Organizational buying behaviour is a choice
making procedure by which formal associations build up the requirement for
products and services and recognize, assess and pick among available options
of brands and suppliers. The organizational buying process is entirely
different from the consumer buying process. While buying decisions are made
relatively easily and quickly by individual customers, organisational buying
involves thorough and deep analysis. Organizations purchase products ranging
from highly complex machinery to small components.
In an organization, the purchase decisions are influenced by several individuals and are not made in isolation by an individual. Organizational buyers are more concerned about the price and quality of the product along with the service being provided by the vendor. Service also plays an important role, because no organization would like to buy goods from a vendor who cannot provide timely and efficient service.
Organizational markets normally purchase the goods
or services for producing other goods and services, using these as raw
materials. There are also resellers, who purchase the products to sell directly
to other customers without any modifications.
In Amul dairy cooperatives in Gujarat have created an economic network that links more than 3.1 million village milk producers with millions of consumers in India. These cooperatives collect on an average 9.4 million litres of milk per day from their producer members. Another example is retailers that buy amul milk in bulk to sell in their shop. Buying in bulk helps in getting the buyer better and cheap prices for that product.
The Organizational Buying
Process:
●In NEED RECOGNITION the organization recognizes a problem or need that can be
met by acquiring a good or service. For example for making chocolates different
ingredients are needed. So at this stage the need would be established.
●In NEED DESCRIPTION buyer determines the needed item’s general characteristics
and required quantity. Here the characteristics and quantity of milk required
is specified on quality terms like fat content etc.
●In PRODUCT SPECIFICATION buyer develops technical specifications of the product
to be purchased.
●In SUPPLIER SEARCH the buyer identifies the most suitable supplier through
trade directories and then contacts other companies, trade advertisements,
trade shows and the internet. The Anand Pattern is essentially an economic
organizational pattern to benefit small producers who join hands forming an
integrated approach in order to economy of a large scale business. The whole
operation is professionally managed so that the individual producers have the
freedom to decide their own policies each member's milk is tested for quality
with payments based on the percentage of fat and SNF. At the end of each year,
a portion of the DCS profits is used to pay each member a patronage bonus based
on the quantity of milk poured.
●In PROPOSAL SOLICITATION the buyer invites qualified suppliers to submit
proposals.
●In SUPPLIER SELECTION the buyer selects a supplier according to the needs of
the organization and attributes of the supplier. The final selection of the
supplier will be done at this stage.
●In ORDER ROUTINE SPECIFICATION the buyer negotiates the final order with the
supplier, listing the technical specifications, quantity needed, expected time
of delivery, return policies, warranties etc.
●In PERFORMANCE REVIEW the
buyer periodically reviews the performance of the chosen supplier
The Amul brand is not only a product, but
also a movement. It is in one way, the representation of the economic freedom
of farmers’ .Amul continues to inspire one and all interested not only in
dairying but also in other areas, people involved in the rural development and
sustaining livelihood through massive employment generation.
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AMULAYA AMUL
This blog is about Amul Milk and its marketing strategies which make it the market leader in Indian Dairy Industry. Amul is a dairy brand which spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. In the process Amul became the top milk brand in India and has ventured into markets overseas.
Tuesday 13 October 2015
Organizational Buying Behaviour
The Brand
AMA defines
brand and branding as "a name,term,sign,symbol or design or a combination
of them,intended to identify the goods or devices of one seller or a group of
sellers and to differentiate them from those of competitors."
Formed in 1946, it is a
brand managed by a cooperative body, the Gujarat Co-operative
Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.6
million milk producers in Gujarat. Amul spurred India's White Revolution, which made the country
the world's largest producer of milk and milk products. In the process
Amul became the largest food brand in India and has
ventured into markets overseas.
BRAND MANAGEMENT
Brand management is a
function of marketing that uses special techniques in order to increase the
perceived value of a product. Based on the aims of the established
marketing strategy, brand management enables the price of products to grow and
builds loyal customers through positive associations and images or a strong
awareness of the brand.
STRATEGIES:
1. The Ultimate Strategy
The Amul girl was the
brainchild of Sylvester Da Cunha, the managing director of the advertising
agency AS. The ads were designed as a series of hoardings with designed relating
to day-to-day issues. The biggest reason for this is the topical nature of
the ads. Amul ads have witty one liners which capture relative
events that have caught the fancy of the nation.
2. Low-Cost Price
Strategy
Low Cost Price Strategy
was adopted to make the product affordable and alluring
to consumers by granting them value for money. The main aim of
Amul is to provide quality products to consumers at minimal cost. The goal
of Amul is to provide maximum profit in terms of money to the farmers. Low Cost
of production of Amul: Milk production is scale insensitive and labour
intensive. Due to low labour cost, cost of production of milk
is significantly lower in Amul.
3. Defence Strategy
Moving consumers to
loose milk to packaged milk and gradually move them up the value chain(tetra
pack to beverage).
4. Product positioning
Strategy
Amul takes to
global sports events
Amul
can venture into offering low-fat versions of milk and will help capture the
market of second and third generation Indians and Global Market.
CONCLUSION
Monday 12 October 2015
Consumer and Consumption
Consumer spending,
consumer demand, consumption, or consumption expenditure is the purchasing of
goods and services by individuals or families. It is the largest part of
aggregate demand at the macroeconomic level. There are two components of
consumption in the basic model: induced consumption (which is affected by the
level of income) and autonomous consumption (which is not).The customer
satisfaction decides the fate of the product and organization. There is various
factors influence to the customer satisfaction.
The 2014-15 figures
indicate that India produced 147 million tons of milk which makes us the
world's largest milk producer. Though a large part of this market is raw
buffalo milk, but pasteurized cow's milk is popular in Tier 1 and Tier 2.
Consumers’ primary
preference is taste; health and nutrition come after that. So whatever products
Amul provides, if people do not get the taste right then it will not work. So
if we look at sugar-free or low-fat products, they don’t even account for 10%
of the brand’s revenues. Such products don’t even sell in 1% of Amul outlets.
The demand is so scattered. Meanwhile, brands like Amul Gold, which is high-fat
milk, is a topseller.
While the act permits four types of milk (double toned, toned, standardized and whole) no dairy in India sells more than two types. So, Amul not only established a presence in all existing segments but also created fresh ones. This later helped during price hikes because consumers could drop from the variety they had favoured to a less expensive one and yet stay within the Amul fold.
In the milk market, consumers show little preference for any brand or even any milk type. They easily shift between the different varieties for price reasons and also because they are unfamiliar with the ingredients that make up milk. However, Amul first had to be available to the consumer. Milk being a primary need, the housewife would settle for another brand(or type) if her preferred brand was unavailable when she needed it most-early in the morning. Easy accessibility seemed to be the key, in other words, perfect and synchronized distribution channels within the vicinity of the consumer’s home. Wide range ofamul product categories caters to consumers across all market segments. For example, Amul Kool is targeted at children, while teenagers prefer Kool Cafe, as it has a cool imagery associated with it
AMUL has different variants of its product for every one –
- Amul gold full cream milk – It has high fat and SNF content, and is favoured by parents for their children.
- Amul Saathi – Double-toned and lower-priced which is low on fat and high on SNF, is preferred by diabetics, blood pressure patients, and the elderly
- Amul Standardized Milk branded as Amul Shakti and Amul toned milk got itself a new name Amul Taaza
- Amul has never forgotten its primary customer – Amul collects 7 million litres of milk from 2.6 million farmers(many illiterate)
- Product for youth – Amul launched chocolate milk under brand name of “Amul Kool Koko” targeting the youth
- Product for diabetic people – India’s first pro-biotic wellness icecream and sugar free delights for diabetics.
Customer preferences are
changing and so are their spending patterns. As a result, the share of value
added branded products in overall revenues, has been rising steadily.
Distribution Decisions
Having a strong product does little good if customers are not able to
easily and conveniently obtain it. Along with price and promotion decisions, a
decision has to be made on the distribution system. There are two components to
this - the physical (order processing storage/warehousing and transport) and
the institutional aspects. The latter involves the choice of agents,
distributors, wholesalers, retailers, direct sales or sales forces.
Amul products are available in over
500,000 retail outlets across India through its network of over 3,500
distributors. There are 47 depots with dry and cold warehouses to buffer
inventory of the entire range of products. GMCMMF has 42 regional distribution
centres in India and exports to more than 15 countries.
A marketer’s distribution system must be both effective and efficient.
·
Assessing the best distribution channels
for getting products to customers
·
Determining whether a reseller network is
needed to assist in the distribution process
·
Arranging a reliable ordering system that
allows customers to place orders
Resellers
These organizations, also known within some industries as
intermediaries, distributors or dealers, generally purchase or take ownership
of products from the marketing company with the intention of selling to others.
If a marketer utilizes multiple resellers within its distribution channel
strategy the collection of resellers is termed a Reseller Network. These
organizations can be classified into several sub-categories including:
·
Retailers.
·
Wholesalers
·
Industrial Distributors
·
Specialty Service Firms
These are organizations that provide additional services to help with
the exchange of products but generally do not purchase the product (i.e., do
not take ownership of the product):
·
Agents and Brokers
·
Distribution Service Firms
·
Others
In the end:
Sunday 11 October 2015
Product Life Cycle
Consumers
buy millions of products every year. And just like consumers, these products
have a life cycle. Older, long-established products eventually become less
popular, while in contrast, the demand for new, more modern goods usually
increases quite rapidly after they are launched. The product life cycle has 4
very clearly defined stages, introduction,maturity,growth and decline each with
its own characteristics that mean different things for business that are trying
to manage the life cycle of their particular products.
INRODUCTION
The first dairy, Kaira District Co-operative Milk
Producers’ Union was established in the year 1946 in Anand district of Gujarat,
which created Amul in 1955 and handed over the brand name to GCMMF in 1973. Since farmers
sold all the milk in Anand through a co-operative union, it was commonly
resolved to sell the milk under the brand name AMUL. At the initial stage only 250 liters of milk was collected every
day. But with the growing awareness of the benefits of the cooperativeness, the
collection of milk increased.Between
1955 and 1970, milk production grew by barely 1 per cent annually, while per
capita milk availability declined by an equivalent amount.
GROWTH
Amul milk production increased to 31.6 million metric tons
by 1980-81, 53.9 million by 1990-91, and 84.6 million by 2001-2. The annual
growth rate was 4.08 per cent during the first phase of Operation Flood. It was
much higher (7.85 per cent) during the second phase, and production continued
to grow at 5.05 per cent per year during the third phase.
As a result of substantial increase in milk production, milk
consumption in India has risen from a low of 112 grams per day in 1968-69 to
over 226 grams per day in 2002. With growing competition from brands like
Nestle, Mother dairy, Britannia, Gokul; Amul introduced new products like Amul
milk gold, Amul moti, Amul chai maza, Amul slim trim etc.
MATURITY
Amul is one of India’s most iconic brands.
It is 1st and only organization in the world to get ISO 9000
standard for its farmer cooperatives. Today Amul collects 11 Lakhs liters of
milk everyday. It has become world’s largest pouch milk brand. With $2 billion
in revenue, the brand is as recognizable across India as Coca-Cola and recently
Amul milk has entered overseas market such as Mauritius, UAE, USA, Oman,
Bangladesh, Australia, China, Singapore, Hong Kong and other South African
countries. Today Amul Dairy is no.1 in Asia and no.2 in the world which is a
matter of proud for Gujarat and the whole of India.
DECLINE
Decline
is the stage where product decline and dies. Though Amul milk went through controversy of
“mozzarella-like milk” it survived and did not let the product decline. Also
hardly any other products of Amul has seen the decline stage and now whose
production is stopped.
Consumer Behaviour and Buying Decisions
Successful
marketing requires that companies fully connect with their customers.”Consumer
Behaviour “is the study of how individuals, groups, and organizations select,
buy, use and dispose of goods, services, ideas, or experiences to satisfy their
needs and wants.
The
starting point for understanding consumer behaviour is the stimulus-response
model. Marketing and environmental stimuli enter the consumer’s consciousness
and a set of psychological process combine with certain consumer
characteristics to result in decision process and purchase decisions.
Four
key psychological processes are motivation, perception, learning and memory-fundamentally influence
consumer responses.
In a
country like India, milk is considered an important part of your diet .whether
it is plain boiled milk or your favourite cutting chai, milk is an item every Indian
drinks. This physiologically motivates our customer to find the need to buy milk.
Amul is perceived as “the taste of India”, a brand which is trusted by millions
of Indians when it comes to milk. Learning induces change in a consumer’s
behaviour arising from experience. Amul has proved itself over the years to
provide its customers with consistency in its products. Amul milk is known to
be fresh and nutritious .Brand associations consist of all brand related thoughts,
feelings, perceptions, images, attitudes, that become linked to the brand.
Brands like Amul ( a brand which is a year older than independent India )
stirred patriotic feelings and much later of course summed up their brand as
the Pride of India.
The buyer decision process is a five stage process which
consumers go through from
Pre - purchase to post - purchase. These stages are need
recognition, information search, evaluation of alternatives, purchase decision,
and post-purchase behaviour.
Need recognition: with an internal stimulus
one of the person’s normal needs-hunger, thirst, sex-rise to a threshold level
and becomes a drive.
Need Recognition: Milk is a daily consumption
item which satiates a consumers hunger .
Information: By gathering information, the
consumers learn about competing brands.
Because of the excellent products, the top of the mind positioning, the
fantastic distribution and supply chain channels and finally the point of
purchase branding and advertising of the Amul girl, Amul finds itself in a very
strong position where its brand equity is concerned
Evaluation of alternative: Amul
has a great competitive advantage over its competition brands Because of the
large numbers of dairy suppliers; Amul has a tremendous strength and
reliability in its supply chain. This makes it a very reliable brand in its consumer’s
eyes. Not only its superior product quality, but also the fact that it is
easily available in most regions makes it an Indian favourite brand.
Purchase
decision: In the evaluation stage, the consumer’s preferences among the brand
in the choice set and form an intention to buy the most preferred brand. In
executing a purchase intention, the consumer may make up to five subdivisions: brand, dealer, quantity timing and payment
method.
In India
milk happens to be majorly bought by the women in the family. Amul being a
brand love by all, has formed a trusted milk brand image in the consumers mind.
Like any FMCG company, Amul concentrates on breaking the bulk it has an
efficient supply chain with distributors and retailers all throughout the
country. Besides this, the company has exclusive Amul stores which sell all
products of Amul brand. Thus, in the marketing strategy of Amul, distribution
is strength of the brand. A consumer can buy milk any times of the day, through
various outlets, in quantities they require. Milk is bought in all parts of
the country; from every urban area to every small village. Amul is even a brand
which is economically priced.
Post
purchase behaviour: After purchase, the consumer might experience dissonance
from noticing certain disquieting features. Marketing communications should
supply beliefs and evaluations that re-in forces consumer’s choice and help him
or her feel good about the brand.
Amul
has had a record in content marketing for years. It is now becoming an example
of customer service on social media. The brand has proved that it is
actually using social media for listening to its customers and solving their
queries on Face book. On tenth October,2014, a disgruntled customer posted
pictures of Amul Gold milk. The images within the post were scary and portrayed
a very negative image of the brand. Within 4 days, the brand had come out and
explained itself on its Face book page. It alleviated the fears which was
instilled in its customers and even gave detailed information which the
consumer wanted. This restored the brands positive image and brand
loyalty.
Saturday 10 October 2015
Product Mix
Product mix of Amul
includes Milk, Bread Spreads, Cheese, Dahi, Ghee, Mithai, Ice-Cream,Paneer and
Beverages.
PRODUCT LINE AND PRODUCT DEPTH
The
product line and product depth of Amul Milk is shown below.
Product
line includes all the different types of milk provided by
Amul like Pouch milk, UHT Milk, flavored milk(Amul KOOL)
UHT MILK
(Available in different
flavors)
POUCH MILK
(Available in different
flavors)
FLAVOURED
MILK
(Available
in different flavors)
PRODUCT LINE AND PRODUCT DEPTH
POUCH MILK
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UHT MILK
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FLAVORED MILK(AMUL KOOL)
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AMUL TAZA
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AMUL GOLD
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THANDAI
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AMUL GOLD
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AMUL TAAZA
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CHOCOLATE
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AMUL DIAMOND
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AMUL CALCI
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ELAICHI
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AMUL CHAI MAZA
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AMUL SLIM N TRIM
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KESAR
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AMUL SHAKTI
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AMUL MOTI
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ROSE
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AMUL SHAKTI
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BADAM
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AMUL SLIM TRIM
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AMUL KOOL CAFE
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AMUL KOOL KOKO
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STAMINA DRINK
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PRO DRINK
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NEW
PRODUCT DEVELOPMENT
Amul
can introduce a small packaging sugar free sweetened milk
For
health conscious people who usually travel long distances. It could be a direct
mix for coffee and other protein powders.
A
lot of people prefer the taste of sweetened milk over plain milk but they don’t
consume flavoured milk due to the calories attached to it so this product
can be the best for them.
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