MARKETING MANAGEMENT – II
AMOGH VYAS (18A3HP609)
RADHA MADHAVI (18A1HP098)
RUMAISA ALEM (18A1HP101)
SAI CHANDER (18A2HP424)
SOWMYA ALUR (18A3HP626)
SUDHEESH RAHUL MEESALA (18A1HP009)
DATE – NOV 28 TH , 2018
Analysis of Marketing Mix of Amul Butter
PRODUCT STRATEGY EVALUATION:
Form: Amul butter can be differentiated by different size s, flavours and packing. Amul butter
is available in different variants like Amul Choco Spread & Amul Garlic spread . They are also
sold in small quantities in the form of Blisters.
Performance Quality: Amul provides high quality butter priced reasonably. They have
employed “Backward Integration” which helps the company to cut down their costs.
Conformance Quality: The taste of the butter doesn’t vary across the country making it the
most trusted and respecta ble brand.
Style: The look and feel of Amul butter is unique mainly because of its packaging. The
package has the mascot – Amul girl with the tagline “Utterly Butterly delicious” making it
distinct from the rest of the other brands. The advertising is one of a kind, p eople connect with
quirky lines which depict the current happenings in the country.
Cheese Milk Bread
Paneer Dahi Ghee Cream Desserts
Amul T –
Amul has product width consisting of diary and perishable products broadly classified into Cheese
Milk, Bread Spread/ Butters, Beverage Range, Milk Powder, Paneer, Dahi, Ghee, Cream an d Desserts.
It has about 65 products under its umbrella. The product line of bread spreads and butters has 6
products – Amul Butter, Amul choco buttery spread, Amul lite, Delicious fat spread, Amul unsalted
butter, Amul garlic and herb butter spread.
Product Depth: Stock keeping units (SKUs) of Amul butter :
Name of Product Variants Packaging
500g Sleeve carton
100g Sleeve carton
20g Sleeve carton
Amul Choco Buttery Spread 200g Tub sealed
500g Sleeve carton
200g Tub sealed
100g Sleeve carton
Delicious Fat Spread
500g Tub sealed and sleeve Carton
100g Tub sealed and sleeve Carton
Amul Unsalted Butter 500g Sleeve carton
100g Sleeve carton
Amul Garlic and Herb Butter
Spread 100g Sleeve Carton
Product Line Stretching:
Amul Butter was launched in the year 1955 and was the first diary product of Amul. Amul Butter is a
preferred product by a good possible range of customers positioning itself in the middle market. Amul
launched products like Amul Lite and Delicious at lower prices than Amul butter and also they had
low fat and low cholesterol content butter, stretching its product line to reach customers seeking for
lite products. It also launched 10gm Blisters of Butter for customers seeking butter for one time use,
portability and low price . This was part of down -market stretchin g.
Product Line Filling:
The unsalted butter, Garlic herb butter and choco buttery spread were launched to expand their
existing product range to satisfy growing consumer wants.
Amul Bu tter is presented in yellow colour sleeve cartons, tubs and blisters. The front side of the unit
has a tagline – “Amul Butter – Utterly Butterly Delicious” which was associated with the product after
about a decade of its launch and is still continuing. It also has a face – a cute chubby blue haired girl in
polka dots frock who is heartthrob of the nation. This helped in building and maintaining brand of the
The packaging of this product has the information regarding nutritional information, batch number,
MRP, manufacturing and expiry date , Ingredients, Manufacturer and Marketer information and
instructions like “Keep under Refrigeration”.
Consumer affluence and innovation opportunity:
Introduction of Tubs and blisters as packaging units drew consumers to the product due to ease of
storage and convenience .
PRODUCT MAP :
Amul butter variants (100gms) Butter of other brands
H1 – Amul butter A- Britan nia dairy butter
H2 – Amul lite B – Mother dairy
H3 – Delicious fat spread C – Nutralite
H4 – Amul unsalted butter D- Fun foods
H5 – Amul garlic and herb butter spread
H6 – Amul choco buttery spread
The product map shows how the product line of Amul are located along with four of its
competitors. Two paperboard attributes are price and quality.
PRICING STRATEGY OF AMUL BUTTER:
Initially when Amul had just started, there were no other regional or national players and the
dairy market was completely unorganised. Amul had the objective to sell to its end consumers
at the best possible price while maintaining quality of its dairy product.
The following factors can be analysed to understand the pricing policy of Amul:
Factor 1: Selecting the pricing obje ctive
The main objective of Amul has always been to price its butter as low as possible in order to
gain maximum market share. They believed that having a higher sales volume would give long
run profits and so they follow a market penetration strategy.
Factor 2: Determining demand
Amul, being one of the first players in the dairy business enjoys a huge market share. Due to
low entry barriers, in recent times, other players such as Mother Dairy, Nutralite and Nandini
have cropped up and are selling dairy products a t lesser prices. But the consumers are
insensitive to this marginal increase in the price of Amul butter. In India, Amul enjoys a major
79.1% of the market share which translates approximately to $459million.
Reasons for price insensitivity:
1. Consumers expect more quality from Amu l products.
2. Taste preferences .
3. The additional expenditure is just a small part of consumer’s income .
4. The presence of the Halo effect of Amul as a brand.
Factor 3: Estimating costs
The prices are derived after an evaluation of the costs of milk, processing, labour,
transportation, sales, promotion and taxes. Their costs can be divided into variable and fixed
costs. Some of the variable costs are incurred in the form of procurement of milk, oil, packaging
expenses which depends on the level of production of butter. And the fixed costs are in the
form of interest paid to banks for the loans taken, rent of factory, salaries paid and insurance
Most of their costs are expended in the procurement of milk which is the major ingredient of
most of their products. In the year 2017 -18, Amul procured a total of 22 lakh kilograms of milk
per day to meet their daily production requirements. This allowed Amul to produce a total of
24939 MT of butter in the FY 2017 -18.
Step 4: Analysing competitors costs, prices and offers
Amul’s competitors are mainly Mother Dairy, Britannia, Nestle and Nandini. Most of the
competitors price their butter relatively lower to Amul’s product but not by a huge margin.
Even though Amul’s prices are higher, people prefer their products to other brands because of
brand loyalty. This is because consumers perceive Amul’s butter to have a higher quality to
other brand’s butter. Here we can say that, Amul is a value p erceived competitor.
Product bundling pricing:
Amul has introduced smaller quantities, containing 10g of butter which can be used as one
serving for one individual. They call it the school pack, mainly targeting school going children.
They bundle together 10 units of such servings, thereby providing a total of 100g. this is pure
bundling pricing as it’s the same product being sold.
Amul has adopted promotional strategies since its inception in such a way that it has made a
mark for itself in the people’s mind, making it the number 1 brand in dairy products. One
unique marketing strategy of Amul is Umbrella Branding i.e., they promote the ir products
under the name Amul across their product categories.
Amul adopted various marketing communication mix which are as follows:
Story of Amul Girl:
In 1966, Sylvester daCunha the MD of daCunha Communications , an adversting firm was t he
brain behind Amul Girl – The chubby girl in polka dots dress. The Amul girl till date is part of
Amul’s promotions and this was initially designed for a campaign which made it to Guinness
book of world records for being the longest and successful runnin g ad campaigns. They
promote in such a way that they reflect the current scenario of the country using the mascot
with quirky lines. After the introduction of their mascot, the sales shoot up from 1000 tonnes a
year in 1966 to 25,000 tonnes a year in 1997.
People greatly connect with the tagline of Amul i.e., The taste of India. Amul has two important
brand elements which are the Amul girl and the catchy tagline “Utterly Buttertly Delicious
Amul” both together create magic and remain relevan t even to this day.
Hoardings, Print Media ( Newspapers, Magazines ), Billboards, TV Ads, Cinema, Websites
and portals were used as adversting platforms to promote their products effectively. Amul
spends not more than 1% of turnover on their advertisement. Amul believes in creative and
genuine ads rather than spending huge amount on advertising.
2. Events and Experiences:
Amul sponsored popular TV shows like Master Chef India to promote Amul Butter, targeting
few of their major consumer groups i.e., households and chefs.
Intensive Distribution Strategy :
Amul has adopted Intensive distribution strategy as where the company products are available
at as many outlets as possible, so that the consumers encounter the product virtually everywhere
they go . Amul Butter is available in retail outlet segments like Kirana St ore / Modern Format
store / Amul Parlors / Hotel ; Restaurant segment / Railway and Flight Kitchen etc .
The main objective of the distribution strategy of Amul is to ensure its products reaching the
final consumers before getting perishable.
Ch annel Integration And System :
• Conventional : The company had adopted conventional channel integration as every
channel in the distribution works for their own independent profits.
• Contractual Vertical Marketing Systems : The company had adopted franchising
model of contractual vertical marketing systems to provide its products to the end
consumers by making them as its one of the distribution channels by providing
franchising to the independent firms. Amul gets benefitted in
o Increasing economies of scale
o Product availability
o Increase in market availabilit y
Pull Strategy In Marketing Channel :
In managing its intermediaries, Amul devoted a pull strategy, where by advertising in social
media referring to the current affairs, promoting its products with other forms of
communications to persuade the consumers to demand the products from its intermediaries like
retail stores, own -house stores and franchise sto res. This strategy is particularly appropriate to
Amul because of its high brand value and brand loyalty.
Distribution Flow :
Including every FMCG company, Amul also concentrates on breaking the bulk to save its
production and selling expenses to ensure the economies of scales by producing more output.
• Three Level: The company adopted 3 level channel flow of distributions to reach its
products to its end consumers, thus eliminating the intermediaries benefitting to low
price offerings. The distributions of the product flows with 3 channels
o Wholesal er/Amul parlour/Amul franchise
The Head Office of AMUL is located at Anand, Gujarat. The entire market is divided in 7
zones representing zonal offices, which are located at Ahmedabad, Mumbai, New Delhi,
Kolkata, Lucknow, Guwathi and Chennai controlling over 60 branches /distributors loc ated
across the country and GCMMF exports to 11 countries. It supplies in huge amounts to its
branches in, wh ich are required to have the right arrangements to store Amul products in bulk
due to its perishability which then transfers the products to wholesalers who in turn give it to
retailers. These transportations were done with fully refrigerated trucks to ensure the product
getting not perishable until it reaches final consumers. Moving forward, Amul has a direct sal e
team , who sells amul butter to modern retail. Amul butter can also be available through online
platforms like Big basket, Amazon Pantry etc.
WHOLE SALER AMUL
Pricin g: Amul can use mixed bundling pricing where a new product or a less selling product
can b e offered with the most popular product. For example, with a 500gm pack of Amul butter
100gm of Amul garlic can be bundled.
Promotion: Sales promotion techniques can be used by distributing small blisters of new
product or less popular butter spreads to the consumers.
Distribution Strategy : Amul can launch their own e – commerce platform where retailers can
register , sell Amul products an d consumer can buy them online .
Packaging: The 100gm Amul butter is packed in a carton box which starts absorbing the oil
content of the butter after some time. This could be improvised by introducing tubs and butter
tubes for 100gm variants. Different var iants of butter like Amul choco spread is available only
in a 200gm tub. For such products different quantities like 10gms blisters, 50gms 100gms,
should be offered