A Study on Consumer Buying Pattern Towards Amul Milk

Abstract

In this paper we describe a case study of a dairy cooperative, AMUL, in western India that has developed a successful model for doing business in large emerging economy. It has been primarily responsible, through its innovative practices, for India to become world’s largest producer of milk. This paper draws various lessons from the experiences of AMUL that would be useful to cooperatives globally as well as firms that are interested in doing business in large emerging markets like India and China. Many of these economies have underdeveloped markets and fragmented supply bases. Market failures for many of these small producers are high. On the other hand, the size of both, markets and the suppliers is large. As a result, firms that identify appropriate business strategies that take into account these characteristics are more likely to succeed in these markets. The following are some key message from AMUL’s success: firms in these environments need to simultaneously develop markets and suppliers to synchronize demand and supply planning, develop or become a part of network of producers (i.e., cooperatives in this case) to obtain scale economies, focus on operational effectiveness to achieve cost leadership to enable low price strategy. In addition, a central focus to bring the diverse element together and a long-term approach are required. In emerging economies different industrial sectors may be at different stages of development. In some of the sectors all of the above environmental characteristics faced may not hold. However, a subset of strategies followed by AMUL would still be very useful. Thus, firms that are contemplating addressing large undeveloped markets or have an intention of taking advantage of extensive but marginal supplier base would still benefit