Human Resource Management

GCMMF's endeavors. The vast and complex supply chain stretches from small suppliersto large fragmented markets.Management of this network is made more complex by the fact that GCMMF is directlyresponsible only for a small part of the chain, with a number of third party players(distributors, retailers and logistics support providers) playing large roles.Managing this supply chain efficiently is critical as GCMMF's competitive position isdriven by low consumer prices supported by a low cost system.

DEVELOPING DEMAND

At the time Amul was formed, consumers had limited purchasing power, and modestconsumption levels of milk and other dairy products. Thus Amul adopted a low-cost pricestrategy to make its products affordable and attractive to consumers by guaranteeing themvalue for money.
INTRODUCING HIGHER VALUE PRODUCTS

Beginning with liquid milk, GCMMF enhanced the product mix through the progressiveaddition of higher value products while maintaining the desired growth in existingproducts.Despite competition in the high value dairy product segments from firms such asHindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and thesequence in which Amul introduces its products is consistent with the core philosophy of providing milk at a basic,

MANAGING THE SUPPLY CHAIN Even though the cooperative was formed to bring together farmers, it was recognised thatprofessional managers and technocrats would be required to manage the network effectively and make it commercially viable.

COORDINATION

Given the large number of organisations and entities in the supply chain anddecentralised responsibility for various activities, effective coordination is critical forefficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control.Buy-in from the unions is assured as the plans are approved by GCMMF's board. Theboard is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies, thereby creating a situation of interlockingcontrol.The federation handles the distribution of end products and coordination with retailersand the dealers. The unions coordinate the supply side activities.These include monitoring milk collection contractors, the supply of animal feed and othersupplies, provision of veterinary services, and educational activities.

MANAGING THIRD PARTY SERVICE PROVIDERS

From the beginning, it was recognised that the unions' core activity lay in milk processingand the production of dairy products. Accordingly, marketing efforts (including branddevelopment) were assumed by GCMMF. All other activities were entrusted to thirdparties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinaryservices.It is worth noting that a number of these third parties are not in the organized sector, andmany are not professionally managed with little regard for quality and service.This is a particularly critical issue in the logistics and transport of a perishablecommodity where there are already weaknesses in the basic infrastructure.

ESTABLISHING BEST PRACTICES

A key source of competitive advantage has been the enterprise's ability to continuouslyimplement best practices across all elements of the network: the federation, the unions,the village societies and the distribution channel.In developing these practices, the federation and the unions have adapted successfulmodels from around the world. It could be the implementation of small group activities orquality circles at the federation. Or a TQM program at the unions. Or housekeeping andgood accounting practices at the village society level.More important, the network has been able to regularly roll out improvement programsacross to a large number of members and the implementation rate is consistently high.For example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., allemployees of GCMMF meet at the closest office, be it a department or a branch or adepot to discuss their various quality concerns.Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with aprocess check at the end to record how the meeting was conducted. Similar processes arein place at the village societies, the unions and even at the wholesaler and C&F agent

levels as well.Examples of benefits from recent initiatives include reduction in transportation time fromthe depots to the wholesale dealers, improvement in ROI of wholesale dealers,implementation of Zero Stock Out through improved availability of products at depotsand also the implementation of Just-in-Time in finance to reduce the float.Kaizens at the unions have helped improve the quality of milk in terms of acidity andsour milk.
(Undertaken by multi-disciplined teams, Kaizens are highly focussed projects,reliant on a structured approach based on data gathering and analysis.)
For example,Sabar Union's records show a reduction from 2.0% to 0.5% in the amount of sourmilk/curd received at the union.The most impressive aspect of this large-scale roll out is that improvement processes areturning the village societies into individual improvement centers.

TECHNOLOGY AND E-INITIATIVES

GCMMF's technology strategy is characterized by four distinct components: newproducts, process technology, and complementary assets to enhance milk production ande-commerce.Few dairies of the world have the wide variety of products produced by the GCMMFnetwork. Village societies are encouraged through subsidies to install chilling units.Automation in processing and packaging areas is common, as is HACCP certification.Amul actively pursues developments in embryo transfer and cattle breeding in order toimprove cattle quality and increases in milk yields.GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to

THE DISTRIBUTION NETWORK

Amul products are available in over 500,000 retail outlets across India through itsnetwork of over 3,500 distributors. There are 47 depots with dry and cold warehouses tobuffer inventory of the entire range of products.GCMMF transacts on an advance demand draft basis from its wholesale dealers insteadof the cheque system adopted by other major FMCG companies. This practice isconsistent with GCMMF's philosophy of maintaining cash transactions throughout thesupply chain and it also minimizes dumping.Wholesale dealers carry inventory that is just adequate to take care of the transit timefrom the branch warehouse to their premises. This just-in-time inventory strategyimproves dealers' return on investment (ROI). All GCMMF branches engage in routescheduling and have dedicated vehicle operations.

UMBRELLA BRAND

The network follows an umbrella branding strategy. Amul is the common brand for mostproduct categories produced by various unions: liquid milk, milk powders, butter, ghee,cheese, cocoa products, sweets, ice-cream and condensed milk.Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya andNutramul. The edible oil products are grouped around Dhara and Lokdhara, mineralwater is sold under the Jal Dhara brand while fruit drinks bear the Safal nam
e.By insisting on an umbrella brand, GCMMF not only skillfully avoided inter-unionconflicts but also created an opportunity for the union members to cooperate indeveloping products.

ACHIEVEMENTS OF THE "AMUL MOVEMENT"
2.

The dairy cooperatives have been able to maintain democratic structure at least atthe grass-root level with the management committee of the village level unitelected from among the members in majority of the villages.3. The dairy cooperatives have also been instrumental in bridging the social divideof caste, creed, race, religion & language at the villages, by offering open andvoluntary membership
.
ACHIEVEMENTS OF GCMMF 1. 3.1 million milk producer member families
2.

15,760 village societies
2.

15 District Unions
3.

9.4 million liters of milk procured per day
5.

Rs. 150 million disbursed in cash daily
6

GCMMF is the largest cooperative business of small producers with an annualturnover of Rs. 53 billion
7.

The Govt. of India has honored
Amul with the ―Best of all categories RajivGandhi National Quality Award‖. 8. Largest milk handling capacity in Asia

GCMMF (AMUL) has the largest distribution network for any FMCG company. It hasnearly 50 sales offices spread all over the country, more than 5,000 wholesale dealers andmore than 7,00,000 retailers.AMUL is also the largest exporter of dairy products in the country. AMUL is availabletoday in over 40 countries of the world. AMUL is exporting a wide variety of productswhich include Whole and Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk,Clarified Butter (Ghee) and Indigenous Sweets. The major markets are USA, WestIndies, and countries in Africa, the Gulf Region, andSAARCneighbors, Singapore, ThePhilippines, Thailand, Japan and China.In September 2007, Amul emerged as the leading Indian brand according to a survey bySynovate to find out Asia's top 1000 Brands.In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector inThe Brand Trust Report,published by Trust Research Advisory.

lARGEST COLD CHAIN NETWORK
9.

48 Sales offices, 5000 Wholesale Distributors, 7 lakh retail outlets
10.

Export to 37 countries w
GCMMF (AMUL) has the largest distribution network for any FMCG company. It hasnearly 50 sales offices spread all over the country, more than 5,000 wholesale dealers andmore than 7,00,000 retailers.AMUL is also the largest exporter of dairy products in the country. AMUL is availabletoday in over 40 countries of the world. AMUL is exporting a wide variety of productswhich include Whole and Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk,Clarified Butter (Ghee) and Indigenous Sweets. The major markets are USA, WestIndies, and countries in Africa, the Gulf Region, andSAARCneighbors, Singapore, ThePhilippines, Thailand, Japan and China.In September 2007, Amul emerged as the leading Indian brand according to a survey bySynovate to find out Asia's top 1000 Brands.In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector inThe Brand Trust Report,published by Trust Research Advisory.

LARGEST COLD CHAIN NETWORK
9.

48 Sales offices, 5000 Wholesale Distributors, 7 lakh retail outlets
10.

Export to 37 countries w
Even today, while competing in the market for high value dairy products, GCMMFensures that adequate supplies of low value products are maintained.On the supply side, as mentioned earlier, the member-suppliers were typically small andmarginal- farmers had severe liquidity problems, were illiterate and had no prior trainingin dairy farming. AMUL and other cooperative Unions adopted a number of strategies todevelop the supply of milk and assure steady growth. First, for the short term, theprocurement prices were set so as to provide fair and reasonable return.Second, aware of the liquidity problems, cash payments for milk supply was made withminimum of delay. For the long-term, the Unions followed a multi-pronged strategy of education and support. For example, only part of the surplus generated by the Unions ispaid to the members in the form of dividends. A substantial part of this surplus is used foractivities that promote growth of milk supply and improve yields. These includeprovision of veterinary services, support for cold storage facilities at the village societiesetc. In parallel, the Unions have put in place a number of initiatives to help educate themembers.To summarize, the dual strategy of simultaneous development of the market and memberfarmers has resulted in parallel growth of demand and supply at a steady pace and in turnassured the growth of the industry over an extended period of time.
Cost Leadership:
AMUL‘s objective of providing a value proposition to a large customer base led naturally to a choice of cost leadership position. Given the low purchasing powerof the Indian consumer and the marginal discretionary spending power, the only viableoption for AMUL was to price its products as low as possible. on costs and had significant implications for managing its operations and supply chainpractices (described later). Focus on Core Activities
:
In view of its small beginnings and limited resources, itbecame clear fairly early that AMUL would not be in a position to be an integrated playerfrom milk production to delivery to the consumer. Accordingly, it chose a strategy tofocus on core dairy activities and rely on third parties for other complementary needs.This philosophy is reflected in almost all phases of AMUL network spanning R&D,production, collection, processing, marketing, distribution, retailing etc.
For example
, AMUL focused on processing of liquid milk and conversion to variety of dairy products and associated research and development. On the other hand, logistics of milk collection and distribution of products to customers was managed through thirdparties.However, it played a proactive role in making support services available to its memberswherever it found that markets for such services were not developed. For example, in theinitial stages, its small and marginal member farmers did not have access to finance,veterinary service, knowledge of basic animal husbandry etc.Thus to assure continued growth in milk production and supply, AMUL actively soughtand worked with partners to provide these required services. In cases where suchpartnerships could not be established, AMUL developed the necessary capabilities andprovided the services. These aspects are elaborated later in this section.

Managing Third Party Service Providers
:
Well before the ideas of core competence andthe 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 andproduction of dairy products. Accordingly, the Unions focused efforts on these activitiesand related technology development. Marketing efforts (including brand development)were assumed by GCMMF. All other activities were entrusted to third party serviceproviders. These include logistics of milk collection, distribution of dairy products, saleof products through dealers and retail stores, some veterinary services etc. It is worthnoting that a number of these third parties are not in the organized sector, and many arenot professionally managed.Hence, while third parties perform the activities, the Unions and GCMMF havedeveloped a number of mechanisms to retain control and assure quality and timelydeliveries (see the sub-section on Coordination for Competitiveness later in the paper formore details). This is particularly critical for a perishable product such as liquid milk. Financial Strategy
:
AMUL‘s finance strategy is driven primarily by its desire to be self
-reliant and thus depend on internally generated resources for funding its growth anddevelopment. This choice was motivated by the relatively underdeveloped financialmarkets with limited access to funds, and the reluctance to depend on Governmentsupport and thus be obliged to cede control to bureaucracy.

AMUL’s financial strategy may thus be characterized by two elements
:(a) Retention of surplus to fund growth and development, and(b) Limited/ no credit, i.e., all transactions are essentially cash only.

For example
, payment for milk procured by village societies is in cash and within 12hours of procurement (most, however, pay at the same time as the receipt of milk).Similarly, no dispatches of finished products are made without advance payment fromdistributors etc. This was particularly important, given the limited liquidity position of farmer/suppliers and the absence of banking facilities in rural India.

AMUL MARKETING

GCMMF is the marketing arm of the network and manages the physical delivery anddistribution of milk and dairy products from all the Unions to customers. GCMMF is alsoresponsible for all decisions related to market development and customer management.These activities, which range from long-term planning to medium-term and short-termoperational decisions are described below.As mentioned earlier, introduction of new products and choice of product mix andmarkets should be consistent with the growth strategy, and synchronous with growth in milk supply. GCMMF‘s demand growth strategy may be characterized by two key elements:(i) developing markets for its high value products by graduating customersegments from low value products, and(ii) Maintaining a healthy level of customer base for its base products (low valuesegment). This strategy often requires GCMMF to allocate sufficient quantityof milk supply to low value products, thereby sacrificing additional profitsthat could be generated by converting the same to high value products.

Interestingly, advertisement & promotion (a la FMCG) was not considered to be enoughof value addition and hence the budget was kept relatively small. Instead, GCMMFpreferred a lower price with emphasis on efficiency in advertising. In this context,GCMMF provides umbrella branding to all the products of the network. For example,liquid milk as well as various milk products produced by different Unions is sold underthe same brand name of AMUL. Interestingly, the advertising has centered on building a common identity (e.g., a happy & healthy ―cartoon‖ AMUL girl) and evoking nationalemotion (e.g., the key advertising slogan says ―AMUL
-
The Taste of India‖).
GCMMF also plays a key role in working with the Unions to coordinate thesupply of milk and dairy products. In essence, it procures from multiple production plants(the thirteen Unions), which in turn procure from the Village Societies registered witheach Union. GCMMF distributes its products through third party distribution depots thatare managed by distributors who are exclusive to GCMMF. These distributors are alsoresponsible for servicing retail outlets all over the country. GCMMF sales staff manages this process. Retailing of GCMMF‘s products takes place through the FMCG retail network in India most of whom are small retailers. Liquid milk is distributed by vendorswho deliver milk at homes. Since 1999, GCMMF has started web based orderingfacilities for its customers. A well-defined supply chain has been developed to servicecustomers who order in this manner.

AMUL MARKETING MIX

One of the most conservative FMCG entities, GCMMF spends a mere 1% of its turnoveron promotions. GCMMF has written and re-written rules of the game. Amul butter girl isone of the longest running ad campaigns in the country for 41 years. Intelligent marketingof milk, ice-cream and butter milk. Intelligent Marketing


Expansion to foreign shores GCMMF had signed an agreement with Wal-Mart tostock its shelves with products under its Amul brand name. Amul processedcheese, pure ghee, Shrikhand, Nutramul, Amul's Mithaee Gulab Jamuns are fewof the products marketed in the US markets. 50 per cent of Americans beingmedically obese, and if Amul is really looking to capture the hearts of the second-and third-generation Indians, offering low-fat versions of its brands, would makea lot of commercial sense. Hence targeting the large Indian community in the USmarkets with its niche products like mithai, packaged ready to eat foods market itcan definitely expand its market to a large extent.


Moving consumers from loose milk to packaged milk and gradually move themup the value chain (tetra pack to beverages) Being exposed to a brand, it is naturalfor a customer to try more products Defense Strategy


Wide range of product categories caters to consumers across all market segments.For example, Amul Kool is targeted at children, while teenagers prefer Kool Café,as it has a cool imagery associated with it. Segmentation


Changing retail environment Striking out on its own, with Amul Outlets orparlours to deliver consumers total brand experience Launched in 2002, there are

SUCCESSFUL PRODUCT STRATEGY

1.Product Positioning Strategy
- Low price Amul Ice - Creams made Kwality walls life hell. Chocolate milk was launched ‗Amul Kool koko‘
2.Product Re-Positioning Strategy
- Jaldhara –
Narmada Neer3.
Product Overlap Strategy –
Amul Processed Cheese Vs Cheese Spread NutramulEnergy Drink Vs Amul Kool4.
Product Design Strategy –
Use of Utterly –
Butterly Girl since 19675
. Product Elimination –
Eliminated Jaldhara – bottled water Successful ProductStrategy6.
Diversification Strategy –
Dairy ProductsE.g.: Fresh Milk, Milk Drinks & Desserts, and Bread Spreads, Cheese Products NonDairy Products Egg: Veg. Oils, Snacks, Instant Food Successful Product Strategy:

SWOT ANALYSIS OF AMUL (GCMMF)
STRENGTHS

1. The company is having Indian origin thus creating feeling of oneness in the mind of the customers.2. It manufactures only milk and milk products, which is purely vegetarian thus providingquality confidence in the minds of the customers.3. It is aiming at rural segment, which covers a large area of loyal customers, which othercompanies had failed to do.4. People are quite confident for the quality products provided by Amul.5. Amul has its base in India with its butter and so can easily promote chocolates withoutfearing of loses.6. The prices of chocolates of Nestles are comparatively cheap as compared to othercompanies.

2. WEAKNESS
1. There are various big players in the chocolate market, which acts as major competitorsrestricting their growth.2. Lack of capital invested as compared to other companies.3. Improper distribution channel in India.

OPPORTUNITIES

1. There is a lot of potential for growth and development as huge population stay in ruralmarket where other companies are not targeting.2. The chocolate market is at growth stage with very less competition so by introducingnew brand and intensive advertising there can be a very good scope in future.
2.
THREATS

1. The major threat is from other companies who hold the majority share of consumers inIndian market i.e. Cadburys and Nestle.2. There exists no brand loyalty in the chocolate market and consumers frequently shifttheir brands.
3. New companies‘ entering in Indian market like Fantasie fine poses lot problems for
Amul.

MARKETING MIX OF AMUL PRODUCTS


PRODUCTS


DAIRY PRODUCTS


COOKING PRODUCTS


PLACE


RURAL AND URBAN MARKET


INTERNATIONAL MARKET


PRICE


LOW PRICING STRATEGY


PROMOTION


ADVERTISEMENT

OBJECTIVES OF STUDY


To know the relationship of sales with the advertisement.


To know awareness of people towards Amul Products.


To know in which segment are mostly like/preferred.


To know which advertisement tool is mostly preferred by people.


To know the preference of Amul Products with comparison to othercompetitive brands.


To know the factors which affects consumer‘s buying behavior to purchase
Amul products.

BCG MATRIX OF AMUL PRODUCTS

STPD ANALYSIS
SEGMENTATION
 Wide range of product categories caters to consumers across all market segments.

TARGETING


Changing Retail Environment


Striking out on its own, with Amul parlors and outlets to deliver the customer atotal brand experience.


Launched in 2002, there are now 4700 Amul parlors across the country.

PROMOTION


Uses A variety of media to communicate


Most famous Billboard Campaign


The endearing polka dotted girl and pun at various issues increased brandsfan

COMPETITORS


Britannia


HLL


Mother Dairy


Nestle


Cadbury
AMUL PRODUCT PROMOTION STRATEGY


Product Positioning Strategy


Low price Amul ice-cream made Kwality Walls Life Hell


Chocolate Milk Was launched – ―Amul Kool Koko‖


Product Re-Positioning Strategy


Jaldhara –
Narmada Neer


Product Overlap Strategy


Amul Processed Cheese Vs Cheese Spread


Nutramul Energy Drink Vs Amul Kool.


Product Design Strategy


Use of Utterly –
Butterly since 1967


Product Elimination


Eliminated Jaldhara –
Bottled Water


Diversification Strategy


Dairy Products


Fresh Milk, Bread Spread, Cheese Products


Non Dairy Products


Snacks, Instant Food

LIMITATIONS  Limited time available for interviewing the respondents. As a result of this it wasnot possible to gather full information about the respondents.


When I interviewed children and teenagers, sometimes they use to give answersunder the influence of their parents or elders.


As winter training is going under winter season so sometimes people are lessinterested in filling up questionnaire.


Sometimes the problem which I face is language problem for which I have tomake them understand.


Non-cooperative approach and rude behavior of the respondents.


If the respondents answer does not falls between amongst the options given then itwill turn up to be a biased answer.

SUGGESTIONS

In order to maintain and increase the sales in the METRO city, the followingrecommendations regarding Amul; particularly regarding advertisement, distribution,promotional policies, etc, are hereby suggested:


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 thesales 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 thenational level. Local advertisement must mention the exclusive Amul shops of thecity.


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

Though Amul chocolate advertisements are rarely shown on television yet manypeople could recall it as per the data of research. It shows that there is only needto give advertisement only to rememorize customers. Because Amul is verystrong brand name.