RS Sodhi, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), has been the man behind brand Amul for long now. The very humble marketer from Anand in Gujarat was bestowed with the Champions of Excellence Award at the recently held Goafest.
In August 2016, Sodhi was appointed as Independent Director on the board of India Post Payment Banks (IPPB), the payments arm of the postal department.
Sodhi has led the federation to mark a turnover of over Rs 27,000 crore for the financial year 2016-17. In the past seven years, GCMMF's turnover has grown by about 3.5 times.
The very jolly Sodhi emphasises that Amul is one of the few Indian brands that believes in the uplift of farmers and helps them earn their livelihood. He believes in simple living and extraordinary thinking. Advertising to him means informing consumers about the products. Therefore, he has also been caught in safeguarding Amul’s ads in legal battles when they go out to inform the consumers the difference between ice-creams and frozen desserts.
BestMediaInfo.com caught up with Sodhi on the sidelines of Goafest 2017 to know about Amul’s marketing strategy, his viewpoint on advertising today, and also about how Amul has maintained its legacy. Excerpts:
Large conglomerates have been trying to enter the Indian dairy market for a long time now. This has only intensified lately. Why is the sector so attractive to them? What keeps them away from entering the category?
We are from the dairy industry and there's lot of scope in the industry. Only one-third of the dairy industry is organised or branded. So there is a lot of scope. But the dairy industry is not like any other food industry like biscuits that you can buy maida and atta from the market and produce. In dairy you require milk and that you have to buy from the farmers and that takes time. It takes decades to set up your infrastructure. If you want to build a national brand in dairy, it will take 20-30 years for anybody to come.
We want big multinationals and corporates to enter the dairy industry because two-thirds of the industry is unorganised. If bigger players come and start procuring milk, farmers will get a better price. So what is good for the farmers is good for Amul. Our organisation is owned by 3.6 million farmers. There are so many areas from where nobody is procuring milk.
Would you say Amul has a monopoly in India?
Of the organised sector, Amul has only 30 per cent of the market share. 70 per cent is with the others. Amul may be number one in all-India, but a lot of corporates are there. Local corporates are the market leaders in various cities. If you go to Karnataka, Nandini is number one. If you go to Tamil Nadu, Ameen is number one. If you go to Punjab, Verka is number one. In Bihar, Sudha is number one.
Do you intend to overtake the local brands in all the states?
There is no need. We handle only six per cent of India’s milk production. Milk is a very big industry. It requires a lot of investment to build infrastructure for milk procurement and processing and distribution. No doubt, every year we are spending around Rs 600-800 crore, but I think a lot more investment is required.
A few brand managers believe that people have started having enough of the Amul billboard kind of advertising. Amul needs to bring in more innovation. What do you have to say about it?
If something is working well, why change it? Branding and positioning never change. Can you give me a few examples of the best brands in the world which have done so in thousands of years?
Was there even any branding thousands of years ago?
Yes, that is what you people don’t know. For example, Cross and Red Cross. Have they changed? Everybody knows about them. Branding is not what Philip Kotler has told us. Branding is there for thousands of years. Branding is something through which people can recognise your product. So, all these are the brands. If Amul’s iconic butter girl campaign is working and with a very small amount of money and if we have become the talk of the town, then why change it? How many products are known for their campaigns? People know Sony TV and not the Sony campaign. People know Maruti car but not the Maruti campaign.
A lot of social and emotional campaigns are happening these days. It has become a trend. What is your take on it? Should campaigns always talk about the product or is selling on emotional and social aspects a good technique of marketing?
I think there is more emotional storytelling because creative people want to show their talent. But I don’t know how much it benefits the brands if you talk about only emotions. We also do rational advertising and it is always better as consumers are looking for rational advertising. For emotional things, you better go and watch movies or TV. Personally, I believe in product-based advertising.
Are you happy with the fact that Amul butter campaigns are more known than the Amul butter product itself?
We are investing less than one per cent in the advertising budget and still are able to build. We are the market leader to talk about the brand.
Do you intend to increase your advertising spend?
There is no need. We need to focus more on consumer’s pocket. Besides, the money has to go out from the milk producers’ pocket, which we don’t want to do.
There is a lot of focus on safety standards. How do you ensure quality when procuring milk from millions of farmers?
In the case of Amul, product quality is checked in four stages. First, when we procure milk from the village cooperative society, milk is checked when the farmer is pouring it. Second, when the milk is transferred to the nearest processing plant. There again the quality is checked to see nothing en-route has happened. The third check happens when we are to pack the product. Lastly, again the product is checked at the dispatch level to see whether it is meeting all the standards.
You are known to give full freedom to your creative agencies in creating campaigns. Isn’t that a risk? Shouldn’t you be involved equally?
Why do you hire creative agencies, architects? Why do you go to a doctor? Because you do not know about that subject. You hire a professional for some expertise. If you have hired a creative agency, then they are the best. So, give them some independence. It is not your job. They know their subject. So, let them work.
How do you allocate your media spend?
We spend less than one per cent on advertising. A major chunk, 65-68 per cent, is on TV and another 25-30 per cent is on print, and the remaining is on digital and outdoor.
Is short shelf life of your products a deterrent?
We have got all types of products. We have long shelf life products like ghee and beverages. We have chilled products like butter and cheese, which have a one-year shelf life. We also have fresh products like milk and dahi. For short shelf life products, you need to manufacture packs near the consumption centre. We have factories near the consumption centres. We pack and sell within three to four hours. The consumer will consume it within one or two days.
Where do you see challenges in the sector?
There are a few challenges. The first challenge is how to ensure that the next generation of farmers continues dairy farming in their villages. They will do it only if it is commercially viable. So, we have to see that the educated youth of the next generation of farmers continue dairy farming and find this profession contemporary, modern and cool.
How and when is an increase in price decided?
We have never tried to exploit the consumers that we have got more than 90 per cent of market share. We keep in mind the factors like inflation, the cost of production and some other factors. So, our average increase in price has never been more than the inflation. Our farmers are not interested in profits. They want a good price for their produced milk. They want a stable price for their produce. Not just for today but for next hundred years. So you have to come out with a business model, where your farmers can get the best results on a long-term basis.