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Amul Case Study

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Submitted By arsenal1981
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1. Comment on the business model and marketing mix of Amul which have led to its business success.

Amul’s business model was nothing like that had taken place before. From the encouragement of freedom fighter Sardar Vallabvai Patel, the exploited dairy farmers from Kaira District formed Kaira District Cooperative Milk Producers Union Ltd. The cooperative was formed with two societies and the initial daily collection of milk was a mere 250 liters. This was the Anand model which later adapted to the brand name Amul. Amul is the flagship brand of India’s largest food company the Gujarat Cooperative Milk Marketing Federation (GCMMF).

Since the suppliers (dairy farmers) were also the owners of Amul, The Company’s primary focus was protecting the interests of the farmers and providing its customers with products that were value for money. Amul bought all the milk that the farmers produced so that they didn’t have to incur any losses. They shared the profits generated from the sales of milk and milk products and encouraged the farmers to produce more milk with better quality by using modern day techniques which in turn lowered the costs of the farmers.

Since GCMMF sold all its products under only one brand name “Amul”, it helped Amul save a lot of money on advertising products under different brand names. The GCMMF spent just 1% of their turnover on advertising campaigns which would have increased to 6-7% if they had adopted to different brands for different products. The GCMMF also sold certain products like milk, ghee etc. under a different brand name Sagar which was sold locally and didn’t need advertisement.

Right from the start, Amul’s strategy was to attack their competitors through aggressive pricing, better distribution, and better quality products. This enabled Amul to be the number one brand in milk products right from the start. The three basic…...

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