Unlocking in the Lockdown: Amul`s Surge during Testing Times

Unlocking in the Lockdown: Amul`s Surge during Testing Times
Case Code: MKTG423
Case Length: 12 Pages
Period: 2019-20
Pub Date: 2020
Teaching Note: Available
Price: Rs.300
Organization : Gujarat Co-operative Milk Marketing Federation Limited ( Amul)
Industry :Food & Beverage
Countries : India
Themes: Marketing Strategy/ Direct to Consumer/ Advertising & Promotion/Crisis Management
Unlocking in the Lockdown: Amul`s Surge during Testing Times
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about the success of the Indian dairy cooperative society Amul during the COVID-19 pandemic in 2020. Amul, a dairy brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Limited (GCMMF), was jointly owned by 3.6 million dairy farmers in the western Indian state of Gujarat.

The announcement of a nationwide lockdown in March 2020 in India due to the spread of Covid-19 dealt a blow to many businesses that were left grappling for their very survival amidst the crisis. But the Managing Director of Amul, R S Sodhi, saw an opportunity in the crisis. He was of the view that this was the time for Amul to spruce up its supply chain and marketing activities in order to reach people who were forced to stay indoors. People’s food consumption pattern had also undergone a change, with consumers demanding trustworthy packaged food and ingredients, which were considered safer than non-packaged products.

While the producers of many goods and food products shut their factories and manufacturing units due to the lockdown, Amul looked for an opportunity and sought to ensure a steady supply of milk and milk products across the country during the lockdown. Compared to pre-COVID-19 times, the lockdown period saw a 5-7% increase in demand for Amul’s liquid packaged milk as consumers trusted the Amul brand over rather than loose milk. While several businesses including small vendors, ice-cream manufacturers, hotels, and restaurants stopped procuring milk from farmers during the lockdown, Amul collected an additional 3.5 million liters of milk daily from the farmers and paid them well.

The pandemic affected several businesses that either curtailed or stopped their operations. Amul, however, ensured an uninterrupted supply of milk and milk products across the country during the lockdown. It incentivized all supply chain partners to maintain the smooth running of their supply chains throughout the disruption.It also arranged accommodation facilities for workers near the plant and explained safety precautions to the dairy farmers to cope with the pandemic. As India was battling to contain the pandemic, Amul ensured that dairy farmers and consumers stayed safe and healthy. During the lockdown when most businesses decided to cut their media spends, the dairy brand continued doing what it considered best in the interest of milk producers and the consumers. To seize the market opportunity, Amul decided to double its marketing spend on advertising and branding. It revisited its marketing strategy, focusing on both the traditional and digital advertising space.

Amul said the lockdown hadn’t affected it and it went ahead with reinventing its distribution network and launching a range of immunity boosting products such as turmeric, tulsi (basil), and ginger milk.The dairy giant said its brand reputation, resilience, prompt action during the crisis, and ability to adapt to the situation would enable it to overcome any future challenges too.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand direct-to-consumer (D2C) marketing and highlight the role of e-commerce players in the D2C market.
  • Examine how business continuity can be ensured during a pandemic.
  • Understand the impact of the COVID-19 pandemic on the supply chain of essential commodities.
  • Analyze the advertising strategies that consumer goods companies can follow in an adverse business environment.

Contents

Keywords

Demand for branded products; Brand image; Brand building; Consumption behavior; Shift in consumer preference, Supply chain disruptions; Panic buying; Rising consumer awareness, Increasing marketing spends; Media promotion; Product line extension; Product innovation, Direct-to-consumer marketing; E-commerce sales; Traditional and digital marketing strategy; Increasing consumer demand; Fast-moving consumer goods

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