In this article we will take up an actual case from the Indian market and try to understand the application of principles of marketing.
Background
In the early nineties, ice cream was the largest packaged food category in India and accounted for 80% of the total packed food volume. There was a sheer dominance of the unorganized sector, accounting for almost 60% of the market. The organized segment was growing at around 14% with Kwality (a local Indian brand) being the only player with national importance.
The market dynamics changed in 1995 when HUL (Hindustan Unilever Ltd.) acquired all major ice cream brands in India and integrated them into a single brand- Kwality Walls, which thus became the market leader in the branded ice cream segment. Kwality Walls truly became a brand to reckon with and enjoyed not just a good market position, but also an aspirational imagery to match.
GCMMF (Gujarat Co-operative Milk Marketing Federation), the owner of brand ‘Amul’, reacted to this and thought of entering the branded ice cream sector.
Market Research
Before entering the market with an ice cream brand, GCMMF carried out an extensive market research, which revealed the following:
- Ice-cream, being essentially a western concept, was not very popular in the traditional Indian market conditions. The key reason for this was the perception of ice cream as a premium product, only for the elite.
- The consumption statistics supported this fact- in the 1990s the per capita annual consumption of ice-cream in India was 106 ml, whereas in the US this figure was 22000 ml.
- There was no space in the market . On one side was the organized sector dominated by the presence of national players like Kwality Walls and Vadilal. On the other hand there was a huge unorganized sector dominated by local players with their own advantages of pricing and distribution.
- Ice-cream being a perishable product required deep- freezing storage facilities. Competition (HUL) had branded ice cream parlours with such facilities.
- Kwality Walls was not made from milk. Instead, it was made from saturated vegetable fats and therefore, it did not classify as an ice cream but as a frozen dessert.
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Amul’s Strengths/Weaknesses
Strengths
- Amul was the flagship brand for a variety of dairy products marketed by the GCMMF.
- GCMMF was based in West but had a good national presence.
- ‘Amul’ had an established legacy in milk and milk based products.
Weaknesses
- Though ‘Amul’ was a well known brand for products like milk and butter, it was new to the ice cream segment, which was a more evolved category.
- It had the disadvantage of being a late entrant in a pretty complex market.
- Distribution was a key competitive strength that the competitors enjoyed.
Strategy
‘Amul’ believed that to become a leader it was critical to change the paradigm of how ice cream was marketed and how consumers saw ice cream and for this it had to manage the marketing mix well. The following steps were taken in this direction:
- Price :Amul ice-cream was launched at a price 30% less than that of Kwality Walls.
- Place :Amul initiated a unique campaign - HamaraApna Deep Freezer- where they invited potential distributors to either pay 40% down payment and own a deep-freezer, or pay the entire amount in equated monthly instalments over 5 years. However the condition was that only Amul brands would be stocked in these deep freezers.
- Product :Amul introduced 14 colourful variants of the core brand and created excitement among the youth.
- Promotion:
- Amul introduced its ice-cream brand with the tagline- Real Milk, Real Ice-cream.
- Amul positioned its ice-cream as a fun alternative to milk while communicating the ‘Real Milk Real Ice-cream’ benefit. Further, the promotional campaigns were targeted towards children and youngsters with the message ‘Chalochalochalo, real milk real ice-cream haijahan’.
Conclusion
Amul ice-cream was initially launched in its home market- Gujarat in 1996. After three years of a strong presence in Gujarat it was rolled out nationally. By 2001, it beat Kwality Walls to become the market leader in the branded ice cream segment with a 40% market share as compared with Kwality Wall’s 10%. This was possible because of its acute marketing strategy which was strategically centred around the various components of marketing mix.
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