Amul, the mother brand of India’s largest food products organization, the Gujarat Co-

operative Milk Marketing Federation Ltd. (GCMMF), redefined the way food products were
advertised to the people. This caselet highlights the clever use of topical advertising by
GCMMF using humor, to generate higher brand recall. The caselet brings out the utility of
hoardings as an effective marketing communications tool for marketers. Finally, this caselet
discusses the rationale behind GCMMF’s strategy to introduce the ‘Amul Cheese Boy’ as a
brand mascot for its Amul cheese brand, despite the popularity of the ‘Amul Butter Girl’.

Issues:

» Role of topical advertising

» Hoardings as a marketing communications tool
» Influence of brand mascots on brand image.

Introduction

The Gujarat Co-operative Milk Marketing Federation (GCMMF) is

India’s largest food products organization. It manufactures value-
for-money food products that include bread spreads, cheese,
mithaee (ethnic sweets), ghee, milk powders, fresh milk, curd
products, ice creams, chocolate and confectionery, health drinks,
and ready-to-serve soups. GCMMF handles around 6.9 million
liters of milk per day with a producer membership base of 2.36
million. Amul is the mother brand for all the products of GCMMF.

Before Amul entered the picture, companies used conventional methods of advertising where
the focus was only on the food products and the tone of the pitch was serious. Amul changed
the way food products were communicated to the people in India. It always advertised its
mother brand – Amul, and not its products like butter, pizzas, or cheese. The cooperative has
been making extensive use of hoardings for promoting its flagship brand ‘Amul Butter’ since
1966, and is all set to enter the Guinness Book of World Records for the longest run promotion
campaign .....

Questions for Discussion:

1. Analyze the reasons for the success of GCMMF’s hoardings, which continue to evoke
customer interest even after 39 years. To what extent do you attribute this success to topical
advertising?

2. GCMMF introduced the ‘Amul Cheese Boy’ in 1999 to create a brand recall for its Amul
Cheese slice as the ‘Amul Girl’ did for its butter. How can GCMMF establish the new mascot
and avoid creating confusion in the minds of the consumers?

Posted: Thursday, Jun 19, 2008 at 2339 hrs IST

Updated: Thursday, Jun 19, 2008 at 2339 hrs IST

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Mumbai, Jun 18: Enthused by its performance in FY 08, the Gujarat Cooperative Milk
Marketing Federation Ltd (GCMMF) is drawing up a fresh game plan for its flagship
brand 'Amul Fresh Milk'. Rival Mother Dairy India is not far behind. To sustain its
competitive edge, Mother Dairy is chalking out an aggressive growth strategy to reach
out to a wider target audience. The Rs 18,000-crore packaged milk sector will soon
witness a pitched battle between two lead players Amul and Mother Dairy India, predict
industry analysts.

On Amul’s future plans, RS Sodhi, chief general manager, GCMMF said: "We are
expanding our processing and packaging capacity to meet growing demands. For starters,
we are setting up additional processing facilities in Delhi and Mumbai. Currently, we
lead the pack with the production of 50 lakh liters per day."

In a bid to pump up volumes, Amul is also extending its distribution network to reach
new markets. "Our core strategy is to further consolidate our operations in existing
markets which includes Kolkatta. Also, we are beefing up our marketing and advertising
strategy to sustain our leadership,” said Sodhi.

Incidentally, Amul is selling its packaged milk brands on the Net too. The company has
recently extended its product portfolio by launching Amul Calci-a fortified milk brand.
The company’s long term strategy includes foray into South India. "But, we do not have
any immediate plans to enter South Indian markets,” said Sodhi.
Meanwhile, Mother Dairy India is sharpening its marketing focus to promote its milk
brand in major metros across the country. "The Rs 18,000-core branded milk sector is
steadily growing as consumer opt for hygienic milk products. We plan to go national in
the next few years,” said Paul Thatchil, chief executive officer (Dairy & Foods), Mother
Dairy Fruit & Vegetables (P) Ltd.

With increasing competition, the packaged milk sector will witness a lot of action this
year, predict industry analysts.” The Gujarat Cooperative Milk Marketing Federation is
beefing up its resources to strengthen its foothold in the liquid fresh milk market of Delhi,
a battleground for the two cooperative giants —National Dairy Development Board
(NDDB) and GCMMF,” said an analyst based in Mumbai. In India, the per capita
consumption of milk is increasing day by day, according to industry analysts.
"Consumers are increasingly opting for packaged milk for health reasons. The sector will
register a healthy growth this fiscal,” added analysts.

Out-of-home advertising in India

Nothing sums up the circumstances in India quite like the figures.

Between January and July 2008, There were eight investments in
seven months in OOH companies. Since then, not a single investments
in an Indian OOH company has been announced. That is, 14 dry
months.
Those investments put big bucks in the hands of a few organized
players, creating fierce competition for sites, leading to astronomical
bids, which the OOH companies naturally expected their clients to pay
through high ad rates. With the down turn, OOH companies big and
small have been severely wrong-footed..
It wasn’t only bad stuff that happened in 2008, though. Among the
most positive things was that OOH was finally accepted as a mainline
medium. New advertisers turned to it while the existing ones upped
their spend. Newer media formats like digital and street furniture
gained prominence.

There was also a surge in innovations

“The feeling of euphoria that was witnessed in 2007 to mid-2008 led
many companies in the wrong direction. Most outdoor companies bid
sky-high for various tendered properties. The valuations were
unrealistic,” admits Yuvraj Agarwal, executive vice-president, group
revenue, Laqshya Media.
HANGING BY THEIR FINGERNAILS
As the slowdown took grip, site occupancy plummeted and ad rates
tanked. Ashish Pherwani, senior manager, Media and Entertainment
(and OOH was hit at least as hard as – if not harder than – other
media. Currently, the sector is fighting to raise rates which dropped by
as much as 50 per cent.”
Noomi Mehta, chairman and managing directors, selvel One group,
adds, “’Lowering prices’ is too gentle a tern are made at times like
these. These are normally done by small operators and fly-by-
nighteres who are out to make a quick buck and are shaken off by the
financial storm.”
Even bigger than the problem of getting business is the matter of
collections. The tightening of credit facilities by the banks and delayed
payments by clients and OOH specialist agencies have compounded
the issue. In the absence of a formal credit policy, every company is
facing a liquidity problem and is forced to part with huge discounts and
credit notes each year to recover dues. As Mangesh Borse, director,
Symbiosis Advertising , puts it, “We are making profits – but only on
paper, since payments are delayed by as much as six months.”
Nabendu Bshattacharyya, President, Ogilvy Action, one of the most
prominent specialist agencies, says that the problem lies elsewhere, “I
strongly believe that 99 Per cent of the clients pay on time if the
paperwork at the agency and media owners is perfect. Clients can
sometimes get into a real cash crunch but that happens rarely.”
MATTERS OF AUTHORITY
The economic hit has made OOH companies especially carefull about
the way they bid for government tenders which , in the past, were
considered a quick one short way of gaining size.
Everyone has in their mind the experience of Big Street, part of the
Anil Dhirubhai Ambani Group (ADAG)which, in August 2008, bid Rs79
crore to gain the rights (for 10 years) to Mumbai’s Bandra Skywalk (a
1.3-Km long, raised pedestrain walkway). Under the changed
circumstances, Big street decided this May to Walk away from the
contract, forfeiting its earnest money with the Mumbai Metropolitan
Regional development Authority (MMRDA). OOH companies have
mixed feelings about bidding for government property.
Mehta of Selvel One believes that dealing with the authorities ha its
pros and cons. The pros include the scope for ‘ managing’ situations
that occur; since accountability is poor, payments can be delayed.
Besides, it helps a company build substantial inventory through a
single storke. It also guarantees stability since government property is
unlikely to be touched by even whimsical changes in municipal policies
on outdoor advertising.
The cons, Mehta believes, are the large earnest money deposits and
the fact that the reserve (or minimum) price for such projects is high.
Large tenders are also fiercely contested to the point of almost
guaranteed loss, as seen in many cases.
NEW MEDIA, NEW ISSUES
As if things weren’t bad enough in the established part of the business,
they got far worse in airport advertising which has grown only in the
few years. Big boy times OOH, which has the advertising rights for
Mumbai and Delhi airports, and gets 70 per cent of its revenue coming
from there, too, has been feeling the pressure. This paragraph in
Entertainment Network India’s (ENIL) Annual Report for 2008-09 is
revealing, though the exact figures for Times’ OOH business are
unavailable. While stating that Times OOH) grew 11 per cent year-on-
year, ENIL managing director, A P Parigi’s message to shareholders,
says that the growth could have been far higher had not been a drastic
fall in outdoor media spends by companies. The report goes on to say
later: ‘…. The OOH business is very capital intensive and has a long
return on investment cycle. Huge investments have already been
made in the OOH. Others too found the going turbulent. Laqshya
Media, which has the media rights for Hyderabad Airport as well as for
Colombo, lost money, too.
This had to do with the fact that- apart from everything else- air traffic
tumbled in the slowdown. “Passenger numbers started dwindling and
the 40 per cent plus growth rates witnessed in airport passenger traffic
in 2007-08 turned into negative 10 per cent rates. This led to a loss in
valuation for airport properties. To make matters worse, categories
like real estate, airlines and financial services virtually stopped
advertising, resulting advertising demand contracting,” shares Agarwal
of Laqshya Media. The company exited digital screens, which were a
drain on its reasources and went through an organizational
restructuring exercise to focus on long term growth. It also downsized
in verticals like Laqshya Digital Media, where the gestation periods
were long.
In fact, in digital media, one of the biggest players, OOH Media that
currently claims to operate about 5000 screens in 22 cities across
India and reach out to 50 million people a month, has slowed its
expansion spree considerably.
Ishan Raina, MD & CEO,OOH Media says, “ when we started off, the
game was one of increasing the number of screens. Now the focus is
on the number of advertisers: my target is to increase the number of
clients from 300 to 1000.”
The good news, he says, is that under pressure, marketers are willing
to explore new options. The bad news? Being a new media, digital
screens have been hit on pricing. “So we are selling more and adding
clients but our topline growth has slowed down as compared to last
year – though we are still growing,” says Raina.
While the worst may be over, the good times are still some time away,
Says Raina, “Once the client has tasted a low rate, it will take at least
a year to increase prices, I expect price pressure on the media
industry to continue for two to three years. We have to be very careful
about our costs.”
Media owners are hoping that a combination of the festival season and
the launch of many new products which has been postponed will see
them through till the end of this year. “By that time, the steps the
government has taken should hopefully kick in and demand should
remain steady. I feel the government itself will emerge as a big
advertiser, “ says Mehta.
WILL INVESTMENTS RETURN?
Pherwani of Ernst & Young certainly thinks so. “There are several
media companies as well as some PE (private equity) firms who still
have a keen eye on the sector. As it gets more mature, with an
increased amount of large public tenders around street furniture,
transport and infrastructure, it is placed to grow and attract
investment,”
Raina , whose own firm has received findings, points out that what has
happened in OOH has taken place with the internet and radio, too.
”This is in the nature of most new business. First, their potential is
overestimated in long term.”
OOH’S NEW CANVAS
Revaluation of properties:
With marketers questioning the rates of OOH property more closely,
media owners are reviewing their own investments. In some cases
substantial investments have been made to improve the outdoor
media format- for example, new international-style bus shelters,
digital screens and better airport infrastructure. Here, marketers are
more willing to appreciate the logic of higher rates. But advertisers are
questioning traditional advertising formats where they are expected to
pay more simply because the owner has thrown more money to win
the space.
THE PLAYERS ARE HOPING THAT THE FESTIVAL SEASON AND THE
POSTPONED LAUNCH OF PRODUCTS WILL SEE THEM THROUGH TILL
THE YEAR- END.
On another front, asset owners now also need to proactively target
advertisers, and sell more actively to them around their
communication objectives, rather than present themselves as a
‘vendor of hoardings’.
MEASURABILITY
Pherwani of E&Y points out that a major reason for the drop in outdoor
site rentals could be the lack of measurability, since marketing
managers need to be able to demonstrate the effectiveness of their
spends at the best of times and doubly so during a slowdown.
The measurement system for outdoor media, better known as the
Indian Outdoor Survey(IOS), was launched in June by MRUC (Media
Research Users Council) with Hansa Research. It has been designed to
provide audience-led research at par with other media in order to
establish traffic, cover and frequency estimates and will aid in planning
and buying of hoardings, bus shelters and Kiosks. To start with, the
survey has been launched for upbeat about this first industry
measurement tool and hopes to see the survey cover other parts out
that when transparency grows, so will the advertisers’ faith in the
medium, leading to its growth.
CREDIT POLICY:
Industry veterans got together at the Outdoor Advertising Convention
2009 held in June in Mumbai, to discuss the formation of a credit
policy. Industry veterans lid Madison’s discussed plans to work on a
detailed credit policy Newspapers Society and the Indian Broadcasters
Federation.
The project has been handed over to Soumitra Bhattacharyya who
retired from Laqshya early this year as CEO and is now and
independent consultant. The aim will be to create a comprehensive
credit policy for the industry, which will be presented and negotiated
with the Advertising Agencies Association of India for implementation
nationally. This will involve review of billing practices, accreditation of
agencies, definition of credit periods and terms, penalties for non-
compliance and the like.
WATCH THOSE GOVERNMENT TENDERS:
Companies now approach government projects and tendered bids with
caution. Tenders used to be for a few years and this was an issue since
OOH firms were reluctant to make big investments if they din’t have a
longer term to play with. They are increasingly pressing for – and
sometimes succeeding to get – longer – term contracts. This is
changing the views of tenders since a long-term tender provides the
much-needed stability.
COMING CONSOLIDATION:
The OOH business in India has traditionally been a fragmented one.
Consolidation is inevitable, feel seniors.
Robin Carruthers, director, square Circle Outdoors, part of Sholk
Media, points out that there isn’t single player in OOH who can fulfill a
client’s need on a pan-India basis. “ This explains the emergence and
current position of the Ooh specialist agencies. Most advertisers look
for a single-window operation and end up going to specialist agencies
which offer them this solution,” he says. E&Y’s Pherwani thinks that
firms need to get together and build national networks, which is what
larger advertisers are clamouring for.
Carruthers opines that consolidation is not just about but-outs and
mergers but also formation of governing bodies where big industry
players come under the same umbrella to ensure that all operate
within a certain set of guidelines. These steps have been initiated with
the formation of the Indian Outdoor advertising Association (IOAA).
While consolidation will ultimately take place by way of buy-outs, he
believes that this is still some time away.
Agarwal Of Laqshya summarises the situation best when he says,”
We’re all dealing with issues that impact our professional and personal
lives. What will set people apart during this time is learning what
doesn’t work, adapting to it, and making sure not to repeat it once the
good time return. Maybe we’ll have our umbrellas ready the next time
it rains.”
Source: The Brand Reporter, Sep, 2009.