ligtres a day to 14 lakh litres a day

and in winter it exceeds 18 lakh litres. The total turnover of the

union has gone up to Rs. 1695 crores in 2009-10.

[65]
 Another milestone in the history of Amul Dairy was

inauguration of a fully automatic Paneer Plant with a capacity of 25

MT per day on 31st October, 2009 on the occasion of celebration of

Amul's 64th foundation Day and 135th Birth Anniversary of Sardar

Patel - the great visionary with whose blessings Amul Dairy was

established in the year 1946. This plant is first of its kind in our

country. In order to utilize the cheese wthey generated during

manufacture of cheese/paneer, a demineralised Whey Drying Plant

has also been set up and the same has come into production in

October 2010.

Total milk procurement by the member Unions during the

year 2011-12 averaged 10.30 milion kg per day, representing

growth of

6.09 per cent over 9.45 million kg per day achieved during 2010-

11.

The AMUL Model/Anand Pattern

The Amul Model is a three-tier cooperative structure. This

structure consists of a Dairy Cooperative Society at the village level

affiliated to a Milk Union at the District level which in turn is

further federated into a Milk Federation at the State level.

Village Dairy Cooperative Society (VDCS)

[66]
 Under the Anand Pattern, a village co-operative society of

primary producers is formed under the guidance of a supervisor or

a milk supply officer of the Union. A milk producer becomes a

member by paying an entrance fee of Re. 1 and buying a share of

Rs.10/-. He must undertake to sell milk only to the Society. The

members elect a managing committee (of 9, 11 or 13 members,

depending on the by-laws applicable) and the committee elects a

chairman.

Committee members are all honorary workers. They employ

aid staff numbering 3 to 6 to run the day to day business of the

society- secretary, milk collector, fat tester, clerk, accountant,

inseminator helper and so on.

Functions of VDCS

• Collection of surplus milk from the milk producers of the

village and payment based on quality and quantity.

• Providing support services to the members like Veterinary

First Aid, Artificial Insemination services, cattle-feed sales,

mineral mixture sales, fodder and fodder seed sales,

conducting training on Animal Husbandry and Dairying etc.

• Selling liquid milk for local consumers of the village.

• Supplying milk to the District Milk Union.

Thus, the VDCS in an independent entity managed locally by the

milk producers and assited by the District Milk Union.

[67]
District Union:

The District Union represents all the villlage societies. It has a

16 member Board of Directors. Twelve are elected from amongst

the representatives of societies out of which, two seats are reserved

for women representatives. The remaining are a nominee of the

financing institutions, a nominee of the district cooperative

department, a representative of the Milk Marketing Federation, one

from individual members and a Managing Director of the Union.

The Board elects a Chairman and Vice-Chairman and appoints a

Managing Director, who in turn appoints General Manager,

Managers and staff. The Board frames policy, the Managing

Director and General Manager look after the day to day work.

Functions of Union:

• Procurement of milk from the Village Dairy Societies of the

District.

• Arranging transportation of raw milk from the VDCS to the

Milk Union.

• Providing input services to the producers like Veterinary

Care, Artificial Insemination services, cattle-feed sales,

mineral mixture sales, fodder and fodder seed sales, etc.

• Conducting training on Cooperative Development, Animal

Husbandry and Dairying for milk producers and conducting

specialised skill development and Leadership Development

[68]
 training for VDCS staff and Management Committee

members.

• Providing management support to the VDCS alongwith

regular supervision of its activities.

• Establish Chilling Centres and Dairy Plants for processing

the milk received from the villages.

• Selling liquid milk and milk products within the District.

• Process milk into various milk and milk products as per the

requirement of State Marketing Federation.

• Decide on the price of milk to be paid to milk producers as

well on the prices of support services provided to members.

State Milk Federation: Gujarat Cooperative Milk Marketing

Federation (GCMMF)

It is the Apex body under AMUL pattern which aims to

provide various type of services to its members.

Functions of Federation: ( GCMMF )

• Marketing of milk and milk products processed/

manufactured by Milk.

• Establish distribution network for marketing of milk and milk

products.

• Arranging transportation of milk and milk products from the

Milk Unions to the market.

• Creating and maintaining a brand for marketing of milk and

milk products (brand building)

[69]
 • Providing support services to the Milk Unions and members

like Technical Inputs, management support and advisory

services.

• Pooling surplus milk from the Milk Unions and supplying it to

deficit Milk Unions.

• Establish feeder-balancing Dairy Plants for processing the

surplus milk of the Milk Unions.

• Arranging for common purchase of raw materials used in

manufacture/packaging of milk products.

• Decide on the prices of milk and milk products to be paid to

Milk Unions.

• Decide on the products to be manufactured at various Milk

Unions (product-mix) and capacity required for the same.

• Conduct long term Milk Production, Procurement and

Processing as well as Marketing Planning.

• Arranging finance for the Milk Unions and providing them

technical know-how.

• Designing and Providing training in Cooperative

Development, Technical and Marketing functions.

• Conflict Resolution and Keeping the entire structure intact.

(ii) Organisational Structure:

The broad organisational structure which is entirely based on

functional pattern is as under:

[70]
ORGANISATION STRUCTRURE

Chairman

Vice Chairman

Managing Director

General Manager

Assistant General Manager

Manager

Deputy Manager

Assistant Manager

Superintendent

Deputy Superintendent

Senior Officer

Workers

[71]
 The management and control of the organisation is vested in

the hands of General Manager who reports to the Managing

Director. Engineers look after the problems of the plant and

machinery and Doctor is heading the medical hospital of the

organisation. Officers are further classified as senior and junior

officers. Superintendents assist the working of the office with the

help of clerks. Peons are the lowest ladder of the organisation.

Various operations of the organisation are allocated to

specific officer so that accountability of performance may be fixed.

Plant is very important for the dairy hence senior and junior

engineers are also deputed to maintain them besides the services of

lower level technical staff like attendants, mechanics, operators etc.

there is a separate section which looks after the financial

operations of the organisation and similarly human resource

interests are also looked after by separate department.

(iii) Objectives of 'AMUL':

Major objectives would be to accelerate the pace of increasing

rural income and employment through dairy development; adopting

modern Technology to improve productivity, reduce operational

costs and ensure greater availability of Milk and Milk Products. In

nut shell the main objectives are:

1. Evolving long term policies to encourage and develop milk

production and productivity in the district.

[72]
2. Achieving Co-ordination among various programmes in the

district to optimise resource utilisation.

3. Providing remunerative and assured market for the milk

produced by the farmers round the year.

4. Improving efficiency in milk collection, transport, processing

and marketing with the emphasis on reducing the cost of

operations at every stage from rural farmer to urban

consumer.

5. Increasing the availability of milk and developing the market

for milk and milk products.

6. Developing the manpower of organisation to reach excellence

in their working life and create a pro-active organisational

culture for achieving competitive edge.

7. Consolidation and expansion of co-operative structure with

special attention to small farmers and weaker sections of milk

producing community.

(iv) Infrastructural Facilities:

Number of Producer Members 6 , 69,546

Number of Village Dairy Cooperative 1176

societies
2.4 Million liters per
Total Milk Handling Capacity
day

[73]
Milk Collection (Daily Average) 1.5 Million Liters

Milk Drying Capacity 100 Mts per day

Whey Drying Capacity 60 Mts per day

Cattle Feed Manufacturing Capacity 1100 Mts per day

Amul Research & Development Research Centre

Association (ARDA)
Dairy Demonstration Farm (DDF) Project at Mogar to
demonstrate scientific
method of dairy farming
Road Milk Tankers With Insulation to
safeguard quality of
milk

Animal Disease Diagnostic Laboratory Mobile and Immobile

Schools 6

Amul Parlours 6315

Amul Milk Stalls At Railway Stations 170

Production Units Dairy Plant Anand,
Food Complex
Mogar Cheese Plant,
Khatraj,
Amul Satelite Dairies in
Pune, Mumbai, Kolkata
and Sikkim
(v) Products and By-products
Products:

AMUL Gold, Shakti, Tazza, Slim and trim and cow milk,

Butter- AMUL Butter with reduced salt, Cheese AMUL processed

cheese, Paneer, Gouda, Emmental, Pizza mozzarella, Infant milk

food- AMUL spray, AMUL infrant formula, I, II, Milk Powders-

AMUL full cream milk powder, AMULYA Dairy whitener, Sagar

[74]
skimmed milk powder, Sterilized Homogenized flavoured milk,

AMUL, Kool cafe, Koko, elaichi, rose, kesar, Sterilized Homogenized

fruit based milk - Mango, Strawberry, Banana, Badam, Curd-

AMUL Masti Dahi; ghee- AMUL Ghee, Butter Milk- AMUL butter

milk, AMUL Masti Chaas, Cocoa products AMUL milk chocolate,

Fruit and nut, Badambar, Chocozoo, AMUL Sugar free, Cooking

chocolate, AMUL Chef's premium- dark chocolate, AMUL Chef's

class Milk chocomass, Malted Milk food- Nutr AMUL; Extruded

Food- AMUL Ganthaia, Munch time, Bread Spread- AMUL lite,

Table Margarine- AMUL Delicious, AMUL Bread- AMUL Sandwich

Bread/Whole Wheat Bread/Bun, Ice creams- Prolife, Sugarfree,

AMUL ice-creams Range, Industrial products: Coco butter, Coco

powder, Coco Mass, Coco cream.

Quality of Milk Products: The Union has obtained ISO 900-2000

and HACCP Certification. It is therefore, imperative that AMUL

focus and lay emphasis on Quality.

Thus Amul's product range includes milk powders, milk,

butter, ghee, cheese, masti Dahi, Yoghurt, Buttermilk, chocolate,

ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk,

basundi, Amul Pro brand and other. Amul PRO is a recently

lanched brown beverage just like bournvita and horlicks offering

whey protein, DHA and essential nutrients to kids along with its

chocolatty taste. In January 2006, Amul launched India's first

sports drink Stamina, which competes with Coca Cola's Powerade

and PepsiCo's Gatorade. Amul also offers mithaimate which

[75]
successfully competes with milkmaid by nestle by offering more fat

% at lower price.

In August 2007, Amul introduced Kool Koko, a chocolate milk

brand extending its product offering in the milk products segment.

Other Amul brands are Amul Kool, a low calorie thirst quenching

drink, Masti Butter Milk, Kool Cafe, ready to drink coffee and

India's first sports drink Stamina.

Amul's Icecreams are made from milk fat and thus are

icecreams in real sense of the word, while many brands in India sell

frozen desserts made from vegetable fat. Amul cares for its

consumers and try to offer them best products at best price. Amul

Sugar-free Pro-Biotic ice-cream won the International Dairy

Federation Marketing Award for the year 2007.

(vi) Marketing of Products

According to Philip Kotler, "Marketing is a societal process by

which individuals and group obtain what they need and want

through creating offering and freely exchanging products and

services of value with other."

• Marketing programme start from the product concept and it

does not end until customer wants are satisfied.

• Profitable sales over the long run and repeat purchase by

customer are vital to success in marketing.

[76]
 • Marketing research and marketing information service alone

can act effectively tools in all decision of marketing

management.

Market Research

Market research is a method of getting facts to be used by the

executives in formulating policies and plans. It enables a

manufacturer or producer to know what the customers want, at

what time and what quantity. It is an organized attempt to reduce

market risk. He principle task of marketing research is to widen the

basis of facts upon which business plans can be laid. Marketing

research shows changes from time to time, if any.

AMUL conducts basically two types of market research. One

is for products and another for the advertising conducted by the

company. These research results serve as an input in future

decision making. The company basically collects feedback from the

customers, about the effectiveness of its advertising campaign and

liking of the products especially in case of new products launched.

It tries to find out by conducting a survey in a target market

whether or not the product is liked by the consumers and ask for

their suggestions for improvement. However AMUL is not much into

conducting research before the launch of the product. Most of its

research is done only once when the product is already launched in

[77]
the market. It does not have any separate department for this

purpose but its sales agents themselves do the work of research for

the company. Yet the results are almost comparable to those

conducted by professionals.

New Product Development:

New product development means development of original

product or product improvement or modification or new brands

through Research & Development efforts. New product development

has become more difficult with the passage of time, due to shortage

of new ideas, keen competition, government and environmental

constraints. It is an expensive affair which involves lot of crucial

decision making.

A number of decisions are taken by AMUL with regards to launch

plans and strategies for the new product, which are as under:-

• Deciding the target customers.

• Designing the promotional campaign.

• Deciding the price.

• Market analysis.

• Deciding the sales force to be employed.

• Deciding the marketing mix.

[78]
 • Deciding whether to launch the product across the country or

in the selected area.

• Appointing distributors.

• Conducting market research.

Product Life Cycle Stages:

A product passes through distinct stages during its life in

market, each posing different challenges, opportunities and

problems. Profits rise and fall at different stages of the product life

cycle. There are four different stages of product life cycle, namely-

1. Production Stage

2. Growth Stage

3. Maturity Stage

4. Decline Stage

Different products of AMUL are in different stages in the product

life cycle.

Products like milk, butter, chocolate and cheese are in the

maturity stage, while ice-creams, chocolates and shrikhand are still

in the growth stage. On the other hand, products like milk powders,

infant food, frozen food items and milk mix are in introduction

stage.

[79]
 Product Mix

A product mix consists of all the product lines and items that

a particular seller offers for sale. A company's product mix has four

important dimensions: width, length, depth and consistency.

Product mix width refers to how many different product lines

the company carries. AMUL has 4 different product lines namely

milk and milk products, chocolate and ice-cream, wet products and

dry products.

Product mix length refers to the total number of items in the

mix. In the milk and milk products line there are 14 different

products, while in ice-cream and chocolate range there are 21

products and in wet and dry products line there are 20 and 10

different products respectively.

Product line depth refers to how many variants are offered of

each product in the line.

[80]
 Product line consistency refers to how closely related the

various product lines are in the end use, production requirements,

distribution channels or some other ways. Although the products

vary in many ways there is still product line consistency in AMUL.

All the products of AMUL are marketed through same channels of

distribution.

Market Segmentation

Market Segmentation is the act of sub dividing a market into

distinct sets of customers who merit attention. Targetting these

customers for marketing by evaluating, selecting, and concentrating

becomes a corollary to segmentation. Market segmentation

assumes importance in the context of intense competition market is

bombarded with. A market consists of buyers, and buyers differ in

one or more ways. They may differ in their wants, resources,

locations, products requirements. These variables have to be

considered in the process of segmentation.

There are different levels of market segmentation. They are

mass marketing, segment marketing, niche marketing and micro

marketing. Markets can be segmented on the geographical basis,

demographical basis, psychological basis, behavioral basis and

loyalty status.

AMUL segments its market on the following basis:

1. Geographical Basis:

[81]
 This segmentation is done on the basis of the lifestyle of

people in different regions and their tastes and consumption

patterns which are distinct according to their geographical

situation. AMUL has segmented India geographically into 5 zones.

2. Demographical Basis:

They have segmented its market on the basis of the

socioeconomic status of the customers i.e. on the basis of their

purchasing power and income level as follows:

Group-A: Consumers falling in this group are from higher social

and economic class.

Group-B: Consumers falling in this group are from Middle

socioeconomic class.

Group-C: Consumers falling in this group are from lower middle

class.

1. Domestic Market

The company has emerged as a trustworthy and quality

manufacturer of wide range of dairy product having an excellent

distribution of network across India. Gujarat state is the main

among the domestic market in India.

2. International Market:

The company has been exporting various dairy products. In

the international markets are how available in US, Gulf Countries

and in Singapore. The company has been successful in creating the

[82]
value added dairy product manufacturers to suit all the segment of

the society. It has all been recognized as Asia's largest dairy

product manufacturers.

Price Policy:

Pricing is very critical decision in marketing management.

The term price can be defined as 'monetary value of anything at

selling/purchasing element point'. Pricing is one of the most

important elements in getting success in today's business world.

Since the marketing of AMUL product are handled by decided

by GCMMF. But the price of liquid milk and flavored milk and

flavored milk are decided by AMUL themselves.

The GCMMF considers all cost elements like cost of milk,

labour cost. Processing cost, packing cost, advertising cost,

transportation cost, sales promotion cost and taxes and set them in

pricing structure to decided selling price of milk and milk products.

The price of milk product is fixed by a programmed committee

and members of this committee are as follows.

1. Two members of federation.

2. Two members of AMUL.

3. Two members of N.D.D.B.

Marketing Targeting:

[83]
 After segmenting the market, company evaluate the various

segments and decides how many and which ones to garget.

Generally the market is targeted in three ways:

Undifferentiated Marketing

Differentiated Marketing

Concentrated Marketing

AMUL uses undifferentiated marketing strategy for targeting

its customers as far as its milk and milk product line is concerned.

While the company implements differentiated marketing strategy

for targeting its customers for the other product lines that are ice

creams and chocolates, wet products and dry products.

Differentiated marketing means market coverage strategy in which

a firm decides to target several market segments and designs

separate offers for each. AMUL targets its customers according to

the segments like geographic and demographic.

Distribution:
Improvement in both width and depth of distribution across

urban and rural India continues to be the key of focus. The unique

combination of ambient, chilled, Frozen and fresh distribution

highways has always been an advantage to the organisation and

the channel partners associated with the organisation have been a

major strength. In the year 2010-11 Hub-n-spoke model of

distribution was rolled out to explore the huge and potential

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markets of small towns and rural areas. Phenomenal success of

this distribution approach in terms of generating sales volume has

made it imperative that this model to reach fast to still untapped

markets of small towns and rural areas.

Packaging:

Packing includes the activities of designing and producing the

container for the product. Packaging has become the potent

marketing tool. Well designed packages can create convenience and

promotional value. Various factors contribute to packaging growing

use as a marketing tool:

• Self Service

• Consumer Affluence

• Company and Brand Image

• Innovation Opportunity

Packaging of the products of AMUL varies according to the nature

of the product. As most of the products are perishable in nature

special care is taken in packing them. MILK AND MILK PRODUCTS

are packed in plastic bags or containers, while ICE-CREAMS and

CHOCOLATES are packed in cardboard packing. The company

maintains the standards prescribed by BIS, with regards to

packing. These products are then packed in cartoons, for greater

safety measures and for transporting them to the market.

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Labeling:

Labeling printed information that appears on or with the

package, is also a part of packaging. Labels may range from simples

tags attached to products to complex graphics that are part of the

package. Label identifies describes and promotes the product

through attractive graphics. The label might carry only the brand

name or great deal of information or pictures. Even if the seller

prefers a simple label the law may require additional information.

The labels of the products of AMUL are attractively designed.

It contains all the information as per statutory requirements.

Information like name of product, brand name, logo, date of

packing and manufacturing, expiry date, price, code number,

ingredients, storage and usage instructions, weight, manufacturer's

and marketer's name, logo showing "PURE VEG" etc. appears on

the label of the products.

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SUPPLY CHAIN OF AMUL

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Procurement

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