In-depth Research on the Business Model of Amul you need to know!

Amul is one of the oldest organisations operating in India! This article will take a deep dive into the business model of Amul.

Amul is an Indian dairy co-operative society that spurred India’s White Revolution and becomes the largest Milk and Dairy products Company in India. The business model of Amul has developed India as the largest milk producer. Around 15 million milk producers instill their milk in 1,44,000 dairy societies in the country. 

In this case study, we will be taking a look over the business model of Amul, the marketing strategy of Amul, and the SWOT Analysis of Amul. Let’s first learn more about the company.

About Amul

Anand Milk Union Limited (AMUL) needs no introduction as such because the whole nation knows about Amul being the biggest brand in the Dairy Products Society. The name AMUL itself is a big brand and has created this name and reputation by delivering the best quality Dairy Products all over the world. Amul was founded in 1946 by Verghese Kurian and is situated in Anand, Gujarat. The current CEO of Amul is R.S. Sodhi.

Looking at the business aspect of Amul, it caters best quality Dairy Products all over the world and is quite reputed. The success story of Amul is very attractive and exclusive. Today, whenever someone mentions, ice cream, milk, cheese, butter, or any Dairy Product, Amul is the first company that pops into our mind. One of the reasons for Amul’s great success is its innovation at each step.

Now you know the basic details about Amul which will give you a better understanding of the company. So now let’s move on to the Business Model that Amul follows which has had a great impact and reputation in the market.

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Buyers’ Persona

Business Model of Amul

The  Business Model of Amul has a cooperative society model. It is a model where people get together and pool resources to grow in the market. The people who pool the resources are members of this society. They take care of the finances, resources, and operations of this cooperative society.  The business model of Amul focuses on affordable prices for consumers, keeping in mind the interests of farmers. Let us dive into it.

The business model focuses on affordable prices for consumers, keeping in mind the interests of farmers. Let us dive into it.

First Tier – The first tier consists of the farmers from the villages who are a part of the Village Dairy Cooperative Society. All the villages in a particular State select their representatives who represent their village in the District Milk Unions. The Village Dairy Cooperative Society is the first tier in this Business Model.

Second Tier – The second tier consists of the representatives that the Village Society selects. These representatives then together manage the District Milk Union. These Unions take care of the milk and the milk products and are responsible for processing these products. After processing the products, they sell these products to the State Milk Federation.

Third Tier – The third tier of this model is the State Milk Federation. State Milk Federation sells the processed products that they receive from the District Milk Union and acts as a distributor and facilitates the selling of the products in the market. The revenue that is earned is distributed downwards in a similar fashion.

Now that we know the business model of Amul and get to know in detail about the Cooperative model that they follow, one might understand how successful and effective this model is. It shows how the benefits trickle down from the market and right to the producer who is at the bottom of the Pyramid. Now let’s move on to the marketing strategies that have made Amul a successful company.

Marketing Strategies of Amul

We all know how successful and reputed Amul is. But do you know the reason behind this success? In this section, we will get to know the answer to this question and how Amul has maintained and continued a legacy for a very long time. The marketing strategies that helped Amul gain success are –

Product Catalogue

Amul has a very wide range of products catering to the needs of all age groups, genders, and professions. The list of products that Amul sells is Amul Milk, Bread spreads (Amul butter, Amul Lite, delicious table margarine, unsalted butter, garlic butter), Amul Cheese, Amul Beverages (Amul kool flavored milk, Amul Masti buttermilk), Amul Ice cream and other dairy products.

The Brand

Amul promotes all its products under one brand name i.e., ‘AMUL’. This provides the company with better brand visibility and reduces its advertising costs. The reputation of the brand name has been impeccable through the decades and still, its reputation is similar to when Amul came into the market decades ago.

Pricing Strategy

As we saw, Amul caters its products to every segment of society, be it kids, adults, senior citizens, rich, poor, or all the segments of society. It has always catered even to the economic segments without any compromise on its products. Products that cover a huge market segment and are used daily are tried and provided at an affordable price without any compromise in the products, hence giving them an advantage over their competitors.

Advertising Campaign

One of the biggest marketing strategies that helped Amul gain success is its advertising campaign. Amul got its name in the Guinness World Record for the longest-ever advertising campaign. The Amul-girl, the cartoon figure, is used by the company to promote its brand. Their advertisements are related to recent and trending events happening all over the world with a bit of sarcasm and humor.

Now that we know the marketing strategies of Amul, let’s take a look at their SWOT Analysis.

Campaigns of Amul

• Amul Butter: The Taste of India: This is Amul’s long-standing tagline, emphasizing the brand’s strong association with Indian culture and taste preferences.
• Utterly Butterly Delicious: Another famous tagline that highlights the deliciousness of Amul butter.
• Amul Doodh Peeta Hai India: This campaign focused on the importance of milk consumption in India and positioned Amul as a symbol of quality milk products.
• Amul Ice Cream: Amul’s campaigns for its ice cream range have also been popular, often showcasing its wide variety of flavors and the joy of consuming ice cream.
• Women’s Empowerment and Social Issues: Amul has also used its campaigns to address social issues and promote women’s empowerment, showcasing the Amul girl as a voice for change.
• Festivals and Celebrations: During various festivals and celebrations in India, Amul comes up with special campaign designs that reflect the festive spirit of the country.

Competitors of Amul

• Mother Dairy is a well-known brand in India and operates in dairy products, fruits, and vegetables. Mother Dairy is a subsidiary of the National Dairy Development Board (NDDB) and competes with Amul in various product categories.
• Nestle India is a global food and beverage company with a strong presence in India. Nestle offers a wide range of products including dairy items such as milk, yogurt, and milk-based beverages that compete with Amul’s offerings.
• Britannia Industries is a major player in the Indian food industry, offering a variety of products including dairy items like cheese, butter, and milk-based products. Britannia competes with Amul in the dairy segment.
• Parag Milk Foods is a dairy company that produces and markets a range of dairy products including cheese, ghee, milk, and more. Parag Milk Foods is a significant competitor to Amul in the dairy market.
• Heritage Foods is a prominent dairy and retail company in South India. Heritage Foods offers a range of dairy products that compete with Amul in certain regional markets.

Example of a Failed Campaign Or Backlash from Users

1. Amul Macho Controversy (2007): Amul Macho is a brand of innerwear for men produced by Amul. In 2007, they launched a controversial advertising campaign that featured a muscular man wearing Amul Macho underwear and a tagline that read “Yeh Toh Bada Toing Hai” (This is very stimulating). The campaign was widely criticized for being in poor taste and objectifying women. Many felt that it was offensive and conveyed an inappropriate message. Amul faced backlash from various quarters, and the campaign had to be pulled.

2. Amul Kool: Are You Cool? (2005): Amul Kool is a line of flavored milk products. In 2005, they ran an advertising campaign featuring a teenager who becomes “cool” after consuming Amul Kool. The campaign was criticized for its portrayal of peer pressure and the idea that one’s social status could be determined by consuming a specific product. It was seen as an attempt to exploit the insecurities of young consumers, and the campaign received negative feedback.

Suggestive Campaigns for Amul

1. Sustainable Farming Campaign: Highlight Amul’s commitment to sustainable and ethical farming practices. Showcase the efforts they take to ensure the well-being of their dairy animals and the environment, promoting the idea that quality products come from responsible practices.
2. Health and Nutrition Awareness: Create campaigns that emphasize the nutritional benefits of Amul’s dairy products. Educate consumers about the importance of including dairy in their diet for overall health and well-being.
3. Local Sourcing and Farmers: Feature the stories of local farmers and how they contribute to the production of Amul’s products. This could help consumers connect with the people behind their food and reinforce the idea of supporting local communities.
4. Innovation and New Product Launches: When launching new products or innovative variations, Amul can run campaigns that highlight the uniqueness of these offerings. Whether it’s a new flavor of ice cream or a specialized butter spread, these campaigns could generate curiosity and excitement.
5. Amul in Modern Recipes: Showcasing how Amul products can be used in contemporary and trendy recipes could appeal to a younger audience who enjoy experimenting in the kitchen.

Conclusion 

As we all know, Amul has been growing for the past many decades and has always been one step ahead of its competitors. We learned here about the business strategies, marketing strategies, and many other topics of such a huge establishment which helps us understand these companies and how they work, even better. 

Amul keeps on increasing its customer base every year by its marketing strategies which are very effective and efficient and are giving Amul the desired results. 

All the credit for its success goes to its marketing strategies and its constant attempt at innovation. It also tells us that how important marketing has become in today’s world and the best option in marketing is digital marketing. Digital marketing is taking over the business world. 

If you are interested in Digital Marketing and want to pursue your career as a Digital Marketer, IIDE will be happy to help you with its short-term courses which are accessible from anywhere in the world.

If this blog helped you or made you curious that how the companies work, then please leave a comment. You can head on to read the blogs of various other huge establishments and their strategies at the official site of IIDE. 

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