November 28, 2014

Marketing mix of Amul

Marketing mix of Amul

Amul is definitely an “Amoolya” brand. Amoolya in Sanskrit means something which is invaluable or priceless. With a presence in almost every product which can be made by milk, Amul has won over hearts along with market share to become a highly valued brand with an Indian origin. Amul was formed because of a revolt of dairy farmers. And today, Amul is a brand against which companies want to compete and come on top but the same is not being allowed by the smart minds in Amul. The reason Amul is such a strong brand is because of the marketing mix of Amul. Here is an in depth analysis of the Marketing mix of Amul.

Product in the marketing mix of Amul –  Amul has a very very strong product portfolio. Amul product portfolio is comprised mainly of Dairy products. Amul butter, Amul cheese and Amul ice cream are cash cows for Amul as they have the major market share in their product category. Amul ice cream is amongst the top 10 ice cream brands of India.

Amul milk, Amul Paneer and Amul Dahi consumption is on the rise. In fact Amul milk has 26% of market share in the packaged milk segment. The only disappointing performance is seen in Amul Chocolates which are a burden for Amul and lot of push is required for the sales of the same. This is because the chocolate market has established players like Parle, Dairy milk and others.

The Amul family tree has the following brands –  Amul Milk, Amul bread spreads, Amul Cheese, Amul Milk, Amul kool and its variants, Amul pro, Amul ice cream, Amul Paneer, Amul Dahi, Amul Ghee, Amul Milk powders, Amul Nutramul, Amul mithai range, Amul mithai mate, Amul chocolates, Amul butter milk. Thus the product portfolio of Amul considering its dairy origins is astounding. Amul has various competitors based on different products. In ice cream it is Vadilal, Dinshaws and Havmor. In butter and milk there is mother dairy, Britannia and others. However, no competitor has such a vast dairy based product portfolio as Amul. This is the major reason that Amul has a sustainable competitive advantage over its competitors.

Price in the marketing mix of Amul – Amul has a strategy of low cost pricing. Some may call it penetrative pricing. But penetrative pricing strategy is used when the market has a high level of competition and a player wants to establish itself in the market by giving low prices. However, in the case of Amul, when Amul started, there were no national players and the dairy market was unorganized. During the introduction stage itself, Amul had a vision to provide their products to end customers at the best affordable rates. And the same vision is in place even today.

Today also, you will find that Amul butter, milk and cheese are available at affordable prices keeping in mind the end customers. You may call these products costly, but the cost has nothing to do with Amul’s strategy. Remember that transportation costs as well as storage and distribution costs are very high in FMCG. Thus, as the cost of transportation, storage and distribution has increased over the years, so has the cost of Amul products gone up. But considering their value for the average India consumer, these products are still priced at an affordable rate.

Place in the marketing mix of Amul – Amul has a massive distribution network because its ice creams, milk, butter and cheese is found practically everywhere. As it is a FMCG product, Amul follows the methodology of breaking the bulk. The initial factory output is in bulk. Later on this bulk becomes smaller and smaller and finally one individual slab of butter or scoop of ice cream is sold at the retail place.

There are two different channels through which Distribution happens in Amul. One is the procurement channel which is responsible for collection of Milk through dairy co operatives. The other is the distribution channel which is responsible for distributing the finalized product to the end customers.

In the procurement channel, the milk is individually delivered from farmers to the co operatives. The co operatives then collect all this milk and send the bulk to the manufacturing facility. At the manufacturing facility, the milk is used to manufacture the finalised products.

In the distribution channel, there are carrying and forwarding agents, distributors, dealers and retailers involved. There are also Amul shoppe’s which sell all products in the Amul product portfolio. The distribution is as follows.

Amul >> Carrying and forwarding agent >> Distributor >> Dealer / Retailer / Amul Shoppe >> Customer

Amul >> Modern retail

Thus there is a lot of transportation involved for all of Amul’s products. However, the distribution channel of Amul ensures that the products reach every nook and corner of India.

Promotions in the marketing mix of Amul – Amul is responsible for one of the most unique and longest running outdoor campaign as well as one of the most known outdoor advertising characters –  The Amul girl. We would like to take this opportunity to specially thank Mr Eustace fernandes, the creative brain behind the sweet girl. But we should know by now that the Amul girl is hardly sweet or cute. She is known to be the most naughty advertising girl ever. Amul hoardings mainly feature the current news and are used to take a tongue in cheek viewpoint at current happenings. However, each advertisement hits the nail on the head.

The promotions of Amul are mainly for butter but for all the other products there is hardly any promotions. During the launch of products, Amul is known to go ATL and advertise milk, butter etc. The Smita Patil ad wherein Smita patil is shown as a village milk collector is one of the most famous ads for Amul. But overall, the main advertisement is BTL through outdoor, trade promotions, discount schemes and sales promotions.

The major reason for Amul’s absence in hardcore advertising is that Amul does not want to give away margins in advertising its products. As per Amul, their maximum budget for advertising is 1% of the turnover. Above and beyond that will directly affect the cost of the product. And the major reason for Amuls strong presence in the market is its excellent quality combined with the affordable price. Thus, overall promotions will always be low for Amul except for the outdoor advertising of Amul butter.

This concludes the marketing mix of Amul. The bottom line is that we love that an Indian brand like Amul has reached such staggering heights and that we are a part of the time when such a white revolution took place.

Also Read about Marketing Mix

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Hitesh Bhasin

Hitesh Bhasin

Admin at Marketing91
I love writing about marketing and advertising. How did you like the post? Kindly send me you suggestions and post ideas via Feedback or you can also Follow us on Email and get daily marketing updates.
Hitesh Bhasin
Hitesh Bhasin
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About Hitesh Bhasin

I love writing about marketing and advertising. How did you like the post? Kindly send me you suggestions and post ideas via Feedback or you can also Follow us on Email and get daily marketing updates.

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