Top-Rated Free Essay
Preview

Amul Research

Powerful Essays
1182 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Amul Research
Marketing Channels of Amul Milk in Lucknow: Factors Affecting Channel Efficiency
Introduction

In India, dairy plants have different systems of milk marketing, namely non-cooperative (or private) and cooperative. The overall dairy industry is classified in two sectors: organized and un-organized. And, the marketing of milk and milk products in India is dominated by the unorganized sector, which handles about 86% of total milk production, while the organized sector handles only about 14 % of the total (GoI, 2004). The dairy cooperatives are considered a vital channel for the improvement of production and the reduction of the cost of procurement, processing, and marketing of dairy products through the economy of scale approach, together with the provision of quality milk to the consumer at the lowest cost. Amul is the brand name that is maintained by Gujarat Cooperative Milk Marketing Federation (GCMMF), India’s largest food product marketing organisation. Amul entrenched and positioned itself as a unique product in the Indian market with its customary way of operation in rural market. Amul had spurred the “White Revolution” in India and transformed India as the largest producer of dairy products in the world. Amul innovated itself in terms of variety, quality, technology in business; established itself over last 67 years and proved as one of the most successful co-operative organizations in the world. As per the official figures, Amul’s annual turnover was INR 13.735 billion during the last financial year, 2012-13 i.e. about 13% of the Indian milk market of over INR 100 billion. It handles a milk capacity of 16.80 million litres per day. Much of the success of the firm can be ascribed to its efficient supply and wider distribution networks. The phenomenal success of this largest food brand of India propelled us to have an insight in the key aspects contributing to its success. To focus on in depth detail and market statistics, we have limited our study and research by focusing on Lucknow and its suburbs (Delhi Zone as per Amul).
Some guiding points which encapsulates objective of our project study:
a. To identify major factors affecting the demand of milk in our study area
b. To identify the present marketing channel system adopted by Amul to distribute milk
c. To identify the role of marketing agents in such distribution of milk
d. To understand the major costs associated with marketing of such milk products
e. To identify key distribution constraints in the channel management in our area of study
f. To identify the adjustments made in the distribution channel on an increase in demand of milk

Literature Review
There have been several studies of the marketing of liquid milk in both cooperative and private dairy plants of India. Most of these studies have classified the Indian dairy industry in two sectors: organized and unorganized. For illustration, as per the findings of Rajendran and Mohanty (2004), about 80 per cent of the milk produced by the rural producer is handled by an unorganised sector and the balance 20 percent is handled by the organised sector. It also supported the vital role played by the dairy co-operatives in alleviating the rural poverty by augmenting rural milk production and marketing. The study concluded that milk quality, product development, infrastructure support development and global marketing are found to be future challenges of India 's like marketing. However, there are a few studies that attempted to compare the efficiencies of the co-operative and private dairy plants in specific regions/states. For instance, Rangasamy and Dhaka (2008) has tried to compare efficiencies of co-operative and private in the state of Tamil Nadu. They found that the marketing cost for toned milk is same in both the dairy plants vis-à-vis co-operative and private, whereas it is higher for standardized milk, full cream milk and flavoured milk in the co-operative dairy plant. All the dairy products earn more marketing margins in the private than co-operative dairy plant, except for toned milk. The study has further suggested the development of co-operative dairy industry in a sustainable manner. A similar study was conducted by Saxena and Mahto (2007) for the Uttaranchal Cooperative dairy Federation Limited (UCDFL). Their study found that UCDFL was focused mainly on liquid milk marketing and has not adopted product diversification, which is the need of the day. It was also found that due to insufficient margins, the number of agents working for other private dairies has increased. They suggested that local sale of milk at the society level should be encouraged to increase the popularity of their brand. A recent study by Sarker and Ghosh (2010) for the co-operative and non-cooperative milk marketing in the state of West Bengal attempted to empirically investigate the price spread, marketing costs, marketing margins, marketing efficiency, and profit efficiency among market middlemen under cooperative and non-cooperative marketing channels in the domestic trade market of liquid milk. An important finding of this study is that, although the inter-market (and intra-market) price variation for liquid milk under the cooperative marketing agency in not far from uniformity, and all marketing agencies under cooperative channels receive much lower abnormal profit per unit of milk as compared with non-cooperative channels, the former fails to provide much economic benefit, either to the producer or to the consumer, because of the burden of much higher fixed cost per unit of liquid milk. The existing literatures suggest that most of the studies for liquid milk has been done in regional (or state level) context. Carrying forward the existing trend, this study would attempt to understand the Marketing channels and its efficiencies for Amul in the local context of Lucknow.
Methodology
This study will be conducted in following steps. First, identification of the participants in the marketing channels of Amul milk will be done. For example, retailers such as local convenience store, mini road milk sellers and other bigger stores and other intermediaries (distributors and wholesalers) will be identified in the locality of Lucknow. Second, information related to the cost, margin, stock quantity maintained, reorder level, minimum perishable time and the strategy adopted to minimize costs will be collected from participants at each level. Information related to other supply and distribution constraints will also be collected. Primary data will be collected from around 15 participants at each level (i.e. retailers, wholesalers/distributors). Also, data related to purchase decision of milk will also be collected from 15-20 households. Third, collected data will be analyzed to understand and identify the factors affecting channel efficiency. The study will also attempt to identify the most efficient channel for Amul Milk in locality of Lucknow.
Timelines

References
Rajendran K. & Mohanty, S. (2004). Dairy Cooperatives and Milk Marketing in India: Constraints and Opportunities. Journal of Food Distribution Research, 35(2), pp. 34-41.
Rangasamy, N. & Dhaka, J.P. (2008). Marketing Efficiency of Dairy Products for Co-operative and Private Dairy Plants in Tamil Nadu –A Comparative Analysis. Agricultural Economics ResearchReview, 21, pp. 235-242.
Sharma, M.L., Saxena, R. Mahato, T. & Das, D. (2007). Potential and Prospects of Dairy Business in Uttarakhand: A Case Study of Uttaranchal Cooperative dairy Federation Limited. Agricultural Economics Research Review, 20, pp. 489-502.
Sarker, D, and Ghosh B. K. (2010). Milk Marketing under Cooperative and Non-Cooperative Marketing Channels: Evidence from West Bengal. Economic Annals, 187.

References: Rajendran K. & Mohanty, S. (2004). Dairy Cooperatives and Milk Marketing in India: Constraints and Opportunities. Journal of Food Distribution Research, 35(2), pp. 34-41. Rangasamy, N. & Dhaka, J.P. (2008). Marketing Efficiency of Dairy Products for Co-operative and Private Dairy Plants in Tamil Nadu –A Comparative Analysis. Agricultural Economics ResearchReview, 21, pp. 235-242. Sharma, M.L., Saxena, R. Mahato, T. & Das, D. (2007). Potential and Prospects of Dairy Business in Uttarakhand: A Case Study of Uttaranchal Cooperative dairy Federation Limited. Agricultural Economics Research Review, 20, pp. 489-502. Sarker, D, and Ghosh B. K. (2010). Milk Marketing under Cooperative and Non-Cooperative Marketing Channels: Evidence from West Bengal. Economic Annals, 187.

You May Also Find These Documents Helpful

  • Satisfactory Essays

    • Lion Dairy & Drinks has two main channels: ‒ Grocery (Woolworths, Coles, Other independent supermarkets) which accounts for 56% of net sales; and ‒ Convenience & Food Services (CFS) accounting for 44% of net sales • Private Label brands are significant in grocery (53.7% of fresh/UHT milk) and growing. This places pressure on branded players due to the price differential • • CFS is a highly complex channel consisting of over 100,000 stores, each with differing needs…

    • 818 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    * Managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milk…

    • 3062 Words
    • 13 Pages
    Good Essays
  • Satisfactory Essays

    Mother Dairy

    • 7991 Words
    • 32 Pages

    2.1) Indian Dairy Industry: An Overview 2.2) Operation Flood 2.3) National Dairy Development Board (NDDB) 2.4) About the Company: Mother Dairy 2.5) Delhi NCR Market…

    • 7991 Words
    • 32 Pages
    Satisfactory Essays
  • Powerful Essays

    This industrial review project has been conducted by Chethan Prasad (1111105), Jose Alex (1111107) and Nagarjun Karnatakam (1111108) as per the requirements of our course based on the guidelines given to us. We studied the basics of Dairy Industry and the major players in this industry. We were given three companies namely Aavin, Amul and Nandini. We conducted a detailed research on each of these companies by finding information regarding their market share, growth rate of the company, turn over, product profile etc. We have obtained information mainly from secondary methods of data collection such as the internet, company brochures etc. We also conducted a comparative analysis of the companies using the SWOT and 7s model, with which we were able to draw a conclusion on the status of the company and the industry.…

    • 14069 Words
    • 57 Pages
    Powerful Essays
  • Powerful Essays

    creees

    • 3834 Words
    • 17 Pages

    Dairy milk production in Moc Chau contributes to improve the welfare of farm households. It generates daily income for farmers,…

    • 3834 Words
    • 17 Pages
    Powerful Essays
  • Powerful Essays

    Lecturer

    • 6501 Words
    • 27 Pages

    value chain is not well organized in Dire Dawa. The roles and functions of all…

    • 6501 Words
    • 27 Pages
    Powerful Essays
  • Satisfactory Essays

    Vinamilk - Sacombank

    • 2373 Words
    • 10 Pages

    Dairy product company increased the milk retail price by 10% - 15%. In Q1/2010, milk retail price raised about 10% - 15% compared to the 6% increase in December 2009. Dairy product companies therefore increased the retail price in order to ensure the profits in the context that the price of material milk rose largely at the end of 2009. The market share of liquid milk and yoghurt…

    • 2373 Words
    • 10 Pages
    Satisfactory Essays
  • Good Essays

    Dairy Products Preparation

    • 16498 Words
    • 66 Pages

    Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the international dairy processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world. As he expands his overseas operations to India many profitable options await him. He may transfer technology, sign joint ventures or use…

    • 16498 Words
    • 66 Pages
    Good Essays
  • Satisfactory Essays

    This overview of the consumer and market dynamics of the South African Dairy sector allows new entrants and established companies to gain rapid and comprehensive insight into the current state of the market and identify the key trends that will drive growth in the coming years.…

    • 455 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Nilsson J. and Ohlsson C. (2007) The New Zealand Dairy Cooperatives’ Adaptation to Changing Market Conditions, Journal of rural cooperation, 35(1) p43-70…

    • 25254 Words
    • 87 Pages
    Good Essays
  • Satisfactory Essays

    The dairy products imports mainly comprise skimmed milk powder and butter oil brought in by the National Dairy Development Board (NDDB) to meet shortfall in milk procurement of its subsidiary, Mother Dairy, and other co-operatives. With their procurement lagging behind, liquid milk supplies have been affected in many States. B L 180510…

    • 760 Words
    • 4 Pages
    Satisfactory Essays
  • Powerful Essays

    I do hereby declare that this project “MARKET ANALYSIS AND DEVELOPMENTAL STRATEGY IN SOUTHERN REGION OF WEST BENGAL” done with my own effort and submit to “MOTHER DAIRY CALCUTTA”. It is not submitted to be published by any other university before.…

    • 7802 Words
    • 32 Pages
    Powerful Essays
  • Good Essays

    This report allows readers to identify the key demographic groups driving consumption in the Indian Dairy market, and what motivates their consumption. The report uses a unique method of quantifying consumer trends to highlight the degree of influence they have on consumption within the category. This enables the reader to identify the most important trends within the market and also determine whether beliefs over what influences consumer behavior within the category are accurate.…

    • 627 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    This report provides an insight into the Opportunity in Cheese Industry current scenario, structure and practices in India.…

    • 339 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Ppp in Dairy Sector

    • 12601 Words
    • 51 Pages

    India is viewed as one of the world’s largest and fastest growing markets for milk and dairy products with an annual growth of 7.5 per cent in value terms. High expenditure elasticity of milk reveal conducive for the growth of dairy sector and diversification of Indian agriculture. In addition, per capita income and shift in consumption behaviour towards dairy products would lead to quantum shift in demand for dairy products in near future. The sector plays a significant role in supplementing family income and providing gainful employment to the rural masses. The facts that the annual value of India's anticipated milk production amounts to more than Rs.1,430 billion in 2008-09, dairy cooperatives generate employment opportunities for around 13.9 million farm families, livestock contributes about 25.6 per cent to the GDP from agriculture and about 22.45 million people work in livestock sector, which is around 5.8% of the total work force in the country reveal the very pivotal role of this sector in shaping the socio-economic development of millions of rural households and impacting the national economy to a large extent.…

    • 12601 Words
    • 51 Pages
    Powerful Essays

Related Topics