Development of Strategies for Increasing Market Share of Amul Ice- cream at Retail Level in Patna
Development of Strategies for
Increasing Market Share of Amul Ice-
cream at Retail Level in Patna
Faculty Guide: Prof. Sudeep S Kumar
Prof. Simon George
Industry Guide: Mr. Manoj Prabhakar
Presented By
Tanvi Srivastava (10349)
Vishwajeet Narayan (10356)
Amul – An Overview
Started in 1946 in Anand, Gujarat
Amul(GCMMF) is the largest cooperative business of small producers with an annual turnover of 2.15 billion US $.
2.8 million milk producer member families with 13,759 village societies and 13 District Unions. 8.5 million liters of milk procured per day and Rs. 150 million disbursed in cash daily.
Largest milk handling capacity in Asia.
Largest Cold Chain Network.
48 Sales offices, 3000 Wholesale. Distributors, 5 lakh retail outlets.
Export to 37 countries worth Rs. 150 crores
Dr. Verghese Kurien, the World Food Prize and the Magsaysay Award winner, was the architect of India’s White Revolution, which helped India emerge as the largest milk producer in the world.
Currently, its headed by Mr Parthi Bhatol
Ice-cream Industry in India
The ice cream industry in India is worth Rs. 2,000 crores.
The industry can be divided into the branded market and the unbranded market. The branded market at present is 100 million liters per annum valued at Rs. 800 crores
In 2008-09, in the branded ice cream market, Amul held the number one spot, with a market share or 38%, followed by Kwality Walls at 14%, Vadilal at 12% and Mother Diary at 8%
The per capita consumption of ice cream in India is approximately 300 ml, as against the world average of 2.3 liters per annum.
Vanilla, Strawberry and Chocolate together constitute approximately 60% of the market.
NEED FOR THE PROJECT
0
500
1000
1500
2000
2500
355 400 450 455
493 493 500 500 575 616 672
850 1050
1325 1504
1700 2172
Sale
s Sales Turnover in US $ (in millions)
Amul Sales Turnover
Decreasing market-share in
Patna
0
0.5
1
1.5
2
2.5
3
3.5
4
2007 - 082008 - 09
2009 - 102010 -11
2.5
2.9 3.2
3.7
Sa
les(
in c
ro
res)
Amul Ice-cream Sales in
Patna
0
0.5
1
1.5
2
2.5
3
3.5
4
2010 -112009 - 10
2008 - 092007 - 08
4
3 3
2
Ma
rket
Po
siti
on
Market Position of Amul ice-
cream
Identification of problems in the distribution and supply chain that
adversely affect the sales of Amul Ice-cream at retail level.
Study the behavior of the ice-cream market in Patna region.
Strategies for improving market share of Amul ice-cream in retail
and push-cart segment.
Comparative study of different competitors vis-à-vis Amul in the
ice-cream sector
Major parameters to be considered in comparative study
I. Quality
II. Market-share
III. Brand value
Project Objectives
Scope & Limitations
PART – I: PROBLEM IDENTIFICATION
It was decided by the management that the project shall be focused
only on the decreasing sales of Amul ice-creams.
The region to be covered in the initial stage would be Kankarbag
colony and the whole Patna town at later stage.
The marketing of either Amul ice-creams or any other Amul
products shall be out of scope for the project.
The analysis shall cover the analysis of issues faced by
distributors, retailers and sales-man dealing with ice-creams
only.
The entire sales process, starting from stock supply to dealing with
margins to closing of sales, shall be in the scope of the project.
Scope & Limitations
PART-II: QUESTIONNAIRE BASED RESEARCH ON
DISTRIBUTORS, RETAILERS AND CUSTOMERS
The research shall focus on A/B/C/D type of shops dealing with ice-
creams or planning to do so, in future.
The research shall focus on the sales related variables only and not
include matters under the purview of the Human Resources
department.
Methodology
The project was approached in 4 phases:
Phase 1: The Silent Observation Phase
a. Total number of shops visited was 40.
b. Act as silent observers of the ice-cream market of Amul and its
competitors in the Patna city, at retail level.
c. Information regarding the behavior and perception of retailers as
well as customers was gathered.
Phase 2: The Retailer Survey Phase
a. Consisted of visiting various outlets(A/B/C/D shops) in different
geographic locations in the city.
b. Personal interviews with different distributors, salesman and the
retailers in the region.
c. Questionnaire was primarily based on the information gathered in
previous phase.
Methodology
Phase 3: The Consumer Survey Phase
a. Collection of information regarding the consumers’ buying
behavior and their perception of ice-creams and the related brands in
the Patna town.
b. General survey was conducted keeping in mind the fact that it was
beyond the scope of project.
Phase 4: Push-Cart Segment Survey Phase
a. Targeted the push-cart distributors and brands actively involved in
this segment.
b. Analyze the market and figure out reasons for Amul’s low presence
in this segment.
Research Analysis
The conclusions derived after each phase:
Phase 1: The Silent Observation Phase
a. Different brands of ice-cream present in the Kankarbag area were:
i. SnowBall
ii. Creambell
iii. Vadilal
iv. Amul
v. Golden
vi. Rollick
The graph below shows the customer’s preference in terms of taste and price
Choco-
bars
29%
Cups
40%
Cones
21%
Candies
10%
Taste
0
10
20
30
40
50
Less than
5Between 5
to 10Between
10 to 25Greater
than 25
10
35
46
4
No
. o
f cu
sto
mer
s(in
%)
Customer Preference
Research Analysis
Phase 2: The Retailer Survey Phase
a. The sampling method used here is stratified sampling.
b. The sample size was taken as 140 outlets for all strata.
c. The regions covered in this phase were:
i. Boring Road
ii. Belly Road
iii. Maurya Lok Complex
iv. Gandhi Maidaan
v. Kurjee( P&M Mall and Big Baazar)
Breakup of the number of stores covered of each class in % in the Kankarbag
region (Fig 1) and the whole Patna town (Fig 2).
A
8%
B
22%
C
70%
Kankarbag Region
A
16%
B
29%
C
55%
Patna Region
Research Analysis
0
10
20
30
40
AmulCream bell
Snow ballGolden
VadilalRollick
10
25
40
3
20
2
Phase 2: The Retailer Survey Phase Contd…
The ice cream market is estimated to be between Rs 35 crore and Rs 40 crore
The graph below depicts the current market share of different brands in the town.
Research Analysis
Phase 3: The Consumer Survey Phase
a. The sample size in this case was 300.
b. Customers are price-conscious and prefer the ice-creams in the range of
Rs 5 to Rs 25.
c. Most of customers are not brand-conscious and would go for any ice-
cream which is readily available.
d. Profile of respondents:
Home -
Maker
32%
Service
10% Self-
Employed
24%
Student
34%
Occupation
Male
44%
Female
56%
Sex
Research Analysis
Phase 3: The Consumer Survey Phase Contd…
a. Sales of ice-cream increases by almost 50% in the marriage season.
b. The major factors to be considered in this phase:
i. Availability
ii. Seasonality
iii. Awareness
c. Push-carts have major penetration among the customers.
d. Profile of respondents:
< 2 lakhs
9%
2 - 3 lakhs
20%
3 - 5 lakhs
34%
5 - 8 lakhs
22%
> 8 lakhs
15%
Income Level
< 20 yrs
32%
20 - 30 yrs
26%
30 - 40 yrs
16%
40 - 50 yrs
14%
> 50 yrs
12%
Age Group
Research Analysis
Phase 4: Push-Cart Segment Survey Phase
a. The biggest factor that has been affecting Amul’s presence in the market is its short
and poor supply.
b. Different players in the push-cart segment:
i. Vadilal
ii. Treat
iii. Golden
iv. Amul
v. Sudha
0%
10%
20%
30%
40%
Golden: On
cupsGolden: On
bricksTreat
VadilalAmul
38%
22%
40%
30% 30%
Margin Offered to Distributors
0%
5%
10%
15%
20%
25%20%
22%
16% 15%
17% 20%
Margin Offered to Vendors
Data Analysis
Bar-graph drawn below measures the over-all satisfaction level of retailers and
distributors separately on a scale of 1 to 5.
Amul Cream
bellSnow
ballGolden
VadilalRollick
3 3.5 4
3 3.5 3
Sati
sfact
ion
Lev
el
Satisfaction Level of
Retailers
AmulCream
bellSnow
ballGolden
VadilalRollick
3 3.5 4 3.5 3.5 3.5
Sati
sfact
ion
Lev
el
Satisfaction Level of
Distributors
Main factors affecting the satisfaction level of retailers are: Margins offered by the
companies and Replacement policy.
S. No. Brands Margins Offered to the Retailers Replacement Policy
1 Amul 17.5 % Conditional
2 Snow - ball 35 – 40 % None
3 Cream - bell 17 – 19% None
4 Vadilal 17 – 19% Conditional
5 Golden 30 – 40% None
6 Rollick 18 – 19% None
Data Analysis
Factor Analysis:
The different factors considered are:
a. Price
b. Quality
c. Availability
d. Packaging
e. Taste
f. Awareness
Three important factors on which
the sales of Amul ice-cream
depends in the Patna region.
Factor 1 Factor 2 Factor 3
Taste Price Availability
Awareness
Quality
Factor Analysis data sheet
Customer Response
Sheet
AMUL ice-cream’s SWOT Analysis
STRENGTHS
1. A well-known brand. respected for its quality, thus less effort required to market Amul ice-creams.
3. Huge demand from customers.
4. Ice-cream made up of fresh milk, unlike others which are made up of vegetable oils.
WEAKNESSES
1. Very poor supply.
2. Inability to provide the entire range of ice-creams during the peak season.
3. Low number of distributors.
4. Very low number of push-carts in the city.
5. No incentive of any kind by the company in the push-cart segment.
OPPORTUNITIES
1. Exploit its huge customer demand by maintaining its demand-supply equilibrium.
2. Increase in the number of push-carts will lead to increase in distributors and in turn will mean increase in sales.
3. There are areas which still need to be tapped. Ex Eco Park (near Strand Road).
THREATS
1. Tendency among the Amul push-cart vendors to switch to other brands.
2. Ice-cream buying behavior mainly depends on the availability in this region
3. Difficult to compete with the local players
Data Analysis
Push-cart supplied by Amul is manufactured by Voltas (currently by Rockwell) and is
shipped from Kolkata. The details of the price-list:
HAPC
Rockwell Voltas
Tricycle 38250 41384
Push-Carts - 39114
If purchased locally, the distribution of costs for a 200 litres push-
cart: Cost of tricycle i.e. framework : Rs 11000-11500
Cost of Western deep-freezer : Rs 24500 (for 200 ltrs, the actual capacity is 130 ltrs)
Miscellaneous expenses(inverter, tube-light etc) : 1500
Hence, the total cost comes up to Rs 37000 – 38000. This includes all the taxes and road
permit etc which is an addition of 13%.
The same when ordered locally (i.e. centrally purchasing) costs less as the taxes and
transportation costs are reduced. Hence the cost of one push-cart comes up to Rs 33000 –
34000.
Hence, one is able to save 4000 approx., significantly less than what Amul charges for the
same.
Conclusions
1. Amul ice-creams have a huge demand in the town.
2. A brand respected for its quality, hence less effort required to market.
3. Adheres to the norms of ‘ice-cream’ as against ‘frozen dessert’ made of pure
milk.
4. Local players very strong in the region.
5. Very poor supply.
6. Entire range of ice-creams absent in the retail stores.
7. Stock outs faced during peak season.
8. Very low number of push-carts in the town.
9. Very few distributors in the push-cart segment present.
10. No incentive in the push-cart segment.
11. Consumers mostly not brand biased while purchasing ice-creams.
12. Target setting done on an annual basis.
Recommendations
Increase the number of SKU’s.
Can put up a factory of the best selling items like cups and chocobars, in the
local vicinity.
Tap the areas in the town where there is huge sales potential.
Increase the number of distributors in the retail as well as the push cart
segment.
Recommendations
Decrease the cost of push-cart by buying it locally.
The target setting needs to be done on monthly basis rather than the annual
basis and it needs to be aggressive.
References
1. www.amul.com
2. www.wikipedia.org
3. http://www.dare.co.in/opportunities/other-business-opportunities/ice-cream-
industry-in-india.htm
Thank You