About the market

The highest milk producer in the entire globe – India boasts of that status. India is
otherwise known as the ‘Oyster’ of the global dairy industry, with opportunities galore to
the entrepreneurs globally. Anyone might want to capitalize on the largest and fastest
growing milk and mil products' market. The dairy industry in India has been witnessing
rapid growth. The liberalized economy provides more opportunities for MNCs and
foreign investors to release the full potential of this industry.

The main aim of the Indian dairy industry is only to better manage the
national resources to enhance milk production and upgrade milk processing using
innovative technologies.

Potential for investment in the dairy industry

Some areas of Indian dairy industry can be toned up by the evocation of differentiated
technologies and equipment from overseas. These include:

1. Raw milk handling: The raw milk handling needs to be elevated in terms of
physicochemical and microbiological properties of the milk in a combined
manner. The use of clarification and bactofugation in raw milk processing can aid
better the quality of the milk products.
2. Milk processing: Better operational ratios are required to amend the yields and
abridge wastage, lessen fat/protein losses during processing, control production
costs, save energy and broaden shelf life. The adoption of GMP (Good
Manufacturing Practices) and HACCP (Hazard Analysis Critical Control Points)
would help produce milk products adapting to the international standards.
3. Packaging: Another area that can be improved is the range of packing machines
for the manufacture of butter, cheese and alike. Better packaging can assist in
retaining the nutritive value of products packed and thus broaden the shelf life. A
cold chain distribution system is required for proper storage and transfer of dairy
products.
4. Value-added products: There's vast scope for value-added products like desserts,
puddings, custards, sauces, mousse, stirred yoghurt, nectars and sherbets to
capture the dairy market in India.

The Indian dairy industry has aimed at better mananamegemt of the national resources to
enhance milk production and upgrade milk processing involving new innovative
technologies. Multinational dairy giants can also make their foray in the Indian dairy
market in this challenging scenario and create a win-win situation for both.

India's Milk Product

Fluid Milk 46.0%

Ghee 27.5%
Butter 6.5%
Curd 7.0%
Khoa (Partially Dehydrated Condensed Milk) 6.5%
Milk Powders, including IMF 3.5%
Paneer & Chhana (Cottage Cheese) 2.0%
Others, including Cream, Ice Cream 1.0%

Overview of the Indian Dairy Sector

• The country is the largest milk producer all over the world, around 100 million
MT
• Value of output amounted to ` 1179 billion (in 2004-05) (Approximately equals
combined output of paddy and wheat!!)
• 1/5thof the world bovine population
• Milch animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred cows)
• Immensely low productivity, around 1000 kg/year (world average 2038 kg/year)
• Large no. of unproductive animals, low genetic potency, poor nutrition and lack
of services are the main factors for the low productivity
• There are different regions – developed, average, below average (eastern states of
Orissa, Bihar and NE region) in the dairy industry.
About orissa
Cost of living in rural Orissa was one of the lowest in the country even as the state
government claimed reduction in poverty by 11.73 between 2004-05 and 2007-08.
The rural-urban poverty gap remains larger than all India average. While coastal region
registered the sharpest decline of poverty according to 61st round of NSS (national
sample survey), the extent of poverty in southern and northern regions is still very high
and remains a matter of concern.

Pointing out that the state witnessed wide range of regional and social disparities in
development, the report said that all regions have not developed uniformly.

The analysis presented in the survey 2010-11 clearly brings out that there is perceptible
structural change in Orissa's economy.

The service sector has become more and more pronounced with its share being 54 per
cent of GSDP as per quick estimation of 2009-10.

The share of the industrial sector has increased to 28 per cent and that of the agriculture
sector has come down to 18 per cent of GSDP in 2009-10.

population (Millions) 726 275 1001

per capita NDP(Rs.) 10652 30095 15993

Refrence:- http://articles.economictimes.indiatimes.com/2011-02-
15/news/28540071_1_orissa-rural-urban-poverty-gap-perceptible-structural-change
Amul marketing mix orrisa And analysis

Products:-
milk, butter, ghee, cheese, chocolate, Shrikhand, Gulab Jamun, ice cream, cream,
Nutramul brand.
As they are into rural markets which donot much like preserve foods therefore their
preserve food segment will not be the part of their product mix. For example milk powder
etc. the choco drink amul cool also will not be introduced.
Instead they could introduce the new product segment of drinks
Sweet Lassi
Mango juice
Namkeen lassi
Thandai, etc

Price:-
As mentioned about the economy of orissa its lowest compare to all India hence the
products must not be priced high. So for providing such prices the amul must design their
pricing strategy acoordingly.
They must introduce products in small packaging and introduce low segment products
like.
Milk no cream costing 7 rs/500ml
Small butter packets costing rs. 5
Small kids chocolates costing rs.2-10
Low price ice creams like ice candies costing rs2-5

Place:-
As 85% of the population lives in rural (census report 1999-2000)
Hence the most of the population is in rural sector.
There fore their distribution network must include:-
Local vendors
The dairy shops

Should start with their own amul kiosks at regular intervals so as to create presence in the
mind of customers

Promotion:-
CSR is the word for the promotion .
Today Amul collects, processes and distributes over a million liters of milk and milk products per
day, during the peak, on behalf of more than a thousand village cooperatives owned by half a
million farmer members.

The first products with the Amul brand name were launched in 1955. Since then, they have been
in use in millions of homes in all parts of India, and beyond. There is something more, though,
that makes the Amul brand special and that something is the reason for the commitment to
quality and value for money. Amul is the brand name of 2 million farmers, members of 10,000
village dairy cooperative societies throughout Gujarat. This is the heart of Amul, it is what gives
strength to Amul, and it is what is so special about the Amul saga.
The Amul Pattern has established itself as a uniquely appropriate model for rural development.
Amul has made India one of the largest milk producers in the world. It is also the world's biggest
vegetarian cheese brand. Amul's product range includes milk powders, milk, butter, ghee,
cheese, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, Nutramul brand and
others.

Like in all states amul must use their 3 tier model

The Three-tier "Amul Model"

The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy
Cooperative Society at the village level affiliated to a Milk Union at the District level
which in turn is further federated into a Milk Federation at the State level. The above
three-tier structure was set-up in order to delegate the various functions, milk collection is
done at the Village Dairy Society, Milk Procurement & Processing at the District Milk
Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in
eliminating not only internal competition but also ensuring that economies of scale is
achieved. As the above structure was first evolved at Amul in Gujarat and thereafter
replicated all over the country under the Operation Flood Programme, it is known as the
‘Amul Model’ or ‘Anand Pattern’ of Dairy Cooperatives.

Responsible for Marketing of Milk & Milk Products Responsible for Procurement &
Processing of Milk Responsible for Collection of Milk Responsible for Milk Production

3.1 Village Dairy Cooperative Society (VDCS)

The milk producers of a village, having surplus milk after own consumption, come
together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy
Cooperative is the primary society under the three-tier structure. It has membership of
milk producers of the village and is governed by an elected Management Committee
consisting of 9 to 12 elected representatives of the milk producers based on the principle
of one member, one vote. The village society further appoints a Secretary (a paid
employee and member secretary of the Management Committee) for management of the
day-to-day functions. It also employs various people for assisting the Secretary in
accomplishing his / her daily duties. The main functions of the VDCS are as follows:

• Collection of surplus milk from the milk producers of the village & payment
based on quality & quantity
• Providing support services to the members like Veterinary First Aid, Artificial
Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder
seed sales, conducting training on Animal Husbandry & Dairying, etc.
• Selling liquid milk for local consumers of the village
• Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and
assisted by the District Milk Union.
3.2 District Cooperative Milk Producers’ Union (Milk Union)

The Village Societies of a District (ranging from 75 to 1653 per Milk Union in Gujarat)
having surplus milk after local sales come together and form a District Milk Union. The
Milk Union is the second tier under the three-tier structure. It has membership of Village
Dairy Societies of the District and is governed by a Board of Directors consisting of 9 to
18 elected representatives of the Village Societies. The Milk Union further appoints a
professional Managing Director (paid employee and member secretary of the Board) for
management of the day-to-day functions. It also employs various people for assisting the
Managing Director in accomplishing his / her daily duties. The main functions of the
Milk Union are as follows:

• Procurement of milk from the Village Dairy Societies of the District

• Arranging transportation of raw milk from the VDCS to the Milk Union.
• Providing input services to the producers like Veterinary Care, Artificial
Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder
seed sales, etc.
• Conducting training on Cooperative Development, Animal Husbandry &
Dairying for milk producers and conducting specialised skill development &
Leadership Development training for VDCS staff & Management Committee
members.
• Providing management support to the VDCS along with regular supervision of its
activities.
• Establish Chilling Centres & Dairy Plants for processing the milk received from
the villages.
• Selling liquid milk & milk products within the District
• Process milk into various milk & milk products as per the requirement of State
Marketing Federation.
• Decide on the prices of milk to be paid to milk producers as well on the prices of
support services provided to members.

3.3 State Cooperative Milk Federation (Federation)

The Milk Unions of a State are federated into a State Cooperative Milk Federation. The
Federation is the apex tier under the three-tier structure. It has membership of all the
cooperative Milk Unions of the State and is governed by a Board of Directors consisting
of one elected representative of each Milk Union. The State Federation further appoints a
Managing Director (paid employee and member secretary of the Board) for management
of the day-to-day functions. It also employs various people for assisting the Managing
Director in accomplishing his daily duties. The main functions of the Federation are as
follows:

• Marketing of milk & milk products processed / manufactured by Milk Unions.

• Establish distribution network for marketing of milk & milk products.
• Arranging transportation of milk & milk products from the Milk Unions to the
market.
 • Creating & maintaining a brand for marketing of milk & milk products (brand
building).
• Providing support services to the Milk Unions & members like Technical Inputs,
management support & advisory services.
• Pooling surplus milk from the Milk Unions and supplying it to deficit Milk
Unions.
• Establish feeder-balancing Dairy Plants for processing the surplus milk of the
Milk Unions.
• Arranging for common purchase of raw materials used in manufacture /
packaging of milk products.
• Decide on the prices of milk & milk products to be paid to Milk Unions.
• Decide on the products to be manufactured at various Milk Unions (product-mix)
and capacity required for the same.
• Conduct long-term Milk Production, Procurement & Processing as well as
Marketing Planning.
• Arranging Finance for the Milk Unions and providing them technical know-how.
• Designing & Providing training on Cooperative Development, Technical &
Marketing functions.
• Conflict Resolution & keeping the entire structure intact

They must continue Their Amul baby campaign for advertisement.

Refrences
http://en.wikipedia.org/wiki/Amul#The_Three-tier_.22Amul_Model.22
www.syl.com/.../amulpatternauniquemodelforruraldevelopment.html
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