Amul Project report

A project report on

AMUL CHOCOLATE

Dissertation submitted in partial fulfillment

Post Graduate Diploma in Business Management

BY

SUVESH KUMAR

Roll No.: GJUJUL08AB279

Batch July 2008-2010

Under the Guidance of

Mrs. MEGHA MATHUR

(Faculty of Marketing)

NSB SCHOOL OF BUSINESS

B-II/1, MCIE, Delhi-Mathura Road, New Delhi

DECLARATION

I hereby declare that this project report entitled “Market Research on Amul

Chocolate” for Gujarat Cooperative Milk Marketing Federation (GCMMF)

is a bonafied record of work done by me during the project work and that it has not previously formed the basis for the award to us for any degree/diploma associate ship, fellowship or other similar title, of any other Institute/ Society. SUVESH KUMAR

ACKNOWLEDGEMENT

This research in itself is an acknowledge to the inspiration, drive, technical assistance contributed to it by many individuals. This study even internal part of our PGDBM programme and to do this project in a short period was a heavy task. Intention, dedication, concentration and hard work are very much essential to complete any task. But still it needs lot of support, guidance assistance, co-operation of people to make it successful.

I bear to imprint of my people who have given me their precious ideas and times to enable me to complete the research and the project report. I want to thank them for their continuous support at my research and writing efforts.

I would like to express my heartfelt gratitude to the Mrs.MEGHA

MATHUR for providing me the opportunity to undertake this project .

Table of content

Sr.No.

Contents

Page No.

1. Company Profile 4

2. The brand name – Amul 8

3. List of products marketed 11

4. Performance of Amul in last decade 16

5. The Chocolate 18

6.. Research methodology 21

7. Analysis 28

8. SWOT analysis 38

9. Distributor services the retailers 43

10. Problem faced in Amul chocolate 47

11. Areas of improvements & recommendations 52

12. Limitations of the study 55

13. Annexure: 57

COMPANY PROFILE

AMUL AND THE COOPERATIVE MOVEMENT:

Amul embarked upon its illustrious journey as a beacon for the Indian cooperative movement in 1946. Since then, it has been undergoing a multidimensional evolution whose overarching objective has been the same throughout: serving the farmer and catering to consumer requirements.

A structural landmark in this evolution process was the formation of the

GCMMF in 1974. Throughout these last 35 years, the company has

demonstrated-again and again-that Amul both represents and reconciles diverse expectations and aspirations.

Gujarat Cooperative Milk Marketing Federation (GCMMF):

Gujarat Cooperative Milk Marketing Federation (GCMMF) is an India’s largest food product marketing organization. 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

consists of:

AMUL BUTTER GIRL

Members: 13 district cooperative milk

producers' Union

No. of Producer Members: 2.79 million

No. of Village Societies: 13,328

Total Milk handling capacity: 11.22 million litres per day

Milk collection (Total - 2008-09): 3.05 billion litres

Milk collection (Daily Average 2008-09):

8.4 million litres

Milk Drying Capacity: 626 Mts. per day

Cattlefeed manufacturing Capacity:

The moppet who put Amul on India's breakfast table:

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 Milk and Amulya have made Amul a leading food brand in India.

50 years after it was first launched, Amul's sale figures have jumped from 1000 tonnes a year in 1966 to over 25,000 tonnes a year in 1997. No other brand comes even close to it. All because a thumb-sized girl climbed on to the hoardings and put a spell on the masses.

For 30 odd years the Utterly Butterly girl has managed to keep her fan

following intact. So much so that the ads are now ready to enter the Guinness

Book of World Records for being the longest running campaign ever. The

ultimate compliment to the butter came when a British company launched a butter and called it Utterly Butterly.

The Brand Name - “AMUL”

AMUL means "priceless" in Sanskrit. The brand name "Amul," from the

Sanskrit "Amoolya," was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are found in several Indian languages.

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 Milk and Amulya have made Amul a leading food brand in India.

Today “Amul” is a symbol of many things:

-•

Of 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.

•

Of a proven model for dairy development.

MILK PROCUREMENT

Total milk procurement by Member Unions during the year 2008-09 averaged 2.79 billion . Milk collection (Daily Average 2008-09): 8.4 million litres, total milk handing capacity 11.22 millian per day achieved.

DISTRIBUTION

Alignment of four Distribution Highways of fresh, chilled, frozen and ambient products is a major factor for the company. The company is planning to

increase our Distributor Network in smaller towns. The fast changing market scenario resulting from rise in household incomes leading to metamorphosis of rural and smaller markets, significant increase of middle class families and migration from rural areas to smaller developing towns has resulted in the emergence of growing markets in smaller towns all across the country.

An addition of almost 900 distributors in small towns was undertaken on a Time Based Military (TMT) technique. This initiative has already started yielding results in the form increasing availability of products in smaller towns and thereby generating additional business.

SALES

During the year, Federation's sales registered a growth of 1.4 percent to reach Rs. 2,922.53 crores (Rs.29.22 billion) including consignment sales of Rs.1.53

crores (Rs.0.02 billion). Despite intense competition, sales value of Amul Butter grew by 4.5 percent.

LIST OF PRODUCTS MARKETED

Bread Spreads:

• Amul Butter

• Amul Lite Low Fat Breadspread • Amul Cooking Butter

Cheese Range:

• Amul Pasteurized Processed Cheddar Cheese • Amul Processed Cheese Spread

• Amul Shredded Pizza Cheese • Amul Emmental Cheese • Amul Gouda Cheese

• Amul Malai Paneer (cottage cheese) • Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

• Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) • Amul Amrakhand

• Amul Mithaee Gulabjamuns • Amul Mithaee Gulabjamun Mix • Amul Mithaee Kulfi Mix

• Avsar Ladoos •

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

Pure Ghee:

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

Infant Milk Range:

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

Milk Powders:

• Amul Full Cream Milk Powder • Amulya Dairy Whitener

• Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

• Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:

• Amul Taaza Toned Milk 3% fat • Amul Gold Full Cream Milk 6% fat • Amul Shakti Standardised Milk 4.5% fat

• Amul Slim & Trim Double Toned Milk 1.5% fat • Amul Saathi Skimmed Milk 0% fat

• Amul Cow Milk

Curd Products:

• Yogi Sweetened Flavoured Dahi (Dessert) • Amul Masti Dahi (fresh curd)

• Amul Masti Spiced Butter Milk • Amul Lassee

Amul Ice creams:

• Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi)

• Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza,

Roasted Almond)

• Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh

Strawberry, Black Currant, Santra Mantra, Fresh Pineapple)

• Sundae Range (Mango, Black Currant, Sundae Magic, Double

Sundae)

• Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone,

Chococrunch, Megabite, Cassatta)

• Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake

Magic)

Amul Chocolate

• Amul Milk Chocolate

• Amul Fruit & Nut Chocolate • Amul Fundoo

• Amul bindaas • Amul Almondbar

-Sales Turnover Rs (million) US $ (in million) 1998-99 22192 493 1999-00 22185 493 2000-01 22588 500 2001-02 23365 500 2002-03 27457 575 2003-04 28941 616 2004-05 29225 672 2005-06 37736 850 2006-07 42778 1050 2007-08 52554 1325 2008-09 67113 1504

THE CHOCOLATE

AMUL Chocolate

is made from:

-• Sugar

• Cocoa Butter • Milk Solids • Chocolate mass

• Milk Fat 2% • Sugar 55%

• Total Fat 32.33% • (Milk Fat + Cocoa Fat) • Cocoa Solids 7.5% • Milk Solids 20%

PRODUCT SPECIFICATION:

Everyone has to go through marketing research process, what I have also adopted. For better processing let us know what market research is:

“Market research is the systematic design, collection, analysis and reporting of data and finding relevant to a specific marketing situation facing the company.”

An effective marketing research involves five steps:

The methodology used in conducting the research work on Amul Products with major emphasis on its sales and marketing strategies involve the following steps:

Defining the problem and research objective.

Developing the

research plan. Collecting the _information.

Analyzing the information. Present the

Why I have selected Amul only?

I have selected Amul for my summer internship because it is the company that I wanted to do my training with. This is because Amul is a big brand that will help in building up my career.

Defining the problem and deciding research objectives:

Defining the objective is the most important part of any study process. Proper defining of the problem is a must for proceeding further with the research process. The type of study to be carried out, the questions to be raised, the sampling procedure to be followed, and the data to be collected, all depends on a correct understanding of the problem. Also, by clearly focusing on the real problem, the research job can be simplified and completed with the minimum cost, effort and data.

1. Developing the research plan:

In this a plan was developed about how to collect the require information i.e. whom to contact for gathering the relevant data. Data is the foundation of all research. It is the raw material with which a researcher functions.

Therefore, it requires great care to select the sources of data. Data, or facts, may be obtained from several sources. Data sources can either be primary or secondary.

A. Secondary data:

The sources from which secondary data was collected:

• Press releases of the company. • Newsletters and In-house journals.

• Brochures and detailed descriptive leaflets • Magazines.

•

Websites such as www.amul.com and www.google.com. These were the sources from which secondary data has been gathered. Most of the

information presented in this report was extracted from the above data sources.

B. Primary data:

Collection of primary data was conducted by visiting the people personally for the preparation of the report.

2. Research approach:

It means the way by which the information was collected. Visiting the various places of Lucknow, getting the questionnaire filled by different individuals.

Beside this, frequent visit to the retailers was of great help to conduct the analysis and research work.

3. Contact methods:

Instrument or Data collected Forms: It is the method by which data is gathered. It could be done through various instruments like

questionnaires, observations; getting information from the shopkeepers was sufficient enough to conduct the study.

4. Collection of information:

The primary information was collected by face-to-face and direct

interviews with the retailers and the customers. They provide the relevant information regarding the profile of the company as compared to the other company in the Indian market.

The secondary sources of information were various web sites of the companies, newspapers & magazines.

5. Analyzing the information:

The data collected was carefully analyzed. The research and analysis of the information has been done on the basis of various sales and

marketing strategies adopted by the company during its tenure. 6. Reporting and conclusions and recommendations:

This is the most vital part of the work undertaken. After collection and analysis of data, it was recorded in the form as prescribed. The major part of the report is the findings. The finding also includes charts, tables and diagrams etc. The report also mentioned the limitations of the project undertaken. Then conclusion has been drawn out of the findings and

various recommendations have been given at the end of the report. Certain tables on the basis of which the findings were made have been included in the appendices section followed by the bibliography.

RESEARCH PROCESS

Individual Retailers One to One Retailers retailer opinion interaction feedback

STARTING

FOCUS

MEANS ENDS

ANALYSIS

Analysis of the data (from the questionnaire) obtained from the Retailers and consumers.

Table 1. Area covered for study.

Area Covered No. of Correspondent Aashiyana 10 Alambagh 18 Krishna Nagar 12 Graph 1. No. of Correspondent 25% 45% 30% Karol Bag

Mayur Vihar Phase - I

Laxmi Nagar

Table 2. The most preferred brand by the retailers for selling and consumers to buy. No. of Correspondent 45% 30% 25% Alambagh krishna Nagar Aashiyana

Brand No. of correspondence Cadbury 20 Amul 5 Nestle 15 Graph 2

Table 3. The number of correspondent having knowledge of Amul product.

Product Knowledge No. of Correspondent

Yes 24 Not Much 16 No. of Correspondence 49% 38% 13% Cadbury Nestle amul

Not Much 0 Graph 3. No. of Correspondent 60% 40% 0% Yes Not Much Not Much

Availability No. of correspondent Very Good 12 Good 28 Bad 18 Graph 4.

Table 5.Represents whether the retailers are willing to keep Amul Product.

Particular No. of Respondent

Yes 14 No. of Correspondence 17% 50% 33% Very Good Good Bad

Not Much 26 Graph 5. No. of Respondent 35% 65% Yes Not Much

Table 6. Attributes of product that are in the consumer’s mind while purchasing.

Attributes No. of Respondent

Quality 30

Taste 22

Availability 38

Graph 6. No. of Respondent 30% 22% 38% 10% Quality Taste Availability Purity

Table 7. Represents the Consumer source of information.

Types of Media No. of Respondent

Newspaper 54

T V 28

Radio 10

Graph 7.

No. of Respondent

54%

28%

10%

8%

_Newspaper

T V

Radio

Friends

FINDING

After analyzing all the data given by shopkeepers and consumers we found certain key findings that is very important for our project.

1. Most of the retailers are not interested for keeping some of the Amul products.

2. Retailers are not satisfied with the services provided by the company. 3.The sale of Amul product is average round the year.

5. Prices of Amul products are almost as par customers need. 6. Retailers want more margins from Amul.

7. People were highly satisfied with product quality of Amul.

8. Retailers are unsatisfied with the replacement of unsold Amul products. 9. Distributors could not provide all type of varieties because of less stock. 10. Due to negligence of the company the customers of Amul are shifting

towards another company.

11. There is a tuff competition in the market and that’s why the market share of Amul is dropping day by day.

SCOPE OF THE STUDY:

Amul is spreading its wings and widening its business horizon to reach and serve customers at new centers in the year ahead. The company products are backed by a highly motivated and technology driven team to achieve

customers need, product expertise and geographic reach.

The study is oriented towards the concept of different brands offered by Amul and its competitors to its customers. The company has endeavored to move fast in providing market solution, which maximize customer needs and

convenience, using multiple delivery channels in composing the agency network, wholesalers and retailers.

STRENGTH

2. India’s major giant player in dairy products. 3. Wide product range.

4. Qualified marketing & sales force..

5. Maximum milk handling capacity (11.22million litres) per day. 6. High-quality products sold at reasonable prices.

WEAKNESS

1. Lack of availability of stock at various locations.

2. Lack of promotions (advertisements/offers/schemes).

3. Weak distributors service channel to retailers (in some areas).

OPPORTUNITIES

1. Retailers look for convenience and margin.

3. A great opportunity to cash the brand name once again by giving good quality product.

4. Weak areas can be targeted to cover up the entire market as per the demand.

THREAT

1. Some customers are in the hands of retailers because the retailer enjoys good profit margin from other competitor’s brand.

2. Psychological state of mind of retailers and consumers.

3. Old manufacturing date on packs is a major threat .

5. Competitor brands are offering huge profit margin to retailers, whereas few of them are selling at lower retail prices.

6. If delivery service is not improved it will result in reduction of sales of ‘Amul Chocolate’.

DISTRIBUTOR SERVICES THE RETAILERS

The service offered by the distributor varies from place to place. Some areas are such that they get good delivery service but some of them are lacking by the distributors services. More than half percentage of market is getting once in a week service, whereas a big portion of market goes on its own to purchase the chocolate because of no distributor’s service available to retailers.

The following chart shows the distributor services the retailers of Amul chocolate in the market:

Distributor services the retailers

.

On its own 19% Once in 15days 3% Once 54% Twice 16% Daily 4% Thrice 4% Once in 15days Once Twice Thrice Daily On its own

OBSERVATION

1. About 54% of retailers are getting once in a week service by the

distributor or the sales boy comes to them once in a week. Retailers are demanding for service, that it should be increased and should be made more than once in a week.

2. 4% is the percentage of retailers who get service daily because of huge

sale of milk & butter. 4% of retailers are the major players in the sale , so they are getting good service.

3. 16% of retailers are getting twice a week service. As it is a small

percentage, they are getting service as per the demand.

4. 4% are getting thrice a week service which states that they are selling

but not too much as compared to the major players selling getting daily service.

5. A big percent goes on different locations. 19% of retailers are

untouched by the services of distributors. This is the area where it needs big improvement.

6. A very small percentage is getting service once in 15 days. This is due

PROBLEM FACED IN AMUL CHOCOLATE

The following chart shows the problems faced in Amul butter by the retailers in the market:

Problem Faced in Amul C hocolate

0 10 20 30 40 50 60 70 O ld m fd . D at e U na va ila bi lit y & D el iv er y P ro bl em R ep la ce m en t Lo w M ar gi n O ffe rs /S ch em es S eries1

Problem Faced in Amul Chocolate

0 10 20 30 40 50 60 70 O ld m fd . D at e U na va ila bi lit y & D el iv er y P ro bl em R ep la ce m en t Lo w M ar gi n O ff er s/ S ch em es Series1

OBSERVATION

Old manufacturing date:

• Amul Chocolate has been facing a major problem of old

manufacturing date on its packs. The packs which are available in the market shows, the manufacturing date of February month during the month of June.

• Retailers complain about the response of customer for old

manufacturing date. Customers are demanding for fresh chocolate but due to old manufacturing date in Amul chocolate, some of them are switching over to other brands that are supplying fresh packs for sale in the market.

• Other competitor’s brands are supplying fresh packs with current month manufacturing date. Amul chocolate is facing such problem, which is resulting into the change of customer’s preference for chocolate at the point of purchase. This shifting of preferences on other brands is resulting into ignorance of Amul chocolate due to its manufacturing date.

Unavailability and delivery problem:

• There is a demand of ‘Amul chocolate’ but due to unavailability of chocolate the retailers are facing such problem.

• There are some areas where there is a demand but there is no supply available. Retailers go on their own because there is absence of delivery service and supply available.

• Retailers are complaining about the unavailability of stock demanded by them. There is a limited supply of chocolate in respect to the current market demand.

• In interior areas there is an absence of proper delivery channel and where it is available it is fulfilling the demand to a very less extent.

Replacement:

Few retailers are facing replacement problem, form (the dealers) where they purchase. They have a complaint that the dealer shows very rude behavior with them and never listen to their queries.

Low Margin:

• Retailers are complaining about the profit margin offered to them on ‘Amul chocolate’. They are demanding for more profit margins because the other competitor brands are offering double and even more than double profit margins.

• Retailers are giving more emphasis on other Chocolate brands because of profit margins. They are trying to sell chocolate of other chocolate brands to customers to earn more profit.

Offers/Schemes:

There is a complaint of offers and schemes; few chocolate brands are offering some schemes on purchase of chocolate packs. The retailers are demanding as well as complaining about the offers, in respect to other chocolate brands.

AREAS OF IMPROVEMENT

&

RECOMMENDATIONS

• ‘Unavailability of Amul Chocolate’ is main part. This part can be taken into consideration for improving the service quality as well as ensuring maximum availability of Amul chocolate at every possible location. • Right time to go for advertisement and promotion schemes. No such

major strategy is being followed by the competitor’s brand right now. The company can draw the attention of customers and can take

advantage out of it.

• Only milk and ice cream products are there for displays and

advertisements in the market. There is an absence of ‘Amul chocolate’ displays, danglers, posters, illuminated boards etc. to focus on the ‘Amul Chocolate’.

• There is a great demand from retailer’s side that the company should offer greater profit margins. As the profit margin in ‘Amul Chocolate’ is less as compared to the competitor’s brand, retailers are switching and giving their preference to the competitor’s brand that is offering maximum margins to them.

• The old manufacturing date on packs is creating the shifting of

preference in consumer’s choice. The consumer wants fresh chocolate and due to the old manufacturing date, the consumer opts for other chocolate brands.

• Relationship with retailers and company should be kept under a close watch.

•Salesmen should be given the responsibility to handle the retailer’s grievances

•Orders by the retailers should be executed in a proper manner to avoid irregular availability.

•Promotion activities should take into consideration in two different ways a) Company should associate themselves with social events, b)

Company should use electronic as well as print media for their advertisement.

•Company should give special offers to retailers frequently.

•Company should expand their business throughout the small towns. •Company should open exclusive Amul parlors and outlets in big

shopping Malls for promotion in higher segment.

•There have been a lot of complaints about replacement policy of Amul. Amul should try to improve its replacement policy and make it

somewhat liberal.

•Amul should check the regular demand of the product and should supply accordingly.

• It was quenching time in the shops that use to deal in and some retailers could not give proper attention towards our queries.

• Some retailers did not co-operate with us as they thought; it is just wastage of time.

• There was no way to assess the reliability of the retailers. What ever they said had to be assumed to be truth.

• Category wise search for retailers was a terrific job in the market.

• Interpretation of data may vary from individual depending on the individual understanding the product features of the company.

• Since all the products are not widely used by all the customers it is difficult to draw realistic conclusions based on the survey.

ANNEXURE

S.No.

Market/Area

S.No.

Market/Area

1 Natkheda Road 11 Indra lok

2 Chandan nagar Market 12 Sindhu nagar

3 Talkatora Road 13 Manas nagar

4 Puran Nagar 14 Ramgagh Colony

5 Ram Nagar 15 Hind nagar

6 Sri Nagar 16 L.D.A Sec-E,F,D-1

7 Sringar nagar 17 Parag

8 Manak nagar 18 Aashiyana Sec-G

9 Barabirwa 19 Pawer house

10 Krishna nagar 20 Khajana Complex

Questionnaire

1. Brand(s) available in the shop:

 Amul  Cadbury  Nestle

 Others (if any) ______________

 Amul _____________  Cadbury _____________  Nestle ___________  Others (if any) _____________ _____________

3.Display on the shop (Banners/Boards/Paintings etc.) (Type)

 Amul _____________

 Cadbury _____________  Nestle ___________  Others (if any) _____________ _____________

4. Profit margin offered by the company: Percentage (%)

 Amul _____________

 Cadbury _____________

 Nestle ___________  Others (if any) _____________ _____________ 5. How many times the distributor services the retailer:

 Once a week  Twice a week  Thrice a week  Once in 15 days

Books:

Kothari C.R., “Marketing Research”

Ramaswamy, “Marketing Management”

Websites:

http://www.amul.com