Dairy Industry In India Marketing Essay

Dairy Industry In India Marketing EssayIn India the dairy industry is of crucial importance. The country is the worlds largest take out producer and accounts for more than than 13% of worlds total draw ein truthplacelapion. India consumes al close 100 % of its own milk harvest-homeion and is stated to be the worlds largest consumer of dairy merchandises. Dairy products constitute as a major source of cheap and nutritious food to jillions of tribe in India and the unless acceptable form of animal protein for large vegetarian segments of the Indian population. (Karmakar, 2006)Top Dairy companies in IndiaAmul is one of the topmost companies in the dairy industry, which recorded a gross revenue turnover of 67113 one million million Rs in 2008-09 (Amul, 2009). Followed by Nestle India Pvt Ltd. with a turnover of 51672 million Rs (Nestle, 2009) and Britannia Pvt Ltd whose turnover were 34523 (Britannia, 2009)In this melodic theme I have chosen Amul Pvt Ltd, as it is the larges t milk production telephoner in Asia.1.2 History of the CompanyAmul Pvt Ltd. is the community that is renowned for initiating the phenomena of The clean novelty in India do the country the largest manu concomitanturer of milk and its by products in the world.Amul was completed on December 14th, 1946. Dr Verghese Kurien in any casing referred to, as the Father of the White Revolution is the man behind the success of the gild. AMUL is an acronym for Anand draw Producers Union India Limited.Amul was setup as a model for development in rural beas. Amul is locate in the state of Gujarat, in a sm each(prenominal) town c each(prenominal)ed Anand. (Business maps of India, 2010)Amul was interpreted over by the Gujarat Cooperative draw Marketing Federation GCMMF in 1973.Gujarat Cooperative Milk Marketing Federation is one of Indias largest food products marketing organization. Its main aim is to provide to the farmers remunerative returns and for the benefit of the consumers provide them with calibre products which be measure out for money. (Amul, 2010)1.3 Company StatisticsMembers13 district cooperative milk producers UnionNo. Of Producer Members2.9 millionNo. Of Village Societies15,322 fit Milk handling capacity13.07 million litres per daylightMilk entreaty (Total 2009-2010)3.32 billion litresMilk Collection (Average 2009-2010)9.10 million litresMilk Drying Capacity647 Mts. Per dayCattle feed manucircumstanceuring Capacity3740 Mts. Per day(Amul, 2010)1.4 Company Financials 4Sales turnover rateRs (million)US $ (in million)2000-01225885002001-02233655002002-03274575752003-04289416162004-05292256722005-06377368502006-074277810502007-085255413252008-096711315042009-10800531700(Amul, 2010)1.4.1 Amuls Sales turnover 4*Graph found on the figures from the table preceding(prenominal)(Turnover is in Million US $)The attach to recorded a growth of 28.8 % despite the global economic downturn. From a turnover of 1325 million dollars in 2007-08 the milk gia nt jumped to 1504 million dollars in 2008-09, resulting in a double-digit turnover 3 courses in a row1.4.2 Exports*Graph base on the figures from the tables above(Turnover in Crore Rs)The company witnessed a growth in spite of the global economic meltdown. The companys exports reached 133 crore Rs in 2008-09 in equivalence to the 125 crores in 2007-08.Amul products are exported to a modus operandi of countries namely Australia, Bangladesh, China, Hong Kong, Mauritius, Singapore, UAE and USA1.5 carrefour feedAmul is recognized as the biggest stigmatize in the pouched mile sector of the world and stated to be Indias largest food brand.Amul has a varied range of products, which includeMilkMilk PowdersGhee (Saturated Butter)ButterCheesePaneer (Cottage Cheese)YogurtChocolate and confectionariesIce-CreamInfant Milk RangeThe products under these categories are available under a brand umbrella with over 60 different product names. Amul has been very famous for Milk, butter and cheese . Amul milk is sold under brand names such as Taaza, Gold and Shakti. Amul butter is available under names such as Amul butter and Lite. Cheese is available under brand names of urbane cheese spreads, godiva and Emmental (Amul, 2010)1.6 Consumers Relationships with Amul ProductsFor consumers, dairy product are an integral part of their life-style irrespective of the fact to which strata of the society they belong to. Thus the relationship created betwixt them is Interdep rarityence, the products form a part of the consumers casual routine.Amuls Marketing MixProductThe Products form a part of the FMCG industry. The products are all-important(a) commodities bought on a regular basis. expenditureAmul products are priced at relatively affordable prices for wholly the segments of the market, in time certain products are priced comparatively higher and are bought by a segment of the market with higher purchasing power.PlaceLocations of the stores round the most significant role in higher sales of the product. As stated earlier their distribution network consists of over 2 million retail outlets.PromotionAmul launched one of the most successful sweats with the utterly Butterly small girl character which resulted as an entry into Guinness book of world records for the longest track campaign. The mascot has played an imperative role in increasing the brand remove value.2 Analysis and Data InterpretationAccording to Mr. P.G. Bhatol, the companys chairperson, he tell in the 35th annual report of the company 2008-09 that The Company registered a growth of 28% against the backdrop of the global recession. (Bhatol, 2009) This statement by the chairman reveals the fact that in spite of the economic downturn, the buy purpose making process of the consumer remained unchanged during the changing financial situations.2.1 Buying Decision-Making Process The moulding (i)(Adapted from Cox, R and Brittain, P (2000), Retail Management, 4th Edition, Pitman Publishing) The growth of the company can be attributed to the consumers purchase decision-making process.The Buying Decision-Making process as seen in the diagram above begins with the a simple need, in context with purchase any amul product the process can be explained asIt all begins with the Need. The consumers require these dairy products on a daily basis as this product falls within the essential commodity category.Although these products are indispensable on a regular basis, consumers recognize the need to buy these commodities any on a certain occasion when they run out of it or they feel need to buy and store it for future consumption.Since dairy products are a customary purchase, the involvement is low in comparison to buying a product such as a Television. This decision of buying the product is taken by a single person with subatomic time consumption in making the final decision.Since this product is a low involvement purchase, there is only a limited add of information search carried out. In some trips there is no certain effort do by the customer to get the information regarding the product but is got when watching television or flipping through pages of the magazines. Amul being a very well established and old brand is probably only one of the causalitys why consumers choose it. Amul has al shipway focused a big bucks on advertising and their mascot is always used to portray the current situationsWhen consumers shade for information regarding any dairy products Amul would always be the first plectrum however a consumer will always look for alternatives, where they could find break off quality products at better prices.Amul products are very reasonably priced in comparison to its competitors.The decision is obvious, as Amul is priced very reasonably in comparison to its competitor Mother dairy. Purchase of Amul products is made convenient through their lovesome distribution network.Distribution Network (2008)Number of OutletsDistribution for s trong milk1800Distribution for value added milk products3500(Amul, 2009)The consumer is already happy with the fact the product is available at every corner, and feels a sense of tremendous rapture with the high quality of the product bought at reasonable prices.2.1.1 accustomed Decision-makingHabitual decision-making can be defined as natural selections that are made with teensy or at time without any certified effort.The Constant growth in the sales turnover from 1050 million $ in 2006-07 to 1325 in 2007-08 and to 1504 million dollars during the recession hit period of 2008-09 could be attributed to the fact that these purchases are made because of usual decision making behaviour of the consumer.The curl in which the pull ahead increases year after year has a direct connect to the trend in which the consumer makes his purchase decision.Since dairy products are consumed on a daily basis their purchase can be termed as a habitual purchase,This process of habitual decision-m aking by the consumer is one of the foremost reasons of the companys success. Consumers of Amul products make this decision of buying the product with little or sometimes without any conscious effort.Thus the entire imagination of habitual decision making by the consumer results in constant purchase of the same brand irrespective of the fact whether they can afford it at that point of time which increased sales of the company despite the recession and resulted with a 179 million $ profit.Apart from the fact that consumers made these purchases decisions out of habit they were also habituated to looking at the Amul Mascot i.e. the Uttlery Butterly girl50 years after it was first launched, Amuls sale figures have jumped from yard tonnes a year in 1966 to over 25,000 tonnes a year in 1997. No other brand comes even close to it. (Amul, 2010)amul30.jpg(Amul Hits, 2008)The topical ad released during the economic downturn in 2008This ad campaign has been successful proper from the start and all through out the economic depression. The ad above was made to address the economic downturn in 2008.This ad campaign to a great extent had a certain amount of play on the consumer. Not only did the ad bring a little humor to the serious part of the recession but was somewhere sculptured in the back of the consumers mind.In terms of consumer behavior concepts, the entire ad campaign comes in play when a consumer has to make a cream between alternatives.The ad campaigns have a great impact on the consumer hence influences the consumers decisions while selecting the product from other competitor products.2.1.2 The AlternativesA elaborated analysis of this reveals that alternatives are influenced by ad campaigns in the following ways(Solomon et all, 2010,334)It is a known fact that however loyal customers may be to a certain brand of products at times they may break away to consider looking at other attractive alternatives.Through the ad campaign Amul, as brand has been l ucky enough to create a niche in the minds of their consumers, to be more precise in the elicited set of their consumers.This evoked set is defined as the set of alternatives that the consumer already knows about and is aware of. This set consists of those products, which are already in storehouse i.e. the retrieval set. (Sololmon et all, 2010)If analyzed in context with the ad above, such an ad leaves an impact on the consumer. This ad was used to create a expressed place for that product non only in the minds of the consumer but also establish a prominent place in the environment. It increases the brand bring forward value thus making the product (amul) seem the best prime(a) from the rest.The ad campaigns to a large extent encourage the need of buying a product.2.2 Needs and BehaviorAccording to Mr. P.G. Bhatol, the companys chairman, he said in the 35th annual report of the company 2008-09 that Since Milk and Milk products are fundamental staples for every Indian househol d, their demand is not likely to be affected by transient economic slumps (Bhatol, 2009)This statement when analyzed conveys the subject matter that irrespective of the recession and the effect of it on the consumers, certain products, in this case being milk and its by products cannot be compromised on.The direct of consumption by different consumers of these products may decrease but will certainly not be stopped.Sales figures of the company show an increase in these products during the year 2008-2009ProductSales Growth (%)Amul Milk44 %Amul Cheese26%Amul Butter17%Amul Ice-cream16%Dairy Whitener12%(Amul, 2009)A reason for this increase in sales during the recession can be linked directly to the concept of Maslows hierarchy.As these products fall under physiologic inevitably, these needs are inevitable, and they are essential for survival.These needs form the largest and most important part in Maslows hierarchy(Solomon et all, 2010, 186)As Maslows hierarchy implies, the basic ne eds have to be fulfilled before climbing up the ladder.A consumer will for certain satisfy these basic lower direct needs. Milk is just a part of the physiological needs however once that need is satisfied it gives rise to other needs and a consumer then satisfies all these needs together. This contributed to the increase in sales of the by products of milk.Related to Maslows hierarchy we could also explain a consumers behavior on the basis of Motives in particular. Looking at this motive classification we could agnize the consumers behavior from a different perspective(Blythe, pp 32-33)If we relate the concept of Maslows hierarchy with the different motives, the most predominant motive that influences the consumer when buying an Amul dairy product would be a still motive. These motives exist in the minds of the consumer but they are not aware of it. Consumers in their subconscious mind hold these dormant motives, which result in buying the same brand products over and over again without much effort.Dormant motives are connected to secondary motives. supplemental motives are the reasons why consumers buy a particular brand. This is probably the reason why they choose Amul over the other brands.A deeper analysis in to the statement reveals that the demand remained unaffected could be explained through the primary concept of needs and behaviour.It is a known fact that, if a need does not exist then there isnt any motivation to achieve the inclination of satisfying the need.As stated by the chairman of the company Milk and milk products are staple for the people of India. Analysis of this statement leads to the fact that these needs are Biogenic needs, which are required to maintain life.The crinkle here could be further think toNeedsIf milk is a staple then the need for it is essential.In this case the need is very high. Consumers needs for dairy products are constant with very little change. These needs have to be fulfilled almost instantly. This probabl y was a broker that resulted in the 44% growth of milk in 2008MotivationA sense of tension is created when this need is left unfulfilled which will stab them to take some action and fulfill this need. Here in this case the consumer will find the need to buy the product, which will motivate him/her to go out to the closest store and buy it thus fulfilling its need.WantsIt is possible that sometimes what we deficiency may not be a need. A want is defined as the consumption behavior that satisfies the unfulfilled need. A want is not necessarily a need and a need is not necessarily a want. However in this case the need is more dominant then the want for it.GoalsThe basic need of dairy products leads to buying the product and achieving the finale of satisfying it by purchasing value products.When talk about value products, consumer satisfaction is a feeling directly related to it.Based on a recent consumer report by consumer soda water Amul scored a Customer satisfaction level of 5 .003, which is considered as a bang-up average score.nescsl.jpg(Consumer daddy, 2010)The above graph shows a constant trend in the level of satisfactionnewcs1.jpg(Consumer daddy, 2010)For Amuls consumer the brand value and set for money are important aspects along with hygiene, reliability and safety of the product.This level of satisfaction a consumer wants from any product is related to the stages of the means end set up. From the above statistics it can be derived that for Amul consumers just the product wasnt the main terminal but also the level of satisfaction achieved after the purchase.2.3 The Means-End ChainThe chain is explained with the example of milk(Tao, 2010)In the context of the consumer satisfaction report mentioned above,Consumer looks for maximum satisfaction in terms of the quality value over price.Price is incidental in this case while the company brand value and product value is predominant.Here when explaining the chain through milk, the attributes consume r gets are fresh and natural product, the consequence being the consumer gets a balanced diet which in the end results in a healthy life which is the Life goal of any consumer.3. ConclusionAmul will always be the first choice for consumers as it is a well-established brand and also provides good quality products, thus creating a niche in the minds of the consumers. Also amul has expanded extensively all over the country thus enabling the consumers to have easy entranceway to the products at any given point of time.From the above analysis and data interpretation carried out, one can conclude that reason for the companys success Amul was purely based on the fact that these products were primary commodities and for consumers Amul was always their first choice based on the fact that is a very well established brand and is known for quality products.The Brand has created a niche in the minds of the consumers thus encouraging and gaining more customer loyalty. During the times of depr ession, Amul success could me based on the fact that there was a constant demand for essential commodities.