INTRODUCTION

Amul (Anand Milk-producers Union Limited), formed in 1946, is a dairy cooperative

movement in India. It is a brand name managed by an apex cooperative organisation, Gujarat
Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some
2.41 million milk producers in Gujarat, India[1]. It is based in Anand town of Gujarat and has
been a sterling example of a co-operative organization's success in the long term. The Amul
Pattern has established itself as a uniquely appropriate model for rural development. Amul has
spurred the White Revolution of India, which has made India the largest producer of milk and
milk products in the world. It is also the world's biggest vegetarian cheese brand [2].

Amul's product range includes milk powders, milk, butter, ghee, cheese, curd, chocolate, ice
cream, cream, shrikhand, paneer, gulab jamuns, basundi, Nutramul brand and others. In January
2006, Amul plans to launch India's first sports drink Stamina, which will be competing with
Coca Cola's Powerade and PepsiCo's Gatorade [3].

Amul is the largest food brand in India and world's Largest Pouched Milk Brand[4] with an
annual turnover of US $868 million (2005-06) [5]. Currently Amul has 2.41 million producer
members with milk collection average of 5.08 million litres/day. Besides India, Amul has entered
overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong
Kong and a few South African countries. Its bid to enter Japanese market in 1994 had not
succeeded, but now it has fresh plans of flooding the Japanese markets [6]. Other potential
markets being considered include Sri Lanka.

Dr Verghese Kurien, the chairman of the GCMMF, is recognised as the man behind the success
of Amul.
 History

Amul was formally registered on December 14, 1946. The brand name Amul, sourced from the
Sanskrit word Amoolya, means priceless. It was suggested by a quality control expert in Anand.
Some cite the origin as an acronym to (Anand Milk Producers Union Limited).

The Amul revolution was started as awareness among the farmers. It grew and matured into a
protest movement that was channeled towards economic prosperity.

Situation of farmers

Over five decades ago, the life of an average farmer in Kheda District was very much like that of
his/her counterpart anywhere else in India. His/her income was derived almost entirely from
seasonal crops. The income from milk buffaloes was undependable. Milk producers had to travel
long distances to deliver milk to the only dairy, the Polson Dairy in Anand – often milk went
sour, especially in the summer season, as producers had to physically carry milk in individual
containers. Private traders and middlemen controlled the marketing and distribution system for
the milk. These middlemen decided the prices and the off-take from the farmers by the season.
As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often,
they had to sell cream and ghee at throw-away prices. In this situation, the private trader made a
killing. Moreover, the government at that time had given monopoly rights to Polson Dairy
(around that time Polson was the most well known butter brand in the country) to collect milk
from Anand and supply to Bombay city in turn (about 400 kilometers away
Setting up of Kaira District Co-operative Milk Producers' Union

The Kaira District Co-operative Milk Producers' Union Limited began pasteurizing milk for the
Bombay Milk Scheme in June 1948. By the end of 1948, more than 400 farmers joined in more
Village Society, and the quantity of milk handled by one Union increased from 250 to 5,000
liters a day. The success of Amul was instrumental in launching the White Revolution that
resulted in increased milk production in India. It is officially termed as Operation Flood by
Amul. The breakthrough technology of spray-drying and processing buffalo milk, developed by
Mr. H.M. Dalaya, was one of the key factors that contributed to the Revolution.

Setting Up of Gujarat Cooperative Milk Marketing Federation

In 1954, Kaira District Co-operative Milk Producers’ Union built a plant to convert surplus milk
produced in the cold seasons into milk powder and butter3. In 1958, a plant to manufacture
cheese and one to produce baby food were added. Subsequent years saw the addition of more
plants to produce different products. In 1973, the milk societies/district level unions decided to
set up a marketing agency to market their products. This agency was the Gujarat Cooperative
Milk Marketing Federation (GCMMF). It was registered as a co-operative society on 9 July
1973.

GCMMF Today
GCMMF is India's largest food products marketing organisation. 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 consumers by providing quality products, which are good value for money.
GCMMF markets and manages the Amul brand. From mid-1990's Amul has entered areas not
related directly to its core business. Its entry into ice cream was regarded as successful due to the
large market share it was able to capture within a short period of time - primarily due to the price
differential and the brand name. It also entered the Pizza business, where the base and the recipes
were made available to restaurant owners who could price it as low as 30 rupees per pizza when
the other players were charging upwards of 100 rupees.
Products
In August 2007, Amul introduced Kool Koko, a chocolate milk brand extending its product
offeringt 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.[7]

Other Players
Amul has been able to withstand the onslaught of private and foreign players in the dairy
industry and has also been able to export products in limited quantities. The success of Amul
resulted in similar organizations being setup by state governments throughout India, most of
which had reasonable success. Examples are Milma in Kerala, Vijaya in Andhra Pradesh, Aavin
in Tamil Nadu ,K.M.F ( Nandini ) in Karnataka, Sudha in Bihar and others.

Other co-operative partners of Amul include National Dairy Development Board (NDDB) (with
its Mother Dairy and Sugam brands). With Amul entering the sports drink market, its rivals now
include Coca Cola and PepsiCo.

Production Function

Introduction

Explosion of the production technology and changes in technical field is going

to bring out revolution in the industry sector which eventually gives stand to
study and favors the come backing subject i.e. production and management.

Production and operation management is planning, organizing, staffing,

directing and controlling of all the production system those portion of
organization that convert inputs into products and services. In general
 production system takes raw material, personnel, machines, buildings and
other resources and produce products and services.

The core of production system is its conversion subsystem where in workers;

raw materials are used to convert inputs into products and services. This
production department is at heart of the firm, as it is able to produce low cost
products and superior quality in timely manners.

Thus, there arises enormous need of giving due importance to this

department as a whole and a strong concrete base being foundation pillars of
a manufacturing organization, if the intention is to succeed domestically and
globally.

Steps:

Milk Processing Chart:

Collection of Raw-Milk

Electronic Milk Test

Methyline Blue Reduction

Test

Purchasing And Standardizing Process

 Separation Process

Quality Check

Packaging Process

Cold Storage

Steps in Production Process

1. Collection of Raw Milk

Raw milk is collected from different co-operative societies of Gujarat. About

122000 liters of raw milk is collected per day. Before this milk is sent to the
laboratory for testing the ‘FAT & SNF’ proportion, the milk is separated from
the raw milk. The milk is taken from the chilling centers to Ahmedabad with
the help of trucks.

After collecting the samples of milk, they are taken to the laboratory ,where
two types of tests are conducted.

• Electronic milk test

• Methyline blue reduction test

Electronic Milk Test

Before pasteurizing the milk the samples are taken to the laboratory. In the
laboratory with the help of machine called electronic milk tester, the
proportion of SNF & FAT is checked with phosphate solution. When the colour
of the milk becomes yellow, it is sent for pasteurisation.
 Methyline blue reduction test

Another test, which is taken in the laboratory, is called Methyline blue

reduction test. This test is conducted for checking for how long the milk will
remain fresh. To check this, 10 ml of milk is taken and 1 ml of methyline blue
solution is added to it. It is then kept under water at 57-degree C. After one
hour, if the solution losses its colour than it is called raw milk. If the solution
remains the same even after 5 hours than it is considered as fresh milk,
which remains constant for a long period of time.

The dairy fixes the proportion of FAT & SAF.

MILK SNF FAT

Buffalo 9% 6%

Cow 8.5% 4.5%

After laboratory gives green signal and confirming the raw milk at the
reception dock is brought in to the house connected with the pump is sent to
the milk processing plant. This is than chilled below 4 degree C. and then
stored in milk silos. After that milk is processed which has two steps i.e.
pasteurising and standardizing.

2. Pasteurising & standardizing

After collecting and checking and conducting laboratory tests, the pasteurising

process is conducted. To pasteurized the milk means to kill all the germs in the

milk by a particular method which was invented by a scientist called James

Pasteur and so the name pasteurisation.

In pasteurizing, the milk is first heated at 72 C to 76 C for 15 seconds and
then it is immediately cooled below 4 C. By this method they destroy the
pathogenic bacteria present in the raw milk. But if the right degree of
temperature is not provided there are chances that the milk might still
contain germs. After this process some milk goes to separator machine and
remaining is proportionately sent for standardization.

Standardization process is known such as it bifurcates the milk in 3

categories varying according to that FAT & SNF contents. The equipment
named OSTA. Auto standardization adjusts the fat directly. The computer is
just ordered whether gold or standard milk is to be rationed and the same will
be received with appropriate contents.

Ready Milk = Pasteurised + Standardized.

3. Separation process

Separator machine separates two kinds of products, skimmed milk & cream,
through channels. There are 100 disks fixed in separator machines, which
revolve at 5000 rpm (revolution per minute). It is taken to the tanks, which
has the capacity of 20000 litres. Whenever the milk is needed from the tank,
it is tested in the laboratory and the deficit proportion fat is added by mixing
cream. This process continues for 24 hours.

4 Quality Check
Pasteurized milk is sent for a quality check in the Quality Assurance
laboratory of the dairy plant. Within 14 seconds FAT and SNF proportion is
received regarding 30 lack litres of milk. The total investment put into the lab
by the Dairy plant is of Rs. 6 crores.
This laboratory only checks and analyses the powder, milk and ghee. There is
a separate ice-cream analysing laboratory.

5 Packing Process
After this the milk is sent for packing to the milk packing station in the dairy
plant. In the milk packaging station there are huge pipelines and behind each
of them there is polyfill machine from which the material to pack milk comes
out. There are 12 such polyfill machines in the packaging station from which
the materials to pack milk comes out. From each of these 12 machines 100
pouches are packed in one single minute.

6. Storage

Then the milk is sent to the cold storage of the dairy where the milk is stored
until it is dispatched. Here the milk is stored at temperature ranging from 5 C
to 10 C, it is maintained with the help of exhaust fans having silicon chips.
About 40000 litres of milk is dispatched from the cold storage of the dairy
plant everyday. The damaged pouches are kept a side and the milk is once
again put to the tank.

Milk Powder

For converting milk powder first of all water content is evaporated in

condensing plant. By this process they get condensed milk, it is used as a raw
material. There after the milk is sent to the drying plant. The spray drying
plant is huge in size with a height of 70 feet. The plant is divided into many
floors to enable easy use of the plant. First of all the raw material i.e.
condensed milk is put into the first floor of the plant along with air at 200° C.
By this process the remaining water, which the condensed milk might have
retained is also evaporated and milk comes as powder but this is not the last
stage.
This powder is again put in to a machine called milk calendaria, where it is
turned in to real milk powder. Its capacity is 1000 litres per 15 minutes. Then
again this milk powder is put into a Dense Waise Vessel. Here the lumps are
removed and uniform milk powder is sent up.

After processing the powder is sent for quality checking at quality assurance
laboratory. After the quality confirms, this milk powder is differentiated, by
adding different flavors to them like elaichi, chocolate & sugar free milk
powder. Thereafter they are packed in tins and boxes. Afterwards it is stored
at storage department.

Marketing Function

Gujarat Co-operative Milk Marketing Federation (GCMMF)

GCMMF was the first co-operative to be set up under operation flood.

GCMMF’S dairy plant commissioned in 1994 is one of the most modern and
largest plants. It can handle up to 1million litres of milk per day. The plant
also has facilities for pasteurizing and packing. It was funded by NDDB.
GCMMF’s milk is sold under its flagship brand Amul.

GCMMF was formed in 1973. As an apex marketing federation of 12 district

milk unions of Gujarat to operate own marketing and distribution network in
India and abroad.
GCMMF sales turnover grew by 21% Rs. 15.5 billion to Rs. 18.8 billion
including consignment sales of Rs. 3.7 billion sale of Amul milk in Gujarat and
Maharastra increased by 11% and 16% respectively. Dairy product turnover
registered a 19% growth. Amul butter registered 18% growth. The sale of
Amul & Sagar Ghee increased by 47%. Amul Cheese registered 60% value
growth.

GCMMF’s sales to the defense services were Rs.233 million during the year,
were mainly to Burma, Uganda and West Africa. The company plans to
expand its export markets in Saudi Arabia and other Middle East countries.

During 1999, launching it in 8 states and 2 union territories extended the

Amul ice-cream brand franchise. Amul ice creams have become India’s 2nd
largest brand. Recently it has commissioned a dairy at Kolkata.

New products launched during the early 2000 were Amul Pizza, Cheese and
Amul slice cheese, Amul paneer and Amul Mithaee range. Safal mango drink
has been launched by Strategic alliance with Safal (A union of NDDB). The
product range to be launched under the Safal brand will include fruit drinks,
squashes, pickles, jams, and ketchup and mango pulp.

Amul ice-cream brand franchise was extended with launch in 8 states & 2
union territories. Amul ice cream has become the 2 nd largest brand in the
country & has garnered major share in its existing markets in a short time
span of 3 years. Amul’s main ice-cream manufacturing facility is located at
Gandhinagar which is Asia’s largest and most modern integrated ice-cream
manufacturing plant and uses world renewed refrigeration units and an
efficient cold chain. GCMMF has become very popular because of its excellent
marketing strategy. GCMMF marketing strategy is to understand the
consumer needs, develop products that provide superior value at fewer
prices. GCMMF has shown a tremendous commitment to the floodwater
situations. GCMMF has never stopped the supply of milk and other milk
products. And unlike other competitors, it has never taken wrong benefits in
these kinds of situations. It has developed an excellent distribution channel to
provide its products to the consumers. It has made its products available in
each part of Gujarat & India.

Market Segmentation

Market segment is a very important function for the market department of

the GCMMF, because the market consists of buyers different in many ways.
They are different in their wants resources, locating buying practices.
Because buyers have unique needs and wants, each buyer is potentially
separate market.

Geographic segmentation

Under these variables, GCMMF has divided market into different geographic
units such as region, states, cities etc. GCMMF sells its products by
geographic segment action like in the north where production of milk is very
high the sale of Amul’s product is not much. But in the western region it is
high. GCMMF identifies this kind of variables and deals with it.

Demographic Segmentation

Under this variable GCMMF has divided market into several segments such as
age, gender, family, size, income, occupation etc. For each group GCMMF
marketing strategy is different. In milk Amul targets all the class where as in
the other products like butter, ghee, ice-cream etc. it targets to the middle
and higher middle class.
Distribution Network
Most producers work with marketing intermediaries to bring their products to
market. The marketing intermediaries make up a marketing channel also
called distribution cannel. Distribution channels are sets of interdependent
organizations involved in the process of making a product or service available
for use or consumption.

The Head Office of GCMMF is located at Anand. The entire market is divided in 5
zones. The zonal offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and
Chennai. Moreover there are 49 Depots located across the country and GCMMF caters to
13 Export markets.

A zero level of channel also called a direct marketing channel consists of a

manufacturer selling directly to the final customers. A one level channel;
contains one selling intermediary such as retailer to the final customers. A
two level channel two intermediaries are typically wholesaler and retailer. A
three level channel are typically wholesaler, retailer and jobber in between.

GCMMF has an excellent distribution. It is its distribution channel, which has

made it so popular. GCMMF’s products like milk and milk products are
perishable. It becomes that much important for them to have a good
distribution.

Distribution Chart
 Agents

Wholesaler

Retailer

Consumer

We can see from above figure that GCMMF distribution channel is simple and
clear. The products change hands for three times before it reaches to the
final consumer. First of all the products are stored at the Agents end who are
mere facilitators in the network. Then the products are sold to wholesale
dealers who then sell to retailers and then the product finally reaches the
consumers.

Amul Parlors
Amul has come out with a unique concept of Amul Parlours. They have
classified them under four types namely:

• Center for excellence

• On the Move
• Amul Parlours
 • Amul Preferred Outlets

Center for Excellence: These Amul Parlours are specifically at a place,

which has a class of excellence of its own. We can find such parlors at the
Infosys, IIMA, NID Ahmedabad etc.

On the Move: These parlors are at the railway stations and at different state
bus depots across different cities.

Amul Parlours: These parlors can be seen at different gardens across

different cities. These are fully owned by Amul.

Amul Preferred Outlets: These are the private shops that keep the entire
of product range of Amul. They also agree not to keep any competitor brands
in the outlets. They can keep other brands that are in the non-competitor
category.

Amul has more than 200 such outlets right now. It wants to have 1,00,000
parlors by the end of the year 2010.

Managing Competition

The Indian market is dominated by a large number of small local and regional

players. There are an estimated 150 manufacturers in the organized segment,

which accounts for 30-35% of sales and about 1000 units in the unorganized

segments of the market. In the organized segment the significant brands are
Kwality Walls , Vadilal, Amul, Havmor, Mother dairy and Baskins & Robbins.

GCMMF is facing very tough competition from both in and outside India.

Amul combats competition from its competitors by providing quality products at

a price which its customers value. Along with good quality products and

reasonable price the packaging is also very good. Most of its products are

available in many flavors. Excellent advertising backs its products and helps

GCMMF (AMUL) to leave its competitors a tough time. Also Amul has come out

with Amul Parlours to cater to various segments of customers. Amul has a very

strong Brand Image in the Domestic market. Many products are exported by

GCMMF.

Exports

GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading
House" status. GCMMF has received the APEDA Award from Government of India for
Excellence in Dairy Product Exports for the last 9 years.

The major export products are:

Consumer Packs

• Amul Pure Ghee

• Amul Butter
• Amul Shrikhand
• Amul Mithaee Gulabjamun
• Nutramul Brown Beverage
• Amulspray Infant Milk Food
• Amul Cheese
• Amul Malai Paneer
• Amul UHT Milk (Long Life)
• Amul Fresh Cream

Bulk Packs

• Amul Skimmed Milk Powder

• Amul Full Cream Milk Powder

The products are exported to 18 countries namely, USA, Kuwait, Qatar, UAE,
Yemen, Bahrain, Muscat, Saudi Arabia, Tanzania, Madagascar, Sri Lanka,
Singapore, Nepal, Bangladesh, Nepal Thailand and Australia.
Advertising by Amul

Amul has two agencies that look after its entire range of products namely
FCB Ulka and Da Cunha.

FCB Ulka looks after a broad range of products namely, Amul Lite
Breadspread, Amul Shrikhand, Amul Chocolates, Amul Paneer, Amul SnowCap
Softy Mix Ice cream, Amul/Sagar Ghee, Amul Infant Milk Formula 1 & 2, Sagar
Tea and Coffee whitener, Amul Spray Infant Milk Food, Amul Mithaee, Amul
Gulab Jamun, Amulya Dairy Whitener, Mithaimate Sweetened Condensed
Milk, Amul Ice cream, Sagar Skimmed Milk Powder and Amul Whole milk
Powder.

Da Cunha looks after the Amul butter. Da Cunha also prepares the very
popular Amul butter billboard campaigns, which we see at various locations.
Over and above the Amul butter, Da Cunha also looks after the Amul Cheese,
Cheese spread, Gouda Cheese, Emmental Cheese, Masti Dahi and Buttermilk,
Amul Slim-n-Trim, Amul Taaza and Amul Gold (all different brands of milk),
Amul Fresh Cream, Amul Chocolate Milk, Amul Fresh Milk and Nutramul.

FCB Ulka also looks after the corporate campaign.