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Amul : A Cooperative with a Brand
Article · June 2010
1 author:
Ritesh Dwivedi
Amity University
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Amul : A Cooperative with a Brand
Dr. Ritesh Dwivedi, Lecturer, Amity School of Rural Management, Amity University, Sec125, NOIDA.
This paper describes success story of a cooperative institution (AMUL) which has touched the
level of excellence as top corporate players. Cooperative has farmers as members and they used
to sell their milk collectively under cooperative framework to maximize profits and increase
bargaining power. Profitability of a cooperative is heavily depends upon maintaining balance
between farmer’s ownership in cooperative and professional management. Objective of this
paper is to review the AMUL story, derive core practices responsible behind the success of Amul
and find how branding has played a role in AMUL’s phenomenal growth. In AMUL’s case
Marketing strategy and Branding have been the mantras of success as AMUL Brand is one of the
super brands of Indian market and it has established its contract with customers showcasing its
higher quality standards, justified and correct pricing strategy & product availability in every part
of India. This paper is based on secondary data collected through different websites, magazines
and newspapers. Importance of a strong brand has been focused and Amul branding strategy has
been discussed with brief description of market share of different Amul products. This paper has
been divided in Introduction, Evolution of Cooperative, Brand Building, Range of Products and
Conclusion. It has been emphasized that Cooperative always stands strong if democratic,
participatory, and efficient management have been developed to run it. At the end, it has been
concluded that Amul stands profitable at same time competitive due to three strong practices
namely Branding, matching supply and demand and professional management.
Amul represents a fantastic success story before us and it shows, cooperatives can be an integral
part of economic growth in developing nations. It has been established from the case of Amul
that government can be an important catalyst, policymaker and moreover a support institution
but should not be a market player in itself. In every cooperative segment government
interference should not be as it hampers the institution building and obviously decision making
process also. Daily milk sale is an essential part of India’s farmer’s income having cows/
buffaloes. Before Amul, entire process starting from collection of the milk upto selling it and
collecting payments was infected with inefficiency and unfairness. Role of middlemen was so
strong that farmers had to sell their milk on their prices. In these conditions, farmers were so
much exploited and on the other hand, there was no alternative option rather than forming
farmer’s own cooperative. Amul has organized over 10,000 village cooperatives, designed and
implemented multiple interventions along the value chain. Together these cooperatives bring
thousands of liters of milk to market daily, which makes them the leading player in the Indian
milk industry.
Evolution of Cooperative
AMUL was formed in 1946 and this brand name has been managed by Gujarat Co-operative
Milk Marketing Federation Ltd. (GCMMF) which is jointly owned by 2.6 million milk producers
in Gujarat. 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 consumer by providing quality products which are good
value for money.
White Revolution of India was a historic success because AMUL business concept was part of it.
Every day, AMUL collects 447,000 litres of milk from 2.12 million farmers (many illiterate),
converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60
million) to over 500,000 retail outlets across the country. Today, AMUL is a world player
because of its high quality products, vast co-operative network, indigenous technology,
marketing strategy & member farmer’s belief. Amul has transformed the process for millions of
small farmers by using an automatic, computerized collection system which reduces the time for
weighing, quality testing and payment processing from a few hours with payment days later, to
five minutes and immediate payment. Each day, milk is collected no more than 10 miles from the
farmer, with this nationwide, decentralized, collection process. Amul developed a computerized
quality testing machine, which makes the process transparent and fair to the farmer, and buys
exclusively from women—a decision which has increased the status of the women, while
developing a positive brand image for India's largest food products business.
AMUL is a name widely recognised and respected, not just in cities and towns, but in villages as
well. AMUL is a company that strongly pushes itself as an Indian company. For its own sake it
works well because it relies extremely heavily on domestic sales. One reason that AMUL is the
giant it is because as said earlier it’s built on the back of a co-operative movement. It encourages
women and farmers to collect milk from their cows and pass it on to them for a price. That way it
has been able to morally empower them.
The flipside of the same movement has been a very strong source as the starting point to
AMUL’s supply chain. By managing milk supplies from the cattle farmer and sending it straight
to the factory, it’s been able to eliminate the middleman. This gives AMUL an edge over its
competitors. They used this strong supply chain for maximising their market share and also,
started making such consumer products that have traditional market. They always anticipated the
right type of product at the right time. Most of these products remain to be products derived from
milk like butter, cheese, packaged milk beverages, chocolates; etc.
Brand building of Amul
Advertising of AMUL has been excellent till today as they know the pulse of a common Indian
as well as modern youth. Certainly it has helped that those responsible for keeping the AMUL
name in the public eye have used considerable imagination.
‘The taste of India’ campaign has proved to be a trend setter. In today’s world the brand name
serves in as a contract towards a common consumer. It is the assurance to the buyer that her
specifications will be met. It is the seller’s assurance that quality is being provided at a fair price.
You have to renew constantly your brand to use it as a contract. When the brand fails to meet the
customer’s expectations then the contract loses its value or we can say that faith of consumer
dips. AMUL has constantly reviewed its marketing and branding strategy that it’s contract with
consumers never dishonored. It is also a fact that when AMUL first thought of exporting to West
Asia and even to the United States, it was because of the loyalty of AMUL customers who, even
when far from home, still craved our ‘taste of India’.
Survival of the brand depends upon its quality and if it does not equal or exceed what the buyer
expects the sell drops. Quality is a vital ingredient of a good brand. Remember the “core
benefits” – the things consumers expect. These must be delivered well, consistently. While
selling food product, the brand must always represent the highest hygienic & bacteriological
standards. Taste is topmost characteristic and it should be just delicious.
A customer will be always satisfied a lot if he gets gets what he pays for. AMUL has always
cared for common consumer and supplies far better qulity product than others. The price tag of
AMUL products have always focused to increase its market share and certainly not at the cost of
exploiting the consumers. Even when adverse conditions have reduced supplies of products like
butter, AMUL have resisted the common practice of raising prices, charging what the market
would bear.
Availablity is another important criteria for increasing the sale. If company spends a lot to create
a positive brand image but the distribution network is unable to supply the customer who wants
to buy it, then the whole campaign can fail like anything. Over the years, AMUL have built what
is probably the nation’s finest distribution network. It reaches hundreds of cities and towns
through a cold chain that not only ensures that products are available, but they reach the
customer at the farthest end of the country with the same quality. AMUL used not only TV
campaigns but also road and poster campaigns. That’s why it has very deep reach in rural / urban
areas of the country.
Occasionally, companies can commit some mistakes – or, its customer may think they have
made a mistake. But progressive marketing strategy always says that customer is always right.
AMUL have very efficient complaint redressal system. They always listen to customer complaint
and correct it as it can be.
For more than fifty years, AMUL has served its consumer with higher degree oof commitment.
Established as a super brand of India, AMUL means quality, value for money, availability and
Amul range of Products
AMUL defending its turf has changed retail environment, striked out on its own, with AMUL
Outlets or parlours to deliver consumers total brand experience. Launched in 2002, there are now
400 AMUL parlours across the country, which contributed 3% to the brand’s total turnover last
year. AMUL parlours are today present on campuses of Infosys, Wipro, IIM-A, IIT-B, Temples,
Metro rail and railway stations in Gujarat.
AMUL is the largest milk brand in Asia, marketing more than 30 different brands of dairy
products like cheese, ice-cream, condensed milk, ready-to-eat pizza, beverages etc. AMUL Kool
and Kool Café are doing well. AMUL has done well defending itself against names like
Mahananda, Vijay, Milma and other co-operative milk brands and also against FMCG and F&B
brands like Britannia, Nestle and Mother Dairy.
AMUL has largest chunk of market share of mare than 86 % . AMUL has introduced a number
of diverse range of varied products like cooking butter, low fat butter etc along its main product.
Hence covering all the segments in which a competitor can enter, thus creating strong barriers
and in turn playing offence to defend its market position
AMUL ice creams has 24.75 % market share in caparison to Mother Dairy share of 8.66% & the
market leader HUL- kwality walls share of 28.22%. AMUL is constantly engaged in deriving its
counter strategy to grow its market share. AMUL has offered Pro-biotic Ice-creams for health
concious individuals. This can be a promising product to keep family healthy and strong. The
product was launched with this in view.
AMUL chocolate market share is merely 10 % compared with 70 %share of the market leader,
Cadbury. AMUL is reworking its strategy in the chocolate category to push its chocolate product
sales. AMUL's strategy is to identify the market gaps and fill them suitably.
Three key practices are there behind the success of AMUL.
The first, that Amul has developed a strong brand and implemented its marketing strategy
towards strengthening it constantly.
The second that AMUL presented traditionally accepted milk products with a brand value as well
as targeted sustained growth for the long term depending upon matching supply and demand.
Third, that Amul never compromised on professional grounds and separated decision making
and management into two folds. Member Farmers were always involved in decision making and
controlling the giant and on the other hand, professional managers and technocrats were
appointed to run the management.
“Brand Yatra: Amul’s ‘Utterly Butterly Delicious’ road to being an iconic brand” by
www.exchange4media.com/brandspeak/brandspeak_FS.asp. (Assessed on 9 March
India's Amul Dairy Cooperative by Etahn Arpi on
http://www.nextbillion.net/blog/2006/08/24/indias-amul-dairy-cooperative (Assessed
on 21st April 2010)
Chairman's Speech: 33rd Annual General Body Meeting held on 14th June, 2007 on
www.amul.com/chairmanspeech.html (Assessed on 9th March 2010)
Success Story on www.chrmglobal.com/.../Case-Study--Growth-of-AMUL.html
(assessed on 9th march 2010)
Jones, John Philip 2008, “What’s in a brand? Building brand equity through
advertising” TATA McGraw hill, New Delhi
Articles by Devnath Tripati, Editor of the Asian Journal of Operations Management
on www.India-seminar.com/.../498%20verghese%20kurien.htm (assessed on 9th
March 2010)
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