With reference to the mini case study given below, evaluate the opportunity for brand extension of Amul into camel milk category in India and recommend whether Amul should reinforce its current brands only, or should it revitalize its brand portfolio through brand extension? 2. Develop a profile of target market for Amul Camel Milk and discuss the brand associations that would appeal to that target market. 3. Discuss how Amul may integrate its product, price, promotion, and distribution strategies with brand positioning strategy. Mini Case Study In March 2015, Gujarat Cooperative Milk Marketing Federation (Amul), the market leader in the Indian dairy market, planned to launch the sale of camel milk in India. Some reports suggested that cows milk from dairy farms contained antibiotics and was nutritionally deficient. The Food and Agriculture Organization of United Nations listed camel milk as having three times as much vitamin C as cows milk, with a high content of unsaturated fatty acids and B vitamins. However, India had not yet regulated the consumption of camel milk. India had been the largest dairy-producing country in the world since 1998, according to a National Dairy Development Report on the countrys dairy industry. The report also predicted a substantial growth in the industry in coming years, expecting the demand to reach 200 tonnes (t) by 2022. The milk industry was dominated by an unorganized sector of 70 million households producing milk. GUJARAT COOPERATIVE MILK MARKETING FEDERATION LIMITED Founded in 1946 and reorganized in 1973, the Gujarat Cooperative Milk Marketing Federation(GCMMF) was a food product marketing organization based out of Gujarat in west India. It was one of the few Indian companies with a pan-Indian presence. The company marketed almost all of its products under the flagship brand, Amul, and had a large product portfolio in key categories such as dairy and its associated products butter, ice cream, cheese, cream, yogurt, oils, and fats. The milk category accounted for the largest portion of the companys revenues. In addition, GCMMF built a nationwide network of milk booths and retailers. The company registered a sales turnover of INR207.3 billion for 2014/15, an increase of 14 per cent over the previous year. MARKETING MIX AT GCMMF Amul catered to a large segment of the Indian market with a wide product portfolio, and regularly introduced new products to the market over the years. Amuls wide product range included milk, bread spreads, cheese, ultra-high temperature (UHT) milk, a range of beverages, ice cream, paneer (cottage cheese), yogurt, ghee (clarified butter), milk powders, fresh cream, chocolates, and traditional Indian sweets. Amul led the 20 billion domestic butter market with double-digit growth in both volume and value, holding a dominant market share. GCMMF developed several new products in 2014. For example, it launched Amul Crme Rich in the ice creamcategory and positioned it as a premiumice creamto compete with Hindustan Unilevers new launch, Magnum. Other new launches included Amul cheese spread in nine new flavours, and Amul garlic and herbs butter spread. These products were designed to introduce different flavours, and in particular, to meet a recent rise in demand for Italian cuisine. Some other significant developments included Amul brown ghee, Amul Slim N Trim, and Amul whipping cream. Price GCMMF entered the market with the goal of providing dairy products to consumers at affordable prices at a time when the Indian dairy industry was highly unorganized and lacked a national competitor. Until 2014, Amul had maintained its strategy of providing its products to consumers at reasonable prices, which kept Amul at the top in this competitive market.In the milk category, as a farmers cooperative, Amul operated on a cost-to-cost basis and priced its products aggressively, forcing its competitors to slash their prices to stay competitive, even if lower prices resulted in thinner margins. The company maintained its reasonable pricing Page 2 of 3 even for premium products in the growing chocolate segmentin order to compete against international brands,such as Mondelez and Nestl. Place With a focus on supplying all of India, the Amul built an extensive distribution network with 56 sales offices, 10,000 dealers, and 1 million retailers across the country. The company handled the distribution of its products through self-run retail outlets and third-party retailers. To increase market penetration, the company strengthened its distribution network over the years to extend its reach even into parts ofrural India that were not easily accessible. Like any other fast-moving consumer goods company, Amul supplied huge volumes of product to its carrying and forwarding agents, who were responsible for transferring the products to distributors, who in turn forwarded the product to the retailers. The company also had a direct sales force that catered to the needs of the modern retail format. To supply such a large market, the company constantly upgraded and opened new plants to increase production capacity. GCMMFs expansion plans included the addition of a milk powder plant in Palanpur with a 120 t capacity per day, a dairy plant at Rohtak, a butter plant at Gandhinagar with a 40 t capacity, and other state-of-the-art new dairy plants.Various online retailers (such as Vishal Mega Mart, BigBasket, and AaramShop) also sold Amuls products, adding yet another channel for Amul to supply even more consumers. Promotion Amul was identified by its mascot, the polka-dotted Amul Girl. In 1966, Amul approached Sylvester DaCunha, founder-chairman of DaCunha Communications, to design an advertisement campaign for Amuls butter brand. Cartoonist Eustace Fernandes created the mascot and the first billboard, Give us this day our daily bread with Amul butter. DaCunha Communications continued to handle the Amul account and the campaign became famous for being the longest-running outdoor campaign. Amul monitored current events and used the Amul Girl in different ways to communicate the companys interpretations of various subjects. The campaigns evolved over the years and covered varied topics. The first advertising campaign in 1966 dealt with the topic of in vitro fertilization. Later campaigns dealt with a World Cup win, Anna Hazares protests, Bharatiya Janata Partys election campaign, Bollywood controversies, Obamas visit to India, and more. Amul also engaged its customers with television commercials, but the main focus was on below-the-line campaigns with outdoor advertising, sales and trade promotions, and discount schemes. In 2015, Amul also launched a book (Amuls India) as a promotional strategy, collaborating with the makers of the movie Piku for the campaign. The launch included prominent personalities associated with the film, such as Shoojit Sircar, Deepika Padukone, and Irrfan Khan. Further, Amul was the title sponsor of the cooking show MasterChef India, and the company established itself as a pioneer in the dairy industry. Packaging Amul upgraded its packaging system to the latest, modern Tetra Pak technology. New high-speed production lines allowed Amul to process UHT milk and adapt to consumer trends while maintaining the highest industry standards of quality. Amuls milk was pouch-packed for customer convenience. MAJOR COMPETITORS Britannia With a history of more than 100 years, Britannia was amongst the oldest companies in India. Starting in the baked goods industry, Britannia sold a range of food products through more than 3.5 million retail outlets all over India, and in 2014/15, had revenue of over 60 billion. The company produced a wide variety of dairy products, including milk, cheese, and flavoured drinks. Profits from the companys dairy business, which comprised less than 5 per cent of totalsales, plummeted 69.5 per cent from 350 million in 2013, to 106.7 million by the fiscal year-end in 2014. The business registered a turnover of 2.99 billion, down 3.2 per cent from 3.09 billion in the previous year. The dairy business experienced a 30 per cent increase in milk prices in that period. Nestl One of the biggest companies in the world, Nestl had operations in almost all countries. Nestl Dairy started in India in 1961, with a plant in Moga, Punjab, collecting 511 kilograms of milk. In 2015, the company collected over 1.3 million kilograms and produced milk and milk products to supply all of India. Milk and nutrition products, as a category, was the largest contributor to Nestls revenues in India. It accounted for 47.1 per cent of the companys revenue in 2014. In the same period, the volume of milk and nutritional products dropped 2.3 per cent from 138,772 t in 2013, to 135,591 t in 2014. Nestls investment in milk collection and distribution development also declined from 175.9 million in 2013, to 161.8 million in 2014. Its investment was 157.8 million in 2012, 131.2 million in 2011, and 143.1 million in 2010. Page 3 of 3 CONSUMER EVOLUTION The Indian milk industry grew by 15 per cent in 2014 to reach 603 billion. Trends showed a switch toward more health-conscious options, largely driven by the growing urban population. Consumersfocused more on a protein-rich diet, relying on milk as an easy option. The first effect was a move from traditional loose milk to packaged milk. Drinking-milk products were predicted to see a value-compound annual growth rate of 4 per cent at constant 2014 prices, to reach 749 billion by 2019. Consumers in urban India switched to the new UHT and flavoured milk options, while the majority of rural customers moved to packaged milk. UHT was safer and could be stored for longer, hence eliminating the need for regular purchase.45 While packaged milk delivered by the local milkman was still common in Tier 2 and Tier 3 cities (cities with populations between 20,000 and 100,000), distribution in the big metro cities veered toward the easily available new UHT and other modern milk products. Premium consumers and double-income households had moved towards these products, whereas middle- and low-income households still used packaged fresh milk. Flavoured milk saw the fastest growth in the milk category, with a value of 26 per cent in 2014. This encouraged manufacturers to introduce new flavours and variants. With many people also switching from traditional beverages like tea to milk, flavoured milk had seen a substantial growth. Rising inflation and the overall increase in milk prices resulted in an increase in the average unit price. All major companies, including as Amul and Mother Dairy, introduced flavoured milk products. CAMEL MILK Camel milk, a by-product of camel breeding, was consumed primarily by herdsmen and their families, especially during migration. The average daily yield of a lactating camel was 2.5 to 6 kilograms.The camels were milked twice a day.Camel milk, which was dense white in colour, had a sweet and sharp taste, but could also taste salty. The water content of camel milk fluctuated between 84 to 90 per cent. Changes in taste were attributed to the type of fodder and the availability of drinking water. Factors considered important when rating the quality of camel milk included the age of the animal, the stage of lactation, the quality and quantity of feed, and the amount of water available during animal feeding. The taste of camel milk was drastically different to the taste of full-fat cows milk, making it difficult for many consumers to adapt to the taste. Camel milk was proven to contain three times the amount of vitamin C found in traditional cows milk and one and a half times that in human milk. It was also a good source of vitamin B1 and calcium. Lower fat content and the presence of anti-bacterial properties also made camel milk more beneficial than cows milk. In addition, camel milk was more similar to human milk than cows milk. India was at the risk of becoming the diabetes capital of the world by 2025, with rapid globalization and lack of precautionary measures identified as the leading causes of diabetes in the country. Analysis of camel milk showed that it contained 52 micro units of insulin per millilitre, which was 60 per cent more than the average external insulin required by Type 1 diabetic patients. Camel milks natural probiotic properties made it easy to digest, and it could be consumed by lactose-intolerant people.53 Preliminary evidence had also shown that camel milk was an effective antioxidant. Camel milk had a very short shelf life of four to five hours half that of cows milk. In addition, it took as long as 10 to 12 hours for camel milk to turn to curd, compared to the three to four hours it took for cows milk. In a curd-consuming nation like India, that might be an issue in the acceptance of camel milk. Camel milk contained less vitamin A, B2, folic acid, and pantothenic acid than cows milk, which might be viewed by some as a negative. There was a drastic drop in the camel population in India from 500,000 in 2003, to 300,000 in 2013. If this trend continued, local sourcing of camel milk would prove to be a factor in competitive advantage; hence, the drop in camel population was seen as a problem that needed urgent attention. Yet only a few locations in India had the resources to sustain large herds of camels. The herds were mainly Mewari camel, raised in the Aravalli Hills (in South Rajasthan), the Udaipur, Chittorgarh, and Rajsamand districts, the Neemuch and Mandsour districts (in Madhya Pradesh), and in the Banaskantha district