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. 

Over the last five and a half decades, dairy cooperatives in Gujarat have created a network that links more than 3.1 million village milk products with millions of consumers in India. GCMMF is India's largest food product marketing organization with annual turnover (2014-15) US$ 3.4 billion. Its daily milk procurement is approx 14.85 million lit per day from 18,536 village milk cooperative societies, 17 member unions covering 31 districts, and 3.37 million milk producer members. More than 70% of the members are small or marginal farmers and landless labourers including a sizeable population of tribal folk and people belonging to the scheduled castes.

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.