INTERNATIONAL INSTITUTE FOR SPECIAL

EDUCATION

FINAL PROJECT ON “Channels of distribution of AMUL-The Taste Of

INDIA

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 DECLARATION
I hereby declare that the project work entitled Channels of distribution of “Amul
“submitted to the IISE, is a record of an original work done by me under
the guidance of Dr. Shekhar Srivastava Professor ,IISE Luck now , and this project
work has not performed the basis for the award of any Degree or diploma/ associate
ship/fellowship and similar project if any.

Alankrita Singh
1545

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 Acknowledgement
I have taken efforts in this project. However, it would not have been possible without
the kind support and help of many individuals. I would like to extend my sincere
thanks to all of them.

I am highly indebted to Dr. Shekhar Srivastava for his guidance and constant
supervision as well as for providing necessary information regarding the project &
also for his support in completing the project.
I would like to express my gratitude towards other faculty member as well for their
kind co-operation and encouragement which helped me in completion of this project.

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 Research Methodology
For my project I have taken all the data from secondary source which is internet. I
have research and gone through different websites to do research on the topic.
Research Approach:
The objective was to know the competitive position of Amul in the Lassee market
thus in order to successfully conduct the research the unbiased opinion of the
above parties was desirable. Thus we conducted the research as the representative
of Amul company and sometimes the representatives of the other company like
Mother Dairy or Gowardhan in order to have an unbiased opinion of the concerned
persons and it worked to achieve our goal.

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 Objective of the project
 To know different strategies of distribution channels
 To know about the company AMUL
 How channels of distribution work in the organization effectively

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 INTRODUCTION
The dairy industries companies run mainly on the factors such as
availability, service frequency, affordability, taste and marketing.
Availability is plays a vital role because purchasing power is depend
upon availability of that product, in case distributors and retailers service
matter a lot. Retailing includes all the activity in selling goods or service
directly to the customers or personal non-business use .A retailer or
retail store is any business enterprises whose sales volume comes
primarily from retailing.
The project delves into the workings from the distribution aspect of an
FMCG organization, in detail. AMUL, being an FMCG company,
attaches a lot of significance to the distribution aspect of its business.
The distribution channel of AMUL holds a lot of potential in affecting
the demand or sales of AMUL products through delivery on time,
delivery of variety of products, the retailer- friendliness of the policies
being set by the distributors and equitable distribution of products to all
the retail outlets in a particular region, to name a few.

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 Promotion Tool Used:
The consumer promotion tools mean the promotion activities, which
are beneficial for consumers as well as company. Such as price
discounts, samples, cash refund, premiums, prizes, cross promotion and
coupons etc. We decided to use discount coupons. We distributed it
among customers and validity kept seven days from issued.
• The consumers are seduced to buy the product.
• It helped to increase sales volume.
• Consumer can get good quality of good in cheaper price.
• It can attract the new consumers and customers buying other brands.
• Attract brand switchers, who are primarily looking for low price, good
value or premiums.
• Turn switcher to loyal users,
• It induced to make some subsequent purchases.
• Give little permanent gain in market share

Need of Study:
Managers are always curious about the position of their company‟s
products in the market which largely depend upon the company‟s
goodwill, and the position of their brand. In order to maximize the sale
and profit, company must deliver outstanding satisfaction to the
retailers, wholesaler & customers. So market survey of retailers,
wholesalers & customers, chart out the position of the company as
compared to the competitors. It helps the organization to find out the
brand being sold most by the retailers along with their stocking
and also consumer buying preferences.

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 Industry Profile
The World Dairy Situation
The International Dairy Federation (IDF) just released its "World Dairy
Situation 2013" report during the IDF World Dairy Summit taking place
this week in Cape Town, South Africa. A key trend in the dairy industry
the past decade has been increasing globalization. While higher farm
level prices stimulated a 2.5 percent (18.5 million metric tons) increase
in milk production above 2011 levels, this was readily absorbed by the
market.
Global per capita milk consumption increased by 1 kilogram to 107.3 kg
(236.6 pounds). Among the Regions of the world, Asia accounts for 39
percent of world dairy production consumption, followed by Europe at
28 percent and North America at 13 percent. However, in other regions
demand is growing faster; between 2005 and 2012, demand for dairy
products grew by 26 percent in South America and by 22 percent in
Africa.
World trade dairy products increased by 10 percent in 2012 to 58.2
million metric tons, well above the average annual growth rate during of
4 percent since 2000. World cheese trade increased 6.6 percent, with all
the major dairy exporting countries seeing increased export volumes
except for New Zealand.

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 Indian Dairy Industry -- A Profile
India‟s dairy sector is expected to triple its production in the next 10
years in veiw of expanding potential for export to Europe and the
West.Moreover with WTO regulations expected to come into force in
coming years all the develop countries which are among big exporters
today would have to withdraw the support and subsidy to their domestic
Milk product sector. Also India today is the lowest cost producer of per
litre of Milk in the world, at 27 cents, compared with the US‟63 cent.
The urban market for Milk products is expected to grow at an
accelerated pace of around Rs.9774 crores by year 2012. This growth is
going to come from the greater emphasis on the processed food sector
and also by increase in the conversation of Milk into Lassee and other
products. By 2010, the value of Indian dairy produce is expected to be
Rs 10, 00,000 million. Presently the market is valued at around
Rs7, 00,000mn.
Also to take advantage of this lowest cost of Milk production and
increasing production in the country multinational companies are
planning to expand their activities here. Some of those Milk producers
have already obtained quality standard certificates from the authorities.
This will help them in marketing their products in foreign countries in
processed form.

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 Co – Operative Unions
Backward integration of the process led the cooperatives to advances in
animal husbandry and veterinary practice. The system succeeded mainly
because it provides an assured market at remunerative prices for
producers' Milk besides acting as a channel to market the
production enhancement package. What's more, it does not disturb the
agro-system of the farmers. It also enables the consumer an access to
high Milk products. Contrary to the traditional system, when the profit
of the business was cornered by the middlemen, the system ensured that
the profit goes to the participants for their socio-economic upliftment
and common good.
Recently the Indian cooperative movement got a much needed facelift.
With competition snapping at its heels, the sector which has been
governed by arcane laws until the recent past will see a special provision
inserted in the companies Act, 1956. All the cooperative unions will be
re- christened cooperative companies; they will come under the purview
of the registrar of companies, instead of the registrar of cooperatives.
Dairy cooperatives account for the major share of processed liquid milk
marketed in the country. Milk is processed and marketed by 170 Milk
producer‟s cooperative unions, which federate into 15 state co-operative
Milk marketing federations.

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 Some of the major dairy cooperative federations
include

• Andhra Pradesh Dairy Development Co-operative Federation Ltd

(APDDCF)
• Bihar State Co-operative Milk Producers Federation Ltd (COMPFED)
• Gujarat co-operative Milk Marketing Federation Ltd (GCMMF)
• Haryana Dairy Development Cooperative Federation Ltd. (HDDCF)
• Himachal Pradesh State Cooperative Milk Producers Federation Ltd
(HPSCMPF)
• Karnataka Cooperative Milk Producers Federation Ltd (KMF)
• Kerala State Cooperative Milk Marketing Federation Ltd (KCMMF)
• Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)
• Maharashtra Rajya Sahkari Maryadit Dugdh Mahasangh (Mahasangh)
• Orissa State Cooperative Milk Producers Federation Ltd (OMFED)
• Pradeshik Cooperative Dairy Federation Ltd (UP) (PCDF)
• Punjab State Cooperative Milk Producers Federation Ltd
(LASSEEFED)
• Rajasthan Cooperative Dairy Federation Ltd (RCDF)
• Tamilnadu Cooperative Milk Producers Federation Ltd (TCMPF)

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 The Dairy Cooperative Network
• Includes 176 milk unions
• Operates in over 338 districts
• Covers nearly 1,08,574 village level societies
• Is owned by nearly 13 million farmer members.
Apart from making India self sufficient in Milk, these dairy co-
operatives have established our country as the largest Milk-producing
nation in the world.

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 The Organization
Introduction & History
In the year 1946 the first Milk union was established. This union was
started with 250 liters of Milk per day. In the year 1955 AMUL was
established. In the year 1946 the union was known as KAIRA
DISTRICT CO-OPERATIVE MILK PRODUCERS‟ UNION. This
union selected the brand name AMUL in 1955.
The brand name Amul means “AMULYA”. This word derived form the
Sanskrit word “AMULYA” which means “PRICELESS”. A quality
control expert in Anand had suggested the brand name “AMUL”. Amul
products have been in use in millions of homes since 1946. Amul Butter,
Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Prolife
Lassee, Amul Pro and Amulya have made Amul a leading food brand
in India. (The total sale is Rs. 2 billion in 2012). Today Amul is a
symbol of many things like of the high quality products sold at
reasonable prices, of the genesis of a vast co-operative network, of the
triumph of indigenous technology, of the marketing savvy of a farmers'
organization.
And have a proven model for dairy development (Generally known as
“ANAND PATTERN”).

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 Amul Secret Of Success
The system succeeded mainly because it provides an assured market at
remunerative prices for producers' milk besides acting as a channel to
market the production enhancement package. What's more, it does not
disturb the agro-system of the farmers. It also enables the consumer an
access to high quality milk and milk products. Contrary to the traditional
system, when the profit of the business was cornered by the
middlemen, the system ensured that the profit goes to the
participants for their socio-economic up-liftment and common good.
 Bring at the command of the rural Milk producers the best of the
technology and harness its fruit for betterment.
 Provide a support system to the Milk producers without disturbing
their agro-economic systems.
 Plough back the profits, by prudent use of men, material and
machines, in the rural sector for the common good and betterment
of the member producers.
 Even though, growing with time and on scale, it has remained with
the smallest producer members. In that sense, Amul is an
example par excellence, of an intervention for rural change.

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 Vision
GCMMF will be an outstanding marketing organization, with
specialization in marketing of food and dairy products both fresh and
long life with customer focus and IT integrated. The network would
consist of over 100 offices, 7500 stockiest covering at least every
Taluka. Head quarter servicing nearly 10 lakh outlets with a turnover of
Rs.10,000 Cr and serving several co-operatives. GCMMF shall also
create markets for its products in neighboring countries.

Mission:
We at GCMMF endeavor to satisfy the taste and nutritional
requirements of the customer of the world through excellence in the
marketing by our committed team. Through cooperative networking,
we are committed to offering quality product that provides best value for
money.

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 Organization Structure:
Organization Structure is divided into two parts:
• External Organization Structure
• Internal Organization Structure
• External Organization Structure
External Organization Structure is the organization structure that affects
the organization from the out side.

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• Internal Organization Structure:
The following is internal organisation chart of Amul:
Organization Structure Chart

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 Production Function:
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.

• Operating Analysis-
Amul‟s only source of raw material is Village Milk societies. Milk is brought from
such village Milk societies every morning and evening. This Milk is then sent to
the dairy plant. In the dairy plant the Milk is processed i.e. it is made free from
germs.

· Milk Processing
The entire process of Milk can be divided into following steps:

Steps:

Milk Processing Chart:

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19
 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 channel.
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 37 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.

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 Distribution Chart

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.

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 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, 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

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 Advertising by Amul
Amul has two agencies that look after its entire range of products
namely FCB Ulka and Dacunha.
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 Butter, 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.

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Sales Turnover

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 Some Facts
Members: 13 District Cooperative Milk

No. of Producer Members 3.03 million

No. of Village Societies 15,712

Total Milk handling capacity
Milk collection (Total - 2010
11)
Milk collection (Daily Average
(2010-11)
Milk Drying Capacity
Cattlefeed manufacturing
Capacity
Sales Turnover (2010-11)
13.67 million litres per day
3.45 billion litres
9.2 million litres
647 Mts. per day
3690 MTS per day
Rs. 9774 Crores (US $ 2.2
billion)

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 Achievement & Awards
Amul: Asia‟s largest dairy co-operative was created way back in1946 to
make the Milk producer self-reliant and conduct Milk- business with
pride. Amul has always been the trend setter in bringing and adapting
the most modern technology to door steps to rural farmers.

Amul created history in following areas:

 First self motivated and autonomous farmers “organization
comprising of more than 5000000 marginal Milk producers of
Kaira District”.
 Created Dairy co-operatives at village level functioning with Milk
collection centers owned by them.
 Computerized Milk collection system with electronic scale and
computerized accounting system.
 The first and only organization in world to get ISO 9000 standard
for its farmers cooperatives.
 First to produce Milk from powder from surplus Milk. Amul is the
live example of how co- operation amongst the poor marginal
farmers can provide means for the socio-economic development
of the under privileged marginal farmers.

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 AWARDS:-
Amul a co-operative society and its co-operation has led many different
awards in its favour.

 Magsaysay award for community leadership presented in manila.

 Philippines to Shri Tribhuvandas Patel, Shri D N Khurody and Shri
V. Kurien
 1964: “Padmabhusan” award given to Shri T.K. Patel
 1965: “Padmshri” awarded was given to V. Kurien, general
manager, by the president of India.
 1987: “Best Productivity” awarded by national productivity
council for the year 1985-86 awarded to Amul dairy.
 1988: “Best Productivity” awarded for the second successive year
1986-87 by the president of India, Mr. R. Venkatrao to kaira union.
 1993: “ICA” Memenoto towards genuine and self sustaining
cooperative worldwide ICA regional office for Asia and pacific,
New Delhi, 1996.
 1999: G.B.Birla award. Moreover the Amul union has achieved
the prestigious ISO 9001-2000 and HACCP Certificate and effects
are got to obtain ISO 14000.
 1999: Best of All" Rajiv Gandhi National Quality Award for the
year,
 2003: The Gujarat Co-operative Milk Marketing Federation Ltd.
has emerged as the top scorer in the service category of the
prestigious IMC Ramkrishna Bajaj National Quality Award.
 2006-07: GCMMF has bagged award for excellent performance in
exports of dairy products from Agricultural and Processed Food
Exports Development Authority (APEDA).

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 2007: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World
Dairy Summit.
 2008: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World
Dairy Summit.
 2009: Amul Bags Srishti G-cube Award For Good Green
Governance.
 2010: GCMMF receives Srishti's G-Cube Award.
 Dr. V.Kurien honoured with Life Time Achievement Award.
 Amul receives Green Globe Foundation Award.
 2011-12: ET-Corporate Citizen Award of the Year 2010-11 to
GCMMF
 2013: GCMMF wins the SAP Award for Customer Excellence
(SAPACE) 2013 under the category of "Best Run Award in
Finance"

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 List of Products Marketed
Bread spreads
• Amul Butter
• Amul Lite Low Fat Bread spread
• Amul Cooking Butter

Cheese Range
• 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), Frozen, Refrigerated and Tinned
• Utterly Delicious Pizza

Mithaee Range (Ethnic sweets)

• Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)
• Amul Amrakhand
• Amul Mithaee Gulabjamuns
• Amul Mithaee Gulabjamun Mix

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• Amul Mithaee Kulfi Mix
• Avsar Ladoos

Pure Ghee
• Amul Pure Ghee
• Sagar Pure Ghee
• Amul Cow Ghee

UHT Milk Range

• Amul Shakti 3% fat Milk
• Amul Taaza 1.5% fat Milk
• Amul Gold 4.5% fat Milk
• Amul Lite Slim-n-Trim Milk 0% fat Milk
• Amul Shakti Toned Milk
• Amul Fresh Cream
• Amul Snowcap Softy Mix

Infant Milk Range

• Amul Infant Milk Formula 1 (0-6 months)
• Amul Infant Milk Formula 2 (6 months above)
• Amulspray Infant Milk Food

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Milk Powders
• Amul Full Cream Lassee Powder
• Amulya Dairy Whitener
• Sagar Skimmed Lassee Powder
• Sagar Tea and Coffee Whitener

Fresh Milk
• Amul Taaza Toned Milk 3% fat
• Amul Gold Full Cream Milk 6% fat
• Amul Shakti Standardized Milk 4.5% fat
• Amul Slim & Trim Double Toned Milk 1.5% fat
• Amul Saathi Skimmed Milk 0% fat
• Amul Cow Milk

 Sweetened Condensed Milk

 Amul Mithaimate Sweetened Condensed Milk

Curd Products
• Yogi Sweetened Flavored Dahi (Dessert)
• Amul Masti Dahi (fresh curd)
• Amul Butter Milk
• Amul Lassee
• Amul Prolife Lassee

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Amul Ice creams
• Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch,
Tutti Frutti)
• Sundae Range (Mango, Black Currant, Chocolate, Strawberry)
• Millennium Ice cream (Cheese with Almonds, Dates with Honey)
• Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam
Kulfi, Shahi Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)
• Cool Candies (Orange, Mango)
• Cassatta
• Tricone Cones (Butterscotch, Chocolate)
• Megabite Almond Cone
• Frostik - 3 layer chocolate Bar
• Fundoo Range - exclusively for kids
• SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango,
pineapple)
• Health Isabcool

Chocolate & Confectionery

• Amul Prolife Lassee Chocolate
• Amul Fruit & Nut Chocolate

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Brown Beverage
• Nutramul Malted Milk Food
• Amul Pro

Lassee Drink
• Amul Kool Flavoured Lassee

Health Beverage
• Amul Shakti White Milk Food

Ready to Serve Soups

• Masti Tomato Soup
• Masti Hot & Sour Soup

Recently launched
• Amul Ganthiya

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 DATAP ROCESSINNG & ANALYSIS
Data Analysis For Retailers
Number of retailers stocking Amul Prolife Lassee.

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Sources from where retailers get Amul Prolife Lassee

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 Conclusion:-
Amul means different things to different people.
To a Lassee producer – A life enriching experience
To a consumer – Assurance of having wholesome
Lassee To a mother – A reliable source of nourishment for her child
To the country – Rural development and self reliance
As we know that Amul is very big organization and market leader in
dairy products. It has maximum market share in Lassee, Butter, Cheese
& Ice-Cream which are its main/core products. But in case of local
market like Kalyan the Amul Prolife Lassee is not a popular product as
compared to other Amul Products. With the help of research, company
can find out its week points in Lassee product and can increase its
market share through rectify mistakes.
People have believed in Amul‟s product and they will accept it also if
effective actions were taken.

The survey resulted into following conclusions :

Amul must come up with new promotional activities such that people
become aware about Amul Prolife Lassee .
Quality is the dominating aspect which influences consumer to
purchase Amul product, but prompt availability of other Lassee brands
and aggressive promotional activities by others influences the consumer
towards them and also leads to increase sales. In comparison to Amul
Prolife Lassee, the other players such as Mother dairy,

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 BIBLIOGRAPHY AND WEBLIOGRAPHY

Books:
i Marketing Management (12th Edition) – Philip Kotlar
ii. Research Methodology – C. R. Kothari

Websites:
i. www.google.co.in
ii. www.wikipedia.com
iii. www.amul.com.
iv. www.marketresearch.com
v. www.dairy.com

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