In early 2001, Gujarat Cooperative Milk Marketing Federation (GCMMF) planned to leverage its brand equity and distribution network

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• Marketing Management
•  
• Case Studies
• CASE STUDY (20 Marks)
• In early 2001, Gujarat Cooperative Milk
  Marketing Federation (GCMMF) planned to leverage
  its brand equity and distribution network to turn
  Amul2 into India's biggest food brand. Verghese
  Kurien, Chairman of GCMMF, set a sales target of
  Rs.10 bn by 2006 as against sales of Rs 2.3 bn in
  2001. In 2001, GCMMF entered the fast food market
  in India with the launch of vegetable pizzas
  under the brand name SnowCap in Ahmadabad,
  Gujarat. GCMMF was also planning to launch its
  pizzas in other western Indian cities like
  Mumbai, Surat, and Baroda. Depending on the
  response in these cities, GCMMF would decide to
  introduce its pizzas in other cities in India.

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• The pizzas were offered in four flavours
  plain tomato-onion-capsicum, fruit pizza
  (pineapple-topped), mushroom and 'Jain pizzas'
  (pizzas without onion or garlic). GCMMF launched
  the pizzas in the Rs.20-25 price range. The
  existing players in the pizza market, like
  Domino's, Pizza Hut and Nirula's offered pizzas
  at nothing less than Rs.39. Analysts felt that
  GCMMF's move would force the existing players to
  reduce their prices in the long run. GCMMF
  planned to open 3,000 pizza retail franchise
  outlets all over the country by 2005. The pizzas
  would be made at the retail outlets. The
  technical training and the recipe for the pizza
  would be provided by GCMMF.

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• It would also negotiate with bulk suppliers
  of vegetables to get these at wholesale rates.
  These would be provided to the retailers. The
  main cost component of the pizza is the mozarella
  cheese. GCMMF would offer the cheese at a bulk
  rate of Rs.140 per kg, compared to the market
  price of Rs 146 per kg, thus saving the retailers
  Rs.6 per kg. GCMMF on its part would have a ready
  market for its cheese products.

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• Answer the following question.
•  
• Q1. Give an overview of the case.
•  
• Q2. Explain in detail the diversion strategy of
  Gujarat Cooperative Milk Marketing Federation
  (GCMMF), Amul.

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