Page 51 - DMGT509_RURAL MARKETING

Rural Marketing

Notes to capture member information, milk fat content, the volume collected and amount payable
to each member proved invaluable in ensuring fairness and transparency throughout the
AMUL organization.
In value added products AMUL had humble yet solid beginnings. From milk alone, the
portfolio had expanded to include some very marketing-intensive products AMUL
commissioned IMRB to do a study on what products the customers expected from its stable.
Butter and ghee were the old success stories. Flavoured mild under the brand name 'Kool'
has also been accepted as a success story. Over time, AMUL expects to collect sufficient data
to validate the same. Says R S Sodhi, "We have been trying to figure out how we can dispose
off the milk procured. It's 52 lakh litres a day, so how does one maximize returns on it?
Hence the foray into value-added products." AMUL outlined its advantages as follows:

1. Cost-effective production including primarily, procurement of milk from over two
million dairy farmers, which, in turn, assures poor farmers reasonable prices.
2. Climbing up in the value-chain by diversifying in value-added products, such as
milk sweets, ice creams, pizzas, confectioneries, truly as a food company rather than
as one merely selling milk, and to be known only as an organized milk-vendor.

3. Sustained building of loyalty of customers, not by promoting individual products,
but all its products under the umbrella of its premium brand AMUL, and by investing
a good 40 per cent of its ad budget towards brand promotion.
4. Facilitating reach to customers throughout the country by a strong chain of
distribution outlets. AMUL reached out to five lakh retail outlets and had 2,600
distributors under its fold, and a well-established cold chain. The investment in
relationship with business partners, both farmer-based co-operatives and distribution
networks for purchasing and selling functions respectively, enables AMUL to enter
into any food category without much time or investment.

The key categories were chocolates, ice creams, soups and retail initiatives.
1. Chocolates: GCMMF, which had been lying low for a while with its generic chocolate
variants such as Fruit & Nut and Milk, intended segmenting its chocolates, catering
to different age groups and categories that were likely to consume its brand. Sanjay
K. Panigrahi, General Manager, GCMMF, said, "We intended to take advantage of
our already existing cold chain to get more active in the growing market of moulded
chocolates and confectionery." Having launched an occasion-related sub-brand of
"Nuts 'bout U" on the eve of Valentine's Day and Kite Bite for the kite flying festival
in Ahmedabad, it was decided to segment the market with brands catering to the
`impulse' and `teen' segments as well as having brands catering to different occasions.
2. For its ice-cream and milk business, GCMMF had invested in increasing its milk
capacity. It firmed up plans to invest 100-120 crore to expand this from 1.1 million
litres a day to 1.8 million litres a day at its Gandhinagar factory. The cooperative
also planned to expand its production facilities beyond Gujarat to service other
regions. GCMMF bought an ice-cream manufacturing unit in Nagpur and installed
a dairy unit alongside. Through this unit, AMUL extended its milk supply to over 10
cities spread over Rajasthan, Madhya Pradesh and Maharashtra.
It also focused on its supply system. Efforts were on to ensure greater availability of
AMUL ice-cream at pushcarts and small outlets. The company felt that availability was the
most important factor in ice cream sales. Thus, AMUL ice-cream could be found in 'just
around the corner shops,' local STD booths, local kirana shops, and chemists and bakers,

Contd...

46 LOVELY PROFESSIONAL UNIVERSITY