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Amul Marketing Management

Introduction: In December 14, 1946 a great company came into origin which we know today as “AMUL”. The name has taken from the Sanskrit word “AMULYAM” which mean ‘priceless’. As per study we came to know that the name has been suggested by the quality control department of Amul in ‘Anand’. But, for some it seems that it is the acronym of the word ‘Amul’ as (Anand Milk Union Limited). During the late 40’s an awareness program took place in the Anand district of Gujarat by the farmers which took the shape of revolution. This revolution was known as the dairy revolution in India.

Though, this was a revolution it was well managed and channelized that led to the prosperity to India’s economic growth. It’s a co-operative organization which is being managed by the apex body, Gujarat Co-Operative Milk Marketing Federation Ltd. The organization is based in the Anand district of Gujarat and has set an example to the world that how well can a co-operative organization run in a long term. Amul in India has brought a white revolution and helped India to be the global leader in the production of milk. India ranks no. 1 in the world in milk production. It is also the no. 1 brand in manufacturing of vegetarian cheese in the world.

The organization is being owned by around 2. 41million milk producers of Gujarat. Amul has a variety of products in its product line of which some of are as follows amul butter, amul cheese, amul ghee, amul curd, amul chocolate, shrikhand, milk powder, paneer, gulabjamun, nutramul and other brands. Amul is one of the biggest and the largest food brand in India which has an annual turnover of US $ 1700 million in (2009-2010). At present it has 2. 9million milk producing members which help it to collect 9. 10million liters of milk daily and annually 3. 32billion liters. Amul not only operate in India it has its name outside India too.

Amul also exports its products to many countries and is regarded that amul is the largest exporter of the dairy products from India. It operates in many countries like USA, Singapore, Gulf countries and many other countries also. It also has received many awards from the government of India like APEDA award for 11consecutive years. [pic] Source: http://www. amul. com/products. html PESTLE ANALYSIS: MACRO ENVIRONMENT-PESTLE ANALYSIS: One of the useful ways of analyzing an organization external environment is by grouping external forces nearly into six areas using pestle analysis.

PESTLE: a. a )Political b. b) Economical c. c) Social d. d) Technological e. e) Legal f. f) Environmental ? Economic factor:Though the economic environment is influenced by domestic policies, it is also dependent upon world economic trends, rate of economic growth influences consumption patterns, income distribution inflation rates, unemployment price instability, exchange rates, energy prices and many other economic trends determines the nature of product and services required by consumer well as how difficult it becomes to supply them.

There is no doubt that the AMUL is making a big contribution in the economies of the foreign country as well as in their own country. ? Social factor: Social aspect of the analysis deals with the life styles of the consumer, demographic issues, education, immigration, religion issues, population in the country and the career attitude. The impact of the business in the society is really great because of it become sweeteners after every meal. AMUL recognizes the rights of the work force and valued the ideas they might contributes for their progress. Technological factor: It includes the technological developments, new product development, new places to sell, automation, impact on cost structure, new ideas and models and so on. Companies have the ability to sell their products over the internet there are different cost of AMUL in other countries. From the traditional crafting of AMUL, the company also recognizes the importance of technology. From the production, AMUL had incorporated into many types of machinery that make their production be a cost – efficient procedure. Environmental factor: The Company recognizes the certain impacts that they might bring in the environment. There are available strategies and continues inspection came from the local officials to ensure that the resources, as well as the environment is not exploited. ? Legal factor: The idea is of creating a specify taste to be available in the market. The competitor’s and the other companies making the same nature of business are unique. In terms of merging and acquiring businesses, the company recognizes the legal aspect that is the basis of right flow of the business. [pic][pic]

For any product right composition of ingredients is very important and amul did not give any less importance in that because of its standards. So it is for Amul Choco-Crunch which is a new product in amul’s product line. ? Total fat32% ? Cholesterol 2% ? Sodium 2% ? Carbohydrate 7% ? Dietary fiber 9% ? Vitamin A 2% ? Vitamin C 2% ? Calcium 8% ? Iron 4% Breaking the markets in sub-markets or smaller groups of market (i. e. customers) can be called as market segmentation. We can also call this kind of market as niche market or the specialty market.

These markets are almost similar in nature and act similarly as the customers may have similar kind of taste and preferences, likes-dislikes ideas etc. They might also think that the strategy behind all the segmentation is same regarding the product mix, pricing, distribution and promotion. The reason why all the marketers give more impotence in segmentation is because that it give an idea to them that who are their potential customers. How they can get maximum revenue from their limited source of fund. Market Segmentation of Amul CHOCO CRUNCH • It should have similarity within the segment Heterogeneity between segments • The segments must have feature like identification and can be measured. • Segments must be accessible and actionable. • Segments must be large so that maximum profit can be made. The segmentation process can be defined by the wordSADAM: • S Substantial: It means the segment should be large enough to rip maximum profit. • A Accessible: The product should reach the customer efficiently. • D Differential: The product should act differently in different markets. • AActionable: There should be a product for all segments to act. • MMeasurable: The size and the purchasing power must e given due importance. After the segmentation process is completed the company should look which is the most profitable target market and which market should be targeted. But in this course organizations should not blindly target the market which gives maximum revenue in short term and loss in long term. So, for this organizations follow the four different processes before targeting any new market. AGE GROUP TARGETED [pic] Source: www. amul. com The four activities used by Amul while targeting are:- ? What are the abilities and the resources required to enter the market. Examine their competitors in field of resource and skills ? Compare the abilities of the company with that of the competitors. ? Finally, decide the actual target market. The above three points are described from the point of competitors and how to analyze the competitors. The final decision on to zero down to an actual target market is the result of the analysis made from the above points and how the competitors will react on it. After a detail analysis the company has a list of segments near them and they have to choose among them which the best target is for them and which can give them the maximum returns.

The process of targeting can only be started on if the management knows the segments and it is predefined to them; also they should analyze the segments as well as the competitors of those segments. After the targeting process gets over the market should be selected, but the marketing strategy to be used in this markets are yet not decided. So, to decide the marketing strategy the knowledge of segments and the advantages of segments should be known properly. These are the following four major categories which can help marketing management to take decisions: ? PRODUCT ? PRICE PLACE ? PROMOTION These variables are popularly known as marketing mix of 4 P’s of marketing. With the help of these important variables marketing managers can control their customer’s needs and wants in the targeted market. The process of marketing mix can be better understood by the following diagram: Marketing Mix The organization likes to have a proper blend of all this four important variables so that it can generate the maximum profit from the targeted customer’s. So, now let’s take a look of marketing mix of the new product CHOCO-CRUNCH and how these four variables i. product, price, place and promotion are being used. [pic] The organization can choose several pricing policies. They can select value based pricing, cost based pricing and competition based pricing. But in the case of Amul’s Choco Crunch they should follow the competition based Pricing strategy, Because of customer having so many option for same product. Competition Based Pricing In Competition Based Pricing, price setting is based upon competitor’s products. Company may charge the less or more price than the competitor or the same price.

Companies marketing Managers made some different assumptions for making pricing decision and they selected three type pricing strategies for Amul’s Choco Crunch :- 1) Product is having more distinctiveness when comparing with competitor’s product. In this situation we can assume:- a) Price elasticity of the product is very low. b) Cross elasticity of the product also very low. c) Product demand will increase. 2) The product crying perishable distinctiveness comparing to their competitor’s product, we can make an assumption the feature of the products are medium distinctiveness. ) Product is having less distinctiveness when comparing with competitor’s product, the assumption will be a) High price elasticity for the product b) High cross elasticity for the product c) Demand expectation of the product is not predictable Competition based pricing approach helped Amul to beat out all other chocolate in the competition like Cadbury. Pricing of Amuls products are quite cheaper and giving the same quality as compares its competitors such as Cadbury. These factors are customer preferring Amuls products over all other competitor’s product.

The Amul’s Milk product price ranges between Rs. 20 and Rs. 35. [pic] Communication is playing a big role for the success of a product or service, if a product or services clearly communicated to the targeted market what benefit customer gets from the product or services then only that product will have a success life cycle. Organizations promotional strategy or communication mixes consist of:- Advertising: Advertising can communicate a massage to a mass audience all over the world at a low cost per person reached. Public relations:

Public relations means create a positive relationship with public through the media. Public relationship and publicity (it’s the subset of PR) can bring high credibility through news stories, lobbing, and providing information to customer. If there is good public relationship organization can able to handle their negative part. . Sales promotion: Sales promotion includes a variety of short term incentives at promoting purchase of product or services. This includes coupons, premiums, and contests. Promotion Budget Cost sheet Schedule ‘A’ PARTICULARS |Rate |Total Cost | |Mascot (Mooh) |100/day |10,000 | |Television Advertisements | |90,000 | |Radio Jingles | |6,045. 5 | |Banners and Hoardings | |58,000 | |Print Advertisements (Newspapers) | |60,000 | |Print Advertisements(Magazines) | |45,500 | |World Cup Promotional Activity | |-Nil | |Payment to brand ambassador | |3,50,000 | Comparing Prices Of AMUL and CADBURY: |Product |AMUL |CADBURY | | |(Rs. ) |(Rs. ) | |Dry fruit Choco Crunch (pack of 10pcs) |40 |50 | Source: www. amul. com

By comparing these two (Amul and Cadbury) product prices, Cadbury offered higher price than Amul’s product, they are targeting rich people like professionals, working couple and high class families. Amul organization did a market research on this who all are willing to pay higher prices? And who all are not? So Amul set a price below competitor’s product which people can afford. Amul’s Targeting customers are between the age of age 6 to age 50 years. So it shows that Amul targeting all age category include children’s, teenagers, youngsters and aged people’s or its all comes under upper middle class or middle class families, people who all comfortable with these prices. Pull promotion strategy and push promotion strategy

These are the two basic promotion mix strategies most used in business 1)Push promotion or pushing product moving through the channels of distribution to the final consumers. Personal selling and trade promotions are the primary efforts of the marketing. 2) Pull promotion or direct marketing efforts to the final consumer in order to create the demand for the product. Advertising and consumer promotions are the primarily uses by pull promotion. The philosophy of pull promotion is that when the consumer demands the product from the retailer, then he will demands from wholesaler, wholesaler will demands from the producer. So consumer pulls the demand of product through the channel. [pic] Cost |A strong emphasis is given on the target costing, cost for designing, value engineering, and the cost for | | |manufacturability. Minimum variety in product. Significant manufacturing and accounting involvement in | | |development. In the process of development suppliers are well integrated. For manufacturing high volume | | |oriented and automated machines are used. | |Quality / Reliability / |A high level and a rigorous product development process are being followed. Products are made according to | |Dependability |the needs of the customer and which can satisfy them. The methods and techniques like FMEA, FTA, FRACAS, | | DOE, Taguchi Methods, poke-yoke, are used for reliability prediction. Heavy emphasis is given on testing | | |and qualification. | |Time-to-Market | Continuous survey of the marketplace and understanding of customer needs are done. Company follows a | | |well-defined development processes which is based on tightly integrated design automation tools. All the | | |programs are well defined and the responsibilities given to employees are well executed. Process | | |equipment’s are used to handle wide range of employees. |

Company’s marketplace can be better understood and be defined from the first point, customer needs and competition. Based on the above assessment, the company’s primary objectives can be selected and a strategy can be develop and enhance these primary objectives. Once all the above activities are done then product process and design can be processed and can be implemented. SWOT ANAYLSIS: Strengths: ? parents support ? strong distribution network Weakness: ? raw material supply-volatile prices ? chocolates-comparatively small business unit Opportunities: ? Low penetration, consumption ? Scope of launching new variants and extensions Threats: ? foreign multinationals [pic]

When the target market is made or selected, then a company starts on deciding on marketing there product mix or marketing mix. But before that an important thing for the marketers is to decide how to create a positive image in the minds of the customers. Each segment is different from each other and the taste and preferences of the customers in this segments are also different so the company have to position differently in the minds of different customers. The Process Of Positioning The Product Of A Company: 1. Positioning helps to identify and differentiate between the segments. 2. It help’s in deciding which part of the segment to be positioned.

With the help of positioning the company impacts the targeted customers. The process-data model shows all the concepts of positioning and how this positioning strategy is useful in positioning of a product. The model also helps to analyze how those predefined models helps in positioning. To create a good positioning strategy all the analysis like market analysis, competitors and the abilities of the company should be taken in consideration. References: www. amul. com Marketing Management, Philip Kotler, 12th edition, 2007. http://www. amul. com/products. html [pic][pic] ———————– History of Amul Product Line AMUL CHOCO-CRUNCH COMPOSITION Market Segmentation Market Targeting MARKETING MIX

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