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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Background Note Contd...

Under the chairmanship of Tribhuvandas Patel (Patel), the Kaira Union, headquartered in Anand, began with two milk societies, and a daily milk collection of 250 litres. When it started operations, the cooperative included two tiers. At the base was the primary village dairy cooperative society (DCS) of milk producers. Several such village cooperatives together formed the district milk producers' union at the second level, which was entrusted with procurement and processing of milk. By appointing qualified technologists and professional managers, the cooperatives helped the farmers to leverage modern management practices and technology. Varghese Kurien's (Kurien) association with KCMPUL began soon after the inception of the cooperative.

He had obtained a master's degree in Mechanical Engineering from Michigan State University in 1948 and subsequently completed an assignment at the Government's Research Creamery in Anand when Patel met him. Patel named Kurien, KCMPUL's General Manager in 1950. In 1954, when the Bombay Milk Scheme refused to take all the milk that KCMPUL had produced, the cooperative found itself saddled with surplus milk.

Apart from marketing milk in and around Anand, KCMPUL embarked on a wide range of dairy processing activities. To differentiate its high quality products, KCMPUL decided to brand its produce. In 1955, KCMPUL adopted the brand name 'Amul' for its products. 'Amul', derived from the Sanskrit word 'Amulya', meaning priceless, also stood for 'Anand Milk Union Limited'.

Amul's Business Model

Amul followed a unique business model, which aimed at providing 'value for money' products to its consumers, while protecting the interests of the milk-producing farmers who were its suppliers as well as its owners. As milk was a perishable item, the farmer suffered a loss if it was not sold before the end of the day.

Amul bought all the milk offered by the milk producer, made timely payment, and shared with the producers the profit generated from marketing the milk and milk products under the Amul brand name...

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