The Bishop’s Co-ed School

Kalyaninagar
ECONOMICS
 Topic
A Study Of Two Cooperative Institutions with a
view to compare the Organisational and Financial
Structure of the Organisations Production
Capacity and Output, Marketing Strategies, Sales,
Market Share, etc.
 Personal Details
Name: Aryan Singh
Class: 11 A (Commerce)
Roll No.: 38
Computer Code: 191089
 ACKNOWLEDGEMENT

First of all, I would like to thank my teacher Mrs. Tulika Talukdar

whose valuable guidance has been the one that helped me
patch this project and make it full proof success. Her
suggestions and instructions has served as the major
contributor towards the completion of the project.
Not forgotten my parents for providing everything, such as
money to buy anything related to the project work and their
advice, support which are the most needed for the project.
They also supported and encouraged me to complete this task
so that I will not procrastinate in doing it.

Aryan Singh
11 A (COMMERCE).
 INDEX
Sr. Number Contents Page Number

1. Introduction 1

Turnover Of The
2. 5
Co-operatives
Organisational
3. Structure Of The 7
Co-operatives
Financial Structure Of
4. 8
The Co-operatives

5. Marketing Ability 9

Marketing Strategy Of
6. 10
The Co-operatives

Sales Of The
7. 14
Co-operatives

Market Share Of
8. 16
The Co-operatives

9. Conclusion 17

10. Bibliography 18
 Introduction
Once the effectuation of first co-operative act is over in 1904, co-
operative societies took large footsteps in India in almost all range of
socio-economic activities. Dairy industry too didn’t remain untouched
by this wave and started leaping towards the rural development of
India through the establishment of co-operative milk societies. The
commencement of white revolution from a small town Gujarat
instituted an unparalleled model of growth in rural India that focused
on setting up public private partnership in the dairy industry. India is
the world’s largest milk producer, accounting for more than 17% of
world’s total milk production. Dairy sector in India has acquired
substantial growth momentum from 9th Plan onwards as a result of
which we now rank first among the world’s milk producing nations,
achieving an annual output of about 127.3 million tonnes of milk
during 2011-12 compared to 121.8 million tonnes in 2010-11. This
represents sustained growth in the availability of milk and milk
products for our growing population. Dairying has been viewed as
prime activity directed towards alleviation of poverty and
unemployment mainly in the rural areas which serves as steady
additional income for rural people in the rain-fed, hilly and drought-
prone regions covering a varying population segment of women, small
and landless farmers. The per capita availability of milk has reached a
level of 281 grams per day during year 2010-11, but it is still lower than
the world average of 284 grams per day. Most of the milk is produced
by small, marginal farmers and landless labourers. About 14.46 million
farmers have been brought under the ambit of 1,44,168 village level
dairy co-operative societies up to March 2011. The indispensable
contribution of co-operatives to India’s dairy industry speaks volumes
in itself as India became the leading milk producing nation in the world.
In India, the milk sector comprises of unorganised and organised and
the former is putting a firm competition to the later. Consequently, it is
imperative that the organised milk producing firms should motivate
more producers-sellers to join them by extending help in terms of
production of milk as well as providing a handsome price. Co-operative
milk society’s works on the same principle of providing assistance and
good deals to its associate members so as to meliorate the productivity
of the dairy business. Often, the co-operatives as confronted with
problems like lack of entrepreneurship, ignorance about source of
credit/finance, lack of training programmes of necessary productive
assets, lack of required skills, etc. More than 75,000 co-operative
societies are dispersed all over the country and the membership is also
record more than 10 million. In a whole, co-operative sector amounts
to over 10 million households as compared to more than 70 million
households pursue milk production. Gujarat Co-operative Milk
Marketing Federation LTD. (GCMMF) is India’s apex organisation of the
dairy co-operatives of Gujarat, popularly known as Amul. Leaving off
the brand name ‘Amul’ , Almost all the state milk co-operation brands
are regional. Some of the major regional brands are ‘Mother Dairy’ in
New Delhi, ‘Parag’ in U.P, ‘Sanchi’ in M.P, ‘Nandini’ in Karnataka,
‘Saras’ in Rajasthan, ‘Vijaya’ in Andhra Pradesh, ‘Verka’ in Punjab,
‘Aanchal’ in Uttarakhand, etc. Demand forecasting, raw material
procurement and distribution of processed materials are the crucial
elements of dairy industry as these form the basis of maximising
productivity of an organisation. Indian firms are somewhat vulnerable
over these issues and come shorter to MNC’s and private dairies.
 Amul (GCMMF)
Amul is an Indian cooperative dairy company, based at Anand in the
state of Gujarat.
Formed in 1956, it is a cooperative brand managed by a cooperative
body, the Gujarat Co-operative Milk Marketing Federation Ltd.
(GCMMF), which today is jointly owned by 3.6 million milk producers in
Gujarat.
Amul spurred India's White Revolution, which made the country the
world's largest producer of milk and milk products.
Amul was spearheaded by Tribhuvandas Patel under the guidance
of Sardar Patel. As a result, Kaira District Milk Union Limited was born
in 1946. Tribhuvandas became the founding chairman of the
organization and led it until his death. He hired Dr. Verghese Kurien in
1949. He convinced Dr. Kurien to stay and help with the mission.
Kurien, founder-chairman of the GCMMF for more than 30 years, is
credited with the success of Amul's marketing. Amul has ventured into
markets overseas.
 Karnataka Milk Federation (KMF)

Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the

Apex Body for the dairy co-operative movement in Karnataka. It is the
second largest dairy co-operative amongst the dairy cooperatives in
the country. In South India it stands first in terms of procurement as
well as sales. One of the core functions of the Federation is marketing
of Milk and Milk Products.
The Brand "Nandini" is the household name for Pure and Fresh milk
and milk products. Karnataka Dairy Development Cooperation(KDDC),
the first ever World Bank/ International Development Agency funded
Dairy Development Program in the country started in Karnataka on co-
operative lines with the organisation of Village Level Dairy Co-
operatives in 1974. The results of effective dairy development by KMF
have made far-reaching and extensive impact on rural landscape in
Karnataka. The best remunerative milk purchase price to farmers,
efficient and timely input services, delivered at the door-steps to
farmers, such as, unfailing veterinary health services to any remote
village, quality artificial insemination for breed improvements, supply
of balance cattle feed at less than the market price, etc., have made
the farmers to increasingly patronize their cooperative. The extent of
patronization by farmers is so complete, that dominant share of
marketable surplus milk of farmers in Karnataka is procured by KMF
dairies and hardly there is any organized private dairy milk
procurement, which is widely prevalent in other parts of the country.
 Turnover of Both the Co-operatives in the Year 2017-2018
Turnover (In Crores)
35,000

30,000
29,225
25,000

20,000

15,000

13,550
10,000

5,000

0
Amul Karnataka Milk Federation

The turnover of Amul in the year 2017-2018 was Rs. 29,225 Crores.
The turnover of Karnataka Milk Foundation in the year 2017-2018 was
Rs. 13,550 Crores.
Amul

SALES PERCENTAGE OUT OF THE TURNOVER

Paneer, 2%,
Others, 1%,
Milk Powder, 3.5%,

Khoya, 6.5%,

Yogurt, 7%,

Milk, 46%,
Butter, 6.5%,

Ghee, 27.5%,

As seen above out of the total turnover of Amul in the year 2017-18
the money made by each product specifically is:
 Total Sales of the
Product Percentage %
Year (In Crores)
Milk 46% 13443.5
Ghee 27.5% 8036.875
Butter 6.5% 1899.625
Yogurt 7% 2045.75
Khoya 6.5% 1899.625
Milk Powder 3.5% 1022.875
Paneer 2% 584.5
Others (Ice Cream &
1% 292.25
Cream)

Karnataka Milk Federation

SALES PERCENTAGE OUT OF THE TURNOVER

Paneer
Cheese Flavoured Milk
1%
1% 1%
Curd
1%
Butter
3%
Ice-Cream
4%
Ghee
8%
Milk Powder
8%

Milk
73%

As seen above out of the total turnover of Karnataka Milk Federation in

the year 2017-18 the money made by each product specifically is:
 Total Sales of the
Product Percentage %
Year (In Crores)
Milk 73% 9891.5
Milk Powder 8% 1084
Ghee 8% 1084
Ice-Cream 4% 542
Butter 3% 406.5
Curd 1% 135.5
Cheese 1% 135.5
Flavoured Milk 1% 135.5
Paneer 1% 135.5

Member Unions of Amul and KMF

Amul:
1. Kaira District Cooperative Milk Producers’ Union Ltd.
2. Mehsana District Cooperative Milk Producers’ Union Ltd.
3. Sabarkantha District Cooperative Milk Producers’ Union Ltd.
4. Banaskantha District Cooperative Milk Producers’ Union Ltd.
5. Surat District Cooperative Milk Producers’ Union Ltd.
6. Baroda District Cooperative Milk Producers’ Union Ltd.
7. Panchmahal District Cooperative Milk Producers’ Union Ltd.
8. Valsad District Cooperative Milk Producers’ Union Ltd.
9. Bharuch District Cooperative Milk Producers’ Union Ltd.
10. Ahmedabad District Cooperative Milk Producers’ Union Ltd.
11. Rajkot District Cooperative Milk Producers’ Union Ltd.
12. Gandhinagar District Cooperative Milk Producers’ Union Ltd.
13. Surendranagar District Cooperative Milk Producers’ Union
Ltd.
14. Amreli District Cooperative Milk Producers’ Union Ltd.
15. Bhavnagar District Cooperative Milk Producers’ Union Ltd.
16. Kutch District Cooperative Milk Producers’ Union Ltd.
17. Junagadh District Cooperative Milk Producers’ Union Ltd.
 18. Porbandar District Cooperative Milk Producers’ Union Ltd.

KMF:
1. Bengaluru Milk Union.
2. Belagavi Milk Union.
3. Ballari Milk Union.
4. Vijayapura Milk Union.
5. Chamarajanagar Milk Union.
6. D.K Milk Union.
7. Dharwad Milk Union.
8. Hassan Milk Union.
9. Kalaburgi Milk Union.
10. Kolar Milk Union.
11. Mandya Milk Union.
12. Mysuru Milk Union.
13. Shivamogga Milk Union.
14. Tumakuru Milk Union.
 Organisational Structure of The Co-operatives

Amul Organisational Structure:

President

Vice President

General Secretary

Treasurer

Directors Of Unions (18)

Mukadam

Workers (5000)

Karnataka Milk Foundation Organisational Structure:

Chairman

Managing Director

Directors Of Unions (14)

Manager (5)

Deputy Manager

Workers
 Financial Structure Of Both the Co-operatives
Amul:

Financial Structure Of Amul

3,000.00

2,500.00

2,000.00
IN CRORES

1,500.00

1,000.00

500.00

0.00
2009-2010 2010-2011 2011-2012
Current Assets (CR) 70.63 72.60 76.11
Current Liabilities (CR) 30.42 34.86 42.82
Net Profit (CR) 735.75 926.65 1,070.29
Gross Profit (CR) 143.14 163.42 259.03
Sales (CR) 1,689.38 2,106.42 2,466.34
Turn Over (CR) 800.53 977.42 1,166.80

As seen in the above graph there is an increase in assets of the

company which is affecting the amount of current liabilities in the
company. There is a rise in the amount of sales in the company which
is helping in boosting the annual turnover of the company.

Karnataka Milk Federation (KMF):

Financial Structure Of KMF

1,000.00
900.00
800.00
700.00
IN CROCRES

600.00
500.00
400.00
300.00
200.00
100.00
0.00
2009-2010 2010-2011 2011-2012
Current Assets (CR) 52.06 50.74 65.29
Current Liabilities (CR) 44.87 45.90 52.44
Net Profit (CR) 1.73 2.16 3.51
Gross Profit (CR) 54.55 60.05 63.82
Sales (CR) 566.33 698.44 882.17
Turnover (CR) 42.43 47.24 58.86
As seen in the above graph there is a sudden drop in the assets in the
year 2010-2011 which shows that the company went in some kind of
loss during that time period, also it is seen that even though the
amount of assets were less in 2010-2011 the amount of liabilities did
not decrease in that year.
It is also seen that there is a sudden rise in the sales and also a sudden
rise in the turnover of the company after the year 2011 this shows that
even though the company went through some losses during the year
2010-2011 still they managed to get a high amount of turnover in the
year 2011-2012.

Manufacturing Ability

Amul being a larger cooperative, stores and processes more amount of

milk every day, but it is seen that KMF has been on its toes to process
more litres of milk since the past many years and has been successful
in doing the same.

Manufacturing (In Lakhs)

7
Karnataka Milk Federation
8

50
Amul
33

0 10 20 30 40 50 60

Milk Processing Milk Collection

In the above graph it is seen that KMF’s milk processing and collection
is much more less than Amul’s milk processing and collection, this is
because Amul is a much larger cooperative than KMF. Amul is a
supplier of milk to all parts of India whereas KMF is mostly active only
in the southern regions of India being Andhra Pradesh, Karnataka,
Kerala and many more.

Marketing Strategy of Amul

The Marketing strategy of Amul covers various aspects of the business
right from segmentation and targeting to the
overall mission and vision of the company and the various parameters
which the company executes to become the top brand that it has in
the market.
Let’s see the strategy in brief:

1. Segmentation, targeting, positioning in the marketing strategy of

Amul:
The Segmentation of Amul is the mass population and in general,
you will find people of all different age groups and demography
enjoying Amul products. This is because Amul is not only present in
Milk, but also in ice cream, butter, cheese and other such products.
As it has a very deep product portfolio, it does not differentiate in its
customers but uses a mass marketing principle, and till date, this
principle has worked very well for the marketing strategy of Amul.
Similarly, the target audience are the regular middle class people.
This is because high end customers do not have a lot of high end
products as an alternative in milk. However, for other products like
butter cheese, both high end and low end customers are the target.
In terms of positioning, Amul has top of the mind positioning
because it is the first brand which comes in mind when talking of
milk, ice cream, cheese, butter or any other milk based products.

2. Competitive advantage in the marketing strategy of Amul:

There are two major competitive advantages of Amul over other
brands.
A. First and foremost is the supply chain, because of the large
numbers of dairy suppliers, Amul has a tremendous strength and
 reliability in its supply chain. Hence it is able to produce such high
volumes of dairy products.
B. The second competitive advantage is the wide portfolio due to
which it can run Amul Shop’s and also have its products present in
retail. The product portfolio is such that products like milk butter
and ice cream are cash cows for the company.

3. BCG Matrix in the Marketing Strategy of Amul:

When we plot the BCG Matrix, Amul has certain products which are
stars whereas other are cash cows, and in fact, Amul chocolates are
question marks because they have low market share in a growing
market. Amul Ice cream and butter can clearly be said to be the cash
cow because they have very high market share and the market itself
is growing with the increase in population.
On the other hand, dairy products like milk, buttermilk, cheese, lassi,
Amul Kool, etc have a lot of direct and indirect competition in their
niche. However, when compared with the same type of product,
then Amul has a high market share. Thus, these products are stars
for Amul.

4. Market Analysis in the marketing strategy of Amul:

The FMCG market is high competitive in nature and is known to
have a combination of organised players as well as unorganised
players. Similarly, in FCMG, direct competition is equally important as
indirect competition.
For example- During winters- cold milk products and ice cream will
not sell, whereas butter and cheese will sell equally well.
But on the other hand, during summers the demand of ice cream
shoots up.
Thus, when we analyse the market of Amul, in some cases Amul is
the clear market leader, whereas in other products it is a competitor
in the market.

5. Customer Analysis in the marketing strategy of Amul:

 The typical customers of Amul belong to the Sec B and Sec C
segment wherein they are either middle class or lower class. Amul
in general uses mass marketing and therefore it targets these 2
classes majorly. The high end customers are more likely to prefer
Naturals, a Baskin Robbins, or any other such brand which meets
their taste and status.

Marketing Strategy of Karnataka Milk Federation

Karnataka Milk Federation being a smaller cooperative manages the

sale of milk, milk products and advertisements in four districts namely
Dharwad, Gadag, Haveri and Uttra Kannada in the brand name
Nandini.

The marketing department has the following objectives:

A. To increase the market share of Nandini.
B. To set up more marketing strategies.
C. To be responsive to consumers and channel members.
D. To promote more Nandini milk and milk products through intense
advertising.

Competitors:
The Nandini milk is facing a lot of competition in the market. The prime
competitors are private brands like Bharat, Dutta, Mysore, Kazi, Arokya
and loose vendors.

Promotional Activities:
To overcome the neck-to-neck competition, different promotional
activities are followed with the help of KMF and IMDDB for building the
brand image of Nandini and enhancement of sale of milk and milk
products.
A. Advertisements in all available medias.
B. Sponsoring events viz. cricket match, exhibitions, etc.
C. Participation in trade fairs.
Distribution Channels:
DMU has its own marketing channels. However, it follows two types of
direct channels:

1. Consumer Market:
DMU is selling directly to the consumers through its special vendors.
It also distributes to a total of 800 retailers and milk parlours which
sell only KMF products. There is demand of 85,000-90,000 litres of
milk per day.

2. Institutional Market:
There is demand for about 4,000 litres of milk per hour from
various sources like institutions, hospitals, jails, schools, hotels,
etc.

Strategies adopted by the department to enhance the sale of its

products are:
A. Conducting awareness programme of milk and homogenized
processed milk.
B. Attain daily complaints of consumers and retailers.
C. Need for healthy promotional activities against competitors.
D. Adopting differentiated marketing strategies in place of
undifferentiated marketing strategies.

Collaboration with local NGO’s:

The self-help groups have been appointed as agents of KMF for selling
milk in the areas of Gulbarga and Shimoga Milk Unions. In addition to
sale of milk, the said self-help groups have been entrusted with the
task of taking up door-to-door campaign with regard to nutritional
aspects of milk, the health hazards involved in consuming non-
pasteurized/loose milk. This has helped in bringing awareness among
women, children and also in increasing the sale of Nandini milk in those
areas.
 Sales of The Co-operatives

Amul:
Gujarat Co-operative Milk Marketing Federation Ltd, which markets
the Amul brand of milk and dairy products, reported an 8% increase in
turnover at Rs 29,220 crore for the financial year ended March 31,
2018. Its branded consumer products registered growth of 14% over
the previous year, with products such as cheese, butter, milk
beverages, paneer, cream, buttermilk and curd having expanded 20-
40%. The group turnover of Amul brand has crossed Rs 41,000 crores
which is 10% higher than last year. The Amul federation has been
achieving a compound annual growth rate of more than 18% for the
past eight years because of higher milk procurement, continuous
expansion in markets, launching of new products and adding milk
processing capacities. Based on the estimated growth in demand for
Amul products and the future marketing efforts, the company
anticipate a 20% a compound annual growth rate in the business in the
next five years The 18 member unions of Amul federation, with a
network of more than 36 lakhs across 18,700 villages of Gujarat,
procured on an average 211 lakhs litres of milk per day in fiscal 2017-
18, which was 20% higher than the year before. Amul passes on 80-85
paisa of each rupee it makes to milk producers.

TOTAL MILK SALES

Total Milk Procurement (Lakh Litres Per Day)

250
211
200
170 176
149
150 132
127
106
91 94
100

50

0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018
Karnataka Milk Federation:
The Bangalore Milk Union is marketing milk and milk products in the
brand name of Nandini through 1280 retailers, 38 franchisee outlets,
26 milk parlours, 240 distribution routes. The key success factor of
Bamul in becoming a market leader is the narrow price spread
maintained between purchase and sales, marketing higher volumes of
milk. The volume of sales plays a critical role in determining costs.
Hence, the market strategy of Bangalore Milk Union is to regard selling
of market milk as its core marketing activity and to concentrate its
efforts in this direction to increase the volume of milk sales. The
impressive growth in the sale of milk by Bamul over the years is due to
the persistent efforts to maintain timely supply, maintaining quality
and attending to the complaints of consumers and agents with prompt
follow up action.
Bamul is also organising Consumer Awareness Programmes as a part of
market development to create awareness of Nandini Milk through
personal contacts, door to door campaigns, organisational meetings,
school children mega dairy plant visit etc, are conducting regularly.

TOTAL MILK SALES

Total Milk Procurement (Lakh Litres Per Day)

40
34 35
35 33
30
30
24
25

20
16
15
10
10 6.6 6.9
5

0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

If we see closely at the graphs of both the co-operatives it is seen that

the sales of KMF is far more less than Amul this is because KMF
stresses on sale of its milk mostly in the southern part of India whereas
Amul manufactures it milk all over India and hence is able to make
more amount of sales.

Market Share of the Co-operatives

Market Share

36%

64%

Amul Karnataka Milk Federation

It is seen that the market share of Amul is much more than Karnataka
Milk Federation again the reason being that Amul focusses on its sales
all over India whereas KMF only is able to achieve huge amount of
sales in Southern India.
 Conclusion

As we know that Amul is a very big organisation and market leader in

dairy products. It has the maximum market share in Milk which is its
main product. All the retailers feel that Amul products are very good in
taste and once a customer tries it they become a loyalist to the brand
but, then again, supply shortages have led to customers shifting to
other brands like Nandini.
India Dairy sector contributes a large chuck in agricultural gross
Domestic Product Milk is of the basic need for the people. Nandini, a
service oriented co-operative as entered in the households of
Bangalore and other parts of Karnataka with its attractive products and
efficient service. The customers can be taken in to confidence so that it
helps dairy with better insides even though KMF is facing a stiff
competition from Amul. It still has a strong brand image and also
better distribution network.
This Project has given me an insight in understanding the various
attempts of the products as well as the other factors which influences
the buyer behaviour of business markets for effective formulation of
marketing strategies with respect to product, promotion and
placement because the advertisement and sales promotional,
strategies are very important for any product to become popular and
push the sales up.
Hence, to conclude it is proven that in many aspects as a successful Co-
operative Amul Is the better one than Nandini.
 Bibliography

1. www.wikipedia.com
2. www.scribd.com
3. www.toi.com
4. www.etnow.com
5. Research papers by:
 Mayank Maheshwari (Amul)
 Prasant Satabdi (Amul)
 Simran Nasre (Amul)
 Tousif Ahmed (KMF)
 Umesh Allanavar (KMF)
 Nitin Nit (KMF)
6. www.slideshare.com
7. www.researchgate.net
8. www.academia.edu
9. www.mouthshut.com
10. www.indiancooperative.com
11. www.businesstoday.in
12. www.marketing91.com