Amul To Stop Dealer Incentives

Mumbai, March 23 | Updated: Mar 24 2004, 05:30am hrs
The Gujarat Cooperative Milk Marketing Federation (GCMMF), the cooperative FMCG behemoth that owns the Amul brand, has decided to cut down on the incentives that were offered to retailers and dealers. The company will now only focus on advertising and related promotional activities. GCMMF general manager-marketing RS Sodhi said that the days of giving hefty incentive schemes to the retailers and dealers are over.

Mr Sodhi added that Amul never believed in giving huge incentives to the distribution chain, unlike other FMCG players. The company believes in giving volumes to the trader rather than high per-unit margins. Mr Sodhi feels that in offering value-for-money, huge incentive schemes are not possible. Amul has always been into advertising, both in TV and print media, and will continue to do so, according to Mr Sodhi.

A leading redistribution stockist in Mumbai said that Amul has conveyed its new strategy to the dealers and stockists. The reason being given was that giving incentives does not bring in the expected benefit to the company. Amul feels that advertising is a more effective medium of conveying the message to the customer. The new strategy will be implemented from April 1.

Stockists also believe that the Cadbury worms episode did not have any incidental significant positive fallouts for Amul. Moreover, the presence of Amul in the chocolate business is small as compared to Cadbury.