CASE STUDY 3: AMUL INDIA 1

AMUL TASTE OF INDIA

SYED DANIAL HASHMI

SYED DANIAL HASHMI 1. Costumer Value Chain

Holistic marketing is integrating the value exploration, value creation, and value delivery activities with the purpose of building long-term mutually satisfying relationships and co prosperity among key stakeholders. The different dimensions of the matrix for Amul are summarized below.

Cognitive Space:
It reflects the needs of the consumers. Customers need in this case is easily available and hygienic dairy products. They wanted such kind of dairy products that are good for health, the milk that should be healthful to drink, germless and should be pure. Due to the provision of impure milk by the Doodhis (person who sell fresh milk) people were losing their trust on them as well as the fresh milk thats why they wanted such a kind of milk-provider Company that should provide them good quality, pasteurized, and dehydrated Milk. Customer Benefits: Costumers benefit is what costumers derive from the product. Mean the net benefit a costumer derives from a product after deducting the cost. Amul is providing well-known dairy brands consistently for the last 66 Years. It has developed a customer confidence in its products. The Indian costumer is deriving both physical and psychological benefits from it, physical in the sense of good health and psychological in the sense that costumer knows that they are having a product that is not harmful for their health. Indeed, its good for health. So, costumers are deriving a bundle of benefits from Amul,s products. It has fulfilled their need, provided them with hygienic and healthy dairy brands at a normal price. Customer-Relationship Management: Amul is managing the customer relationships in an excellent way. It is demonstrated by the profitability of the company. Amul consistently works on the quality and other than that it also introduces new products on a regular base. GCMMF continuously increases the product of the product line Amul. Managing costumer relationship is a complete art and science in itself. It is really very much difficult to make and maintain good costumer relationship. First of all, they shall made good relations with the costumers. It can do say in many ways like the company shall value its customers, it shall give the costumer a feel of ease and of homely product. They once the good relations have been made with the costumers the company shall maintain them. Making good relations is no doubt very tough but managing them is much more tougher then making them. Amul has created and maintained that kind of relationship very well. Indian costumer values the products of Amul a lot. For them now it means their own taste, Amul-the taste of India.

CASE STUDY 3: AMUL INDIA

Competency Space:

Competency space is basically the broad and physical capabilities of the company that gives companys product a distinctive edge, a competitive advantage. Competency space in case of Amul is that it is producing dairy products and producing them excellently from the last 66 years. Amul has managed its value chain in a good manner. As Amul is offering perishable goods, its return policy is also good. The company has managed its infrastructure, HRM, technology and procurement. Future more, it takes great care of its suppliers and costumer. They get milk from the farmers after inspection. There are certain limits below which the company does not purchase the milk. Business Domain: Amul is producing a variety of products but all of the products are made from milk which means that their Business domain is Dairy industries. The different Brands with product line are given below:1 Amul Milk Amul tazza Amul Gold Bread Spreads Butter Lite Table margarine Cooking butter Cheese Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza

UHT Milk Amul Shakti 3% fat Milk Amul Taaza 1.5% fat Milk Amul Gold 4.5% fat Milk
1

The data has been taken from Tatas website

SYED DANIAL HASHMI

Amul Lite Slim-n-Trim Milk 0% fat milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy Mix Beverage Range Nutramul Malted Milk Food Amul PRO Ice Cream Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond) Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple) Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta) Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic) Dahi Amul Flaavyo Yoghurt Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee Ghee Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee Milk Powders Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener Mithai Range Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos Mithai Mate Chocolates This is the whole product line (Amul) by offering which company is having good profit.

CASE STUDY 3: AMUL INDIA

Internal Resource Management:

IRM helps to integrate major business processes i.e. primary and supporting marketing activities. Amul has not compromised profitability over distribution. They have maintained their profitability. They distribute all the money among their partners. They ask their partners ( i.e. farmers) to invest money and then earn profit which would be distributed among all the partners. One very interesting thing about amul is that the whole governing personnel (the executive body) is farmers. This helps Amul a lot in different matters. Resource Space: Resource Space includes horizontal partnerships, with partners chosen for their ability to exploit related market opportunities. In case of Amul its products are all dairy products and its partners are the farmers of India. So, Amul wants that its farmers should have a complete knowledge of animal husbandry. One of the main objectives of the co-operative is the economic development of the producer-members (farmers) by efficient organization of the marketing of milk and dairy produce, providing them with veterinary medicines, cattle fields, vaccines, and other animal products. Business Partners: Amul selects only those farmers and make them partners who are delivering high quality milk consistently. The company has set a standard for milk and if any farmer doesnot fulfill that standard the company does not get milk from them. By standard here I mean the amount of fat, protein, water and other different things present in milk. In the rural areas most of the farmers are women. So, Amul works on women empowerment and this empowerment section is described in BPM. Business Partner Management: The suppliers of Amul are the farmers who have those buffaloes and cows that yield milk. Amul make its suppliers its partners in order to create value. In Indian subcontinent mostly rural men are farmers which are called as Doodhi or Doodh ka Beopari in India. In the rural areas, mostly women have the responsibility to look after her home and do all the work. She also has the responsibility to feed the animals and get milk from them. Amul knows this thing and thus is working on women empowerment. Amul model of dairy development is a three tired dairy structure with the dairy co-operative society at village level, district and state federation. This is given with the help of picture below:

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VILLAGE LEVEL 200 members 8-9 members committee

District level Board of Directors-12 900 members(approx)

State State Federation Federation Members Members are are chairpersons chairpersons of of district district level level co-operative co-operative && exexofficial official members. members.

Rajesh deo florin, Thomas mantoo, Kumar sarooj thakur and Nishat Swaroop Model for Amul.

CASE STUDY 3: AMUL INDIA 7 2.

Value creation and Delivery response of Emmental cheese

Value creation by any company consists of 3 broad categories that are choosing the value, providing and communicating it. The different steps of this sequence for Emmental cheese by Amul are described below:

Choose the Value

Costumer Segmentation: Segmentation is the most important step in the value delivery process. Segmentation helps the marketer to understand and went in to the selected segment that is its target market. For Emmental cheese, Amul would have segmented the market very carefully. It is really important to segment the market for such a kind of product that is a premium product in a country like India where the majority of population belongs to low socio-economic class. For Emmental cheese what I think Amul should go for Psychographic Segmentation and should segment the market on the basis of Social class ( lower lower, upper lower, working class, middle class, upper middles, lower uppers, upper uppers), Lifestyle (Achievers, Strivers, Survivors) and Personality (Compulsive, gregarious, authoritarian, ambitious) Market Focus: As stated earlier, Emmental cheese is premium brand of Amul. So, the targeted market for this cheese would be urban upper middle, lower uppers and upper uppers class of India that is rich enough and is versatile enough to buy and to taste different product. Those people who can afford it and those who can accept changes in life and tastes. Value Positioning: Value positioning consists of the 4 ps of Marketing. Value is basically the net benefit that a costumer derives from a product. So, value position stands for how the company is creating value for its costumer. Product: Emmental is a Swiss cheese with dry flavor and hazelnut aroma. This cheese is normally available in the form of a wheel that has convex edges and is covered by a dry-hard rind which is golden-yellow in color. This skin is to be removed before consumption. Emmental is a ready to eat salver cheese and goes best with wines & cocktails. As opposed to the commonly available processed cheddar cheese, Emmental is actually a `live' cheese. It is a 100% vegetarian coagulating enzyme.

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Price: Emmental cheese is a premium brand of Amul so it is prices at a bit more price than the normal cheese and its price of 400g pack is 160 indian rupee. The price is high but the company justifies it with providing the quality in the product that is Emmental cheese. Place: As it is a preminum brand of Amul so it must be placed in all top Gourmet Stores/APOs/MFS in Major Metros and Mini Metros Promotion: Promotional campaign by Amul for Emmental cheese was very interesting and attention-seeking. It focused on the promotion of the Swiss taste. Once if a person eats it he would get addicted to it.

Now, here they are promoting the Emmental cheese in an excellent way. Royal way of its serving with grapes wine and can also be used for different things.

CASE STUDY 3: AMUL INDIA Provide the Value

Product-development: In this phase, the actual product is developed to be sold later on. In this case it involves the full process in which the cheese is made by milk. Shelf life is another important thing in this respect. Emmental cheese has a shelf life of 45 days. Service-development: Service- development is also a major step in providing the value. After the product has been made, its design and packaging has been finalized it is important to set some kind of services associated with that product. A strong return policy for the Emmental cheese was must and the Amul provided it. Pricing: Pricing is one of the most important decisions that have to be taken by the firm. Pricing is very sensitive decision especially Indian consumers are very much price conscious and sensitive. Furthermore it is a general perception among the masses that a product with higher price will be better than the other with the product with low price. However, the price should be set keeping in view all the aspects, the cost of producing that product and all other marketing activities plus the costumers perceived value. As the targeted market of Amul for Emmental cheese is the upper class of the society who can afford such a kind of premium brand and are ready to accept different taste so the price should not have been low and thats why the company set the price of Emmental cheese 160 for 400g pack of cheese but Amul also justifies this price by giving quality and the original Swiss taste in its cheese. Sourcing Making: It is the step in which the company chooses the persons from which it will get the raw material for its products which will further be refined to made final product. Amul as it does get milk from farmers and the milk is also world class. It chooses the farmers who provide high quality milk. It is choosing that source which is extremely good. The rural farmers who have their own buffaloes which produce fresh milk are the source of Emmental cheese. Distributing Servicing: Distribution deals with how the product is distributed among the targeted costumers? How does our product will reach the final consumer? Now, Emmental cheese is a kind of product of product for which Amul should use a following kind of distribution channel.

SYED DANIAL HASHMI

Producer

Wholesaler

Consumer

Because, Emmental cheese has a target market of upper class which usually visits the big malls, metros and retail giants, chains for shopping. So, the company shall make these big metros of urban areas there distributors which would cheese to the final consumer. There is no need to place the product on small retail stores.

Communicate the Value

Sales force: Sales force basically refers to the persons involved in the sale of a product. Here the sales force means the persons in fact the whole management system that is involved in selling Emmental cheese. Sales Promotion: Emmental cheese is a new product for Indian costumer and market. To promote Emmental cheese among people, Amul needs to tell people more about this product. For this purpose what they can do is to set an introductory price for the cheese and place it on the same huge retail outlets where they are going to place their product in future but the product should be well appeared to the people. It is a premium brand of Amul as stated earlier so one thing that cant happen for sure is that they offer Tasting of Emmental cheese. Advertising: Advertising means to tell the masses about the product. Now the advertisement of Emmental cheese shall be in such a way that it should be very catchy and shall also represent the royal taste and royal values. Some of the ads in the print media of Emmental cheese are below:

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Now, if look deeply at this promo it is very clear that Amul is promoting the royal taste of Swiss cheese and Royal values associated with Emmental cheese. There is a clock placed on the table with an expensive pen and paper. What all that basically represents is the lifestyle of the rich people who have to deal with pens and papers and have to write letters and are time conscious.

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3.

Best of Class practice

Company selected: Nestle (Pakistan)

Reason of selecting Nestle (Pakistan): Nestle is a well known company in the whole world for its products. It produces dairy products along with other product lines like juices etc. In Pakistan it is in operations from many years. In the dairy industry Nestle is producing a wide range of products targeting from small children to the old fellows of society. From Cerelac to MilkPak to Nes vita to Nes Caf, Nestle is producing products for each kind of costumer. More than 900,000 farmers and their dependants have been directly affected by the milk purchases of Nestle. It has now become the biggest company in the respective industry. Best of class practices by Nestle Human Resource Management: Nestle has paid special attention to its HR department. Nestle has dedicated its Human Resource department to its employees, and ensures that the company have all the right people with the right skills, in the right places at the right time. Nestle understands very well that the people are the core of business strategies for any business; they enhance the skills of employees with revolutionary training and provide them with all the facilities they require. The company pays a lot of attention to R&D and Innovation and thus selects only those employees who are flexible, innovative and are always ready to face any kind of challenge. Nestle runs a Management Trainee Programme that aims to develop talented young men and women and help them achieve their potential in a dynamic environment. Each year more than hundred people go abroad to attend the international training and development events. In-Bound Logistics: In-bound logistics of Nestle are very interesting indeed. To some extent it is similar to that of Amul but there are certain things from which AMUL can definitely get something to deal with. Nestle at first launched Milk Pak and its factories are at Sheikupura and Kabirwala. The milk collection process of Nestle is firstly explained with the help of this picture:

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It is a 5-step process. Each step of this process is explained below in detail: Step 1: In villages a farmer mostly milks his buffaloes twice a day. After milking his buffaloes each farmer brings almost 4 liter milk to the Village Milk collection centre. Step 2: There the farmer's milk is poured into an aluminum churn. The agent at the centre checks the milk's freshness and purity, and enters the quantity of the milk into the farmer's logbook (each farmers book is separately maintained by the company). After that the agent takes the milk to Nestl's Secondary Reception and Cooling Stations, about 2-4 km away from the collection centre. Step 3: At the Secondary Reception Station there is a large electrically powered cooling tank. There the milk inspector measures the fat content, the non-fat solids content, and the milk's acidity. Once satisfied, he takes the milk to the Main Reception and Cooling Stations. Step 4: At the Main Reception and Cooling Station, the milk is poured into massive tanks and systematically checked for quality. The milk is then send to the factories. Step 5: At the Sheikhupura and Kabirwala factories, the milk is processed and packed into the familiar Nestl cartons. It is checked for quality three times before releasing for sale. Some milk is also processed into yogurt, powdered milk, or other dairy products.