Amul's advertising spends have always been less than 1% of turnover: R S Sodhi

Following the concept of 'umbrella branding' and devising an advertising strategy of doing 'only that which is absolutely necessary,' Amul campaign remains relevant and young, says RS Sodhi, MD, Amul

e4m by Devansh Sharma
Published: Jul 21, 2014 9:04 AM  | 4 min read
Amul's advertising spends have always been less than 1% of turnover: R S Sodhi

R S Sodhi, MD, Amul has been associated with the iconic brand for over 30 years. Amul has always been known for its brand recall and value for money proposition. In a conversation with exchange4media, R S Sodhi talks about Amul’s 50-year long brand campaign and how it still remains fresh and relevant for the consumers.

Amul is a legendary brand. What is the fundamental marketing strategy of the brand? Has his seen a drastic shift over years?

Amul’s marketing strategy has remained same over last 50 years; best quality product by using latest technology  with the best packaging and designing. Value for money is another important proposition, since Amul is a mass product. As far as our communication and advertising strategy is concerned, we always go for something which is absolutely necessary. Our advertising spends have always been less than one per cent of our turnover. Despite the limited spends we successfully create enough buzz about our products. Another noteworthy point is, Amul follows umbrella branding.  All our products are promoted under the ‘Amul’ umbrella, so we have to take care of only one child. While other brands, which have for instance 10 sub-brands are spending on 10 children. If your focus is on one brand, you can nurture it better.

Satire, wit and being topical seems to have worked out for the brand over years. How was this winning combination formed initially?

This strategy has worked for us for more than five decades. 50 years ago when the founder of Amul wanted to launch Amul butter, there were products under English brand name. But he insisted on having an Indian brand name, and one of his chemists suggested Amul(priceless), and by coincidence its abbreviation means Anand Milk Union Limited.

So first was the brand name and second was brand building. Marketing plays a very critical role in brand building.  So the objective was to come out with a marketing communication which stood out of the cluttered advertising and could last for many decades. So Sylvester DaCuhna came up with the line ‘Utterly Butterly Delicious’ and then this campaign of topicality emerged. With this five-decades old campaign, the brand is still fresh, it is still young and on top of the mind. And if we carry this forward for another 50 years the campaign will remain young and relevant even at that time.

Amul has gone international via Global Dairy Trade (GDT). What is your take on this development?

Since last two years we have had a lot of commodities to sell. For instance skimmed milk powder was in great demand. But Amul brand name or an India brand name was not recognized internationally. Fonterra, world’s largest dairy trading company had started a platform called Global Dairy Trade (GDT). GDT is an auction platform for internationally traded commodity dairy products. In GDT there are only four international brands. They saw our quality and the processing procedure, which matched their standards and agreed to list us in GDT. After getting listed there, we have been getting orders from all over the globe which otherwise would have had taken us decades to reach at that level. Not just the orders, we are also getting a good price. When Amul started on GDT we were getting 10-15 per cent lower price in comparison to international brands. But now when we have started selling on GDT, the quality of our products is being appreciated and we are getting 10-15 per cent higher price than the competition.

What are your views on the current Union Budget? As a brand leader how does it affect you?

This Budget is growth-oriented and is going to give results in the long term. Immediate benefit could be for the tax payers. I see a lot of emphasis on infrastructure development and skill development which will also give benefits in the long term. It encourages middle income level people to save which will bring VAT money in circulation.

How do you maintain the balance between keeping the existing consumers happy and attracting the new ones?

Dairy products are such that they are consumed by everyone. What is required is to stick to the core propositions of Amul by giving a tastier and good quality product. This will make Amul a preferred brand among our existing consumers and prospective consumers.

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