Amul Report (MRP-II)

A

Management Research Project ( MRP-II )

On

“Strategic Analysis and Analyzing SWOT of GCMMF w.r.t. Amul”

Submitted To:

Hemchandracharya North Gujarat UniversityOn 19th April, 2004

In Partial Fulfillment of the requirementsFor the Management Research Project Course in the

Master of Business Administration

Submitted By :

Vipul Prajapati (335) Tejas Shah (357) Mayur Solanki (344)

S.V. INSTITUTE OF MANAGEMENT, KADI

“Amul – The Taste of India” 1

PREFACE

Management ideas are widely tested in actual proactive with rapid,

industrialization the management of business enterprise has acquired great

theoretical as well as practical significance. As a result a formal study of MBA

has become essential. Management is increasingly being re-organization. Many

institution are engaged in providing management studies with practical training.

Being a student of MBA, we get knowledge of management theoretical as

well as practical. However the study of management together with some

practical training such as study of Functional Area will enhance the value of

subject even more.

We have visited “GCMMF” which is leading liquid milk processing

plant. It is a well known unit as it is a part of “AMUL INDUSTRIES”.


ACKNOWLEDGEMENT

First of all, we are very thankful to North Gujarat University that they have included this type of practical work in our study.

We are also thankful to S.V.I.M. that they have given me permission to go visit at working days. They have given me opportunity to apply my theoretical knowledge in business world and how they are functioning.

First of all, we take this opportunity to thank out Director Dr. Hitesh

Ruparel who guided us regarding the project contents and issues related to it.

Further, we are very grateful to Mr. Tejas Dave, Mr. Bhavin Pandya, Mr.

Nikunj Patel and Aashish Vashani who provided their valuable guidance

throughout the project.

We are also thankful to unit of AMUL at Anand, about giving permission

and they have given good amount of understanding about working of unit and

all such necessary inputs which we have re-produced them in our project report.

Lastly we are very thankful my friends and all those who have helped us

directly and indirectly in preparation of this project report.

Name Roll No.Vipul Prajapati 335Mayur Solanki 344Tejas Shah 357


Executive Summary

India, with its status as the largest milk producer in the world, is on the verge of assuming as

important position in the global dairy industry. Many international dairy companies are

viewing India with an eye to tapping its vast, growing market for dairy products. Similarly,

many Indian dairy companies are now trying to acquire international scale, and would like to

tap other markets.

Indian Dairy Industry is dominated by cooperative sectors for so many years. Indian dairying

is emerging as a sunrise industry. India represents one of the world's largest and fastest

growing markets for milk and milk products. Dairy industry occupies a prominent position in

the industrial structure of India. Dairy industry has very rapidly infrastructure facilities due to

which severe bottlenecks have been created in the way of rapid industrialization. Dairy

industry occupies important place in Indian economy. The rate of growth of this industry was

around 1% only. It has gone up 4.2% later on cows and buffaloes are important animals

for producing milk.

The organised dairy industry in India is estimated at INR 145 bn(USD 3 bn) and is expected

to witness a CAGR of over 13% over the next 4 years, to reach a size of INR 240 bn (USD 5

bn) by 2005.

India offers several attractive features to players interested in coming to the country.

- Free regulatory regime, providing equal opportunities for domestic as well as foreign

players.

- Huge scope for growth – Organised industry accounts for less than 20% of the milk

produced in India.

- Large growth expected in consumption of packed dairy products due to several

demographic factors, including increased affordability, increased no. of nuclear families

and working women, and rising exposure to Western diary products, as well as packed

dairy products such as yoghurts and UHT milk.

- The emergence of organised food retail chains has led to greater availability of shelf

space for chilled/frozen dairy products, which is expected to boost growth in sales of


packed dairy products. Organised food retail in India is expected to grow from USD 230

mn to USD 2.3 bn by 2006.

Some of the major international dairy companies, which have already established operations

in India, include Nestle, Unilever (through HLL), Danone (through Britannia) and Nutricia.

Britannia has recently entered into an alliance with Fonterra for accessing technology and

providing market access to Fonterra. The Britannia-Fonterra alliance has heightened other

Indian companies’ need for securing international partnerships in order to remain

competitive.

GCMMF was the first co-operative to be set up under operation flood in the year 1973. It

is an apex marketing federation of 12 district milk unions of Gujarat. It has most modern and

largest plant which can handle up to 6.7 million litre of milk per day. GCMMF sold its all

dairy products under the brand name of “AMUL”.

GCMMF has become very popular because of its excellence marketing strategy. GCMMF

marketing strategy is to understand the consumer needs, develop products that provide

superior value at fewer prices. This type of marketing has made GCMMF on of the leading

dairy in India. GCMMF has shown a tremendous commitment to the flood water situations.

GCMMF has never stopped the supply of milk and other milk products. And unlike other

competitors, it has never taken wrong benefits in these kinds of situations. All these have

made Mother Dairy No. 1 dairy in Gujarat and in India. GCMMF has developed an excellent

distribution channel to provide its products to the consumers. It has made its products in each

part of Gujarat & India.

GCMMF is the largest player. All other local dairy cooperatives have their local brands e.g.

Warana in Maharastra, Saras in Rajasthan, Vijaya in A.P etc. other private players include J

K Dairy, Heritage Foods, Indian Dairy etc.

The industry, which is co-operatives and milk is produce by different dairy and is marketed by regionally like

Sumul milk, Sabar milk, Sughsagar milk etc but other milks products like ice-crème, cheese, ghee, butter etc is

marketed by under the brand name “AMUL”.

The Indian market is dominated by a large number of small local manufacturer and regional

players. There are an estimated 150 manufacturers in the organized segment which accounts

for 30-35% of sales and about 1000 units in the unorganized segments of the market. In the


organized segment the significant brands are Kwality Walls, Vadilal, Amul, Mother dairy and

Baking Robbins. There is intense competition in ice-crème with player like Havemor,

Vadilal, Quality Walls, Gokul etc, in milk like Payal, Gayatri, and Sardar etc. in Ghee like

Krishna, Abad, and Gopi etc.

The project highlights the functional area of GCMMF with a prime focus on marketing. By

studying these functional areas we had done some analysis like five force, SWOT etc.


RESEACH METHODOLOGY

RESEARCH OBJECTIVE:

To get the overall idea regarding industrial environment.

To study the functional areas like Marketing, Finance, Production, and

Personnel of the organization.

To evaluate the performance of the Organization.

To study the Strength and Weakness of organization.

To find out the Opportunities and Threats for the organization.

To suggest the strategies to smoothen the operations of the organization.

RESEARCH DESIGN:

Data source:


Primary source: We have taken the in depth interview of the concerned persons of

AMUL to collect the required functional information.

Secondary source: Websites, Magazines, Books

Sampling Plan

Sampling Unit: MD, and HODs of related department, Executives of Marketing

Department

Method: Non- probability judgment sampling in which we have selected the members

who are good prospects for accurate information.

Research Instrument: We have conducted in depth interview with Descriptive

Questionnaire.

Method of Contact: Personally conducted the interview.


IndexPreface……………………………………………………………………… … iAcknowledgement……………………………………………………………..iiExecutive Summary…………………………………………………………..iiiResearch Methodology………………………………………………………. iv

Chapter No. Particulars Page No.

1 About Dairy Industry

1.1 About AMUL1.1.1 Introduction of Amul Dairy1.1.2 Growth and Development of Amul1.1.3 Secrets of Amul Success1.1.4 Organisation Structure1.1.5 Achievements1.1.6 Strategic Focus of Amul

2 Industry Structure2.1 Global Scenario2.2 Indian Scenario

2.2.1 Scope for Foreign Investment in Dairy Industry

2.2.2 Problems Faces by Dairy Industry2.2.3 Consumer Habits and Practices2.2.4 Market Size and Growth2.2.5 Market Share2.2.6 Major Players2.2.7 Export Prospects for India2.2.8 India’s Export of Milk Products

Macro Environment 3 PEST Analysis

3.1 Political and Legal Factors3.2 Economical Factors3.3 Social Factors3.4 Technological Factors3.5

Micro Environment 4 Functional Analysis

4.1 Personnel Department


4.1.1 Introduction4.1.2 Recruitment 4.1.3 Selection 4.1.4 Training and Development4.1.5 Promotion and Transfer Policy4.1.6 Wages and Salary Administration4.1.7 Job Description 4.1.8 Performance Appraisal4.1.9 Social Welfare Activities4.1.10 Total Employees and Time Keeping

4.2 Production Department4.2.1 Plant Layout4.2.2 Product Profile4.2.3 Sources of Raw-Material4.2.4 Operating Analysis

- Milk Processing- Milk Powder- Butter Oil- Ice-Cream

4.2.5 Pollution4.2.6 Other Departments

4.3 Marketing Department4.3.1 Introduction4.3.2 Marketing Environment4.3.3 Marketing Aspects of Dairy Industry4.3.4 Marketing Chart4.3.5 Marketing Function of GCMMF 4.3.6 Mission of GCMMF4.3.7 Market Segmentation4.3.8 Market Mix

(1) Product Mix Packaging and Labeling Strategy(2) Price Mix(3) Place Mix(4) Promotion Mix

4.3.9 Advertising4.3.10 Entertainment Zone4.3.11 Distribution Channel4.3.12 Forecasting Demand4.3.13 Branding4.3.14 Management Information System4.3.15 Managing Competition


4.3.16 Product Life Cycle4.3.17 Strategy as a Market Leader4.3.18 Differentiation and Positioning Strategies4.3.19 Marketing Ethics

4.4 Finance Department4.4.1 Highlights of Trading P & L A/c.4.4.2 Highlights of Balance Sheet4.4.3 Ratio Analysis4.4.4 Significance of Accounting Policy4.4.5 DuPont Analysis

4.5 R & D Department

5 Michal Portar’s Five Force

6 SWOT Analysis of GCMMF

7 Challenges To Be Met

8 Suggestions9 Future prospects for Dairy Industry10 Conclusion11 Bibliography


ABOUT DAIRY INDUSTRY

Introduction Of Dairy Industry

An industry whereby milk and milk products are handled are known as Dairy

Industry. Dairy Industry includes all the firms dealing with the processing of milk and

manufacturing of milk products and their marketing in industrial scale. Dairy Industry is a

very important and the basic industry for country like India. Nearly 70% of the people in

India is based on agriculture and most of them have cattle's (cows and buffaloes) in their

houses. Indian Dairy Industry is dominated by cooperative sectors for so many years. Indian

dairying is emerging as a sunrise industry. India represents one of the world's largest and

fastest growing markets for milk and milk products. World focus on India for this industry

are because of low cost economy, liberalisation process, low inflation rate, inexpensive

labour, largest democracy, no government interference, etc.

Dairy industry occupies a prominent position in the industrial structure of India. Dairy

industry has very rapidly infrastructure facilities due to which severe bottlenecks have been

created in the way of rapid industrialisation. Milk consumption in India has much less than

the developed countries. Dairy industry occupies important place in Indian economy. It is one

of the consumer goods industries. Its products is more useful items in popular diet, large

proportion of Indian population is vegetarian, therefore for milk and milk products assume

importance and only source of animal fat in their diet and importance source of animal

protein.

On the peasant milk producers of Khaira district, Gujarat the NDDB (National Dairy

Development Board) was set up under the chairmanship of Dr. Verghese Kuriene in 1970

under the programme, the Anand Dairy of Khaira was developed first. Khaira is one of the

India's flushest milk tracts and is distinguished by a famous dairy procurement, processing

and marketing co-operative established at Anand in 1946.

India has a long tradition of keeping milk animals as a part of the farming household.

Animals are cared for highly rated milk and milk products are also greatly valued in the

society as a source of good nutrition. Cow is considered to be a sacred animal since time


immemorial. Milk is used in most of the rituals. Milk production and consumption is always

been a part of Indian culture.

Industrial sector has played a crucial role in the development of Indian economy.

Industrialisation holds the embryo of employment and fuller utilisation of resources.

After 53 years of independence India has come a long way an her journey towards the goal of

industrialisation and has become self-sufficient in respect of the consumer goods. Dairy

industry a prominent position in the industrial structure of India. Dairy industry has very

rapidly infrastructure facilities due to which severe bottlenecks have been created in the way

of rapid industrialisation.

Milk is complete a food. Though widely used per capita milk consumption in India was much

less than the developed countries the dairymen were also not developed on commercial lines.

In 1965, in order to support the farm economy by developing dairy sector on the request by

peasant milk producers of Khaira district, Gujarat the NDDB (National Dairy Development

Board) was set up under the chairmanship of Dr. Verghese Kuriene.

During 1960s, the European countries were facing over production of milk, converted into

dried skimmed milk and butter oil for which there was no adequate commercial outlet. In the

latter part of 1960s the EEC (European Economic Community offered some part of these

stocks as a donation to India through, the aid channels of the WFP (World Food Programme).

The aid was to be handled by NDDB reasoned to sell those commodities within India rather

than to distribute them as relief, which could be realised for twin purpose of enhancing milk

production in India and establishing a national dairy marketing grid. To handle the financial

aspects of such a programme the IDC (Indian Dairy Corporation) was set up by NDDB in

1970, the programme 'Operation Flood' or the 'White Revolution' as it is popularly known

was launched. The programme was mainly to restructure India's diary industry on the lines of

advanced dairying countries in order to enhance productivity and efficiency, while at the

same time directing income benefits towards the rural poor. Under the programme, the Anand

Dairy of Khaira was developed first. Khaira is one of the India's flushest milk tracts and is

distinguished by a famous dairy procurement, processing and marketing co-operative

established at Anand in 1946.

In 1965, “The National Dairy Development Board” came to existence & as a result

India at pioneers in dairy development.


First union exist in Maharashtra mane “Dooth Sagar Dairy” then in “Baroda Dairy”, Valsad

has “Vasundhara Dairy”, Ahmedabad has “Utter Dairy” & Gandhinagar has “Gandhinagar

Dairy”

All these daries make milk, powder, cheese, ghee, butter & other Amul’s products. All dairies

have 4.6% crores of members jointly trade union has Rs 2200 crores.

At the time of independence there were 106 dairy plans in the country. There were 92 liquid

milk plants and 60 pilot milk societies. There were 26 product factories and 3 cream

industries, 51 dairy projects were in different stage of implementation. In 1984-85 the

number of dairy plants went up to 138. By March 1996 there were 72500 dairy co-operative

in 1170 milk shades 9.2 million farmers were participated in those societies.

* In 1997 India produced 74.3 million tones to occupy 2nd position in the world.

* U.P. is to be largest producer of milk in India followed by Punjab, Bihar, A.P. and

Rajasthan sharing 34% of the national production.

* Bulk of milk production is in rural areas. In urban areas there are only 4% of milk cows

and in the cities and town milk buffaloes are about 61%.

* The rate of growth of this industry was around 1% only. It has gone up 4.2% later on

cows and buffaloes are important animals for producing milk. 53% of milk is provided

by buffaloes, 33% of milk is provided by cows. Government milk is used in some parts of

the country.

Distribution Pattern

StateCow

Milk

Buffalo Milk

Cow Ghee

Buffalo Ghee

UP, Bihar &

Orissa

19.56% 42.08% 11.16% 39.26%

West Bengal & Assam

30.16% 60% 6.02% 3%


Maharashtra & Gujarat

11% 15.55% 11.26% 12.49%

Karnataka,Chennai,Jammu &Kashmir

11% 7.77% 10.04% 9.90%

M P & A P 11.18% 6.31% 8.57% 9.97%Rajasthan, Punjab & Himachal Pradesh

18% 22.18% 52% to 92% 27% to 38%

From the view point of economy dairy industry has several points of significant to this credit.

(1) It gives production of milk and milk products which are dietcurious.

(2) It brings significant change in social economy structure of rural economy.

(3) It has important role in employment generation.

(4) By sound growth of co-operation this industry mutual help and self- sufficient are

cultivated among the masses.

(5) It provides regular source of income as supplementary. Employment to small

and marginal farmers and agricultural labours, therefore it acts as a cattail

change in the directions of equitable society.


ABOUT AMUL

Introduction

Amul is nothing but an experiment. The Kaira District Co-operative Milk Producers union

selected the board name ‘AMUL’ for its product range in 1995.

Amul means ‘priceless’ in Sanskrit. The brand name ‘AMUL’ is from the Sanskrit

‘AMULYA’ was suggested by the quality control ‘priceless’ are found in several Indian

languages.

Amul is situated at Anand in Gujarat. The chairman of Amul Dairy is Shri Ratan Singh A

Rathod. Also there are many partners in the organization. It is a large -scale unit, so it

requires a large number of employees. It has a co-operative society. It is also an association

of personnel who joins together in a solvantary basis for further increase of their common

economic interests.

Amul Dairy is the largest dairy in Asia. It’s full name is “Kaira District Co-operative Milk

Producing Committee” today Amul is symbol of many things.

(1) Of high quality products sold at reasonable prices.

(2) Of the genesis of vast co-operative network

(3) Of the triumph of indigenous technology

(4) Of a proven model for dairy development

AMUL

Amul is an experiment, successful run since last 56 years with the objective of up liftment of

rural economy.

Amul word is derived from the Sanskrit word ‘AMULYA’ which means priceless. In other

words precious or which is price is not evaluated.

Amul is a co-operative unit established on 14th December 1946 at Anand. The union was

established under ‘Kaira District Milk Product Limited’.

The logo of Amul has four hands joined together, which indicates :


Milk producers hand

Milk processors hand

Milk dealers hand

Milk consumers hand

Mission Statement of Amul

Committed to producer world class production

Latest available technology must be upgraded.

Most effective distribution network of marketing

Confidence of large number of consumer of global level.

General Information

Name of the unit Amul Registration office AnandFactory site AnandHead office AnandEstablishment year 14th December,1946 Form of organization Co-operativeAccounting year 1st April to 31th MarchChairman K S Desai (Milk)Vice chairman Shri Ramesh P Patel Managing director Shri Shiva M VyasManager (account) Shri Dipak Roy

Name of banker The Kaira District

Co-operative Bank limited


Growth & Development Of Amul

In beginning there were just a few farmers supplying about 250 litters of milk a day. Soon the

number increased to 400 farmers and quantity of milk handled rise to 5000 litters a day.

Milk yield is higher in winter and in winter, the Bombay milk scheme could not absorb the

extra milk offered. the farmers were forced to sell the surplus milk to traders at very low

rates. This leads to the decision to set up a plant to process the surplus milk into butter and

milk powder.

With financial help from UNICEF, assistance from the government of New Zealand under

the columbo plan & technical assistance provided by FAD, Rs. 5 million factories to

manufacture milk powder & butter was planned.

In 1958, the plant was expanded to manufacture sweetened condensed milk. Two years later

Shri Morarji Desai by then the finance minister, inaugurated a new wing designed to produce

600 tones of cheese and 2500 tones of baby food was processed from buffalo milk on a large,

commercial scale.

A plant to produce balanced cattle food, donated by DXFAM was formally commissioned on

October 31, 1964 by Lal Bahadur Shastri, then the PM of India.

At the request of the government of India in 1963, a new dairy with a capacity of 40 tones of

milk powder and 20 tones of butter a day was speedily completed. This was meant to meet

the requirement of India’s defence forces. The dairy was declared open by Morarji Desai in

April 1965. By now the dairy complex could hand 500000 liters of milk a day.

The capacity was raised to 350000 liters a day in 1974. The same year the Kaira union set up

a plant to produce high protein weaving food, chocolate & malted food at Mogar about 8 km,

south of Anand.

In September 1981, the cattle field plant at Kanjari, was started. The successful completion of

the co-generation project on September 11, 1985 marked a new milestone on the energy front


when two gas turbines generation of 1.5 M.W, each based on natural gas were commissioned

Kaira up a bread spread plant at Mogar with the assistance of NDDB in 1994.

On October 31, 1992 Dr V Kurian, chairman of NDDB laid the foundation of Kaira unions

third dairy with a processing capacity of 6.5 lakhs liters of milk a day. Work on the union’s

satelite dairy & cheese plant at Khatraj began in February 1994.

There were about 250000 breedable buffaloes in Kaira which is helping Amul to ensure a

regular & quality milk output for various parts of the country. Moreover, the district also had

50000 crores breed cows, which yield milk of high quality.

The experiment in co-operation that began in Kaira district at the instance of Sardar Patel has

new been replicated throughout the country in more than 160 milk sheds. Today there are 8

million dairy farmers who belong to the co-operative supporting between 4.5 to 5 crores

family members.

Urban Chart Of Amul

AreaRank Score

North 2nd 52.92East 4th 59.41West 1st

Amul, which want’s on the chart last year, comes straight on the top

52.08

South ----- -----Metro 1st

Amul was on No4 in metro segment, last year its jumps on 1st

58.10

Urban 1st

Colgate vacates the top spot for Amul, which didn’t feature on last year’s urban segment in top 10 dart

54.59

Rural 5th 49.22Houses wives 2nd 53.67Main corners 2nd 53.05

Males 3rd 49.73Females 1st

Amul jumps & ranks on the top53.02

MHI < Rs20000

5th 50.23

MHI Rs (2000- 2nd 52.91


4000)MHI > Rs

40001st 55.21

Secret Of Amul Success

Despite of all the problems faced by the dairy industry in India, its progress is remarkable. It

is one of the fastest growing industry, about to acquire second position in the world.

Following are the basic sectors of success on India's dairy industry:

1. The efficient milk production, which is symbiotically integrated into agriculture. The crop

farming system provides residues and by-products are feed and fodder's for dairy animals.

The milk production system in turn provides drought power and organic fertilizers to the

farming system.

2. The involvement's of milk producers in setting up their own organisation for milk

production enhancement, procurement, processing and marketing. The dairy co-operative

combines the strength of farmers with the skills of professionals to ensure high returns

3. It has an important role in employment generation with regard to its contribution to

national income it has 1st rank at producer price. The value of its output in the year 1997-

98 was Rs.50,0511 crores. This is the amount next to the value of paddy.

4. The milk producers in India are assured of remunerative prices. They receive almost 66%

of what is paid by the consumers as retail price. This has acted as an incentive to increase

milk production. A low margin between the producer price and the retail price has also

resulted in reasonable price to the consumer, thus expanding the market for milk and milk

products.

5. Imports of dairy commodities in India have been cancelled through a farmer friendly

NDDB, which ensures that imported commodities are not made available to the

processing plants at a price lower than that of locally produced milk.

6. Collecting milk from the milk producers now carries the responsibility of supplying them

inputs to increase the milk production. This linkage also optimizes on the transportation

cost of the cattle feed to milk producers to the processing plants.

7. Bulk of the milk is delivered to processing plants within 3-4 hours of making, thus

avoiding intermediate chilling. This has resulted in reducing the price spread between the

producer and the customer.


8. National milk Grid: Milk now moves right across the length and breadth of the country,

linking producers with the consumers and evening out of regional and seasonal disparities

in production and consumption. This ensures right prices to the producers and the

continues supply to the customers.

9. India ha achieved bilk of the increase in milk production through the genetic upgradation

of the local stock rather than important milk cattle. Only a limited number of exotic were

imported for the production of exotic bulks needed for the up gradation of local stock.

Cattle feed: Balanced cattle feed concentrates are now being made available to milk

producers right at the village level at reasonable price. Trucks that bring also carry cattle

feed thereby saving on the transportation cost.

Organisation Structure

Organization Structure are divided into two parts:

1. External Organization Structure

2. Internal Organization Structure

1. External Organization Structure:

External Organization Structure is the organization structure which affects the organization

from the out side.

State Level Marketing Federation

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

Villagers

As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-operative

organization. The villagers of more than 10000 villages of Gujarat is the base of this

structure. They all make a many village milk produces union ltd. Make district level milk


produce union after all that one state level marketing federation is established. The structure

is line relationship which provides easy way to operation. It also provide better

communication between two stages. So that the bigger and wider stage of organization. This

stage of relationship is accepted.

2. Internal Organization Structure:

Internal Organization Structure is the organization structure which affects the organization

from the inside.

Organization Structure Chart

Chairman

Managing Director

General Manager

Ass. General Manager

Finance Production Marketing Sales & Purchase PersonnelDept. Dept. Dept. Dept. Dept.

Senior Senior Senior Senior SeniorManager Manager Manager Manager Manager

Finance Production Marketing Sales PersonnelManager Manager Manager Manager Manager


A/C.tant Office Marketing Office P.R.F.

Executive

Officers Supervisor F.S.R. Salesmen Executive

Staff


A systematic & well-defined organizational structure plays in vital role & provides accurate

information to the top level management. An organisation structure define a clear cut line of

authorities & responsibilities among the employees of GCMMF work together shaved a

common discipline & contributed to the federation at a higher position.

The Organisation structure of Amul is well arranged structure. At a glance a person can

completely come to know about the organisation structure.

Amul is leaded by the director under him five branches viz. Factory, Marketing, Accounts,

Purchase, Human Resources Department.

Factory department has a separate general manager under him there are six braches viz.

Production, Stores, Distribution, Cold Storage, Quality, and Deep freezing. This department

takes care of the factory work.

Marketing department has regional senior marketing manager and under him there is a

regional manager. This department takes care of the marketing aspects of Amul.

Accounts department takes care regarding accounts i.e. day to day work. Under the

accountant there is one clerk.

Purchase department takes care regarding the purchase of raw materials and may other things.

Purchase department have also various clerks.

ACHIEVEMENTS

Mother Dairy a branch of Amul is fully computerized vaccum and automatic dairy in

Asia.

It has 1000000 liters milk producing capacity with managing 200 employees.

The type of technology is imported form L & T.

They can 1000000 liters of milk per day and packed and distribute.

For packing they have own plastic bag factory in Gandhinagar.

They have owned tube well water demand.

Amul was received J.D.Birla Award for rural development in the year 1999.

In the year 1998-99 the GCMMF popular as largest dairy product market

organization.


Milk payment to farmer rising from Rs.2.1 million in 1972 to close to Rs.40 billion

today.

Substantial increase in employment both direct and indirect.

The no. of women who are involved in the running of dairy co-operation have gone

up from 622000 in 1986-87 to 196700 in 1997-98. This increasing involvement of

women has resulted in more girls attending school longer.

Joint turnover of 12 union federation is more than 2200 cr.

According to Amul official in just 3 years, Amul has become a formidable player in

the organized sector with nearly 40% of total market share.

In this financial year many foreign has demanded amul products.

Veterinary case has reduced the economic losses suffered from disease.

Strategic Focus of Amul

The GCMMF has targeted a sales turnover of Rs. 10000 cr by 2005.

GCMMF want to increase the export from Rs. 30 Cr to 100 Cr.

They want that their future will include another 100 offices dealing with about 7500

stockiest.

They needs of India’s next door neighbour for exports of milk and milk products i.e.

Pakistan, Bangladesh, China etc.

GCMMF is going to launch VAT milk in a card board pack of 500 ml.

Amul want to gave discount other on average big scale.

Also in place will be a distribution network 7500 stock is (3500 today) and 1 million

retail outlets (4 lack today).

Current amul ice-cream are manufactured at 15 plants, which are mainly co-operative

dairies amul plans to increase their 70 to 25.

Amul is focusing on new added value products like “ Butter Milk”.


Industry Structure

Global Scenario

World’s major milk producer (Million Tonnes)

Country 2001-2002 2002-2003India 85 88.5U.S.A. 80 81Russia 40 42Germany 34 35Pakistan 28 28U.K. 22 24Poland 20 21New Zeland 15 17Italy 11 11Australia 9 10

(Source:Dairy industry newsletter)

The World’s 20 largest dairy companies 2002

Company Name Turnover (US $)

Nestle 12.9Dairy Farmers Of America 7.4Danone 6.4Phillip Morris (Kraft) 6.3Parmalat 6.1Suiza Foods 6.0Aria Foods 5.3Lactalis 5.1Campina Melkunie 4.9Snow Brand 4.7Unilever 4.5Friesland Coberco Dairy Foods 4.3Bongrain 3.7Land O’Lakes 3.3Meiji Milk 3.2Dean Foods 3.0Morinaga 2.9Sodiaal 2.8Dairy Crest 2.5Nordmilch 2.4

Source: Rabobank


Indian Scenario

Scope For Foreign Investment In Dairy Industry

After adoption of the new economic policy 1991, India offers to foreign investors, a well-

balanced package of fiscal incentives for exports and industrial investment, without many

interventions from government.

DFP (Dairy Food Processing) offers a good opportunity to foreign investors in India. The

changing international dairy trade pattern following GATT and the emergence of WTO

(World Trade Organisation) offers the Indian dairy industry an opportunity to take its blow as

an exporter. India’s enthusiasm to integrate with the world economy is reflected in

technological up gradation professional excellence and a cost effective approach.

The two main reasons for the world focus on India are:

1. The low cost economy.

2. The liberalization process initiated since 1991.

Other important factors include:

Low inflation rate, inexpensive labour, the presence of the worlds third largest pool of

technological man power, worlds largest democracy, an independent and well established

judiciary and case is communication due to wide spread use of English among educated and

professional class. At the same time the market within India as well as the exports markets is

fast growing which ensures attractive return on entrepreneur’s investment.


Problems Faced By Dairy Industry

1. The consumption of milk among rural population and also low income groups of urban

population is low, despite of India having a tradition of milk consumption.

2. Inability to feed cattle adequately throughout the year remains the most wide spread

constraint.

3. Quality dairy animals are in short supply. Artificial insemination service for breeding

better cattle has limited coverage, barely reading an estimated 10% of bovines.

4. The animal health cover is getting increasingly neglected. In many states over 70-80% of

the veterinary budget is used up for staff salaries and jeeps, with little left to buy

medicines and other supplies.

5. On the production front, the pesticides contamination of new milk is demanding

immediate remedial steps.

6. Limited marketing support handicaps rural milk producers seriously. Presently, urban

milk supplies largely comes from major milk shed districts. Dairy producers in remote

areas are neglected.

7. Limited investment in setting up or expansion of milk procurement network is another

bottleneck. The rapid expansion in milk processing capacity has not kept place milk

production and procurement.

8. The high cost of credit and unavailability of cheap credit on time is another adverse factor

reducing viability of the dairy industry.

9. The immense problem to the dairy industry is due to infrastructure for transporting,

processing, and distributing rurally produced milk to major consumer centres in urban

areas. Improvement in raw milk by its chilling and refrigerated transport is vital for

making quality products.

10. The rural women, an invisible partner need access to training in modern cattle

management to maximize return.

Milk Production In India

YearProduction

(In million tonnes)

Value

(In million rupees)

1984-85 41.5 1,31,650

1985-86 44.0 1,47,670

1986-87 46.1 1,62,010


1987-88 46.7 1,82,880

1988-89 48.4 2,07,900

1989-90 51.4 2,47,800

1990-91 53.7 2,92,690

1991-92 56.3 3,46,500

1992-93 58.6 4,04,000

1997-98 70.0 5,00,000

1998-99 75.0 5,35,725

1999-00 78.1 5,78,665

2000-01 81.0 6,52,485

Daily Collection Of Milk

District Collection (Lakh Lit.)Ahmedabad 360.93Kaira 2698.39Baroda 895.53Bharuch 102.4Gandhinagar 352.14Panchmahal 749.64Sabarkantha 2153.49Mahesana 3803.85Banaskantha 2171.56Rajkot 269.97Surat 2004.50Valsad 574.48

Milk Procurement and Turnover

Milk Procurement

Year Million (Lacks Lit/Day)1995-96 29.801996-97 37.501997-98 38.521998-99 40.221999-00 43.462000-01 44.192001-02 46.242002-03 48.91


Turnover

Year Sales (Rs. In Crores)2001-2002 2856.182000-2001 2564.871998-99 2219.231996-97 1553.691995-96 1379.291994-95 1114.04

Consumer Habits And Practices

Milk has been an integral part of Indian food for centuries. The per capita availability of milk

in India has grown from 172 gm per person per day in 1972 to 182 gm in 1992 and 212 gm in

2002-2003.At this per capita consumption it is below the world average of 285 gm and even

less than 220 gm recommended by the Nutrinitional Advisory Committee Of the Indian

Council of Medical Research.

There are regional disparities in production and consumption also. The per capita availability

in the north is 278 gm, south 148gm,and east only 93 gm per person per day. This disparity is

due to concentration of milk production in some pockets and high cost of transportation. Also

the output of milk in several growing areas is much higher then elsewhere which can be

attributed to abundant availability of fodder, crop residues, etc. which have a high food value

for milch animals.

In India about 46% of the total milk produced is consumed in liquid form and 47% is

converted into traditional products like cottage butter, ghee, paneer, khoya, curd, malai etc.

only 7% of the milk goes into the production of theystern products like milk powders,

processed butter, and processed cheese. The remaining 54% is utilized for conversion to milk

products. Among milk products manufactured by the organized sector. Some of the

prominent ones are ghee, butter, cheese, ice creams, milk poweders.malted milk food,

condensed milk infants food. Ghee alone accounts for 85%.

It is estimated that around 20% of the total milk produced in the country is consumed at

producer- household level & remaining is marketed through various cooperatives, private


dairies & vendors. Also of the total produce more than 50% is procured by cooperatives and

other private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid from and rest is

used for manufacturing processed value added dairy products; for private dairies only 45% is

marketed in fluid form and rest is processed into value added dairy products like ghee,

makhan etc.

Still several consumers in urban areas prefer to buy loose milk from vendors due to the strong

perception that loose milk is fresh. Also, the current level of processing and packaging

capacity limits.

The preferred dairy animal in India is buffalo unlike the majority of the world market, which

is dominated by cow milk .As high as 98% of milk is produced in rural India, which caters to

72% of the total population, whereas urban sector with 28 % population consumes 56% of

total milk produced. Even in urban India, as high as 83% of the consumed milk comes from

the unorganized tradinitional sector.

Presently only 12% of the milk market is represented by packaged and branded pasteurized

milk, valued at about Rs. 8,000 crores. Quality of milk sold by organized sector however is

inconsistent and so is the price across the season in local areas. . Also these vendors add

water and caustic soda, which makes the milk unhygienic.

Market Size and Growth

Market size for milk is estimated to be 36mn MT valued at Rs.470billion. The market is

currently growing at round 4% p.a. in volume terms. The milk surplus states in India are U.P.,

Punjab, Haryana, Rajasthan, Gujarat, Maharastra, A.P., Karnataka, and Tamil Nadu. The

manufacturing of milk products is concentrate Tamil Nadu d in these milk surplus states. The

top 6 states are U.P, Punjab, Rajasthan, Gujarat, Tamil Nadu, and A.P together account for

58% of national production.

Milk production grew by a 1% p.a. between 1947 to 1970. Since the early 70’s, under

operation flood, production growth increased at 5% p.a.


About 75% of milk is consumed at the household level, which is not a part of commercial

dairy industry. Loose milk has a larger market in India as it is perceived to be fresh by most

consumers, in reality however, it poses a higher risk of adulteration and contamination.

The production of milk products, i.e. milk products including infant milk food, malted food,

condensed milk & cheesed stood at 3.07 lakh MT in 2003. Production of milk powder

including infant milk food has raised 2.25 lakh MT in 2003. Where as that of malted food is

at 65000 MT. cheese and condensed milk production stands at 5000 and 11000 MT

respectively in same year.

Market Share

GCMMF faces tough competition in the Indian market by different companies like Britannia,

Vadialal Cadbury etc. Though it is quite new in the Indian market it shares a fair amount of

dairy products in India. By advertising and promoting its product GCMMF has become one

of the leading dairies in India. In western of India GCMMF shares the most of the market

while in other parts of India it is next so. But slowly and surely GCMMF is growing in

sharing the market with other competitors industries.

Major Players

The packaged milk segment is dominated by the dairy cooperatives. GCMMF is the largest

player. All other local dairy cooperatives have their local brands.e.g.Warana in Maharastra,

Saras in Rajasthan, Vijaya in A.P etc. other private players include J K Dairy, Heritage

Foods, Indian Dairy etc.

Export Prospects For India

Presently, India a non-entity in international dairy market. However exports of milk products

are picking up, having gone up by 40 times by value in the first half of the nineties, the value

worth of RS. 400 million in 1994-95. Today GCMMF (Gujarat Co-operative Milk Marketing

Federation) is India’s largest exported of dairy products valued at Rs. 18.3 crores in 1995-96.

Its exports earnings are likely to get doubled in 1998-99. Two note worthy export

opportunities are emerging one in South-east Asia and other in Russia, the immediate future

is the prospects of an additional demand of over 3 million tonnes of milk products in the

Asian region. Equally significant is the rise of Russia as the world’s biggest dairy importer.


India is not fully utilizing its export potential in respect of dairy products. The cost of milk

production in India is the lowest. And the dairy industry is not getting any subsidy. There is

an urgent need to pay special attention to the quality if India has to compete with other

countries. At present the county is exporting the malted milk foods, ghee, butter, and cheese

to other countries like Bangladesh, UAE, Nepal, Shri Lanka, Oman and Bahrain. Of course

world milk prices are subject to dramatic fluctuations.

Export earning from the live-stock sector and related products rose to Rs. 19,250 million in

1996-97 from Rs. 7,920 million in 1988-89.

India’s Export Of Milk Products

India is evident that except for baby food, the exports for all other milk products are showing

an increasing trend in terms of quantity as well as in terms of value.

On the other hand India’s imports of milk production specially milk powder and baby food is

showing a declining trend.

Looking at the growing export opportunities in the post GATT ERA, Indian planners have

measures areas already adopted become quality conscious. Corrective measures areas already

adopted to meet the sanitary and phyto-sanitary specifications prescribed by WTO. Besides,

covering processed dairy products, the specifications of the WTO silos extended to the health

status of cattle and other live stock. Consequently, the main thrust of the ninth plan proposals

is on the improvement of animal health and adoption of sanitary and phyto sanitary

specifications for dairy products. Towards this end, the TMDD (Technology Mission on

Dairy Development) has initiated wide ranging programmes.

Concerns in export competitiveness are

Low cost Of Production

Milk production is a combination of labour & capital intensive. Due to low labour cost, cost

of production of milk is significantly to there in India.

Quality


Significant investment has to be made in milk procurement, equipment, chilling and

refrigeration facilities. Also, training has to be imparted to improve the quality to bring it up

to international standards.

Productivity

To have an exportable surplus in the long term and also to maintain cost competitiveness, it is

imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee, paneer,

shrikhand, rasgolas, etc.


MACRO ENVIRONMENT

PEST ANALYSIS

POLITICAL FACTORS

Political factor is very important aspect for the growth of any industry, thus the political

factor can immerge as opportunity or threat for that industry.

Regulatory Environment in the Dairy Processing SectorThe Indian processed dairy industry has grown and diversified enormously in the last few

years. To ensure the proper development and growth of this industrial sector, the Government

of India has instituted various laws and regulations. The various regulations that govern the

dairy processing industry can broadly be classified into:

“Amul – The Taste of India”

Internal Environment

Structure Culture

Resources

Task Environment

(Industry)

Societal Environment

Technological Forces

Political-Legal Forces

Sociocultural Forces

Economic Forces

Stockholders

Governments

Suppliers

Employees/ Labour Unions

Special interest groups

Customers

Creditors

Communities

Competitors

Trade Associations

35

Compulsory Legislation

Prevention of Food Adulteration Act, 1954This Act is the basic statute that is intended to protect the common consumer against the

supply of adulterated food. This specifies different standards for various food articles. The

standards are in terms of minimum quality levels intended for ensuring safety in the

consumption of these food items and for safeguarding against harmful impurities and

adulteration. The Central Committee for Food Standards, under the Directorate General of

Health Services, Ministry of Health and Family Welfare, is responsible for the operation of

this Act. The provisions of the Act are mandatory and contravention of the rules can lead to

both fines and imprisonment.

Milk and Milk Product Order (MMPO) 1992

The Milk and Milk Product Order (MMPO), 1992, issued on June 9, 1992 seeks to ensure the

supply of liquid milk, an essential commodity, to consumers by regulating its processing and

distribution. Within eight years of its operation, the Central/State Registering Authorities

have till December 2000 registered 666 units with a total processing capacity of 65.8 million

litres per day (mlpd).

Silent Features of the MMPO Order include the following:

Registrations for units handling up to 75,000 litres of milk per day are granted by the State

Governments and units with more than 75,000 litres per day capacity are registered by the

Central Registering Authority.

The Certificate also specifies the milkshed area, which, under the order is defined as a

geographical area demarcated by the Registering Authority for the collection of milk by the

registered unit.

Maintenance of specified hygienic conditions in the premises where milk and milk products

are handled, processed, manufactured or stored.

The collection, transportation and processing of milk normally centres around the operations

of a processing plant. The region from which the marketable surplus of milk production finds

its way to a processing plant is called a 'milkshed'. The concept of milkshed areas is pivotal to

the MMPO. For an orderly development of the dairy industry, a proper assignment/allocation

of milkshed is critical.


The dairy industry is regulated in most countries through various ways. Many subsidise part

or whole of domestic production. Imports are commonly restricted, and exports frequently

subsidised. High dairy price supports in many countries are put in place to stimulate

production to the extent that subsidies for exports are necessitated to maintain domestic dairy

programmes

In the United Kingdom, all the milk produced by farmers is procured by the cooperatives.

Private dairies are required to buy their milk requirement from cooperatives. New Zealand

has no private sector dairy plants. As many as 90 per cent of dairies in the erstwhile West

Germany and 100 per cent in Denmark, Netherlands and Sweden are in the cooperative

sector.

In the United States, 70 per cent of the dairy industry is cooperative. Dairy programmes are

subject to more Government participation or regulation than most other domestic agricultural

industries in the USA. There are also Federal Milk Marketing Orders and movement barriers

in the USA for "orderly marketing control, which is associated with stabilising fluid milk

prices, providing secured and dependable markets for individual farmers producing milk

primarily for the fluid market and improving the balance of market power between farmers

and handlers.

In the emerging liberalised global scenario, trade-distorting agricultural policies have been

the focus of the GATT multilateral trade negotiations. With the liberalisation of agricultural

trade under the new GATT regime, the heavy subsidies prevalent in the dairy sector in the

countries of the EU as well as in the USA will have to be brought down in the next few years.

The competitive advantages of the Indian dairy industry are then considered to be substantial.

With substantial and continued investment in building up milk production, India can emerge

as a major exporter of dairy products in the next few decades.

Standards on Weights and Measures (Packaged Commodities) Rules, 1977These Rules lay down certain obligatory conditions for all commodities that are packed form,

with respect to declarations on quantities contained. These Rules are operated by the

Directorate of Weights and Measures, under the Ministry of Food and Civil Supplies.

Export (Quality Control & Inspection) Act, 1963


The Export Inspection Council is responsible for the operation of this Act. Under the Act, a

large number of exportable commodities have been notified for compulsory pre-shipment

inspection. The quality control and inspection of various export products is administered

through a network of more than fifty offices located around major production centres and

ports of shipment. In addition, organizations may be recognized as agencies for inspection

and /or quality control. Recently, the government has exempted agriculture and food

products, fruit products and fish and fishery products from compulsory pre-shipment

inspections, provided that the exporter has a firm letter from the overseas buyer stating that

the overseas buyer does not require pre-shipment inspection from official Indian inspection

agencies.

Pollution ControlNo Objection Certificate from Pollution Control Board is a must.

Voluntary StandardsThere are two organizations that deal with voluntary standardization and certification systems

in the food sector. The Bureau of Indian Standards looks after standardization of processed

foods and standardization of raw agricultural produce is under the purview of the Directorate

of Marketing and Inspection.

Bureau of Indian Standards (BIS)The activities of BIS are two fold, the formulation of Indian standards in the processed foods

sector and the implementation of standards through promotion and through voluntary and

third party certification systems. BIS has on record, standards for most of processed foods. In

general, these standards cover raw materials permitted and their quality parameters, hygienic

conditions under which products are manufactured and packaging and labelling requirements.

Manufacturers complying with standards laid down by the BIS can obtain and "ISI" mark that

can be exhibited on product packages. BIS has identified certain items like food

colours/additives, vanaspati, containers for packing, milk powder and condensed milk, for

compulsory certification.

Directorate of Marketing and Inspection (DMI)The DMI enforces the Agricultural Products (Grading and Marketing) Act, 1937. Under this

Act, Grade Standards are prescribed for agricultural and allied commodities. These are

known as "Agmark" Standards. Grading under the provisions of this Act is voluntary.

Manufacturers who comply with standard laid down by DMI are allowed to use "Agmark"

labels on their products.


Other Government RegulationsIndustrial Licence: No licence is required for setting up a Dairy Project in India. Only a Memorandum has to be submitted to the Secretariat for Industrial Approvals (SIA) and an acknowledgment is to be obtained.

However Certificate of Registration is required under the Milk and Milk Products Control

Order (MMPO) 1992.

Foreign Investment:Foreign Investment in dairying requires prior approval from the Secretariat of Industrial

Approvals, Ministry of Industry, as dairying has not been included in the list of High Priority

Industries.

Automatic approval will be given upto 51% Foreign Investment in High Priority Industries.

In case of other Industries, proposals will be cleared on case to case basis. Government may

allow 51% without enforcing the old limit of 40% applicable under Foreign Exchange

Regulations Act at its discretion.

Foreign Technology Agreements: Foreign Technology Agreements are freely allowed in high priority industries under the

following terms:

Lump sum payment of Rs 10 million

Royalty payment of 5% on domestic sales and 8% as exports subject to total payment of 8%

on sales turnover, over a 10 year period from the date of agreement or 7 years from

commencement of production.

Foreign Technology Agreements in dairying also need prior approval. Foreign Exchange

required for payment of Royalty will have to be purchased at market rates.

Foreign Technicians can be freely hired.

Import of Capital Goods

Import of capital goods is automatically allowed if it is financed through Foreign Equity.

Alternatively, approval is needed from the Secretariat of Industrial Approvals. The approval

depends on the availability of Foreign Exchange Resources.


Import of Second Hand Capital GoodsImport of Second hand goods is allowed subject to the following conditions:

Minimum Residual life of 5 years The equipment should not be more than 7 years old. A

certificate from the Chartered Engineers of the country of origin certifying the age and the

Residual life is to be produced. Import will be allowed only for actual users.

Dividend BalancingRemittances of dividend should be covered by earnings from exports recorded in the years

prior to the payment of dividend or in the years of the payment of the dividend.

WTO norms may milk Indian dairy dryIN INDIA, dairy farming contributes significantly to the generation of employment in the

rural areas, supplementing the income of small and marginal farmers and landless labourers,

particularly in the rain-fed and drought-prone areas. Allied sectors, such as animal husbandry

and fisheries, which have a negligible share of GDP in agriculture, grew rapidly compared to

the crop sector in 1980-96.

Today, about a fourth of the GDP in agriculture is accounted for by the allied sectors, in

which animal husbandry accounts for the lion's share. The growing diversification of

agriculture is also an indication of changing consumption preferences and income levels. So

far, this activity was protected from international competition through import duties and

restrictions. However, consequent to the Uruguay Round of Multilateral Trade Negotiations

in 1994, to which India is a signatory, this sector is being gradually exposed to the

international market.

The WTO provisions may affect the Indian dairy in two ways. First, Indian dairy products

may have to compete with the major producers of processed dairy products such as the

European Union (EU), the US and the Oceania countries, such as Australia and New Zealand.

Second, in the absence of import restrictions, domestic dairy products may have to compete

with cheaper imports. Will Indian consumers then discard domestic products? Will Indian

butter become bitter? If this happens, the pattern of dairy development will go askew,

affecting income distribution and may lead to social unrest. It is, therefore, necessary to

effectively fortify the dairy industry from international onslaught and help the poor generate

income and raise their standards of living.


According to FAO statistics, of the world milk production of 556 million tonne (MT),

roughly two-thirds is concentrated in the developed countries. The erstwhile East European

bloc and West Europe together account for 18 per cent and South Asia, including India, 17

per cent. North America, consisting of the US, Canada and Central America, produces 24 per

cent, the Oceania countries produce 4 per cent, while the rest is from the remaining countries.

About 86 per cent of the world production comprises cow milk and only 10.3 per cent is

buffalo milk, mostly confined to the South Asian countries.

About 72 per cent of the production of cow milk is concentrated in developed countries such

as the US and the EU, accounting for about 50 per cent of total world milk production.

Today, India ranks first in milk production and has the largest cattle and buffalo population.

Thanks to Operation Flood, or the `white revolution', and cooperative efforts, which raised

milk output from 22.5 MT in 1971 to 71 MT in 1997, the annual growth rate is 4.7 per cent,

perhaps the highest in the world. The per capita availability of milk rose by around 2 per cent

per annum in the same period.

Milk trade

Of the total milk production, only 5-6 per cent is traded globally. Liquid milk is not traded.

The trade is confined only to processed milk products such as skimmed milk powder (SMP),

whole milk powder (WMP), butter and ghee (BG) and cheese. More than 90 per cent of the

total production of processed dairy products is concentrated in the EU, the US, India,

Pakistan, Brazil, Poland, Australia and New Zealand. About 75 per cent of the demand comes

from 8-9 nations. The pattern of world trade in milk production is also segmented. Most of

the low-value dairy products are exported to developing countries while the high-value milk

products are exchanged among developed countries. India has been exporting negligible

quantities of SMP and WMP.

WTO provisions

To make the dairy product market more competitive and improve efficiency of production,

multilateral negotiations in 1994 adopted a package of measures for countries producing

dairy products. These measures have to be adhered to by all WTO signatories. Some of the

important provisions are liberalising trade and government policies to augment world import

demand for dairy products, commitments on market access, reduction of domestic support

and subsidies on exports for the removal of distortions in the domestic market. India is a

signatory to the WTO and has already removed quantitative restrictions (QRs) on 714 items.


The impact

Provisions such as the commitment of domestic support and subsidies on exports under

normal circumstances may not have a negative impact on the Indian dairy industry, at least in

the short run. The Agreement on Agriculture (AoA) mentions that these provisions are

applicable only to select dairy products. Even among these products, only a few are

important. A country can successfully reduce support to unimportant items and support the

important ones, bringing down the total support well within the GATT permitted limit.

As for subsidies on exports, though India tops in milk production, the export of milk and milk

products is negligible. Among the processed dairy products, India exports only butter and

ghee and has a negligible presence in SMP and WMP trade. However, these provisions might

affect Indian dairy through a change in the import demand. A substantial cut in the export

subsidies by the developed countries, which are also bound by the WTO agreement, may

push up world prices, making domestic products, such as butter, cheaper. However, the

impact of these provisions will largely be determined by world price behaviour.

Other provisions, such as market access, removal of QRs, non-tariff barriers (sanitary and

phyto-sanitary regulations) and GMO issues are real cause for concern. The WTO supporters

argue that the withdrawal of domestic support and subsidies on exports will increase the

international prices of the dairy products. Countries with relatively lower costs of production

may enjoy comparative advantages and cash in on the external demand.

As per these provisions, the EU, which accounts for 40 per cent of the world trade of dairy

products, reduced the subsidy on butter from $1,481 a tonne in 1990 to $1,392 in 1995, with

a commitment to reduce it to $947 by 2000. Similarly on SMP, the subsidy was reduced from

$430 a tonne in 1990 to $406 in 1995 with a commitment to reduce it to $275. Thus, the

commitment of the EU has been to reduce 36 per cent of the subsidies uniformly.

The US is also committed to slashing subsidy on these products. However, looking at the

behaviour of the world prices of dairy products, one gets a contrary picture. Instead of the

world prices being pushed up, as was believed, they actually declined. For SMP, the price

declined from $2,025 a tonne (fob) in 1995 to $1,452 a tonne. WMP experienced a similar


price reduction. In some quarters this is attributed to the increased subsidy by the EU and the

US and to the policy of differential subsidy across the globe. In the US, the rate of subsidy is

reported to be higher on the consignments of milk powder destined to South Asia, perhaps to

nullify the freight advantage enjoyed by Oceania countries such as Australia and New

Zealand, which are nearer to South Asia.

Another reason is the dampened demand for dairy products from the crisis-stricken Russian

Federation, which has the largest share in the total demand for milk products. In fact, the

world market structure for dairy products appears to be oligoponist-oligopoly, wherein the

price determination does not follow the rules of supply and demand but of price leadership

and price wars. In fact, the EU has become the price-setter in international trade. In such a

situation, however, questions arise over how the WTO provisions can increase the

competition in the world market. This does not defy the efficiency argument. The only

beneficiary of depressed world prices is New Zealand which produces dairy products more

economically, even without subsidy. As a result, its share in the total exports rose more than

20 per cent.

India has already agreed to zero tariffs on SMP and other imports (the other country being

Singapore). Due to the depressed world price of SMP, the cheaper product would be available

to the domestic consumers. This may disturb SMP production, its price structure and the price

structure of milk and milk products. The Indian dairy industry should immediately advocate

the imposition of tariff equivalent to the difference between the world and domestic prices of

dairy products with some premium on it.

Countries such as New Zealand and Australia, which produce dairy products at the least cost

without subsidy, have imposed 10-20 per cent tariff on SMP imports. India would also have

to minimise production costs to protect the Indian dairy industry. A wide gap between the

cost of production and the world market price may enhance the competitive advantage to

increase exports and insulate the domestic market from cheaper imports. This calls for dairy

development on a more systematic and scientific lines, additional investment in

infrastructure, improved quality and better breeds of animals, transfer of technology and a

more professional approach to dairying.

Non-tariff barriers


Apart from the tariffs, there could be many non-tariff barriers, either under provisions of

Technical Barriers to Trade (TBT) or imposed by the countries, to be overcome by Indian

dairy products to make inroads into the markets of developed countries. Though the WTO

provision lays down that the minimum five per cent market access may have to be given by

importing countries, the developed countries impose certain quality norms and product

specifications and other sanitary and phyto-sanitary regulations. The EU now insists that

milking cows be fully mechanised to avoid contamination, and potable water used to process

milk. It also prescribes that only steel machinery and filtered air be used for processing. To

adhere to these specifications, the Indian dairy industry may have to invest much capital in

the required infrastructure, either through co-operative efforts or corporate sector

intervention. However, this may increase the cost of milk at the present yield levels. The

expansion of milk production through better animal variety, and breeds, therefore, becomes a

precondition for such an approach.

Quality Control & Pre-Shipment Inspection

The Export Inspection Council of India (EIC) was set up by the Government of India under

Section 3 of the Export (Quality Control and Inspection) Act, 1963 to provide for sound

development of export trade through quality control and pre-shipment inspection

Approval Of Food Products Processing Units Under Fsms

EIC continued to operate mandatory export certification under the above system for fish and

fishery products (F& FP), egg products, milk products.

A total of 35 units have been approved by the EIC for export of milk products to the countries of EU.

Regulations About Waste

Discharge

Over the years the discharge of wastes have increased and regulations were imposed in

various countries all over the world making it mandatory on the part of the industries to treat

the waste before it is discharged into the rivers or lakes to avoid pollution of water. India is

no exception in this regard and an Act was passed in the Parliament in 1974 to prevent and

control water pollution


Dairy Waste Generation in India

Regarding dairy industry in India, improved facilities to farmers and wider use of mechanical

refrigeration have made it possible to collect milk over considerable areas and to bring it to a

large central processing plant either for marketing as fluid milk or after conversion into

products. This has resulted in greater concentration of waste and the diary waste being rich in

nutrients may endanger aquatic life if let into rivers or lakes without treatment. A dissolved

oxygen level of 7 PPM is present in rivers or lakes and if this level reaches below 5 PPM the

aquatic life is in danger because the micro-organisms present in the waste or in the water of

the river or lake use the dissolved oxygen to convert the organic matter constituting of

protein, lactose, Fat, etc. into end products. Hence it has become necessary for the dairy

industry to treat its waste before it is discharged into rivers or lakes.

Treatment Process Concept :

The raw effluent, comprising of dairy waste and domestic waste bears oil and grease, high

amount of suspended solids and bio-chemical oxygen demand. The conceptual approach of

the treatment includes the removal of oil and grease, coares and settleable suspended

particles, dissolved organic matter and handling of sludge for disposal. Substantial amount of

free oil and grease is removed by skimming operation in the grease trap. However, the heart

of this treatment system is the aerobic-biological reactors which are designed on the basis of

activated sludge process. The activated sludge treatment process basically involves the

degradation of organic matter by the action of various micro-organisms as depicted in the

following equation.

Organics + Micro + Oxygen + Nutrients -> New cells + Carbon-dioxide + Ammonia +

Energy.

This could be restated as :

Waste + Sludge + Surplus Sludge + End product

In this biological process, a part of the newly synthesised sludge undergoes oxidation called

Endogeneous respiration.

Cells + Oxygen - End products + Less cells


The efficiency of the system mainly depends upon the concentration of active micro-

organisms present to perform the assimilation of organic matter. The activated sludge, in

general consists bacterial and micro-organisms like protozoa, rotifiers, etc. The desirably

environmental conditions like sufficient dissolved oxygen, substrate and nutrients are

required for cell growth and energy for various metabolic functions. It is, essential that the

biological floe should readily separate from the treated waste water in the final clarifier. The

concentration of microflora is maintained by routing the mixed liquor flowing from the

aeration tank through a secondary clarifier and recycling most of the settled biological solids

back to the aeration tank.

Delhi Mother Dairy has set up an effluent treatment plant which was commissioned in April,

1982. The capacity from 1000M3 was emcreased up 1650M3 in 1986. Not only is the waste

waster treated by the activated sludge process in this plant, but also the sewage from the

Dairy and adjoining staff quarters.


ECONOMICAL FACTORS

Infrastructure :

“Amul Dairy” is working in the best area of Anand in Kaira District. This is very good for

dairy industry.Some benefits arising out of this location as follows:

1) Cheap Labour

2) Cheap Land

3) Cheap water supply

4) Constant Electric supply

5) Constant Water Supply

6) Suitable Nature and Environment

Amul has wonderful Plant Layout means arranging machinery in a very systematic manner

which save the electricity as well improve the efficiency of the unit so increase the

production.

There is a no transporting problem because clear and wonderful road for transporting of

milk& milk’s products. The milk collection is very easy and speedy.

Monsoon

A good monsoon is critical for india’s economic growth in 2001-02. In June the first of the

four months the rain were well spread all over the country, rising hopes of a major recovery

in the agriculture sector

Rain fall in June (percentage deviation from normal)

1999 2000 2001

Week1 10 85 50

Week2 -50 50 40

Week3 25 -25 85

Week4 45 -45 -20


Week5 -25 - -

(source: Indian economy Ruddar dutta and k.p sundaram)

The intensity of rains was only during the last weak of the months of 35-sub sdivision, 23

received different to scantly rainfall ,largely covering Rajasthan, MP, Gujarat, Maharastra,

Andhra Pradesh, Karnataka, and Tamil Nadu.

Economic Growth

Last five years has seen slackening of the GDP growth rate, largely due to fall in

manufacturing growth and poor performance of agriculture

2002-03 saw a big fall in agricultural output, and official GDP growth estimate for 2002-03 is

4.7%

Given good monsoon, CII for 2003-04 is at least 6.8% GDP growth

(Source: Indian economy 2003)

Indian dairy sector is clocking a healthy growth of over 4% a year.

The Indian dairy industry registered a substantial growth from the 8th Plan onwards,

achieving an annual output of over 69 million tonnes of milk. India’s milk output

during 2001-02 was estimated to be 84.6 million tonnes and is expected to reach the

level of 88 million tonnes during 2002-03.


SOCIAL FACTORS

Life Style Trend

With more money on hand, more and more Indians are drinking milk and buttering their

bread. Rising income levels have led to a rapid increase in the consumption of milk and milk

products among Indian households.

Urbanization

Urban population is increased about 26 million 1901 to 62 millions in 1951 an increase of

only 36 million in 50 years. But thereafter the absolute increase during the next three decades

was of the order of 98 million(1951-81). Due to this reason the consumption of the milk was

drastically increase during last two to four decades. Because of the consumption of milk is

high in urban area compared to rural area. By the year of last the urban population is reached

around 25.7 percent of total population. The effective milk market is largely confined to

urban areas, inhabited by over 25 per cent of the country's population. An estimated 50 per

cent of the total milk produced is consumed here. By the end of the twentieth century, the

urban population is expected to increase by more than 100 million to touch 364 million in

2000 a growth of about 40 per cent. The expected rise in urban population would be a boon to

Indian dairying. Presently, the organized sector both cooperative and private and the

traditional sector cater to this market.

Consumption Habit And Practices

Day by day the need of milk is continuously increase. In the year 1972 average requirement

of the milk per capita is 172 per gram. While in 2000 the requirement 215 gram per year. So

there will be more demand or milk and milk products in nearer future.

The consumption of milk is highest in north India that is 278 gram per day, while in west

region 174 gram per day. In eastern and southern area combines 215 grams per day require.

46% of the total milk is consumed in liquid form and 47% is converted into ghee, paneer and

ice cream and only 7% milk goes for western products like powder, cheese etc.


The 98% of the milk produced in the rural area which is cats of 72% of the population

whereas the urban sector with 28% populations.

Even in urban India India as high as 83% of the consumed milk comes from the unorganized

sector.

Presently only 12% of the milk is represented by packaged and branded pasteurized milk.

Population

During 1981-91, the population of India grew from 683 million in 1981 to 844 million in 1991-

indicating in increase of 161 million during the period. The rate of the growth slightly declined to

2.11 percent during 81-91 decade. Subsequently, during the 8 years period (1991-98), population

grew from 844 million to 987 million-an increase of 120 million. The annual average rate of

growth registered a decline to 1.8 per cent.


TECHNOLOGICAL FACTORS

Some areas of Indian dairy industry can be strengthened by the induction of specialized

technologies and equipment from overseas. These include:

Raw milk handling: It needs to be upgraded in terms of physico-chemical and

microbiological attributes of the milk collected. The use of clarification and bactofugation in

raw milk processing can help improve quality of the milk products.

Milk processing: Better operational efficiencies are needed to improve yields and reduce

wastage, minimize fat/protein losses during processing, control production costs, save energy

and extend shelf life. The adoption of GMP (Good Manufacturing Practices) and HACCP

(Hazard Analysis Critical Control Points) would help manufacture milk products conforming

to international standards.

Packaging: Another area is the range of packing machines for butter, cheese and the like.

Better packaging can help retain nutritive value of products packed and extend shelf life. A

cold chain distribution system is needed for proper storage and transportation of dairy

products.

Value-added products: There's immense scope for value-added products like desserts,

puddings, custards, sauces, mousse, stirred yoghurt, nectars and sherbets.

In this 21st Century, the Indian dairy industry has set its goal to better manage its national

resources for enhancing milk production and upgrading milk processing through newer

technologies. Multinational dairy giants can carve a niche for themselves in this challenging

task — a win-win situation that can be won!

IT Technology

In today’s cost conscious, competitive business environment the efficiency of streamlined

processes, and the flexibility to grow are important for your business. The IT solution

implementation has been deterred by the need for large investment, huge information

technology (IT) teams, and lengthy implementation schedules to achieve desired benefits

until now.


http://www.indiadairy.com/tech_use_equipment_consumables_packing.html

“Smart dairy Solution” a comprehensive solution portfolio that addresses the unique needs of

Dairy plant management. It provides a simple but complete business solution to efficiently

meet a wide variety of general and Dairy-specific business requirements

Supported by a the technical support team Smart Dairy Solutions is designed to deliver

tangible value to Dairy plants today while providing the scalability to fuel tomorrow's growth

A simple but powerful solution that addresses needs from procurements of milk to final

dispatch of products covering all intermediate activities i.e. Production, Quality control,

Accounts & finance, Personnel & Administration, Purchase & store and Marketing & Sales.

Dairy industry primarily constitute of dairy plants for procurement, processing and marketing

of milk and milk products, unions to supervise the societies at the village level, societies for

procuring milk from the villagers and additionally the state federations and organizations like

NDDB for technical and commercial consulting. Each dairy has societies attached to it for

supply of milk, chilling centers for intermediate storage of milk and fodder plants for

processing and supply of fodders to societies. The dairy in turn gives technical support,

veterinary & health services and fodder to the societies.

iBilt Technologies Ltd a along with their consultancy partner James Martin and Co with their

experience of providing integrated solution for all functional areas at Jaipur Dairy has given

us an immense insight into the process and people requirements of the dairy.

Above Tech.has been short listed by NDDB to implement the Dairy Solution in India.

The iBilt Tech. cater to the needs of dairy industry at all levels, with our offerings

Business Process Reengineering: In the changing business scenario, business focus needs to

shift to consumers/ buyers and it becomes imperative to revisit our business philosophies in

the aspects of operation, culture, social systems and technology. Our consulting team will do

an assessment of the business process identifying the strengthsand weaknesses and propose

the opportunities and guidelines for change.


Information Strategy Plan: Our consulting team will identify the long term IT needs

in terms of hardware, network, software application.

Dairy Website: To create web presence for the dairies and federations for effective

dissemination of information.

Portal: An on line solution to integrate all the members of the dairy industry,

including NDDB, federations, unions, dairy plants, societies, milk producers and

concerned organizations in the field of dairy development.

Enterprise Resource Planning: A comprehensive application catering to all the

functionalities of dairy plant and its associate entities. The Smart Dairy Solution shall

cater to all the business processes of the dairy plant. The solutions shall capture the

data at the process level of dairies and compile the same for decision making at Union

and federation level. The solution shall also provide ready made interface to chilling

centers and other third party software used at the dairy level.

Decision Support System: DSS is an interactive computer-based systems and

subsystems Intended to help decision makers use data, documents, knowledge and/or

models to identify and solve problems and make decisions.

Data warehousing: A data warehouse is a computer system designed to give

business decision makers instant access to information by copying data from existing

systems and storing it for use by

Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-operatives

initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over the

years, several developments in packaging media have taken place. In the early 80’s , plastic

pouches replaced the bottles. Plastic pouches made transportation & storage very convenient,

besides reducing cost. Milk packed in plastic pouches have a shelf life of just 1 to 2 days, that

too only if refrigerated. In 1996, tetra packs were introduced in India. Tetra packs are aseptic

laminate packs made of aluminum, paperboard and plastic. Milk stored in tetra packs and

treated under ultra high temperature technique (UHT) can be stored for four months without

refrigeration. Most of then dairy co-operatives in A.P, Tamil Nadu, Punjab & Rajasthan sell

milk in tetra packs. However tetra packed milk is costlier by Rs. 5 to 7 compared to plastic


pouches. In 1999-2000 Nestle launched its UHT milk. Amul too relaunched its Amul Taaza

brand of UHTs milk. The UHT milk market is expected to grow at a rate of more than 10-

12% in coming years.


MICRO ENVIRONMENT

For any organisation to succeed the management function are as important as the production

because what has been produced has to be marketed, to produce the items the finance is

required and also the employees are required which is taken care in the finance and the

personnel functions resp.

So the important of these functions cannot be under done.

Personnel Department

Introduction

The success to any industrial unit, depend upon their effective personnel department.

Personnel department is basically commercial with human resource of an enterprise and it

also continue procurement, development, non monetary comparison, integration and

maintenance of the personnel purpose of contribution towards the accomplishment of the

organization’s major goal and objectives. Personnel management in opinion of many author

is true management. So sometimes it’s told that management means to manage human

behaviour. Personnel management is that phase of management which deals with the

effective control of use of manpower as distinguished from other source of power.

The management includes all aspects of works such as recruitment, selection, medical

checkup, various types of training, transfer, welfare activities, union activities factory all

provision and industrial dispatch.

Recruitment

Recruitment forms the first stage in the process which continues with selection and cased

with the placement of the candidate recruitment makes it possible to acquire the number and

types of people necessary to ensure to continues operation of the organization requirement

has, been regarded as the most important function of personnel administration.

Amul’s recruitment and selection process is very systematic and comprehensive. All division

head in inform about their manpower requirements. According to the requirement of the

personnel division they get require employees by resources like postal services employment

exchange education institution and advertisement.


Amul Dairy receive lot of application in response to their advertisement. Thus from contains

the information about candidates vest name, place of birth, nationality, region, qualification

and experience details of personal employee status etc. these forms are to be checked by

authorized person and he adopts only needed application and eliminate unnecessary of

unqualified fated scrutinizing the application. Applicants are called for personal interview.

Interview committee conducts this interview. When applicants are too many, then they

conduct a written test for general knowledge. These who pass this test are called for interview

then after smart selection process.

Source of Recruitment

1. By giving advertisement in news papers

2. Labour Union

3. Voluntary Organisation

4. Leasing Contract

5. Private Employment Agency

6. Government Employment Exchange

7. School, Colleges, Universities and Professional Institutes

8. Recommendation of present Employee

9. Recruitment as Temporary Workers

Selection

Selection process is concerned with screening relevant information about an applicant. The

objective of selection process is to determine whether an applicant meets the qualification for

a specific job and to choose the applicant who is most likely to perform well in that job.

In Amul rating are noted for general knowledge experience knowledge that particular field

etc. from these forms then highest marks are selected and send for medical examination. The

applicant which are physically fit are sent appointment letter which contains some terms and

conditions of the candidate. The candidate will have to sign to this letter that he is ready to

strictly obey these terms and conditions. Higher level is to be directly recruited and selected

by the committee. The employee has to inform the date of joining the organization on such

date specific period of training is adjusted.


Training & Development

Training and management development are the two separate things. Training is required for

persons working at operative level and it it required for increasing the knowledge and skills

of employees. So that they can perform their tasks in the best manner while management

development refers to the activities which take place in order to improve the performance of

the managerial levels personnels. Training and management development contribute a lot in

increasing the productivity. It is matter pity that GCMMF is not having a separate dept. for

training and development.

For providing to newly selected person at operative level, he is places at the work under

supervision of a senior worker who gives guidance and instructions about the particular work.

For the managerial level personnel, they select only those person who are having an

experience of at least three year in the same fields. Then a newly selected person is assigned

such tasks as are of less important and his performance is observed for three months.

There are two type of training methods:

On the job Training Methods:

1. On Specific job

- Experience

- Coaching

- Understood

2. Position Rotation

3. Special Projects

4. Selective Reading

5. Apprenticeship

Off the job Training Methods

1. Special course and lecture

2. Conference

3. Case Studies

4. Role playing method

5. Management Games

Promotion & Transfer Policy


Promotion

A promote on the transfer of an employee do a job. which play more money are one that

carries some preferred status. In Amul mainly two promotions policy are taken.

1. Automatic promotion

2. Merit cum seniority

From time to time different type of promotion policies are adopted by Amul.

During the period of 1972,their was negotiation with union under shish promotion was given

automatically do a person who had completed his 6 yrs and 2nd promotion was given after 7

yrs.

Then Amul adopted merit cum senioring policy. And now at present merit Amul favours

promotion.

Under this policy performance of the employee his part record behavior opinion of divisional

head is taken into account while considering a promotion this capacity, to supervise his job

knowledge is also considered.

Managing Director sign the promotion order after the recommendation by the personnel &

Administration department.

Transfer

Transfer is the pre-relative right of the mgt. Transfer is done if it is necessary for the

organization.

Transfer is generally affected to build up a more satisfactory work team & to achievement

some purpose.

In Amul for transfer take place in flash season. Transfers are also to adjust the work forces of

one plant with the another.

Wage & Salary Administration

Attendance is considered to be one of the major & important factor responsible for the

Wage & Salary Administration.


Common method is followed for the Wage & Salary Administration the present catalogue

record received from the time keeping office. The present record is maintained to each

employee in the register, which is known as master roll.

Timekeeper sends this master roll to the account dept. Attendance of each & every employee

is analyzed & entered into the computer. The record is scrutinized and statutory and non-

statutory deductions are made after this salary is calculated for each employee through

computer.

The wages are paid in cash & also credited in corporate salary a/c. Employee wages are

deducted according to grades of workers. Amul has A,B,C,D,E,F grade of workers.

Job Description

Job Description is an important document, which is basically descriptive in nature and

contains a statement of job analysis. it defines the scope of job activities major

responsibilities & positioning of job in organization. It provided the worker, analysist &

supervisor with a clear idea of what the work must do to meet the demands of the job.

In other words Job Description is rules & regulation regarding different jobs.

In Amul those who are at senior Level make job description regarding managerial position.

These are some limitation regarding job description in future one may say that, I have to done

what is mention in job description to avoid this problems. They are not providing job

description to all except managerial levels.

As well as job description is helpful because one is clear about their work. No problem arise

in future.

Performance Appraisal

The performance appraisal system is a process of evaluation of employees performance on a

jobs in loans of it’s recruitment. It is also known as assessment of behaviour performance and

attitude of an employees.

The value, excellence, spirit, qualities of status of some subjects of performance appraisal is

quite useful in various administrative decision as training, transfer, promotion etc.


In GCMMF there is very good performance appraisal system and the management of unit is

good and profitability is very high.

Social & Welfare Activities

Every units success depends upon the regulatory and sincerity of the employees. The

GCMMF is already regular in paying amount of salaries to employees satisfactority for their

contribution in unit. The GCMMF has take many efforts in the welfare activities provided to

their staff and employees are as mentions.

Hospital Facility

Canteen Facility

Uniform Facility

Leave Facility

Loan Facility

Accident Benefits Scheme

Quarter Facility

Bonus

Transportation

Rest Intervals

Cleaning, Washing, Sweeping

Total Employees and Time Keeping System

Total Employee:

The success of the Amul depends upon their excellent team spirit and confidence of people in

the personnel dept. The total employee of GCMMF is 750.

Working Hours

In Amul dairy there are three shifts in one day. All the shifts has eight hours. So the work of

this union of the milk product are continuously and never stops. Therefore the union has

produce maximum stock of this products. The timing of three shifts and office time are as

follows:

1st Shift : 8:00a.m. to 4:00 p.m.


2nd Shift : 4:00p.m. to 12:00 mid night

3rd Shift : 12:00 mid night to 8:00 a.m.

GCMMF office Time : 8:00a.m. to 5:00 p.m.


PRODUCTION DEPARTMENT

Production Process

Introduction

Explosion of the production technology and changes in technical field is going to bring out

revolution in the industry sector which eventually gives stand to study and favour the

comebacking subject i.e. production and management.

Computers has evolved as a growing force with which operations managers tremendously use

for various purposes i.e. starting from cost reductions purposes management has been

enormously up graded to more higher level.

Production and operation management is planning, organizing, staffing, directing and

controlling of all the production system those portion of organization that convert inputs into

products and services. In the general production system take raw-materials, personnel,

machines, buildings and other resources and produce products and services. Moreover

outputs i.e. products and services which generate revenues and perpetuate the system are not

only the concentrated things but also the over looked indirect outputs like axes, wages and

pollution, technological advances, wages and salaries and community are today looked over

as important output.

The core of production system is its conversion subsystem where in workers materials are to

covert inputs in to products and services. This production department is at heart of the firm’s

workers and capital assets are engaged and it is able to produce low cost products and

superior quality in timely manners.

Thus there arises enormous need of giving rise to this department as whole and function as an

individual with strong concrete base being foundation pillars of a manufacturing organization

if the intention is to succeed nationally and internationally.


Plant Layout

Plant layout is the overall arrangement of the machine tools, handling equipments, storeroom,

tool aribs and other various accessories required for facilitating production in a factory. This

arrangement are preplanned with the results that the building has been constructed to fit a

layout of a given process.

GCMMF plant is indigenously worked out with facilitation of various production process and

production of multi products under one plant. The total plot is near about 2.27 kms. separate

buildings are provide with required arrangement of machine tools handling and computers

connection through the control room to fit for varying product manufacturing department.

The plant is engaged in producing milk, ice-creams, milk powder and ghee substantial

department is uniquely provide for the processing of each product. There are 4 production

department and packaging departments pertaining to each products respectively. Also the

strong of each particular is possible in the same. A fluent plant is proven to dispose off the

wastes and remainders water.

The plant also envisage a beautiful garden which cleans up the air and keeps the climate

pleasant. A parking at the right place has been provided for the outsiders and also for the

employees.

The plant is on the end of a large provident with 2 sides round and a beautiful lawn in the

division. At the front security guards cabin which grants the entry for specific tankers,

employees, visitors etc. visitors have to get approval from the office before head to get entry

in the plant. The office of the plant stands left a the pavement ends.

Thus plant layout encompasses all production and services facilities and provides for the

most effective utilization of the men, materials and machines constituting the process. It is

the master blue print of coordinating all operations.

A good layout results in elimination or minimization of accidents and hazards and cost while

increases the output . thus a good layout specifically is observed to be benefited on the

following grounds:

Efforts minimization

Fewer material handling will be provided manufacturing units cost will be lover

Bottlenecking of production will be eliminated


Total item in process will be less

Specialization of operations is facilitated

Less inspection will be required

Production control will be easier to achieve

Plant investment can be held to the necessary minimum

Plant and equipment obsolescence may be less

Wastage space will be eliminated

Thus a true beneficiary is provided to the plant through good and sound planning for plant

layout.


Product Profile

Bread Spreads Healthy Drink

Amul Butter Nutramul

Powder Milk

Powder Milk Cheese

Amul Spray Infant Milk Food Amul Pasteurised

Processed Cheese

Amul Instant Full Cream Milk Powder Amul Cheese Spread

Sagar Skimmed Milk Powder Amul Emmental Cheese

Sagar Tea Coffee Whitener Amul Pizza Mozzarella Cheese

Amulya Dairy Whitener Gouda Cheese

Fresh Milk For Cooking

Amul Fresh Milk Amul / Sagar Pure Ghee

Amul Gold Milk Cooking Butter

Amul Taaza Amul Paneer

Slim and Trim Utterly Delicious Pizza

Fresh Cream Mithai Mate

Chocolate Milk Masti Dahi

Masti Soups

Desserts

Amul Ice Creams Amul Shrikhand

Amul Mithaee Gulab Jamuns Gulab Jamun Mix

Kulfi Mix Amul Chocolates


Sources Of Raw Material The one and only raw materials on which the dairy plant function is milk. And as Gujarat has

abundant livestock especially cows & Buffalos, availability of the raw material.

Lower level or primary level milk producer’s co-operative make a collection of milk from

members producers. members producers are the farmers owing cows or buffalos. They bring

milk to primary level societies. The picture on the next page shows the collection of milk

through member producers standing in queue. An account of every member producer is

maintained which contains the details regarding the fat content, quality and quantity of goods

time of collection& the payment due or outstanding.

In case of quality of the co-operative must be alert so as to neglect the collection of sour milk

and substandard milk.

For pricing collected milk importance is given to quality. The milk’s prices is based on fat

and snuff i.e. solid non – fat content. it needs to consider the bacterial population in the milk

for raw paying milk price. Payment is done on monthly or daily basis depending upon co-

operating policy and member preference.

This milk is proportionally distributed and brought to various milk processing plant

GCMMF is also the same.

Operating Analysis

As is mentioned is sources of raw materials the one and only source from where they procure

milk are village milk societies. Milk is brought on from such village milk societies every

morning and evening. This milk is then to the dairy plant. It is here in the dairy plant the milk

is processed i.e. it is made free from germs.

Milk Processing

The entire process of milk can b divided into following steps:Steps:

Milk Processing Chart:

Collection of Raw-Milk


Electronic Milk Test

Methyline Blue Reduction Test

Purchasing And Standardizing Process

Separation Process

Quality Check

Packaging Process

Cold Storage

1. Collection of Raw Milk

Raw milk is collected from different co-operative societies of different 470 village of Gujarat.

About 122000 liters of raw milk is collected per day.

Before this milk is sent to the laboratory for tasting the ‘FAT & SNF’ proportion, the milk is

separated from the raw milk.

The milk is taken from the chilling centers to Ahmedabad with the help of 407 trucks. Inside

and outside of the tankers the thermocol is to be put. Because of the thermocols the milk is

not affect by the outside environment.

After collecting the samples of milk are taken to the laboratory. Where two types of tests are

conduct.

Electronic milk test

Methyline blue reduction test

Electronic Milk Test:


Before pasteurizing the milk the samples are taken to the laboratory. In the laboratory with

the help of machine called electronic milk test, the proportion of SNF & FAT 2.2 m.l. of

phesphatic solution becomes yellow than it is sent for pasteurization.

Methyline blue reduction test:

Another test which is taken in the laboratory is called Methyline blue reduction test. This test

is conducted for checking for how long the milk will remain fresh. To check this, 10 ml of

milk is taken and 1 ml of methline blue solution is added to it. It is then kept in the test under

water bath 57 degree C. after one hour, if the solution losses its colour than it is called raw

milk.

If the solution remains the same even after 5 hours than it is considered as a fresh milk which

remains constant for a long period of time.

The proportion of FAT & SAF is fixed by the dairy. The minimum proportion of SNF

decided for the first grade buffalo is 6% and for cow it is 4.5% .

We consider if as fixed rate. We further explain it by as under:

MILK OF SNF FAT

Buffalo 9% 6%Cow 8.5% 4.5%

After laboratory gives green signal and confirming the raw milk at the reception dock is

brought in to the house connected with the pump is sent to the milk processing plant. This is

than chilled below 4 degree C. and then stored in milk silos. After that milk is processed

which has two steps i.e . pasteurizing and standardizing .

2. Pasteurising & standardizing:

After collecting and checking and conducting laboratory tests the pasteurizing process is

conducted. To pasteurizing the milk means to kill all the germs in

The milk by a particular method which was invented by a scientist called James Paseure and

so the name pasteurization.


In pasteurizing the milk is first heated at 72 C to 76 C far 15 second and then it is

immediately cooled below 4 C. By this method they destroy the pathogenic bacteria present

in the raw milk. But if the right degree of temperature is not provided there are chances that

the milk might still contain germs.

After this process some milk goes to separator machine and remaining is proportionately sent

for standardization.

Standardization process is know as such as it bifurcates the milk in 3 categories varying

according to that FAT & SNF contents. The equipment named OSTA ---- Auto

standardization adjusts the fat directly. The computer is just ordered whether gold or

standard milk is to be rationed and the same will be received with appropriate contents.

Ready Milk = Pasteurized + standardized.

3. Separation process:

Separator machine separates two kinds of products, skimmed milk & cream, through

channels. There are 100 disks fixed in separator machines which has 5000 RPN (revolution

per minute). It is taken to the tanks to the tanks which has the capacity of 20000 liters. There

are total 8 insulated tanks in the dairy. The milk in every tanks has different position of

‘SNF’.

Whenever the milk is needed from the tank, it is tasted in the laboratory and the deficit

proportion fat is added by mixing cream. This process continue for 24 hours.

4 Quality Check:

Pasteurized milk is sent for a quality check in the QUALITY ASSURANCE lab. Of the

dairy plant. Within 14 second FAT and SNF proportion is received regarding 30 lacks liters

of milk. The total investment put into the lab by the Dairy plant is of RS. 6 crores.

This laboratory only check and analyses the powder and milk and ghee. There is a separate

ice-cream analyzing laboratory.

5 Packing Process:


After this the milk is sent for packing to the milk packing station in the dairy plant. In the

milk packaging station there are huge pipelines and behind each of them there is polyfill

machine from which the material to pack milk comes out. There are 12 such polyfill

machines in the packaging station from which the materials to pack milk comes out. From

each of these 12 machines 100 pouches are packed in one single minute. Per day each

machines having capacity of 50000 pouches. The materials which is used for packaging is

called fill farm slip and it is manufactured by a firm called.

6. Storage:

Then the milk is sent to the cold storage of the dairy where the milk is stored until it is

dispatched. Here the milk is stored at temperature ranging from 5 C to 10 C, it is

maintained with the help of exhaust fans having silicon chips. To maintain the temperature

for refrigerator amenia is used. About 40000 liters of milk is dispatched from the cold

storage of the dairy plant everyday.

The damaged pouches are kept a side and the milk is once again put to the tank.

Milk Powder

When there is excess supply of milk convert some of the excess milk into milk powder. For

converting milk powder first of all 505 of water is evaporated plant/condensing plant. By this

process they get condensed milk, it is used as a raw-materials.

There after the milk is sent to the drying plant. The spray drying plant is huge in size with a

height of 70 feet abd which of 20 feet. The plant is divided into many floors to enables easy

use of the plant. First of all the raw0materials i.e. condensed milk is put into the first floor of

the plant along with air at 200 C. by this process the remaining water which the condensed

milk might have retained is also evaporated and milk comes as powder but this is not the last

stage.

This powder is again put in to a machine is called milk calendaria, where it is turned in to real

milk powder. Its capacity is 15 minutes 1000 liters. Then again this milk powder is put into a

Dense Waise Vessel. Here the lumps are removed and uniform milk powder is sent up.


After the processing the powder is sent for quality checking at quality assurance laboratory.

After the quality confirms, this milk powder is then differentiated by adding differentiated by

adding different flavour to them like elaichi flavour, chocolate flavour & sugar free milk

powder. Thereafter they are packed in tins and boxes. Afterwards it is stored at storage

department (Torage Plant).

In summer the milk production is tremendously increased.

Butter Oil (Ghee)

After milk separation milk scanning is done. Here excess of cream is extracted form the milk

through cream separators. The scanning of milk is done till they get 99% fat and than it is

changed in to ghee.

The separated and scanned ghee is than sent for quality testing in QAL. After it confirm to

the laid standard after checking ghee is sent for packaging.

The packaging is done in tin cans or pouches like that of milk and marketed under the brand

name of Amul Ghee. The packed ghee is standard in the ghee storage department.

Process of Making Ice-cream

Milk can

Dump tank

Milk pump

Milk chiller

Milk shortage tank

Milk pump

Batch pasteurizer


Milk pump

Homogenizer

Mix chiller

Aging vat

Flavour tank

Continuous freezer

Cone machine

Packing table

Hardening tunnel

Cold storage

Cup filling machine

Chocolate coating tank

DISPATCH

PollutionUnlike many other units this unit has a its own affluent to be released per day set by the

GPCB is 1,20,000 liters of affluent per day. Entire the ratio of milk. Affluent in this plant was

1:1:2.but modernization and automation of the unit has now reduced. it affluent generation

capacity of the unit. Now it is only 700 cubic liters per day compared to1,20,000 liters earlier.


Besides the air pollution by the unit is also minimums as far pollution is concerned this unit

has a faire well in fulfilling its social responsibility towards the whole society.

1. Machines & Equipments:

Machines are the important factors of production which is highly involved in conversion or

processing of raw material into semi finished or consumable finished goods.this machines is

used to scan the qualities of milk the percentage of far, solid not fat. And it takes just 14

second for this purpose. The machines cost around Rs.30,00,000.

2. Polyfill Machine:

The polyfill machine helps to pack the milk into the pouches of various sizes. One such

machines can pack 100 pouches of milk in one single minute.

3. Milk Separator:

this machine is used in the production of ghee. The raw-material put into the surplus cream

crtracted while processing milk. And from this cream, the machine keeps extracting water out

of it until they get 99% fat.

4. Milk Calendria:

This machines is used in the production of milk powder. It is used to turn milk in to milk

powder. It is kept in the boiler plant of the unit.

5. Dense Waise Vessel:

This machine is also used in the production of milk powder. After the milk is converted into

milk powder it helps to move the lumps form the milk powder.

Other Machines & Equipments are as under:

Milk tanker

Electronic Milk Tester

Packeging machine


Milk Siolos

Hoses & Pipeline for supply for milk

Spray dying Machine

Boiler and Furnaces

Condersors

Milk Scanner

Pasteurising Machine

Lab Equipment

It is observed that the technical know how is purchased from L&T, while some of the

machine are exported from out sided country. Ice creams manufacturing equipment are

purchase from Akta Co., Italy while pouch-packing machine are purchase from France.

GCMMF is an automated fully computerized plant. The benefits that are arrived to GCMMF

due to automation are;

Increased machine efficiency

Improved quality of products

Reduction of accidents

Conversation of manpower

Decrease in time of process

Reduction of process inventory & working capital required

Reduction in cost per unit of production manufacturing

Lower cost and higher outputs

Other Departments

(A) Quality Assurance Laboratory:

Quality can be defined in narrow sense as ‘freedom from defect’. However quality has a

direct impact on product performance and hence on customer satisfaction.

GCMMF’S quality assurance laboratory all its products are tested for their respective

qualities e.g. for assuring the quality of milk there is a machine called milk scan which scans

the quality of milk within 14 seconds. The machine is a fully automatic one and so it cost the


unit RS.30 lakh. The whole laboratory itself was get us with an investment of RS. 6 crores.

All the activities of the laboratory are controlled from a control room which controls all the

activities by a computer.

(B) Milk Packing Station:

The primary function of packaging is done to contain & protect the product. In olden days

milk used to be distributed in the bottles. But as they broke very often and also due to the

difficult in transporting them now a days usually milk is packed in plastic pouches of 500 m.l.

GCMMF there is a big milk packaging station. here there are big pipelines through which

milk comes out to be packed and behind each such pipeline there is a pollyfill machine. There

are 12 such polyfill machine in the plant and each of these machines can pack 100 pouches of

milk per minute. The material used for packing is called fillfarmslip. It is a product

manufactured by a company called prepack. The unit of mother dairy itself also has a plastic

film manufacturing plant in GIDC Gandhinagar.

(C) Cold Storage:

As soon as milk is packed it cannot be distributed by the wholesalers to the various retail

outlets because it takes time to reach out and besides the time at which the milk is to be made

available to the customers has also to be considered. Therefore during that gap the milk is

stared in a cold storage of the unit. The temperature in the cold storage ranges from 5C to

10C. and in the night when it is time to distribute the milk, the milk is dispatched from here

in big trucks. Among 4,00,000 liters of milk is dispatched from per day.

(D) Spray Drying Plant:

In this plant the excess milk is converted into milk powder. For this first of all 50% water is

evaporated from the milk in an evaporating plant/ condensing plant. This condensed milk is

used as a raw material in the spray plant. The spray drying plant is huge in size measuring 70

feet high and 20 feet. This plant is divided in to some floors to enable easy handling. First

the condensed milk is put in to the first floor of the plant along with air at 200C.

And so the remaining water room which controls all the activities of the spray drying plant

like maintaining various levels of temperature etc. by a computer.


(E) Boiler:

The plant is equipped with large boiler in which a furnace is used to, make steam. I.e. heating

water at 90 C to 95 C and this in turn is used to heat milk. The boiler is huge 4-stored plant

the activities of which are completely controlled by a computerized control room. This plant

includes a machine called milk calendaria where milk is turned to milk powder. The plant

also contains a machine called a Dense Waise Vessel which removes the lumps from the milk

powder and this fine milk powder is then sent to Rilo, which is a milk powder storage tank.


Marketing Department

Introduction

Introduction is very vital function in any industry. Every company has to handle its marketing

function with care. As the whole world is turning in to a global market, marketing function is

getting more and important in every company. The term marketing is changing in the world.

Now selling product by advertising. It is not only the function of marketing. But in this new

world marketing puts weightage on satisfying consumer needs. If the market does a good job

understanding consumer needs, develops product that provide superior value and price,

distributes and promotes them effectively. This products will sell very easily.

Definition of Marketing

A social and managerial process by which an individual and groups obtain what they need

and want though creating and exchanging products and value with others.

Marketing Environment

The concept of markets finally brings as full circle to the concept pf marketing. Marketing

means managing markets to bring about exchanges for the purpose of satisfying human

wants. Thus we return to our definition of marketing as a process by which individual and

groups obtain what they need and what by creating and exchanging products and value with

others. The follow will show is the marketing environment of an industry.


Marketing Environment Chart

Above figure shows the main element in a modern marketing system in the usual situations,

marketing involves serving for market of end users in the face of competitors send their

respective products and message directly to consumer or their marketing intermediaries to

the end users.

Marketing Aspects Of Dairy Industry

India’s diary market is multi-layered, shaped like as pyramid with the base made up of vast

market for low cost milk. The narrow tip at the top is a small but affluent market for western

type milk products. The bulk of demand for milk, however is among the poor in urban areas

where individual requirement is small may be a glassful for use as whitener for their tea.

Nevertheless, it adds upto a sizeable volume of millions of litres per day in major urban

centres where lays the immense growth potential for the modern sector. Presently, its milk

distribution network serves hardly 778 out of 3700 cities and towns, dispensing hygienically

segment would double in the next five years.

Following readings are important to understand the market structure of dairy industry and

what is projected for 2000 A.D.

1. Urban V/s rural market:

“Amul – The Taste of India”

Supplier

Company Marketer

Competitor

Marketing Inter-mediaries

End User Market

Environment

78

In 1995 out of the total milk production 44% was retained in rural areas for 72.2% of

population; where as 58% of milk was brought to the urban areas for 27.8% population.

By 2000 A.D. the rural to urban ratio is projected to be 40:60. It is evident of urban bias in

the milk market.

2. Organised V/s unorganized sector:

Despite of the fact that under OF (Operation Flood) programme, the emphasis was given

on developing organised sector was only 18% in the total milk that was marketed in the

urban area. Its share is projected to increase 22% by 2000 A.D.

The index for plant capacity is also showing a rising trend for organised sector. The plant

capacity is 1950’s was around 10,000-20,000 litre per day, it increased to 1,00,000

income per day in 1970’s to 5,00,000 income per day in 1980’s and to 1 mega litre/day in

1990’s.

3. Co-operative V/s government and private sector:

Within the organised sector the ratio of co-operative V/s governments department to

private sector was 60:40. This ratio is likely to be 50:50 by 2000 A.D. as new private

sector dairies are entering in the market as a result of policy of liberalization.

The proportion of liquid milk to other milk products in co-operative and government

sector was 90:10. The estimation is this ratio will change to 80:20 and 30:70 for co-

operative and private sector respectively. This is an indication of growing market of other

milk products in the country.

Marketing Chart

State Level Marketing Federation


Milk & Milk

ProductsRevenue from Sales

District Milk Products Union Ltd

Marketing Function of GCMMF

Gujarat Co-operative Milk Marketing Federation (GCMMF)

GCMMF was the first co-operative to be set up under operation flood. GCMMF’S dairy plant

commissioned in 19994. is one of the most modern and largest plant. it can handle up to

1milion litre of milk per day. The plant also has facilities for pasteurizing and packing. The

plant has employed only the 187 people. it was funded by NDDB. GCMMF’s milk is sold

under its flagship brand Amul.

GCMMF was formed in 1973.As a apex marketing federation of 12 district milk unions of

Gujarat. To operate own marketing and distribution network in India and abroad. Joint hand

for co-operation and cares for marketing.

GCMMF sales turnover grew by 21% Rs. 15.5 billion to Rs. 18.8 billion including

consignment sales of Rs. 3.7 billion sale of Amul milk in Gujarat and Maharastra increased

by 11% and 16% respectively. Dairy product turnover is registered a19% growth.Amul butter

registered 18% growth. The sale of Amul & Sagar Ghee increased by 47%growth. Amul

Cheese registered 60% value growth.


Raw MaterialInput like seeds, cattle food, education vetsea, fertilised return profit

Village Milk Co-operative Society

Village 1 Village 3

Village 2

GCMMF’s sales to the defence services were Rs.233 million during the year, were mainly to

Barma, Uganda AND West Africa. The company plans to expand its export markets in Saudi

Arabia and other Middle East countries.

During 19998, the Amul ice-cream brand franchise was extended by launching it in 8 states

and 2 union territories.Amul ice-creams has become India’s 2nd largest brand.

New product launched during the year were Amul Pizza, Cheese and Amul slice

cheese,Amul paneer and Amul mithaee range.safal mango drink has been launched strategic

alliance with safal (A union of NDDB). The product range to be launched under the safal

brand will include fruit drinks, squashes, pickles, jams, and ketchup and mango pulp.

Amul ice-cream brand franchise was extended with launch in 8 states & 2 union

territories.Amul ice-cream has become the 2nd largest brand in the country & has garnered

major share in its existing markets in a short time span of 3 years.Amul’s main ice-cream

manufacturing facility is located at Gandhinagar. Which is Asia’s largest and most modern

integrated ice-cream manufacturing plant and uses world renewed refrigeration units and an

efficient cold chain for the regional dairy co-operatives like Mother Dairy for the northern

market. Mother Dairy for the southern market & the Patna Dairy project which commenced

production from April 98 for the eastern market.

GCMMF has become very popular because of its excellence marketing strategy. GCMMF

marketing strategy is to understand the consumer needs, develop products that provide

superior value at less price. These type of marketing has made GCMMF on of the leading

dairy in India. GCMMF has shown a tremendous commitment to the flood water situations.

GCMMF has never stopped the supply of milk and other milk products. And unlike other

competitors, it has never taken wrong benefits in these kinds of situations. All these have

made Mother Dairy No. 1 dairy in Gujarat and in India. GCMMF has developed an excellent

distribution channel to provide its products to the consumers. It has made its products in each

part of Gujarat & India.

Basic Information about GCMMF

Name of the industry: Amul Dairy Industry

Address: Amul Dairy Industry

Anand – 388001


Gujarat.

Marketed By: GCCMMF Ltd.

Anand – 388001

Gujarat.

Manufactured By: Banashkatha district

Co-operative milk producer union ltd.

Palanpur – 385001

Email Address: www.amul.com

Form of the Organisation: Co-operative society.

Year of Establishment: 1973

Executive President: S.K. Bansal

Bankers: HDFC & UTI

Members: 12 district cooperative milk producers' Union

No. of Producer Members: 2.28 million

No. of Village Societies: 11,132

Total Milk handling capacity: 6.7 million litres per day

Milk collection (Total – 2002-03): 1.86 billion litres

Milk collection (Daily Average 2002-03):

5.08 million litres

Milk Drying Capacity: 510 metric Tons per day

Cattlefeed manufacturing Capacity:

1450 Mts per day

Mission of GCMMF

Amul at Gujarat Co-operative milk marketing federation (GCMMF) endearing to satisfy and

nutritiory requirements of the customers the world through the excellence in marketing by

our committed team.

Slogan

“Amul The Taste Of India”

“Utterly, Amul Delicious”


http://www.amul.com/

“Real Milk Real Ice-cream”

Market Segmentation

Market segment is a very important function for the market department of the GCMMF,

because the market consists of buyers different in any ways. They are different their wants

resources, locating buying practices. Because buyers have unique needs and wants each buyer

is potentially separate market GCMMF has segmented its market in following variables.

Geographic segmentation:

Under these variables GCMMF has divides market into difference geographic units such as

region, states, cities etc. GCMMF sells its products by geographic segment action like in the

north where production of milk is very high the sale of Amul’s product is not much. But in

the western region it is high. GCMMF identifies this kind of variables and deals with it.

Demographic Segmentation:

Under this variable GCMMF has dividend market into several graphs such as age, genders

family, size, income, occupation etc. for the every group GCMMF marketing strategy is

different. In milk Amul targets all the class where as in the other products like butter, ghee,

ice-cream etc. is targeted to the middle and higher middle class.


Marketing Mix

Product Mix

What is Product?

A product in simple words means a set of tangible physical and chemical attributes assembled

in an identifiable and recently reorganized form.

Anything that can be offer to a market for attention acquisition use for consumption that

might satisfy a want or need. Product is a bundle of utilities consisting of various product

features and accompanying service.

Soap, Shampoo, Powder, etc. are some example of product.

Product mix is the set of all products and items that a particular seller offers for a sell. A

product mix consists of all the product lines and item that are sold by the company.

Check out this vast and ever-growing range of 'tasteful' Amul delectables!

Bread Spreads

Amul ButterUtterly Butterly Delicous

Amul LiteThe Low at Fat Bread Spread. It is made from a blend of hydrogenated refined oils, milk fats, skimmed milk powder, common salt, emulsifier, class – II preservatives, and antioxidants. Vitamin A not less than 30 IU/gm and Vitamin clamps 2 IU/gm.

Composition: Total Fat 59%Milk fat 10%

Powder Milk


http://www.amul.com/bread-lite.html

http://www.amul.com/bread-butter.html

http://www.amul.com/bread-butter.html

http://www.amul.com/bread-lite.html

http://www.amul.com/powder-milkfood.html

Amul Spray Infant Milk FoodStill, Mother's Milk is Best for your baby

Amul Instant Full Cream Milk PowderA dairy in your home

Ingredients : Tooned Milk, Vitamins A. D

Composition :Milk Fat 28%

Protein 26%

Carbohydrates 37%

Minerals 6%

Moisture 3%

Special Features : the product has more milk fat as compared to normal milk powders. It is

parked under an atmosphere of Nitrogen. The product is creamy while in colour. Marketed in

India since last 3 decades.

Product Specification : Meets ADPI extra grade standard for quality and BIS Specification No.IS:1165-1992.

Sagar Skimmed Milk PowderWhich is especially useful for diet preparations or for use by people on low calorie and high protein diet.

Sagar Tea Coffee Whitener


http://www.amul.com/powder-coffee.html

http://www.amul.com/powder-skimmilk.html

http://www.amul.com/powder-milkpowder.html

http://www.amul.com/powder-milkfood.html

http://www.amul.com/powder-milkpowder.html

http://www.amul.com/powder-skimmilk.html

http://www.amul.com/powder-coffee.html

Amulya Dairy Whitener

The Richest, Purest Dairy Whitener. It is made from partially skimmed milk and sugar.

Composition:Fat 20%

Moisture 3%

Proteins 21%

Carbohydrates 33%

Minerals 5%

Calorific Value:470 keal/100gm

Fresh Milk

Amul Fresh Milk

This is the most hygienic milk available in the market. Pasteurised in state-of-the-art

processing plants and pouch-packed for convenience.

Amul Gold Milk

Composition :Variety Fat(%) SNF(%)

Amul Gold 6 9

Amul Shakti 4.5 8.5

Amul Taaza 3 8.5


http://www.amul.com/fresh-gold.html

http://www.amul.com/fresh-fmilk.html

http://www.amul.com/powder-dairy.html

http://www.amul.com/powder-dairy.html

http://www.amul.com/fresh-fmilk.html

http://www.amul.com/fresh-gold.html

Special Features : Amul Milk is the most hygienic liquid milk available in the market. It is

pasteurised in state of the art processing plants and pouch-packed to make it conveniently

available in consumers.

Product Specification : Amul milk meets the PFA standards for the respective type of milk.

Amul TaazaSlim and Trim

Chocolate Milk

Fresh Cream

Cheese

Amul Pasteurised Processed Cheese

100% Vegetarian Cheese made from microbial rennet. Amul

Pasteurised Processed Cheese is made from sodium citrate,

common salt, citric acid, permitted natural colours, annatto,

emulsifier and class – II preservative

Composition: Fat 27%


http://www.amul.com/cheese-cheddar.html



http://www.amul.com/fresh-cream.html

http://www.amul.com/fresh-chocolate.html

http://www.amul.com/fresh-slim.html

http://www.amul.com/fresh-tazza.html

http://www.amul.com/fresh-slim.html

http://www.amul.com/fresh-tazza.html

http://www.amul.com/fresh-chocolate.html

http://www.amul.com/fresh-cream.html


Moisture 45%

Proteins 23%

Added salt 2.5%

Calorific Value:

340 keal/100gm

Amul Cheese Spreads

Tasty Cheese Spreads in 3 great flavours.

It is made from soft cheese, cheddar cheese and common salt

Composition:Fat 18-20%Moisture 60%Proteins 14-15%Added salt 1.8%

Sodium citrate 2.5%


Amul Emmental Cheese

The Great Swiss Cheese from Amul, has a sweet-dry flavour

and hazelnut aroma

Amul Pizza Mozzarella CheesePizza cheese...makes great tasting pizzas!


http://www.amul.com/cheese-mozzarella.html

http://www.amul.com/cheese-emmental.html

http://www.amul.com/cheese-spreads.html

http://www.amul.com/cheese-spreads.html

http://www.amul.com/cheese-emmental.html

http://www.amul.com/cheese-mozzarella.html

Gouda Cheese

For Cooking

Amul / Sagar Pure Ghee

Made from fresh cream. Has typical rich aroma and granular texture. An

ethnic product made by diaries with decades of experience.

Ingredients : Milk Fat

Composition :

Milk Fat 99.7%

Moisture 0.3%

Calorific Value : 900 Kcal/100g

Special Features : Made from fresh cream. Has typical rich aroma and granular texture. An

ethnic product made by dairies with decades of experience. A rich source of Vitamin A, D, E

and K.

Product Specification : Meets AGMARK SPECIAL GRADE specification of the Agmark

scheme (1938) of government in India.


http://www.amul.com/cooking-sagar.html

http://www.amul.com/cheese-gouda.html

http://www.amul.com/cheese-gouda.html

http://www.amul.com/cooking-sagar.html

http://www.amul.com/cooking-butter.html

http://www.amul.com/cooking-paneer.html

Cooking Butter

Amul PaneerReady to cook paneer to make your favourite recipes!

Dhara Edible Oils

Largest selling brand of edible oils in India.

Utterly Delicious Pizza

Mithai Mate

Sweetened Condensed Milk - Free flowing and smooth texture.

White to creamy color with a pleasant taste.

Ingredients : Sugar & Milk solids

Composition :


http://www.amul.com/cooking-mithai.html

http://www.amul.com/cooking-pizza.html

http://www.amul.com/cooking-edible.html

http://www.amul.com/cooking-paneer.html

http://www.amul.com/cooking-butter.html

http://www.amul.com/cooking-edible.html

http://www.amul.com/cooking-pizza.html

http://www.amul.com/cooking-mithai.html

Sweetened Condensed MilkTotal Milk Solids 31.% minimum

Fat 9.0% minimum

Added Cane Sugar 40.0% minimum

Partly Skimmed Sweetened Condensed Milk

Total Milk Solids 28.0% minimum

Fat 3.0% to (.0% minimum

Added Cane Sugar 40.0% minimum

Special Features : Produced on the only continuous condensing plant in the country. The

product contains on preservatives.

Product Specification : Meets BIS standards : IS : 1166

Use of Product : The product can be used to manufacture Ice Cream, Confectioneries like

Toffees, Biscuits and Sweets.

Masti Dahi

Desserts

Amul Ice Creams

Premium Ice Cream made in various varieties and flavours with dry fruits and nuts.

Ingredients : Milk and Milk products, Sugar, Stabilizers & Emulsifiers

Composition :


http://www.amul.com/desserts-icecream.html

http://www.amul.com/cooking-mastidahi.html

http://www.amul.com/cooking-mastidahi.html

http://www.amul.com/desserts-icecream.html

Milk Fat 13.5% to 14.5%

Total Solids 40% to 41%

Sugar 15% Approx.

Acidity 0.17% to 0.19%

Protein 3.9% to 4.1%

Flavours :Vanilla, Strawberry, Pineapple, Orange, Rose, Mango, Chocolate, Honey-Dew-

Melon, Tutti Frutti, Litchi, Kesar Pista, Kaju Draksh, Butterscotch, Chocochips, RajBhog and

Cashew Break.

Packing :50ml cup, 100 ml cup, 500 ml pack, 1 litre pack, 4 litre pack, Chocobar, ice

candies, Cones and Kulfies.

Product Specification : Product meets BIS specification

Amul Shrikhand

A delicious treat, anytime. It is made from chukka, sugar,

milk, curd, flavouring agents or fruits like safferum, elaichi,

mango, pineapple,etc.

Ingredients : Chakka, Sugar and flavouring agents/fruits

Composition: Fat 5.5%

Milk solid-not fat 13.5%

Sugar 40%

Flavouring agent 2.5%

Mango pulp 0.7%



http://www.amul.com/desserts-shrikhand.html

http://www.amul.com/desserts-shrikhand.html

Special Features : shrikhand is a traditional sweet. It is the only pasfeurized Shrikhand

available in the country with smooth texture and exlended shelf life. Made from most modern

dairy equipment.

Product Specification : Meets BIS specification No. IS:9532-1980

Amul Mithaee Gulab Jamuns

Pure Khoya Gulab Jamums...best served piping hot.

Gulab Jamun Mix

Kulfi Mix


http://www.amul.com/desserts-kulfi.html

http://www.amul.com/desserts-jamunmix.html

http://www.amul.com/desserts-gulabjamun.html

http://www.amul.com/desserts-gulabjamun.html

http://www.amul.com/desserts-jamunmix.html

http://www.amul.com/desserts-kulfi.html

Amul Chocolates

The perfect gift for someone you love.

Ingredients : Sugar, Cocoa Butter, Milk Solids, Chocolate mass

Composition :

Milk Fat 2%

Sugar 55%

Total Fat 32-33%

Coca Solids 7.5%

Milk solids 20%

Special Features : Meets all requirements under the PFA for boiled sugar confectionary

Healthy Drink

Nutramul

Malted Milk Food made from malt extract has the highest protein content among all the

brown beverage powders sold in India.

Composition: Fat 6.5%

Moisture 2%

Proteins 11.5%

Carbohydrates 70%


http://www.amul.com/healthy-nutramul.html

http://www.amul.com/desserts-chocolates.html

http://www.amul.com/desserts-chocolates.html

http://www.amul.com/healthy-nutramul.html

Starch & sugar 23%

Cocoa powder 8%

Packaging and Labeling Strategy

It refers to wrapping, crafting, filling or compressing of goods to protect them from spoilage,

pilferage, breakage, leakage etc. various kinds of goods are placed of packed into appropriate

containers for protection and convenient handling. Bulky materials like cotton and jute are

compressed into bales. Liquid material like oil and milk are put into bottles and cans. Heavy

goods ate orated and fragile products ate placed in boxes, tins or special containers. The

packing implies placing products in suitable package for safe and easy handling. Packing

involves designing and producing appropriate package for products. It is concerned with the

determination of convenient size lots in which the products is to be put on the market and

creation of proper package for different lot sizes, a package is a case container, wrapper or

other receptive used in packing products.

PRODUCT PACKING

Amul pasteurized butter Cardboard

Amul processed cheese Tins & cardboard

Amul milk Plastic polythenes

Amul full milk cream powder Tins

Amulya dairy whitener Tins

Amul cheese spread Plastic cups

Amul lite bread spread Plastic box

Amul pure ghee Tins

Amul Ice-cream Plastic cup

Amul mithaee mate Tins

Labeling

Label is a subject of packaging. Labeling helps in

- Identifying the Products

- Describe the Products

- Promoting the Product through attractive graphics.


All the dairy product marketed by GCMMF on the label-the brand name ‘Amul’. Moreover it

carries all necessary details like Co.’s name, address, date and year of manufacturing, batch

no., M.R.P., punch line etc. Thus the Amul has well design packaging and labeling strategy.

Pricing

PRICE MIX

What is Pricing?

The amount of money charged for a product or service, on the sum of the values that

consumer exchange for the benefit of having the product or service.

In general price is the amount of money charged for a product or service. Historically price

has been the major factor affecting buyers choice. Price is one of the flexible element of the

price mix.

This is the marketing strategy by which companies set price of their product by which they

can decide to when they should target in the market and how to position themselves in the

market. Therefore the company have three choices:

1. Setting a uniform price:

In this strategy the company would have as same price of each product in each region or

each sector of the market. This would result in the price being too high in poor countries and

not too high in rich countries.

2. Setting a market based price:

Here the company would set a price in such a way that every consumer can afford it but this

ignores differences in the actual cost from one market another.

3. Setting a cost based price:

Here company would use a standard mark up of its cost everywhere but this strategy price the

company can be out of the market where it cost is high.


Prices of the Product

The following are the different prices of different products of Amul industries:

Milk and Milk Product

Amul Butter Prices

100 gm 14.00

200 gm (Amul lite) 20.00

500 gm 60.00

Amul Cheese

Chiplet 200 gm 45.00

Cheese 1 kg 154.00

Mozzarella 1 kg 150.00

Mozzarella 250 gm 48.00

Cheese Slice 100 gm 23.00

Cheese Slice 200 gm 43.00

Cheese Tin 400 gm 72.00

Emmental 200 gm 60.00

Amul Cheese Spread

Garlic 200 gm 28.00

Plain 200 gm 28.00

Pepper 200 gm 28.00

Amul Ghee

15 litre Tin 2270.00

1 litre Tetra pack 155.00

1 litre Tin 160.00

2 litre Tin 315.00

200 ml Tetra pack 30.00

500 ml Pouch 79.00


Sagar Ghee

1 litre Tin 160.00

2 litre Tin 315.00

500 ml Pouch 79.00

Liquid Milk

Gold 5 litre Pouch 90.00

Gold 500 ml Pouch 9.00

Shakti 500 ml Pouch 8.00

Taaza 500 ml Pouch 7.00

Saathi 500 ml Pouch 6.00

Butter milk 500 ml Pouch 3.00

Masti Dahi

100 gm 4.00

200 gm 7.00

200 gm pouch 5.00

400 gm pouch 14.00

UHT Long Life Milk

Gold 1 litre 24.00

S & T 1 litre 20.00

Taaza 1 litre 22.00

Gold 200 ml 7.50

Taaza 200 ml 6.50

Chocolate milk 20 ml 10.00

Panner

Panner 1 kg 95.00

Panner 100 gm 11.50

Panner 200 gm 22.00


Amul Shrikhand

Elachi 100 gm 9.00

Elachi 200 gm 17.00

Elachi 500 gm 38.00

Elachi 1 kg 55.00

Kesar 100 gm 9.00

Kesar 500 gm 40.00

Mango 100 gm 9.00

Mango 500 gm 40.00

Badam-pista 200 gm 20.00

Badam-pista 500 gm 45.00

Amul Chocolates

Choclaire 1.00

Milklairs 1.00

Badam bar 35 gm 10.00

F & N 40 gm 15.00

Chocolate milk 18 gm 5.00

Chocolate milk 35 gm 10.00

Nutramul

500 gm Jar 76.00

500 gm RFI 72.00

Amulya

200 gm RFI 30.00

500 gm RFI 70.00

Gulab Jamun

1 kg Tin 72.00

500 gm Tin 40.00


Mix 200 gm RFI 30.00

Amul Mithaimate

400 gm Tin 30.00

Amul Spray

1 kg Tin 138.00

1 kg RFI 130.00

500 gm Tin 72.00

500 gm RFI 68.00

Sagar S.M.P

S.M.P 500 gm pouch 50.00

Amul Instant Formula

Formula – I 105.00

Formula – II 95.00

EDIBLE OIL

Dhara Groundnut Oil

DFGO 1 litre pouch 52.00

DFGO 1 litre tetra 56.00

DFGO 5 litre jar 270.00

Dhara Mustard Oil

DFGO 1 litre tetra 45.00

DFGO 1 litre jar 240.00

Dhara Health

1 litre pouch 59.00


1 litre tetra 61.00

15 litre jar 750.00

5 litre jar 310.00

ICE - CREAM

Vanila

50 ml 5.00

100 ml 10.00

500 ml 35.00

1 liter/1.25 litre 60.00

4 litre/5 litre 230.00

Strawberry

50 ml 6.00

100 ml 10.00

500 ml 35.00



Pineapple

100 ml 10.00

500 ml 35.00

1 litre 65.00

Alphanso Mango

100 ml 15.00

500 ml 60.00

1 litre 100.00

Chocolate

100 ml 12.00

500 ml 60.00

1 litre 100.00


Rose

100 ml 10.00

500 ml 35.00

1 litre 65.00

Anjir

100 ml cup 15.00

500 ml 65.00

1 litre 120.00


Fresh Strawberry

100 ml cup 15.00

500 ml 60.00


Fresh Litchi

100 ml 14.00

500 ml 60.00

1 litre 110.00

Cappucino

100 ml 14.00

500 ml 60.00

1 litre 110.00

Butter Scotch

100 ml 10.00

500 ml 50.00

1 litre 110.00

Kaju Draksh

100 ml cup 13.00

500 ml 50.00


1 litre/1.25 litre 90.00

Kesar Pista

100 ml 15.00

500 ml 60.00

1 litre 100.00

Raj Bhog

100 ml cup 15.00

500 ml 65.00

1 litre 120.00

Black Current

100 ml cup 15.00

500 ml 65.00

1 litre/1.25 litre 120.00

Roasted Almond

100 ml cup 15.00

500 ml 65.00

1 litre 120.00


Tricone

Butter Scotch 120 ml 15.00

Chocolate 120 ml 15.00

Mini cone 50 ml 5.00

Milk Bars

Frostik 80 ml 15.00

Chocobar 60 ml 10.00

Mango Dolly 60 ml 10.00

Rasberry Dolly 60 ml 10.00

Shahi Badam Kulfi 60 ml 10.00


Shahi Pista Kulfi 60 ml 10.00

Mava Malai Kulfi 60 ml 10.00

Green Pista Kulfi 60 ml 10.00

Mini Chocobar 40 ml 6.00

Orange Candy 60 ml 5.00

Mango Candy 60 ml 5.00

Fundoo

Vanila Ball 100 ml 10.00

Strawberry 100 ml 12.00

Mango 125 ml 14.00

Sundae 125 ml 15.00

Mava Malai Kulfi 35 ml 5.00

Green Pista Kulfi 35 ml 6.00

Mango Candy 35 ml 5.00

Orange Candy 35 ml 5.00

Popsicle 45 ml 1.50

Pizza

Regular Pizza 20.00

Jain Pizza 20.00

Premium Pizza 30.00

Softy Ice-cream Mix

Vanila Ball 1 litre 50.00

Butter Scotch 1 litre 50.00

Pineapple 1 litre 50.00

Strawberry 1 litre 50.00

Chocolate 1 litre 50.00

Softy Cone 70 ml 5.00


Place

Place is marketing tool which includes the various activities the company undertake to make

the product accessible and available to the target customers.

Amul has a good channel of distribution having more than 3000 dealers which the customers

to have their product.

Now Amul are spreading in all over the India. Amul’s offices in Ahmedabad are around 15

and 50 in all over in India. Thus, we can say that Amul dairy industry is very well established

in India.

Amul’s products or milk is transported to dealers by vans everyday for their customers giving

the quality product.

Place Decision

Retailers often cite three critical factors in retailing success. Location, location and location?

A retailers locations is key to its ability to attract customer. The cost of building on leasing

facilities have a major impact on the retailers’ profits. Thus, building on leasing facilities

have a major impact on retailers profit. Small retailers may have to settle for whatever

location they can finally afford. Long retailers usually employ specialists who select location

using advanced method.

Amul owns there own retail shops. They have introduce new projects of

Vishramnagar

Audagarden, Ahmedabad - 380052

Ghatlodia

Audagarden, Ahmedabad- 380060

Thaltej

Audagarden, Ahmedabad – 380054


Pragatinagar


Premchandnagar


Vijay Cross road


Shyamal Crossing


Police head quarters


NID

Audagarden, Ahmedabad

Civil hospital


In this way we consider the people of India mostly go to consume ice-cream like

Promotion

Sales Promotion is a key ingredient in marketing campaigns. Where advertising offers a

reason to buy, sales promotion offers an incentive to buy.

Objectives of Sale Promotion

For Amul the objective of sales promotion for consumers are as follows:

- To attract new triers.

- To increase repurchase rate of occasional users.

- To stimulate short term sales.

- To attract brand switchers.


Sales Promotion Tools

There are two types of Sales Promotion tools:

1. Consumer Promotional Tools

Major Consumer promotional tools used by Amul are

- Price packs

- Extra benefits like 20gm Cheese free on 50gm Cheese pack, one jar free on 2 lt.

Ice-cream family pack.

- Amul introduces schemes like Dhanteras scheme in which on the purchase of ice-

cream you get free plastic containers.

- Amul introduces schemes like free home delivery within 2 kms for order of Rs.

150/- or more.

- Amul also arranges marriages party on birthday parties orders. They also offers

free catering services.

2. Trade Promotional Tools

Retailers or distributors are offered discounts or price of on the M.R.P. which may

range from 10-15 %.

3. Business Promotional Tools

These tools are used to acquired lead over its regional competitors as well as to

interest and reward the customers. Amul in trade shows and fairs and setup booths

and displays to demonstrates its products. It also offers coupons and gifts during these

trade shows and fairs to customers who purchase any products during such shows and

win lucky draws.

Advertising

Advertising can be traced back to the very beginning of recorded history. Any paid form of

non personal, presentation and promotion of ideas goods or services by an identified sponsor

is known as advertising. Advertising is very important tool to combat competition.

Amul has got many competitors to compete with. So the company has to give out adapting in

new s papers and magazines at regular interval time period.

GCMMF success lies in its excellence advertisements in the market. In the beginning

GCMMF was nothing that much important on advertisement. But after some time it


understand that if it was to enter in the Indian market, it would have to advertisement its

product largely in the market so it stated advertisements its products in different media.

Just recently it has adopted a new message or slogan that says “Amul, The taste of India” and

GCMMF has recorded 12% rise in the sales of its products. GCMMF has made its products

very popular by advertisement in all the parts of India.

Different Advertising Objectives:

Informing

When a product is to be introduced in the market the product gives the information about it in

advance. In this case objectives is to be build the ad in customers mind. At the time of

Uttarayan Amul introduce a new concept of ‘kite bite’ and ‘chocolate chikki’.

Persuasive advertising

Advertising used to build selective demand for a brand by persuading consumers that it offers

the best quality for their money.

Combined Advertisement

Amul gives advertisement of Nutramul as well as Sagar ghee and also provide inter related

scheme.

Reminding Advertising

Reminding customers that the product may be needed in the near future reminding customers

where to but the product keeping the product in customers minds during off seasons

maintaining top-of-mind position and product awareness.

Amul advertises itself by giving advertisements everyday in newspaper and especially on

Sunday, they provide many schemes and discounts.

Entertainment Zone

Books

The Amul India Story

Ruth Herediya


Management Kurein Style

MV Kamath

The Unfinished Dream

V. Kurein

Sponsored Programs

Amul Surabhai

Doordarshan, India

Amul India Show

Star Plus Channel

Feature Films

Sardar – The Iron man of India

Ketan Mehta

Manthan

Shyam Benegal

TV Films (Coming soon)

Utterly Butterly Amul

New 30 sec. TV film

Amul: The taste of India

TVC: 60 sec film

Amul Golden Jubliee

Manthan TV film: 60 sec film

Amul Cheese

TV film 40 sec TV film

Amul Ice-cream

TV film 40 sec TV film

Distribution Channel

Most producers work with marketing intermediaries to bring their products to market. The

marketing intermediaries make up a marketing channel also called distribution cannel.


Distribution channels are sets of interdependent organizations involved in the process of

making a product or service available for use or consumption.

A zero level of channel also called a direct marketing channel consists of a manufacturer

selling directly to the final customers.

A one level channel; contain one selling intermediary such as retailer to the final customers.

A two level channel two intermediaries are typically wholesaler and retailer.

A three level channel are typically wholesaler, retailer and jobber in between.

GCMMF has an excellent distribution. It is its distribution channel, which has made it so

popular. GCMMF’s products like milk and milk products are perishable. It becomes that

much important for them to have a good distribution.

So Amul dairy industry has two level distribution channel in which there are a wholesaler,

retailer to final customer.

Distribution Chart


Products

Agents

Wholesaler

Retailer

Consumer

We can see from above figure that GCMMF distribution channel is simple and clear. The

produced in the plants are sold to whole sale dealers than to retailers and then the products

comes in the hands of the consumers.

Forecasting Demand

GCMMF produces perishable goods so it becomes very important for them to forecast the

market demand for its products. In any industry forecasting the demands always remain alert

in forecasting the demand. In different like in the summer, in monsoon season sometimes

flood water situations appear in these situations demand of milk may go high.

In the case of GCMMF, it has been observed that sales forecast is on the bases of projection

made by utilizing past sales data.

Next year’s Sale = Current year’s Sale X Current year’s sales Last year’s sales

Branding

Branding is a very important part of a production. Consumers view a brand as an important

part of a product and branding and value to a product. For example, most consumer would

buy Amul’s gold brand of milk very easily. But if the same milk is put into an unpopular

company’s brand. The people might not give that much important to it.

GCMMF made branding a major issue in its product strategy. Developing a branded product

requires a great deal of long term marketing investment for GCMMF.

Management of Information System

GCMMF federation has now integrated it’s country-wide operations through successful

implementation of the “enterprise wide Integrated Application System”. GCMMF is among

the top 100 IT users in the country. Currently there are mote than 3000 computers installed in

different village societies, which support the Automated Milk Collection System. GCMMF

distributors can now place their order on their internet website www.amulb2b.com . We


continue to receive a good consumer response to our website www.amul.com which is noted

for its distinct features like Cyber Store for ice-cream and other milk products, cricket ratings

and the recently launched e-greetings site.

Managing Competition

The Indian market is dominated by a large number of small local manufacturer and regional

players. There are an estimated 150 manufacturers in the organized segment which accounts

for 30-35% of sales and about 1000 units in the unorganized segments of the market.

In the organized segment the significant brands are Kwality Walls , Vadilal, Amul, Mother

dairy and Baking Robbins.

They have also competitor in the market. They felt very tuff competition in our country and

outing countries

For Liquid Milk

Payal Milk

Sardar Milk

Super Milk

Sagar Milk

Gayatri Milk

Samruddhi Milk

For Ice–cream products

Gokul Ice-cream

Dairy-den Ice-cream

Quality Walls Ice-cream

Havmior Ice-cream


Max

Vadilal Ice-cream

For Ghee Product

Gopi ghee

Krishna ghee

Gayatri Ghee

Abad ghee

Butter

Nature butter

Chocolate

Cadburry

Max

Dairy Milk

Five Star

Nestle

Cheese

Britannia

Lebon

Products Life Cycle

All products have a limited life. They passes through different stages of life cycles:

o Introduction Stage

o Growth Stage


o Maturity Stage

o Decline Stage

As far as dairy products is concerned, it is in the “Maturity Stage” of the product life cycle.

Thus though dairy industry in maturity stage, still it has lot of market potential in the coming

years.

Marketing Strategies as a Market Leader

Differentiation and Positioning Strategies

Differentiation Strategies

Any market offering an be differentiated along five dimensions:

- Product, Services, Personnel, Channel, or Image

** Amul’s differentiation strategies are …………

- It’s major focus on distributors and retailers. It offers 10-15 % margin to distributors and

5-7% to retailers which is higher than competitors.

- Another differentiating point is its quality.

- The lots of flavors of it’s dairy products is also different from its competitors.

- It’s pricing is very reasonable compare to competitors.

Positioning Strategies

It has tries to position through punch line like “Amul- The Taste of India” for its all

products.

Marketing Ethics

There are some marketing ethics followed by NDDB. They all are given 7 discussed briefly.

To provide good quality product:


To provide good quality product is the first ethic of marketing each & every profit making

organization has to follow this. Because if you provide good quality product, customers will

be satisfied. Satisfied customers create a successful company.

To provide speedy & efficient service:

It is another one important marketing strategy. An organization should try to provide speedy

& efficient service that gives the customer satisfaction. An organization is providing speedy

services that is must.

To give people knowledge about nutrition:

NDDB is the unit which is connected with milk & only milk. As we know, milk has greater

nutrition value. People connected with NDDB are expects in this field. So many doctors are

also with them. The main tasks of their selves is to sat the people that milk and milk products

are very useful for the over all working of our body. By much advertisement they are telling

us that milk products are necessary for body.

To create Customers:

The basic ethics of marketing is to create, customers. We can create customers by providing

good quality product & highly efficient service. It is our gain to create as more as possible

customer.

Here, we had seen the marketing ethics followed by the NDDB and GCMMF which helps to

take diploid about marketing policies.


FINANCE DEPARTMENT

Introduction

Financial management is that managerial activity which is concerned with the planing and

controlling of the firm’s financial resources. Finance is nothing to other but the money.

Money is necessary input for economic activities. In the other wards “Finance is the common

denominator the vast range of corporate objectives. The major part of any corporate plant

must be expressed in financial term”.

This unit is co-operative, so the finance is raised from members by a way to share capital. In

this share capital is limited. This unit has invested so many rupees in the structure of

organization. Finance for this unit based on share capital they are given 15% dividend to the

share holders. Amul has a long term finance project.

Financial Details

Name of bankers

The Kaira district

State Bank of India

State Bank of Saurashtra

UTI Bank Ltd

Corporation Bank

Name of Auditors : K S DESAISpecial Auditors (Milk)

Milk Audit OfficeAnand


Highlights Of Trading And P & L Account

Particulars 2001-2002 2000-2001

Purchases

Sales

Processing expenses

Packing expenses

Power & Fuel expenses

Salary & wages

Repair & maintenance

Raw material consumption

Marketing expenses

Miscellaneous expenses

2863073762

4687806783

12473006

267523189

233990391

132527532

33726844

800117555

2596396

2223598

3127610687

5091812736

17433143

337660231

295347066

127628470

37935798

873255754

3195280

2688325


Trend Analysis of Profit & Loss Account for Period

Particulars 31/03/2001 31/03/2002 Sales 100 92.07Increase/Decrease of Stock 100 (91.54)Total Income 100 92.90ExpensesCOGS 100 93.92Processing expenses 100 71.55Packing expenses 100 79.23Power & Fuel expenses 100 79.22Salary & wages 100 103.84Repair & maintenance 100 88.91Raw material consumption 100 91.62Marketing expenses 100 81.26Miscellaneous expenses 100 82.71Total Expenses 100 92.90Net profit transferred to capital A/c

100 113.55

Interpretation:

The sales are increased by 7.93%. The company has controlled raw material cost significantly

and has attained economic of scale. The salary & wages expenses is increasing. The


processing expenses is decreasing. The selling & distribution expenses are decreasing. It has

to manage the cutthroat competition.

Common Size Statement of Profit & Loss Account for Period

Particulars 31/03/2001 31/03/2002 Sales 100 100Other income 38.58 38.93Increase/Decrease of Stock 61.42 61.07Total Income 100 100Expenses

Processing expenses 1.03 0.85Packing expenses 19.92 18.01Power & fuel Expenses 17.42 15.76Salary & Wages Expenses 7.53 8.92Repair & Maintaince Expenses

2.24 2.27

Raw material consumption 51.52 53.87Marketing expenses 0.19 0.17Miscellaneous expenses 0.15 0.15Total Expenses 100 100

Interpretation:

The proportion of other income is increased. So that the reducing in decrease in stock. The

proportion of processing, packing, marketing, power & fuel expenses is decreasing. The

salary & wages and repair & maintenance expenses is increasing. So that company is try to

reduce their expenses.

Highlights Of Balance Sheet

Particulars 2001-2002 2000-2001


Share capital

Reserves & surplus

Loans

Current liabilities

Fixed Assets

Investment

Stock

Advances & debtors

Cash & bank balance

200000000

729968022

1180019189

569515380

2402873468

135732554

742763385

464370707

331549715

200000000

727935581

150985785

557005785

2390406846

132240711

761026395

618710965

326145366

Trend Analysis of Balance Sheets As On that Date

Particulars 31/03/2001 31/03/2002 Capital & Liabilities:Sources Of Funds:Share capital 100 100Reserves & surplus 100 101Loans 100 7.82Current liabilities 100 102.25Total Sources of Funds 100 163.79Assets

Uses of FundsFixed Assets 100 100.52Investment 100 102.64Current AssetsInventories 100 97.60Advance & Sundry Debtors 100 75.05Cash & Bank Balance 100 101.66Total Uses Of Funds 100 163.79

Interpretation:


The reserve & surplus is increased so that most of the profit is distributed to reserve &

surplus. So that it is good for the company. Net fixed assets is increased. The investment is

also increased. Inventories is decreased. So that it is good of the company. So that company

in not face the working capital, problem. The loans decreased 100 to 7.82 so that company is

to pay less interest. So that profit is increased. The company has relied on long term debt for

equity. So that it is good or the company.

Common Size Statement for B/S as On Date

Particulars 31/03/2001 31/03/2002 Capital & LiabilitiesSources Of FundsShare capital 12.23 7.46Reserve & Surplus 44.50 27.25Loans 9.23 44.04Current Liabilities 34.04 21.25Total sources of fund 100 100AssetsFixed Assets 56.53 58.93Investment 3.13 3.33Current AssetsInventories 18.00 18.22Advance & Sundry Debtors 14.63 11.39Cash & Bank Balance 7.71 8.13Total Uses Of Funds 100 100

Interpretation:

The proportion of the capital is reduced. Because of increasing the loan. So that the company

is to pay higher interest rate. The debt of the company is increased. The reserve & surplus of

the company is reducing. The proportion of the liability of the company is reducing from

34.04 to 21.25. The company has efficiently used fix assets to augment sales. Half of the

capital is invested in fix assets. The proportion of the inventory is moderate. The recovery of

the bill receivable is fast. Company is trying to reduce the fix cost.

Ratio Analysis

Ratios 2000-2001 2001-2002


Liquidity Ratio

Current ratio 3.30 2.36Quick ratio 1.93 1.64

Turnover Ratio

Inventory turn Over ratio 1.17times 1.36timesDebtor turnover ratio 44days 36daysCreditor turnover ratio 20days 18days

Leverage Ratio

Debt equity ratio 0.75 5.90

Profitability Ratio

Net profit margin 0.25 0.31Return on Assets 0.54 0.61ROCE 1.00 1.32Return on total assets Turnover

0.26times 0.25times

Interpretation:

The company has high current ratio so it has the ability to discharge current liabilities by

generating cash from current assets. So it is good for the company.

The company enjoys high debt equity ratio it shows the aggressive entrepreneurial spirit of promoters. So the company has to increase the burden. Because company is to pay high interest.

Inventory ratio is low. So it shows the inefficiency of inventory mgt. Soothe Company is try

to increase the inventory turnover ration. It is bad for the company.

So that average collection period is low. So that it is good for the company.

The net profit margin is around o.31. So that company is try to increase the net profit. The

return on fixed assets is low. So that the money is blocked. The financial position is

unsatisfactory.

Distribution Of Profit


2001-2002 2000-2001

Net Profit

DISTRIBUTION

Reserve fund (25%)

Contribution toward

education fund of Gujarat

co-operative union

Share dividend (15%)

Dividend equalization fund

General reserve

Charity fund

Co-operative propaganda

Education fund

Research & development fund

14574181

3643545

300000

10410000

165477

44127

11032

-----

-----

12834473

3208618

300000

9110000

43171

138147

17269

8634

8634

SALES TURNOVER OF THE AMULS

Sales Turnover Rs. (Million) Us $ (Million)1994-95 11140.00 355.001995-96 13790.00 400.001996-97 15540.00 450.001997-98 18840.00 455.001998-99 22192.00 493.001999-00 22185.00 493.002000-01 22588.00 500.002001-02 23365.00 500.00

Sales Turnover Graph


Significant of Accounting Policies

The union follows accrual system of accounting

in the preparation.

The financial statements are prepares on the

historical cost convention and in accordance with the generally accepted accounting

principles.

Fixed Assets are values at cost.

Depreciation on fixed assets is provided on

written down values methods.

Raw Materials, packing Material, Semi Packed

Goods And Goods in Transit are valued at cost on FIFO basis.


Finished goods in case of Anand, Kanjari,

Mogar and Khatraj are valued at the Ex-

factory price less 8%, which is fair estimation of the Direct Cost.

Excise duty applicable on Finished Goods stock

has been include in the valuation of Finished Goods.

Sales includes excise Duty.

Investment is for long term period and is stated at cost.


DUPOINT ANALYSIS FOR THE YEAR 2001-02


Return on Total Assets : 0.61 %

Net Profit Margin : 0.31% Total Assets Turnover : 0.26 times

N.P. : 14574181 Net Sales : 4687806783

Net Sales : 4687806783

Total Assets : 4077289829

Net Sales : 4690030381

Total Cost : 1485178511

COGS : 1024615466 Operating Exp.: 460563045

Fixed Assets:2402873468

Current Assets:1674416361

Cash + Bank:331549715

Debtors :464370707

Inventory :742763385

Others:135732554

R & D DEPARTMENT

The Research and Development facilities of Amul dairy endeavors continuously to bring out

new and delivery flavors. The company does not a point any special staff for approval of its

new vanities managers themselves keeping contributed in this regard.

The main purpose of its plant to increase export. They develop their production process to use

new technology. Research and Development has also taken a sponsored project.


MICHALE PORTER`S FIVE FORCE ANALYSIS

According to Porter (1980) a firm must be analyzed in relation to its industry. Factors

outside the industry tend to influence all the industry’s firms in the same way and are

thus not as important to study.

To a large extent, industry structure governs the strategies open to the firms. The

profitability and attractiveness of an industry is dependent of the level of competition.

Competition in an industry originates from industry structure and goes well beyond

the behavior of individual competitors.

According to Porter, each industry has a potential profitability and the profitability for

the firms is dependent on the competitive forces in the industry. Porter identifies five

competitive forces that derive from the ambition to obtain as large share of the

profitability as possible. The five forces are the foundation of the five-force model.

Porter’s Five-Force Model:

In coping with the five forces, there are three potentially successful generic strategic

approaches to outperform other firms in an industry:


Overall cost leadership:

The firm commits it self to being the cheapest alternative. Cost reduction must be

applied throughout the firm. The cost leader competes head on with all other firms in

the industry. Favourable history with first mover advantages

Amul dairy face tremendous level of competition. Further there is old and

conventional culture still exists in the Amul dairy. Every is trying to capture other’s

pie in the market share. Every day each player comes out with the new strategies and

innovative products. They always diffentiate their brand with those of competitors.

The major competitors of the Amul dairy include:

FOR MILK

I. Gayatri

II. Royal

III. Sardar

IV. Uttam


V. Shreshta

FOR ICE CREAM:

I. Vadilal

II. Havmore

III. Dairy den

FOR GHEE:

I. Gayatri

II. Nestle

FOR MILK POWDER:

Nestle

FOR CHOCOLATE:

I. Nestle

II. Cadbury

The success of the national and local competitor’s brands includes effective

distribution system, advertising, good pricing policy etc. The major porter’s factor

can be listed and described in context of Amul dairy such as

1) Threats of new entrants

2) Bargaining power of suppliers

3) Bargaining power of buyers

4) Rivalry among competitors

5) Threats substitutes

Above factor can be shortly briefly known by following points.


1) Threats Of New Entrants :

Amul dairy is co-operative society. That means “cooperation among

competitive” is the fundamental principle. Amul dairy is managed under the

norms of GCMMF and market the products under the brand name ‘Amul’,

which has good reputation at domestic and international level. Here, the raw

material procurement is very difficult for the new entrants. Consequently

Capital requirement is also high. Still new entrants are emerging such as

domestic and international players. So the treats of new entrants are moderate.

Government rules and regulation are not favourable for new entrants. Raw

material is also depending on the villagers who are mostly depend on good

rain. In the seasonal uncertainties will also restrict the new entrants to

establish the new plant.


2) Bargaining power of supplier :

The objective of Amul dairy is not profit making. As it is a part of co-

operative society, it runs for the benefit of farmers those are the supplier of

milk and users of milk product. According the concept of the cooperative

society supplier has bargaining power to have a good return on his or her

supply. However, supplier has limited rights to bargain with the cooperative

society because it made and run for the sake of mass not for individual

benefit.

There is moderate bargaining power of the supplier. In olden days there were

not any kind of cooperative societies as the farmer was exploited. But,

nowadays the farmer’s right has been protected under the cooperative rules

and regulations, which ultimately result in moderate power of bargaining from

the supplier.

3) Bargaining power of buyers :

Amul dairy is having state of the art technology bring down from Denmark

German. And except loose milk vendor mother dairy is the single district level

seller of the milk. However the Amul dairy is bound by the norms of

federation. So, the pricing policy will be decided only by GCMMF and

customer would have not have bargaining power. In nutshell, the bargaining

power of the buyer is low.

4) Rivalry among competitors:

The products of the most of dairy which are listed under the Gujarat

cooperative milk marketing federation are marketed under the one unique

name ‘Amul’. Though, it is not having competition from the domestic level.

Amul dairy which is at the state level faces the competion from Nestle,

Britania, Gayatri dairy, sugam, Dairy dan. The major competitor of the Amul


in ice-cream category is HLL’s kwality wall’s.Although, dairy is not having

tough competition from the local players but international level it is exist.

5) Threats Of Substitute :

Most of the milk and milk products substitute are very low. Milk powder can

be taken as a close substitute for the milk. In case of the ice-cream category

the close substitute is cold drink and soft drinks. So, the substitute of the milk

and milk product is completely low.


SWOT Analysis of GCMMF

STRENGTHS:

Demand profile: Absolutely optimistic

Margins: Quite reasonable, even on packed liquid milk.

Flexibility of product mix: Tremendous. With balancing equipment, you can keep on

adding

to your product line.

Availability of raw material: Abundant. Presently, more than 80% of milk produced is

flowing into the unorganized sector, which requires proper channelization.

Technical manpower: Professionally-trained, technical human resource pool, built over last

30 years.

WEAKNESSES:

Parishability:

Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely,

many new processes will follow to improve milk quality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk yield.

However, increased awareness of development like embryo transplant, artificial

insemination and properly managed animal husbandry practices, coupled with higher

income to rural milk producers should automatically lead to improvement in milk yields.

Logistics of procurement:

Woes of bad roads and inadequate transportation facility make milk procurement

problematic. But with the overall economic improvement in India, these problems would

also get solved.

Problematic distribution:

Yes, all is not will with distribution. But then if ice creams can be sold virtually at every

nook and corner, why can’t they sell other dairy products too? Moreover, it is only a

matter of time before they see the emergence of a cold chain linking the producer to the

refrigerator at the consumer’s home.


Competition:

With so many newcomers entering this industry, competition is becoming tougher day

by day. But then competition has to be faced as a ground reality. The market is large

enough for many to carve out their niche.

OPPORTUNITIES:

“Failure is never final and success never ending.” Dr. Kurien bears out this statement

perfectly. He entered the industry when there are only threats. He met failure head-on and

now he clearly is an example of “ Never ending success.” If dairy entrepreneurs are looking

for opportunities in India, the following areas must be tapped.

Value addition:

There is a phenomenal scope for innovations in product development, packaging and

presentation. Given below are potential areas of value addition.

Steps should be taken to introduce value addition products like shrikhand, ice-cream,

panner, khoa, favored milk etc. This will lead to a greater presence and flexibility in the

market place along with opportunities in the field of brand building.

Addition cultured product like yoghurt and cheese lend further strength both in terms of

utilization of resources and presence in the market place.

A lateral view opens up opportunities in milk proteins thro’ casein, caseinates and other

dietary protein, future opening up export opportunities.

Yet another aspect can be addition of infant foods geriatric foods and nutritionals.

Export potential:

Efforts to exploit export potential are already on. Amul is exporting to Bangladesh,

Srilanka, Nigeria, and Middle East. Following the new GATT treaty, opportunities will

increase tremendously for the export of agri-products in general and dairy products in

particular.

THREATS:


Milk vendors, The un-organized sector

Today milk vendor are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.


CHALLENGES TO BE MET

Expansion up grading of plant and equipment to meet increasing demanded for quality and

quantity with the help of better qualified personnel.

Rapid increase in productivity while respecting the basic man land animal dynamic that is

control to dairy and agriculture development in India.

Development of new markets and expansion of old ones replacing additional system with

quality packaged milk products and vegetable.

Creating a national information network to ensure that accurate timely information is

available to all who need it.

Rapid progress towards the highest quality standard strengthens institutions leaders,

managers and members.


RECOMMENDATION

Suggestion to Production department

1) Sources of raw materials the one and only source from where they procure milk are

village milk societies so they need to strengthen relation with villagers.

2) Department must have to develop strict standard for Quality control milk because

milk is perishable product so advance testing lab is required.

3) Though the good technology used by the dairy advance and automated technology

will be introduce to lower the rate of exposure of the product to human being.

4) All the workers should be allowed with good safety.

5) Sanitation shall be kept clean and hygienic.

Suggestion to marketing department

1) The Company should adopt scientific ways to allocate and manage the resources

for advertisements and sales promotion so as to gain optimum results

2) Amul should design it’s own marketing research system. It should hire people to

carry out systematic market research and surveying the following areas.

- To know consumer taste, preferences and their consumption and buying

pattern.

- Before launching new products in the market.

- Retailers and distributors survey from time to time to know competitors tricks

and practices as well as the satisfaction level.

3) Instead of advertising on national level, one more option that the company should try for

promotion of its brands is to give add on local cable TV network.

4) There should be no gaps in products like more flavor, more scheme, reasonable price etc to

compete the local players as well as competitors.

Suggestion to H.R. department

1) There should be professional approach.

2) They should provide professional training to field force for specific time period for

sharpening selling skills.


FUTURE PROSPECTS for Dairy Industry

India’s dairy sector is expected to triple its production in the next 10 years in view of

expanding to triple its production in the next 10 years in view of expanding potential for

export to Europe. More over with WTO regulation expected to come into force in coming

years. All the developed countries which are among big exporters. Today would have to

withdraw the support and subsidy to their domestic milk products sector. Also India today if

the low cost producer of milk in the world at 27% compare with U.S, 63% and Japan $2.8.

Also to take advantage of this low cost of milk production and increasing production in the

country. MNC are planning to expand their activities. Some of the milk producer have

already obtain quality standard certificate from the authorities this will help them in

marketing their products in foreign countries.

The urban market for milk products is expected to grow at 33% p.a to around Rs. 43500 crore

by year 2005. This growth is going to come from the greater emphasize on the processed

food sector and also increased in the conversion of milk into milk products. By 2005 the

value of Indian dairy produce is expected to be Rs. 10 lac million. Presently the market is

valued at around Rs. 700000 million.


CONCLUSION

Our overall impression about the unit and GCMMF is inexpressible. In this report after

analyzing we can conclude that “GCMMF” is progressive very rapidly in the Indian market.

The performance of the unit is very impressive in the past year. Though there is tough

competition with Britannia, Nestle, Vadilal, Havemore etc. It has shown a good progress.

According to Amul and GCMMF organization – MARG surveys GCMMF remarked 24 th last

year among the top 60 industry in India.

In present Amul is become popular as The Taste of India. 50 years is a very big time for any

brand to establish itself successfully in the market. This give us golden opportunity to know

all functional area of amul. We know about the products of GCMMF, their quality, packaging

and price. The product of GCMMF demanded at very large scale because of their very

reasonable price.

Marketing of GCMMF made it so popular. Under the guidance of Dr. Vergees Kurein Mother

Dairy is growing day by day.

Hope and wise that the success story of AMUL going forever and other industries should take

inspiration from this successfully story.

We are sure and confident that successor capable and innovative my best wishes for future

success of the industry is an important part of our visit.


BIBLIOGRAPHY

1. Books:

Kotlar Philip “Marketing Management”, Published by Pearson Education, 10th edition

K. Aswathappa, Human Resource And Personal Management 3rd edition

2. Websites:

www.nddb.com

www.amul.com

3. Search Engine

www.google.com

www.msn.com

www.yahoo.com

4. Magazines:

Dairy India (March, July, Sept-2003)

Review of Dairy Industry


Documents

Amul Report (MRP-II)