It was more than half a decade ago when a dairy revolution was started in the western Indian state of Gujarat. Amul, a dairy cooperative formed in 1946 is currently the largest food brand in India and the world's largest pouched milk brand with annual revenues of $2.15 billion (FY 2011). Around 2.8 million dairy farmers jointly own the cooperative with around 735 employees in the marketing arm. The management has recently expressed an ambitious objective to join the Nestles and Danones of the world in excellence in the dairy industry. What interests me most is how has Amul been able to market its products and target the right type of customers to achieve the sort of success that it has? Is it doing anything differently because currently the Indian market is dominated by young consumers, whose needs are vastly different from the older consumer two decades back?
The answer is: Yes, Amul is trying to market itself differently as it competes with other large, global players in the lIndian market. It realizes it can't afford to be perceived as a staid old, brand which produces milk in large containers. And, it is responding by changing its marketing strategy. Let's look at the issues with the STP model:
- Identify the total market - The total Indian market comprises 1.2 billion people. Indians across all age groups both in urban and rural areas have a strong preference for liquid milk as a principal source of protein. Fluid milk, ghee (clarified butter) and butter are the most important items consumed (USDA Foreign Agricultural Service, 2010).
- Determine segmenting dimensions - The Indian market can be segmented based on demographics and behaviours. The chief consumers are in the 18-30 age group both in urban and rural areas. The other consumers fall in the higher age ranges, especially those over 30. The 18-30 age group like to experiment with the dairy products that they consume (not just fluid milk, other value-added products); people in the higher age group generally stick to fluid milk.
- Profile each segment - The 18-30 age group is fitness- conscious, spend a lot of their time on social networking, have relatively high disposable income, especially those who enter the job market at a young age of around 21-23. This is also true for young consumer in many smaller towns, which are getting increasingly connected to lifestyles in bigger metros. These young consumers don't prefer fluid milk, they like cheese products (vegetable cheese products) and generally don't like ghee (clarified butter) as well due to its fatty nature. The higher age groups (over 30) prefer fluid milk as well as ghee.
- Assess segment attractiveness - The 18-30 age group, rural and urban combined, comprise over 50% of the Indian consumer base. Their preference for higher value-added and expensive products makes this segment more attractive than the over-30 age segment.
- Select target markets - The prime target segment is the 18-30 age group and Amul is following a concentrated marketing strategy by targeting this segment with new marketing tools. The over-30 age segment is not a major focus since the Amul has a ready market here with its high quality fluid milk, butter and ghee.
- Positioning - Amul has initiated a marketing campaign to change its dull and conservative image among the youth. The company is repositioning traditional, fatty products like ghee as something which could result in a glowing skin. It is a sponsor of the Sauber Formula 1 team in the Airtel Indian Grand Prix, slated for October 30 in New Delhi. The recent ad spoof on former Pakistani fast bowler Shoaib Akhtar "Tab bhi phekta tha, aj bhi phekta hai!" (Used to fib then, and is still fibbing) drew a huge response from youngsters on Twitter. A 22-year old called the company a 'Rockstar'. There are other events and brand positioning plans in the works to connect with the young consumers.
It is still to be seen how the new marketing strategy works out in the medium to long term. But, the initial signs are encouraging for the 'Rockstar'.
The answer is: Yes, Amul is trying to market itself differently as it competes with other large, global players in the lIndian market. It realizes it can't afford to be perceived as a staid old, brand which produces milk in large containers. And, it is responding by changing its marketing strategy. Let's look at the issues with the STP model:
- Identify the total market - The total Indian market comprises 1.2 billion people. Indians across all age groups both in urban and rural areas have a strong preference for liquid milk as a principal source of protein. Fluid milk, ghee (clarified butter) and butter are the most important items consumed (USDA Foreign Agricultural Service, 2010).
- Determine segmenting dimensions - The Indian market can be segmented based on demographics and behaviours. The chief consumers are in the 18-30 age group both in urban and rural areas. The other consumers fall in the higher age ranges, especially those over 30. The 18-30 age group like to experiment with the dairy products that they consume (not just fluid milk, other value-added products); people in the higher age group generally stick to fluid milk.
- Profile each segment - The 18-30 age group is fitness- conscious, spend a lot of their time on social networking, have relatively high disposable income, especially those who enter the job market at a young age of around 21-23. This is also true for young consumer in many smaller towns, which are getting increasingly connected to lifestyles in bigger metros. These young consumers don't prefer fluid milk, they like cheese products (vegetable cheese products) and generally don't like ghee (clarified butter) as well due to its fatty nature. The higher age groups (over 30) prefer fluid milk as well as ghee.
- Assess segment attractiveness - The 18-30 age group, rural and urban combined, comprise over 50% of the Indian consumer base. Their preference for higher value-added and expensive products makes this segment more attractive than the over-30 age segment.
- Select target markets - The prime target segment is the 18-30 age group and Amul is following a concentrated marketing strategy by targeting this segment with new marketing tools. The over-30 age segment is not a major focus since the Amul has a ready market here with its high quality fluid milk, butter and ghee.
- Positioning - Amul has initiated a marketing campaign to change its dull and conservative image among the youth. The company is repositioning traditional, fatty products like ghee as something which could result in a glowing skin. It is a sponsor of the Sauber Formula 1 team in the Airtel Indian Grand Prix, slated for October 30 in New Delhi. The recent ad spoof on former Pakistani fast bowler Shoaib Akhtar "Tab bhi phekta tha, aj bhi phekta hai!" (Used to fib then, and is still fibbing) drew a huge response from youngsters on Twitter. A 22-year old called the company a 'Rockstar'. There are other events and brand positioning plans in the works to connect with the young consumers.
It is still to be seen how the new marketing strategy works out in the medium to long term. But, the initial signs are encouraging for the 'Rockstar'.
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