Vegetable+Oil Syed

8/8/2019 Vegetable+Oil Syed

1/45

Prepared by :

Syed Tareq Muhammad Tanim

05 batch-BBA & MBA

Independent University, Bangladesh

1


2/45

EXECUTIVE SUMMERY

Bangladesh accounts for 4.3 percent of world oilseed production. It has the worlds sixth

largest edible oil economy. Yet, about 43 percent of edible oil available in

Bangladesh is imported. The bulk of edible oil Bangladesh imports under the Open

General License (OGL) is RBD Palmolein of Malaysian and Indonesian origin.

The total import of edible oils during the period form November 1998 to October

1999 totaled 4.4 million tones valued at more than Rs. 9.000 cores. That was against a

demand supply gap of 1.4 million tones in 1998-99. Imports have therefore deluged the

market.

2


3/45

Originally, there was no discrimination between refined and non refined edible oil as far

as import duty concerned. The duty on both was 65 percent. Duty was the slashed to 30

percent for both, then to 20 percent in 1996 and 15 percent in then 1999-2000 budgets.

On December 30, 1999 a differential duty structure was introduced. Duty on

Refined oil was fixed at 27.5 percent (25 percent plus 10 percent surcharge) while that

on crude was retained at 16.5 percent (15 percent plus 10 percent surcharge) But only

actual users (as opposed to traders) are allowed to avail of this reduced duty on crude

oil.

Traders like Mostafa are nevertheless allowed to import crude at the reduced duty but

only to sell to actual users on a high seas basis. This requires that the actual users fills inthe import documents (and pays the reduced duty) but leaves the importing process to

the trader. In most parts of the world, the import duty on oilseeds is lower than that on

oils.

But, in Bangladesh it is higher 40 percent. That is why no import of oilseeds of oil

bearing material has taken place in Bangladesh. The industry wants the duty to be

lowered from the present 40 percent to 5 percent. Edible oils prices in the Bangladesh

market have crashed due to large imports by multinational trading houses see table.

Among the Vegetable Oil refineries, Mostafa Vegetable Oil Industries Limited is one of

the biggest Projects in Bangladesh as it is now producing highest quantity of refines

Soya bean oil covering all three units. With the changing demands of the country the

company has come forward to set up the 3rd unit in the name of Mostafa Vegetable Oil

Industries Limited. The products of Mostafa Vegetable Oil Industries particularly Soya

Bean Oil is refined, pure and Cholesterol free.

3


4/45


5/45

Mostafa vegetable oil limited

Mostafa Textile Sector

Mostafa Properties Development Sector

Mostafa IT Sector

Mostafa Chemical Sector

Mostafa Food and Agro Product

Mostafa Container Terminal

Mostafa Flour Milling and Food Complex Plant

Mostafa Fertilizer

Mostafa foundation

Company profile & History

The Unit 1(one) under the banner of Mostafa Vegetable Oil Industries Limited was

established in the year of 1989 at Bhatiary Industrial belt, Sitakunda Under Chittagong

District in order to manufacturer of refine, pure, Edible Soya bean oil from imported

Crude degummed Soya bean oil (CDSO ).

Among the Vegetable Oil refineries, Mostafa Vegetable Oil Industries Limited is one of

the biggest Projects in Bangladesh as it is now producing highest quantity of refines

Soya bean oil covering all three units. With the changing demands of the country the

5


6/45

company has come forward to set up the 3rd unit in the name of Mostafa Vegetable Oil

Industries Limited.

The products of Mostafa Vegetable Oil Industries particularly Soya Bean Oil is refined,

pure and Cholesterol free. Palm oil and Vegetable Ghee are also pure, demandable and

popular in the market for its high quality. All these items, produced by Mostafa

Vegetable Oil Industries Limited are international standard. That is why the demands of

these products are increasing day by day in our market.

Project and production

The production capacity of the 1st unit of Mostafa Vegetable Oil Industries Limited is

27,000 Metric Tons of refine Soya Bean Oil , 2nd unit for 1,50,000 Metric Tons and 3rd

Unit 35,940 Metric Tons of Vegetable Ghee annually. The 2nd unit was installed and

operated in the year of 1992. All machinery and equipments of the 2nd unit are of

German origin.

The 3rd unit was in operation by the year 2000. Tanks of various capacities for soya

bean oil, palm oil, packaging machinery, Generators, and Boilers are procured from

local sources. To produce refine soya bean oil, palm oil and vegetable ghee, Raw

materials mainly Crude degummed soya bean oil/crude palm oil /crude Palmolein ,

bleaching earth, phosphoric acid, caustic soda etc are used and all these raw materials

are imported from abroad.

6


7/45

Environment

The total project is free from Air pollution and there is no possibility for pollution of

environment as because the by product Flee fat acid which we get at the time of refining

soya bean oil is used and consumed in the soap making industries. For refining Soya

bean oil, imported Boiler will create any problem. The temperature which is needed for

the production of refining soya bean oil, the imported boiler has the capability to utilize

the needed temperature. Under the same system and management, there is a full

pledged Laboratory to examine its products and quality. There is no need for separate or

independent Testing Laboratory for examine/ testing purposes.

Investment

The company has invested total an amount of Bangladesh Taka 118.17 for this Project

with independent 3-units of edible oil refineries in the name and style of Mostafa

Vegetable Oil Industries Limited.

Quality

The company has registered with Bangladesh Standard Testing Institution and got the

BSTI quality certificate for the items produced under MOSTAFA Brand edible oils

and Shakti Brand Vegetable Ghee. Mostafa Vegetable Oil Industries Limited is also

planning for submission of papers and documents in order to get ISO

CERTIFICATE for its products.

The Future of the Project is prospective and bright as it is food item and as well as it is

needed for our day to day use in domestic purposes and industrial purposes. So

7


8/45

Government should encourage this sub sector Edible oil refinery and hydrogenation

and as such should withdraw duties and taxes imposed so that users and consumers

can purchase these unavoidable edible oils within their buying capacity and financial

ability

Company Management

The Management of Industries is managed, controlled, well conversant and monitored

under a corporate management system having its corporate head office at M Rahman

Chamber, 277 Khatungonj, Chittagong headed by a higher qualified, experienced

corporate financial consultant.

Chairman

Mr. Hefazatur Rahaman

8


9/45

Vice Chairman

Mr. Shafique Uddin

Managing Director & CEO

Mr. Jahir Uddin

Directors

Mr. Kafil Uddin Mr. Rafique Uddin Mrs. Mostafa Bagum

Mr. Jashim Uddin Mr. Kamal Uddin

9


10/45

Their mission is the realization of vision through solution for customers daily needs

strictly on ethical and perfect standards at very reasonable cost for the satisfaction of

consumers ensuring optimum benefits to the society

To meet the clients commitment by taking excellence service to new heights.

To be more competitive.

To strive hard to optimize profit through conduction of transparent deals;

To ensure more revenue to the nations.

To create adequate jobs

To ahead with our slogan For a Bright Future

Safety: protecting employees, the environment and installations.

Confidence: honoring our relationships.

Commitment: Complying exactly our obligations.

Quantity: improving continuously the requirements Quantity Polities: Reaching the leadership in our market, exceeding the

expectations of the client, through the prompt delivery of products and services,

with world class quality and competitive prices

10


11/45

Their concept of business germinates from their vision which sees it's as a means to the

wellbeing of the stakeholder, employees, and members of the society at large by creatingnew wealth in the form of goods and services that for ultimate customers satisfaction, in

respect of socio-economic-ecological responsibility in the process of advance technology

For A Bright Future.

Industry analysis

11

Threat of Substitutes:Low

Edible oil, as a product category, is

irreplaceable in the Bangladeshi food

basket. Therefore, at the industry

level, the threat of substitutes is low.

However, the threat of substitution of

domestically manufactured oil by

imported oil and that of branded oil

Inter-- Firm Rivalry: High

Continued growth in edible oil

demand is attracting new

players/capacity addition in the

sector. Refining capacity dispersed

because of which bargaining power

of a being added near ports to refine

imported crude oil. Trader-

importers are also making efforts to

build brands to differentiate the

product, secure higher realization

and build sales resiliency.

Bargaining Power ofSuppliers:

Low

As oilseeds production is

widely dispersed, supplier

power per se is weak.

Bargaining Power oBuyers:

Low to Medium

As edible oil is a consu

product, buyers are wi

dispersed because of w

bargaining power of

average consumer is low


12/45

Structure of the industry

Bangladesh is populated country and inhabitants of several of its regions have

developed specific preference for certain oils largely depending upon the oils available in

the region.

Mostafa has an important role in our edible oil economy. It has around 10% share of the

edible of the market. It has the ability to absorb a heterogeneous of oils, which do not

generally find direct marketing opportunities because of consumers preference for

traditional oil.

For example newer oils like rice bran and cottonseed and oils from oilseeds of tree and

forest origin have found their ray to the edible pool largely through Vanaspati route.

Through technological means such as refining, bleaching and de-odouraisation, all oils

have been rendered practically colorless. Odorless and tasteless, and therefore, havebecome easily interchangeable in the kitchen.

Newer oils, which were not known before they have entered the kitchen, like those of

cottonseed, sunflower, palm, oils or its liquid fraction (Palmolein) soya bean and rice

bran.

12

Barriers to entry: Low

Select areas still offer fiscal

incentives to set up new capacity. As

approximately 60% of edible oil is

sold loose, brand identity may not

pose as a barrier.


13/45

About 60-70% predominately groundnut and mustard seeds are used to make non-

refined or filtered oils. This tends to have a strong and distinctive test preferred by most

traditional customers. The share of raw oils refined oils and Vanaspati in the total edible

oil market is estimated at 42%, 48%and 10% respectively.

MAJOR INDUSTRY PLAYER

The dominant feature which has had great significant impact on thepresent status of

edible oilseeds/oil industry has been the programme of liberalization under which the

Governments economic policy allows greater freedom to the open market and

encourages healthy competition and selfregulation rather than protection and control.

Controls and regulations have been relaxed resulting in a highly competitive market

dominated by both domestic andmultinational players.

Number one position holding player in this industry is

Others are

13

TRIPTI TEER DADA

FRESH PUSTI QUALITY


14/45

Demand for Edible oils rises in Bangladesh:-

Bangladeshi food industry continues to show a strong commitment to oils importsfollowing drop in domestic demand, says industry body.

Fresh figures from the Solvent Extractors Association of Bangladesh (SEAB) revel that

edible oils imports increased by some 21 percent for the first six months to April

2009.Imports jumped to 2.2 million tones in the first half of 2008-2009 up from 1.82

million tones for the same period last year. Imports are expected to be much higher this

year because of a drop in domestic oilseeds production.

Purchases of edible oils by Bangladesh are expected to reach around 5 million tones this

year from. Soya oil in particular saw strong growth. Imports of crude soy oil leapt to

735.352 tones in the November 2007 to April 2008 period up from 236.990 tones in a

year earlier. Crude palm oil purchases rose 10.8 percent to 1.01 million tones from

911,520 tones.

In Bangladesh oilseed output for 2009 is estimated to be around 21.8 million tones, a

fall of 6.4 percent from 23.3 million tones last year.

14

JAYA S.Alam


15/45

The processed vegetable oil market is enjoying decent growth in India, pushing up

demand for oils. The Bangladeshi branded vegetable oil market grew last year by over 5

percent, according to outpacing the global average growth rate 4 percent.

Situation analysis

After salt, edible oils are possibly the most important ingredient in cooking. One of the

most interesting facts about household consumption patterns in Bangladesh is the high

rate of growth of branded edible oils.

Even today, especially in rural Bangladesh and small towns, the majority of households

purchase cooking oil from the nearby oil press or the grocer who sells unbranded oil that

comes in wholesale packs. Till about fifteen years ago branded cooking oils were seen to

be an item of middle class and elite consumption, mostly produced by multinational

companies through their Bangladeshi arms.

The total size of the indigenously produced and branded edible oil consumer market in

Bangladesh is about 360,000 metric tones per year, consumed by some 29 million

households (Source: Bangladesh Retail Audit).

In the highly competitive consumer-pack user segment for branded edible oils, Mostafa

has the largest market share at 10%. It has a total consumer base of 3.05 million

households (Source: IRS 2008), while its turnover exceeds Rs. 3.3 billion.

15


16/45

Achievements

Mostafa at the forefront of the branded edible oil market, leading its consumer pack

segment. It has also been rated as top five fastest growing brands in the FMCG sector in

Bangladesh in 2009.

Through its value creating strategies and emphasis on purity and quality, the brand has

consistently created benchmarks for the entire edible oil industry, including

Bangladeshi subsidiaries of multinational brands.

It has successfully addressed the changing needs and tastes of the consumer and

introduced variants from time to time. Mostafa can also justly take credit for bringing

world-class practices in packaging of edible oil to the country. It introduced tamper-

proof aseptic packaging to guarantee that only the purest quality reached consumers.

Even today, Mostafa is the only edible oil in the country that uses the tetra pack

technology with six-layer packaging and undertakes more checks and tests than any

other brand in the industry.

WHAT RETAILERS HAVE TO SAY

1) Low margin: - Most of the retailers complained that they get very low margin

from different brands.

2) Leakage problem: -The retailers also complained about the leakage problem,

but other companies are giving them full replacement of leakage packages.

3) Feed back problem: - The retailers also complained that they get very less

feed back from the company, like whenever any scheme is introduced by the

company, they are not even made aware of the scheme.

16


17/45

4) MRP Problem: - Retailers also complained that in the days of rising prices,

sometimes it happens that MRP is less than the price at which they have

purchased it from the distributor.

WHAT CUSTOMERS HAVE TO SAY

1) MRP problem: - customers complaint that sometimes they have to pay more

price then the MRP

2) Leakage problem :- customers even told that sometimes they have to face

leakage problems

3) DISCOUNT schemes: - customers complaint that there are very less discount

schemes on soya oil as compared to other refined.

Market share of different brand

Name of brand Market share in %Rupchanda 37%Mostafa 10%Teer 13%Tripti 10%

Fresh 8%Pusti 7%Quality 5%Jaya 3%Dada 5%S.Alam 2%Other 3%

Source: Bangladesh Retail Audit-2009

17


18/45

Marketing objectives

Their long term objectives are to be successfully present in the Bangladeshi market and

establish a base in Bangladesh. The first goals specifically aimed at the Bangladesh are

stated below.

Objectives/Goals

18


19/45

Market share: aims are set at achieving a 15-20% market share in the next 2 years.

Brand awareness: they want to get and increase brand awareness in the next 18

months.

Strategy statement

Market share:

1. They want to contract major supermarkets and promote the products in the

supermarket. This forces the market to make a decision on different brands on

the spot.

2. They want to offset products to whole sale as bigger parties require bigger

amounts and the market wants to buy in big amounts.

Brand awareness:

1. They want to advertise in-house magazines and magazines aimed at students.

2. They want to lower the price to make sure people consider buying products and

therefore know about our existence.

3. They want to bring our products to the customer. This allows the customers to try

our product before buying it and feel positive about our product.

Market analysis

19


20/45

Market research

In 2009, middle class households spent an average amount of 2, 70,120 taka per year

on food. This means 19% of all food is frozen, snacks or eaten at parties. This means

there is a big opportunity for us to this market.

Market potential

A number of related parties, functions, weddings, club meetings etc. have been held in

the Bangladesh and the number is 4175 (app). Multiplied by the percent growth of the

population between 2002 and 2007, we can expect a number of 66,800 parties being

held in future. This is good market to start in as well as expand in.

Competitive and environmental factors

In the Bangladesh, there arent many pastry snack packs available but there is a lot of

competition on rice, beef, chicken, drinks, fish , vegetables, toasts with spiced butter,

peanuts and small blocks of cheese as this is very commonly found at informal parties

and perhaps part of culture to provide this as a basis.

However, people do tend to do something extra and this can vary a lot. This can be fruit,

olives, sausage or something else. This is where promotional strategies can focus on a

different kind of extra party food.

20


21/45

Competitor analysis

(I) Competitor A: Rupchanda

Rupchanda is the product of Bangladesh edible oil and they have the largest

market share. As of early November, the promotional campaign of rupchanda

includes the editing official website, press release for their new oil packaging, posters

and posters in public transport. The rupchanda considered as the main competitor

because these are under the same genre. It draws the attention of our target audience

due to the well-known products.

(ii) Competitor B: Teer

It has become one of the best-selling oil industries in 2009. They do not only contain

unique elements in their products but an educational message as the main character

strives to achieve the market share. Apart from the release of the new soundtrack,

posters in public transport and on newspapers, the Calcutta actress will come to

Bangladesh for a promotion.

(iii) Competitor C: Tripti

In order to differentiate from the main competitors, Tripti promoted as a mothers

first choice. They took huge promotional campaign to get rid of the target markets

confusion between it and Teer. The poster design adopts a black and white color tone to

portray this feeling. In order to attract a larger audience and make them aware of this

21


22/45

product, creative promotional campaigns with some noises are taken. They are trying to

make online campaign interactive and fun. Apart from this, since Bangladeshi people

rarely watch movie in cinema hall, and it therefore is identified as the weakness because

many company can advertise their product in the screen before starting the film. . In

order to let more people, their target group in particular, to notice that theyhaving a

function collaborating with well-known restaurants in the Dhaka-chittagong highway.

Marketing strategies

Assumptions

Bangladeshi informal parties tend to start with Biriani, Mattoon, Chicken followed bybeef, salads and other main courses.

Bangladeshi formal functions and dinners etc. are started by with the same thing

followed by a drink and a small bite, often with a speech of someone followed by an

extensive range of premium foods.

Segmentation, targeting and positioning

22


23/45

Market segmentation

Market segmentation is resorted to for achieving certain practical purpose. For example,

it has to be useful in developing and implementing effective and practical marketing

programmes Mostafa Consumer market segmented on the following customer

characteristics

1. Geographic segmentation

23


24/45

Potential customers are in a local, state, regional or national marketplace segment. If a

firm selling a product such as farm equipment, geographic location will remain a major

factor in segmenting target markets since their customers are located in particular rural

areas. While for retail store, geographic location of the store is one of the most

important considerations, in this case city areas are preferred. Preferred segmented area

of Mostafa is Chittagong because it is a Chittagong based company and people of

Chittagong division use extensive amount of cooking oil. It is a nation wide brand but no

they are focusing on the rural people.

2. Demographic segmentation

24


25/45

Income Household with higher incomeHouse hold with average incomeHouse hold with lowest income

Mostafa divided their demographic segment in three parts, like: house hold with higher,

middle and lower income. Important Segmentation is done on the basis of income level

of a household because 5 liter Mostafa soybean oil priced at 460 taka. But usually people

with average and lowest income buy 1-1, 5 liter. Thats why Mostafa segmented the

market in that way.

3. Physiographic segmentation

Social class Household upper classHouse hold middle classHouse hold lower class

Mostafa segmented the physiographic stratification into three types as Upper, middle,

and lower class. For each segment, they differentiate their products. Like, they areproducing 5 liter for upper class people. They are targeting the each class of social

stratification. In each class, their main focus area is the women because they are a bit

caring about the family.

4. Behavioral segmentation

Variables TypesBenefit

sought

Quality Service Economy

25


26/45

User status Non user Regular PotentialLoyalty

status

Medium Strong Absolute

According to the purchase decision, they segment the household who regularly sought

quality, service and economic price. They segment the user status as non-user, regular

and potential. They also were segmenting the loyalty status as medium, strong and

absolute. User statuses are important issue here because people seeking quality

products with premium price. Household seeks quality products because of good health.

TARGET MARKET STRATEGIES

A company can follow several different target-market strategies and Targeting strategies

usually can be categorized in various ways:

Mostafa target market strategies is full market coverage

26


27/45

Full market coverage

Mostafa attempts to serve the entire market. For This coverage the are following mass

market strategy in which a single undifferentiated marketing mix is offered to the entire

market, or by a differentiated strategy in which a separate marketing mix is offered to

each segment

For Full market coverage, they are differentiating same products in various ways. For

that coverage, they have to achieve potentiality from each segment.

In the above picture, we can see that, these are the products of Mostafa and

performing the same task. But their accommodation is different for

different customer.

Simply we can see it through their social classification

High Income

We generally knows that, house hold with high income, generally purchase 5 liter . high

income does not mean the rich people. People from upper middle class and mid middle

class also generate high income in respect to their class.

27


28/45

Middle group:

Middle class house holds mainly focusing on quality and their purchase decision varies

time to time with price.

Lower-income people:

Lower- income consumers give more influence on price not on quantity. Thats why they

are targeting lower-income group with plastic pack.

Other than household activities, they are targeting business people as well.

They are targeting all types of restaurants, residential hotel and motel in

Bangladesh.

28


29/45

POSITIONING:-

We know that Mostafa oil is a big brand but their market position is not very good one.

Even their market share is high though it is potential company in Bangladesh. Thats

why, The main positioning strategy is developing or reinforcing a particular image for

the brand in the mind of the customer.

The main approach to positioning strategy is: - The price-quality approach.

Price quality approach:

Mostafa attempts to offer more in term of service, feature, quality, or performance. Theycharge higher prices partly to cover the cost and partly to communicate the fact that they

are of high quality.

In fact in the same product category there are brands, through comparable in qualities,

which appeal on the basis of price.

For example

Brands like Teer and fresh use quality and price positioning technique respectively.

Teer competes for quality and Fresh competes for price. It is difficult to use both quality

and price positioning together because there is a risk that high quality-low price

positioning technique may infer the image of the product in the mind of the consumer.

QUALITY

SERVICE, QUALITY, IMAGE,

29

PREMIUM

MARKET

LEXUS

MARKETR

MOSTAF

A


30/45

SCOPE OF PRODUCT LINE

PRICE

In our example, product S.alam is positioned unfavorably. It is too expensive for the

mass market and its quality is not good enough for the premium segment.

Mostafa is in premium level and they are providing the high quality products with

cheaper rate. As we early discussed, they are positioned at price quality strategy. From

the positioning graph, we can see the exact situation.

Lets look the scenario in the positioning map.

H

Quality

30

ECONOM

Y

MASS

MARKET

S.Al

am


31/45

Rupchanda

Mostafa

H L

Teer

Fresh

Price

L

Marketing Strategies

Marketing strategies includesmarketing mix decisions are known as 4 P's of product,

price, place (distribution), and promotion.

Product

The product decisions should consider the product's advantages and how they will be

leveraged. Product decisions should include:

Product Quality

31
http://www.quickmba.com/marketing/mix/http://www.quickmba.com/marketing/mix/http://www.quickmba.com/marketing/mix/


32/45

Mostafa promises the highest quality for all of its products. As such the products are also

manufactured to the highest standards. The consistency in Mostafa promises and the

delivered product please consumers.

Product Features

Their products features can set it apart from the competition and differentiate it for

competitive advantage.

Mustafa vegetable oil:

It is Ultra-refined cooking oil, with the best taste, and also better consistency

and coloring.

Lower in cholesterol and better tasting.

Lighter and healthier than most other oils.

Emulsified vegetable oil with rich taste for special cookings.

Cooking oil which tastes like ghee for those who want the best of both worlds.

The total customer value analysis helps us to determine what product the consumer is

getting in the end. It also helps somewhat in the determination of the key features of

Mostafa vegetable oil products.

32


33/45

Product Design

Design is more than skin deep, it goes to the heart of the product and a good design

contributes to the products usefulness. When we talk about oil products the design

element means how the oils and fats themselves are formulated and how their

compositions influence their market.

Mostafa Vegetable oil

Philosophy

Must be consumer focused and technology driven- a world wide commitment

Mostafa Vegetable oil has once again demonstrated its compliance with its customeroriented policy by the extension in its current product category, thats a unique product

with enriched features. It is altogether a new product, packaged in a 50 gram packet.

Branding

33


34/45

Branding is an aspect of marketing at which Mostafa oil seems to excel especially when

we think of the Mostafa brand. Since its introduction so many years ago Mostafa has

retained the same motherhood and cooking expert image something which is hard to do

for so long. There are typically four levels of meaning conveyed by a brand name. The

following is an analysis of what Mostafa brand names convey

BrandLevel Mostafa vegetable

oilAttribute Premium quality,

high prestigeBenefit Tasty food, ease

cookingValue Motherly love,

traditionPersonality Cooking expert,

tradition

Brand Equity

Brand equity is the amount of power and value a brand name carries in the market.

Firms can capitalize on high brand equity to increase profits and market share. Brandequity is measured on a three-level scale such as awareness, preference and loyalty.

Heres how Mostafa vegetable oil brands stand:

BrandsLevels Mostafa vegetable oil

34


35/45

Awareness HighPreference MediumLoyalty High

Mostafa oil is probably the most widely known of all products and its equity in the

market is high. Mostafa positioning is that of cooking expert and its equity has built up

that image. Those who buy Mostafa vegetable oil remain more or less loyal to it. Somebuy it because their mothers and grandmothers bought it and some because they deem

it the most dependable. In either case the product does not disappoint the purchaser.

The brand seems to be doing very well in its target market and is building up its equity.

Packaging:

The packaging design for the Mostafa vegetable oil is extremely exciting The packaging

makes the products look more contemporary. It ensures more emphasis on the variants

that have already been a part of the product but never been communicated to the

customer that well.

PHB the plastic packaging

35


36/45

The biopolymer poly-3-hydroxybutyrate (PHB) is polyester produced from

renewable raw materials. Its characteristics are similar to those of the petrochemical-

produced plastic polypropylene. Interest in PHB is currently very high. Companies

worldwide are aiming to either begin production of PHB or to expand their current

production capacity. Some estimate that this could result in a price reduction to fewer

than 5 Euros per kilogram. However, that is still four times the market price of

polyethylene at February

2007.

Poly

Poly (lactic acid) has become a significant commercial polymer. Its clarity makes it

useful for recyclable and biodegradable packaging, such as bottles and wrappers that

Mostafa used. In biomedical applications, it is used for sutures, prosthetic materials,

and materials for delivery.

Plastics produced by bacteria

They use the Biodegradable natural plastics can also be manufactured from bacteria.

Within bacterial cells, granules called poly hydroxyalkanoate (PHA) are stored.

Bacteria can be easily grown in bulk culture, and the plastic harvested. Genetic

engineering can also be deployed as a novel biodegradable plastic generating tool. Corn

plants containing the bacterial gene for producing PHA have been shown to produce the

same variety of plastics within their cells.

36


37/45

But environmentalists argue that the cheaper price of traditional plastics does not reflect

their true cost when their full impact is considered. For example, when we buy a plastic

bag we dont pay for its collection and waste disposal after we use it. If we added up

these sorts of associated costs, traditional plastics would cost more and biodegradable

plastics might be more competitive.

Price

Discuss pricing strategy, expected volume, and decisions for the following pricing

variables:

List price

Products Net weight Packaging Retail price

37


38/45

25 ltr. TinMostafa

vegetable oil

5.00 ltr. Plastic bottle 460

2.50 ltr. Plastic bottle 2202.00 ltr. Plastic bottle 180

1 ltr Plastic bottle 95.5 ltr. Plastic bottle 55

100 gm Polyester packet 15

Price Structure of the Market

The market for oil products in Bangladesh seems like a monopolistically competitive

market. That means that it is a market in which many buyers and sellers trade over a

range of prices rather than a single market price and the reason being that sellers can

differentiate their products from each other using quality, features, style and

accompanying services. There are a very large number of buyers and also a large

number of sellers.

Many of the sellers such as tripti, Pusti, Quality and fresh etc. can differentiate their

products from the rest with the different features they offer. Fresh offers UHT treated

oil, Quality sell its ghee in Poly bags Mostafa and Rupchanda differentiate themselves

from the entire market on the basis of quality and so on.

Pricing Strategy

Mostafa market price objective is primarily to tap the upper-middle and upper class

segments. For this they need to achieve product qualityleadership and in doing so

they incur high R&D costs. To cover these costs they use value-based pricing and

premium pricing strategies, relying on consumers perceptions of their products

values. Needless say that to support an image/perception of high quality, they have to

provide high quality products as well. The promotion as discussed in the coming section

is also targeted mostly at the affluent section of the market with the advertisements

showing well-to-do families. The cookery program is also to attract affluent housewives

38


39/45

away from satellite channel cookery programs to local TV where they can view Mostafa

vegetable oil advertisements.

Discounts

Distributors get commission from the company. That is known as

distributor commission.

Wholesaler gets 10% of a product price.

Retailer got 5% from the product price.

Distribution (Place)

Mostafa vegetable oil limited believes in synergy that is a perfect blend of all the

components of the marketing mix. Proof lies in it having one of the most efficient and

largest distribution (networks) systems in our country.

Mostafa group claims that it takes six weeks for the product to move from the factory to

the shelf. The product travels to the primary distributors within one and half week, then

to the secondary distributor within one and half weeks and finally to the trade level

within three weeks.

39


40/45

Decision variables include:

Distribution channels, such as direct, retail, distributors & intermediates

Motivating the channel - for example, distributor margins

Criteria for evaluating distributors

Locations

Logistics, including transportation, warehousing, and order fulfillment

CHANNEL LEVELS

Mostafa vegetable oil limited aims to achieve maximum retail coverage and is not

selective in its distribution technique. It has direct interaction with its wholesalers and

retailers and they has a network of about 1300 distributors located in Bangladesh.

They used Multiple distribution channels are used.

Sales Setup

40


41/45

Promotion

Promotional activities are taken to introducing the products to consumer. Its a way of

influencing buyer to buy the products. Through promotional activates a company wants

to show his products or services value and benefits. The most concentrated promotion

techniques used are television Advertisements. Its ads are shown on deshi channels. The

ads are re-launched after sometime to maintain interest of the consumer and when the

product is modified. Mostafa uses Visibility marketing and Media marketing.

Visibility marketing

41


42/45

Mostafa oil concentrates most on visibility and availability. They pay a lot of attention

towards this form of advertising. This includes print advertisements, price cards, posters

at vendors shops, sign boards, buntings, flags etc.

Media Marketing

Mostafa oil uses different news papers and magazines in promoting their oil but the

major emphasis is on advertisements, shown at the times loving mothers are watching

TV the ads also run at different times of the day specially between 7.30 to 8.30.

Promotional massages

Mostafa oil use Six categories for the promotional packages, including natural,

organic, single serving, quick, fresh, and low or no fat, The low-carbohydrate

craze is testimony to the responsiveness of the cocking oil industry to changes in

consumer preferences, as well as to the difficulty of anticipating consumer demands.

42


43/45

Sales Promotion

It also plays its role in promoting Mostafa oil by arranging different events like

Channel I Ghore Bhaire cooking contests, Ashiyan City & Mostafa vegetable oil

games shows- Tumio Parbe telecast on Desh T.V.

Personal Selling

There is no personal selling in case of Mostafa oil brand, only business products of

Mostafa group are promoted and sold through this process.

When Mostafa come up with its cocking oil, it gives the trade off to the retailers.

Other mediums

43


44/45

Print ads in magazines such as Binodhon Bichitra, Jay Din etc. and those read by the

average but literate housewife. Buntings, posters, trade flags (hung at the retailers)

inducing consumers to try the latest taste for Mostafa oil etc.

Besides this, the cookery program that runs every Tuesday evening in ATN bangle is a

good promotion tactic as it shows use of the Mostafa oil in a variety of dishes. They

deliver a massage through that program and that is a housewifes best friend in every

way.

The symbol and the color of the tin is also a good way to communicate to the

business and household consumer who cant read but can easily recognize the tin

by the leaf symbol or the yellow color scheme. There is an advisory service for the

convenience and help of the consumer a cookbook to gift and keep.

Sales promotion is done to increase sales build image of product in the

consumers so called black-box and develop a relationship with your consumers.

Premiums are offered during Ramadan or offers like a free chat masala packet,

etc. to increase sales. Different sizes (poly bag, plastic bottle, 2.5/ 5 Liter bottle)

are available for convenience of the consumer and to target all segments of the

market. Packaging sent abroad to maintain standards. Brand positioning used is

about benefits of the product itself.

SWOT-analysis

STRENGHTS

1. Mostafa products have the good market share in Bangladesh in oil and market.

2. They have very high customer loyalty.

3. They take care in keeping the highest quality of the products it produces.

4. They have very brand awareness.

44


45/45

5. They are the only fat free brand.

WEAKNESSES

1. Mostafa is a very good brand and their has been very no change in oil color since ages,

people feel that the new better color brands have better products.

THREATS

1. It is also sold loose to a large rural market.

2. The market is now being entered by quality and Fresh ,these are being bought by

health conscience people this will lead to Mostafa oil decline in market share.

3. The overall market of cooking oil is declining.

OPPORTUNITIES

1. They have a large market share in the Chittagong, Shylet and Khulna.

2. People in the metropolitan areas are inclined towards branded products.

3. The fat free is still popular and can be advertised to gain the market in health

conscious people.

Documents

Vegetable+Oil Syed