Amul - Evolution of Marketing Strategy

            
 
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Case Details:

Case Code : MKTA011
Case Length : 26 Pages
Period : 2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Gujarat Co-operative Milk Marketing Federation (GCMMF)
Industry : Food
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"If Amul has become a successful brand - if, in the trade lingo, it enjoys brand equity - then it is because we have honored our contract with consumers for close to fifty years. If we had failed to do so, then Amul would have been consigned to the dustbin of history, along with thousands of other brands. For close to fifty years now, Amul has honored its contract with the consumer. The contract that is symbolized by the Amul brand means quality. It means value for money. It means availability. And it means service."

- Varghese Kurien, Chairman GCMMF1

Introduction

Gujarat Cooperative Milk Marketing Federation (GCMMF), the largest food company in India, recorded a turnover of Rs 2882 crore ($ 0.65 bn) in 2003-04. Its flagship brand 'Amul' was the market leader in butter, whole milk, cheese, ice cream and dairy whitener. GCMMF was the largest cooperative movement in India with 2.2 million milk producers of Gujarat organized in 10,552 cooperative societies. GCMMF collected 5 million litres of milk per day from its shareholders who owned 3.2 million buffaloes, one million cows and 0.3 million crossbred cows. The Federation's extensive marketing network comprised 3000 distributors and 500,000 retailers spread across the country.

Background Note

Amul's genesis was linked to the freedom movement in India. Sardar Vallabhbhai Patel, an eminent Indian freedom fighter encouraged the dairy farmers from the Kaira district in Gujarat to form a cooperative to counter the 'exploitatively' low prices offered for their milk by the monopoly milk supplier of the area, Polson's Dairy. The dairy farmers met in Samarkha (Kaira district, Gujarat) on the 4th of January 1946, and decided to set up a milk producers' cooperative that would deal directly with the Bombay government, the final buyer of their milk. This was the origin of the Anand model.

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Initially, when the Bombay government refused to deal with the cooperative, the farmers called a strike. The government finally relented when Bombay went without milk for a fortnight. The successful union registered itself as the Kaira District Cooperative Milk Producers' Union Ltd. (KCMPUL), Anand, in Gujarat in December 1946.

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1] "The Amul Saga," www.Indiaseminar.com, 2001.


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