My desertation

“A Study of consumer behavior towards various edible oil”

CHAPTER NO 1

NATURE AND SCOPE OF THE STUDY

1.1) INTRODUCTION:

India is a leading player in edible oils, being the world’s largest importer

(ahead of the EU and China) and the world’s third-largest consumer (after China

and the EU). Each year, India consumes over 10 million tons of edible oils. Edible

oils have a high penetration of 90% in India. However, per capita consumption of

edible oils is around 11 kg per year. This is considerably lower than in most

developed countries. Palm oil (mainly imported) and soya bean oil account for

almost half of total edible oil consumption in India, followed by mustard and

groundnut oil. In India, most vegetable oil is purchased by household or industrial

buyers (food processors, restaurants and hotels) for frying or baking needs and is

sold as loose oil or vanaspati (partially hydrogenated vegetable oil). Only a small

percentage of edible oils are sold in branded form at the retail level.

In India consumer oil preferences vary from region to region because

preference is based on local cultivations.

India is fortunate in having a wide range of oilseed crops grown in its

different agro-climatic zones. Groundnut, mustard/rapeseed, sesame, safflower,

linseed, Niger seed/castor are the major traditionally cultivated oilseeds. Soya

bean and sunflower oils have also assumed importance in recent years. Coconut is

the most important amongst the plantation crops. Among the non-conventional

oils, rice bran oil and cottonseed oil are the most important.

Vegetable oil consumption in the country is continuously rising and has

sharply increased in the last couple of years to roughly 11.2 kg/head/year. This is

still lower than the world average consumption level of 17.8 kg and that in

neighboring countries like Pakistan (16.1 kg). The developed western world has a

per capita consumption of 44 to 48 kg/year. According to projections from the

National Council of Applied Economic Research (NCAER), per capita

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consumption of edible oils is likely to reach 13.95, 14.83 and 16.17 kg by 2009-

2010 in per capita income grows by 4%, 5% and 6% respectively.

India is the fourth-largest economy in the world and the fastest-

growing significant economy with an average GDP of 6%. It has a population of

1.06 billion, which is growing at a rate of 1.65% per annum. According to the

NCAER, there are five classes of consumer households, ranging from the

destitute to highly affluent, which differ considerably in their consumption

behavior and ownership patterns across various categories of goods. These classes

exist in urban as well as rural households and consumption trends may differ

significantly between similar income households in urban and rural areas.

Movement to cheaper oils/Pricing power.

EDIBLE OILS AND INDIAN ECONOMY

Oilseeds and edible oils are two of the most sensitive essential

commodities. India is one of the largest producers of oilseeds in the world and

this sector occupies an important position in the agricultural economy covering an

area of 24.38 million hectares and accounting for the production of 20.87 million

tons of oilseeds during the year 1999-2000. India contributes about nine percent

of the world oilseeds production, about seven percent of the global production of

protein meal is the fourth largest edible oil economy in the world1. India is a vast

country and inhabitants of several regions have developed specific preference for

certain oils largely depending upon the oils available in the region. For example,

people in the South and West prefer groundnut oil while those in the East and

North use mustard seed/rapeseed oil. Likewise several pockets in the South have a

preference for coconut and sesame oil2. Through technological means such as

refining, bleaching and deodorizations, all oils have been rendered practically

colorless, odorless and tasteless and therefore, have become easily

interchangeable in the kitchen. Newer oils, which were not known before have

entered the kitchen, like those of cottonseed, sunflower, palm oil or its liquid

fraction, polyolefin, soybean and rice bran3. All of them are again essentially

bland, processed edible oils. About 60-70% predominantly groundnut and

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mustard seeds are used to make non-refined or filtered oils. These are often

branded by large manufacturers. The lower quality and generally lower. Cost

filtered oil produced is mainly by the small scale village based processors. The oil

is mostly sold loose directly to the consumers from a variety of containers, often

within two to three days of production4. These local crushers will produce

between half and two MTs per month. This decentralized production and

marketing pattern may account for around 20% of all edible oils in the country5.

The share of raw oil & refined oil in the total edible oil market is respectively

42.0% and 42.7% as per the Department of Food & Public Distribution. In the

above context, an attempt has been made to understand the buyer’s behavior and

brand preferences for edible oils in the state of Maharashtra.

Marketing and purchasing practices, production, sales and marketing

strategies of business firms in respect of edible oil products were thoroughly

examined in the literature review. The main thrust of these studies is the

evaluation of edible oil brand extension practices of some reputed brands

preferences equity and the market share. In fact the findings of the studies are

very valuable for new researchers and marketers though who want to chalk out

edible oil branding Strategies in a professional way regarding to this study, some

eminent professors and academician’s quality research papers review has been

taken by studying their research papers on edible oils. Near about 10 quality

research papers review has been taken in this study. Prof. H. Sulochana (2008),

eminent female professor of Omanis University, Hyderabad highlighted in her

article that, the consumers must care about the use of edible oil to avoid the health

problems. In India 60% of the health problems are raised by not using the quality

edible oil in their regular diet6. Prof. Reddy Bhagwan (2009) University of Tamil

Nadu has recommended in his research article that the consumers must use the

refined edible oil to prevent the fat in the human body. Heavy fat is the main

cause of weight and stomach problems in the health of human beings. Prof. Philip

Opar Donney (2007) a Marketing vice president of Asian companies from

Afghanistan, basically he is from Kenya, has recommended the packed edible oil

for regular diet by the customers than loose edible oil. Prof. Purushootam Rao

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(2008), dean faculty of commerce and Head department of commerce, Osmania

University Hyderabad from Andhra Pradesh highlighted in his research paper

that, edible oil is the most important part of a food for human being. The Govt.

must prevent the oil mixing practices done by the wholesalers and local retailers

while they are selling loose oils to the consumers. Dr. B.K. Bhattacharya, West

Bengal (2009) a eminent health physician advised and given important

suggestions to his patients and consumers to use the less quantity of edible oil in

the regular diet of the people, 30% of the Indian peoples were not conscious while

using the edible oils in their diet, so the concentration must be given to the regular

use of edible oils. Prof. Merry George (2009), great academician from Malaysia

analyzed in her study that, the producers of edible oil mills are not taking care

while producing the edible oils. The producers must avoid using the chemicals for

getting bright color and better transparency in edible oils. There must be strict

rules and regulations in the production and selling of edible oils1. Dr. Simon

Chippy (2007)

Afghanistan a health specialist recommended to the patients to use

Saffola and Sunflower packed edible oil in their regular food to avoid unwanted

diseases from the use of regular edible oils2. Prof. Abdul Gilani, Pakistan (2009)

has analyzed in his research study that the customers or regular users of edible

oils must avoid fatty edible oils in non-veg food as well as vegetation food. Prof.

James Berry U.S.A. (2009), said in her article that Gov.t. and different NGO’s

must come forward in public and try to create proper awareness in use of regular

edible oils and save the life by health diseases3. Prof. Ramana Joof U.A.E. (2009)

has found in her study that from Afghanistan, Iraq, Iran, and Saudi Arabian

peoples are using most fatty edible oils. She suggested to the regular users try to

use less and refined edible oil in their regular food and easy diet.

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1.2) INFLUENCES ON CONSUMER BEHAVIOR:

Consumer behavior involves the psychological processes that consumers go

through in recognizing needs, finding ways to solve these needs, making purchase

decisions (e.g., whether or not to purchase a product and, if so, which brand and

where), interpret information, make plans, and implement these plans (e.g., by

engaging in comparison shopping or actually purchasing a product).

Sources of influence on the consumer. The consumer faces numerous sources

of influence.

Often, we take cultural influences for granted, but they are significant. An

American will usually not bargain with a store owner. This, however, is a

common practice in much of the World. Physical factors also influence our

behavior. We are more likely to buy a soft drink when we are thirsty, for

example, and food manufacturers have found that it is more effective to advertise

their products on the radio in the late afternoon when people are getting hungry.

A person’s self-image will also tend to influence what he or she will buy an

upwardly mobile manager may buy a flashy car to project an image of

success. Social factors also influence what the consumers buy—often, consumers

seek to imitate others whom they admire, and may buy the same brands. The

social environment can include both the mainstream culture (e.g., Americans are

more likely to have corn flakes or ham and eggs for breakfast than to have rice,

which is preferred in many Asian countries) and a subculture (e.g., rap music

often appeals to a segment within the population that seeks to distinguish itself

from the mainstream population). Thus, sneaker manufacturers are eager to have

their products worn by admired athletes. Finally, consumer behavior is

influenced by learning you try a hamburger and learn that it satisfies your hunger

and tastes good, and the next time you are hungry, you may consider another

hamburger.

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CONSUMER CHOICE AND DECISION MAKING:

Problem Recognition. One model of consumer decision making

involves several steps. The first one is problem recognition—you realize that

something is not as it should be. Perhaps, for example, your car is getting more

difficult to start and is not accelerating well. The second step is information

search—what are some alternative ways of solving the problem? You might buy

a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or

ride a skateboard to work. The third step involves evaluation of alternatives. A

skateboard is inexpensive, but may be ill-suited for long distances and for rainy

days. Finally, we have the purchase stage, and sometimes a post-purchase stage

(e.g., you return a product to the store because you did not find it satisfactory). In

reality, people may go back and forth between the stages. For example, a person

may resume alternative identification during while evaluating already known

alternatives.

Consumer involvement will tend to vary dramatically depending on the

type of product. In general, consumer involvement will be higher for products

that are very expensive (e.g., a home, a car) or are highly significant in the

consumer’s life in some other way (e.g., a word processing program or acne

medication).

It is important to consider the consumer’s motivation for buying

products. To achieve this goal, we can use the Means-End chain, wherein we

consider a logical progression of consequences of product use that eventually lead

to desired end benefit. Thus, for example, a consumer may see that a car has a

large engine, leading to fast acceleration, leading to a feeling of performance,

leading to a feeling of power, which ultimately improves the consumer’s self-

esteem. A handgun may aim bullets with precision, which enables the user to kill

an intruder, which means that the intruder will not be able to harm the consumer’s

family, which achieves the desired end-state of security. In advertising, it is

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important to portray the desired end-states. Focusing on the large motor will do

less good than portraying a successful person driving the car.

INFORMATION SEARCH AND DECISION MAKING:

Consumer engages in both internal and external information

search. Internal search involves the consumer identifying alternatives from his or

her memory. For certain low involvement products, it is very important that

marketing programs achieve “top of mind” awareness. For example, few people

will search the Yellow Pages for fast food restaurants; thus, the consumer must be

able to retrieve one’s restaurant from memory before it will be considered. For

high involvement products, consumers are more likely to use an external search.

Before buying a car, for example, the consumer may ask friends’ opinions, read

reviews in Consumer Reports, consult several web sites, and visit several

dealerships. Thus, firms that make products that are selected predominantly

through external search must invest in having information available to the

consumer in need—e.g., through brochures, web sites, or news coverage.

A compensatory decision involves the consumer “trading off” good and

bad attributes of a product. For example, a car may have a low price and good

gas mileage but slow acceleration. If the price is sufficiently inexpensive and gas

efficient, the consumer may then select it over a car with better acceleration that

costs more and uses more gas. Occasionally, a decision will involve a non-

compensatory strategy. For example, a parent may reject all soft drinks that

contain artificial sweeteners. Here, other good features such as taste and low

calories cannot overcome this one “non-negotiable” attribute.

The amount of effort a consumer puts into searching depends on a number

of factors such as the market (how many competitors are there, and how great are

differences between brands expected to be?), product characteristics (how

important is this product? How complex is the product? How obvious are

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indications of quality?), consumer characteristics (how interested is a consumer,

generally, in analyzing product characteristics and making the best possible

deal?), and situational characteristics (as previously discussed).

Two interesting issues in decisions are:

Variety seeking (where consumers seek to try new brands not because

these brands are expected to be “better” in any way, but rather because the

consumer wants a “change of pace,” and

“Impulse” purchases—unplanned buys. This represents a somewhat

“fuzzy” group. For example, a shopper may plan to buy vegetables but

only decide in the store to actually buy broccoli and corn. Alternatively, a

person may buy an item which is currently on sale, or one that he or she

remembers that is needed only once inside the store.

A number of factors involve consumer choices. In some cases,

consumers will be more motivated. For example, one may be more careful

choosing a gift for an in-law than when buying the same thing for one self. Some

consumers are also more motivated to comparison shop for the best prices, while

others are more convenience oriented. Personality impacts decisions. Some like

variety more than others, and some are more receptive to stimulation and

excitement in trying new stores. Perception influences decisions. Some people,

for example, can taste the difference between generic and name brand foods while

many cannot. Selective perception occurs when a person is paying attention only

to information of interest. For example, when looking for a new car, the

consumer may pay more attention to car ads than when this is not in the horizon.

Some consumers are put off by perceived risk. Thus, many marketers offer a

money back guarantee. Consumers will tend to change their behavior

through learning—e.g., they will avoid restaurants they have found to be crowded

and will settle on brands that best meet their tastes. Consumers differ in

the values they hold (e.g., some people are more committed to recycling than

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others who will not want to go through the hassle). We will consider the issue of

lifestyle under segmentation.

THE MEANS-END CHAIN:

Consumers often buy products not because of their attributes per

se but rather because of the ultimate benefits that these attributes provide, in turn

leading to the satisfaction of ultimate values. For example, a consumer may not be

particularly interested in the chemistry of plastic roses, but might reason as

follows:

The important thing in a means-end chain is to start with

an attribute, a concrete characteristic of the product, and then logically progress to

a series of consequences (which tend to become progressively more abstract) that

end with a value being satisfied. Thus, each chain must start with an attribute and

end with a value. An important implication of means-end chains is that it is

usually most effective in advertising to focus on higher level items. For example,

in the flower example above, an individual giving the flowers to the significant

other might better be portrayed than the flowers alone.

ATTITUDE:

Consumer attitudes are a composite of a consumer’s (1) beliefs

about, (2) feelings about, (3) and behavioral intentions toward some “object”—

within the context of marketing, usually a brand, product category, or retail store.

These components are viewed together since they are highly interdependent and

together represent forces that influence how the consumer will react to the object.

Beliefs. The first component is beliefs. A consumer may hold both

positive beliefs toward an object (e.g., coffee tastes good) as well as negative

beliefs (e.g., coffee is easily spilled and stains papers). In addition, some beliefs

may be neutral (coffee is black), and some may be differ in valance depending on

the person or the situation (e.g., coffee is hot and stimulates--good on a cold

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morning, but not well on a hot summer evening when one wants to sleep). Note

also that the beliefs that consumers hold need not be accurate (e.g., that pork

contains little fat), and some beliefs may, upon closer examination, be

contradictory.

Affect . Consumers also hold certain feelings toward brands or

other objects. Sometimes these feelings are based on the beliefs (e.g., a person

feels nauseated when thinking about a hamburger because of the tremendous

amount of fat it contains), but there may also be feelings which are relatively

independent of beliefs. For example, an extreme environmentalist may believe

that cutting down trees is morally wrong, but may have positive affect toward

Christmas trees because he or she unconsciously associates these trees with the

experience that he or she had at Christmas as a child.

Behavioral intention. The behavioral intention is what the

consumer plans to do with respect to the object (e.g., buy or not buy the brand).

As with affect, this is sometimes a logical consequence of beliefs (or affect), but

may sometimes reflect other circumstances--e.g., although a consumer does not

really like a restaurant, he or she will go there because it is a hangout for his or

her friends.

Changing attitudes is generally very difficult, particularly when

consumers suspect that the marketer has a self-serving “agenda” in bringing about

this change (e.g., to get the consumer to buy more or to switch brands). Here are

some possible methods:

Changing affect. One approach is to try to change affect, which

may or may not involve getting consumers to change their beliefs. One

strategy uses the approach of classical conditioning try to “pair” the

product with a liked stimulus. For example, we “pair” a car with a

beautiful woman. Alternatively, we can try to get people to like the

advertisement and hope that this liking will “spill over” into the purchase

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of a product. For example, the Pillsbury Doughboy does not really

emphasize the conveyance of much information to the consumer; instead,

it attempts to create a warm, “fuzzy” image. Although Energizer Bunny

ads try to get people to believe that their batteries last longer, the main

emphasis is on the likeable bunny. Finally, products which are better

known, through the mere exposure effect, tend to be better liked—that is,

the more a product is advertised and seen in stores, the more it will

generally be liked, even if consumers to do not develop any specific

beliefs about the product.

Changing behavior. People like to believe that their behavior is

rational; thus, once they use our products, chances are that they will

continue unless someone is able to get them to switch. One way to get

people to switch to our brand is to use temporary price discounts and

coupons; however, when consumers buy a product on deal, they may

justify the purchase based on that deal (i.e., the low price) and may then

switch to other brands on deal later. A better way to get people to switch

to our brand is to at least temporarily obtain better shelf space so that the

product is more convenient. Consumers are less likely to use this

availability as a rationale for their purchase and may continue to buy the

product even when the product is less conveniently located.

Changing beliefs. Although attempting to change beliefs is the

obvious way to attempt attitude change, particularly when consumers hold

unfavorable or inaccurate ones, this is often difficult to achieve because

consumers tend to resist. Several approaches to belief change exist:

Change currently held beliefs. It is generally very difficult to

attempt to change beliefs that people hold, particularly those that are

strongly held, even if they are inaccurate. For example, the petroleum

industry advertised for a long time that its profits were lower than were

commonly believed, and provided extensive factual evidence in its

advertising to support this reality. Consumers were suspicious and

rejected this information, however.

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Change the importance of beliefs. Although the sugar

manufacturers would undoubtedly like to decrease the importance of

healthy teeth, it is usually not feasible to make beliefs less important--

consumers are likely to reason, why, then, would you bother bringing

them up in the first place? However, it may be possible to strengthen

beliefs that favor us--e.g., a vitamin supplement manufacturer may

advertise that it is extremely important for women to replace iron lost

through menstruation. Most consumers already agree with this, but the

belief can be made stronger.

Add beliefs. Consumers are less likely to resist the addition of

beliefs so long as they do not conflict with existing beliefs. Thus, the beef

industry has added beliefs that beef (1) is convenient and (2) can be used

to make a number of creative dishes. Vitamin manufacturers attempt to

add the belief that stress causes vitamin depletion, which sounds quite

plausible to most people.

Change ideal. It usually difficult, and very risky, to attempt to

change ideals, and only few firms succeed. For example, Hard Candy

may have attempted to change the ideal away from traditional beauty

toward more unique self expression.

One-sided vs. two-sided appeals. Attitude research has shown that

consumers often tend to react more favorably to advertisements which

either (1) admit something negative about the sponsoring brand (e.g., the

Volvo is a clumsy car, but very safe) or (2) admits something positive

about a competing brand (e.g., a competing supermarket has slightly lower

prices, but offers less service and selection). Two-sided appeals must,

contain overriding arguments why the sponsoring brand is ultimately

superior—that is, in the above examples, the “but” part must be

emphasized.

PERCEPTION:

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Our perception is an approximation of reality. Our brain attempts

to make sense out of the stimuli to which we are exposed. This works

well, for example, when we “see” a friend three hundred feet away at his

or her correct height; however, our perception is sometimes “off”—for

example, certain shapes of ice cream containers look like they contain

more than rectangular ones with the same volume.

Subliminal stimuli. Back in the 1960s, it was reported that on

selected evenings, movie goers in a theater had been exposed to isolated

frames with the words “Drink Coca Cola” and “Eat Popcorn” imbedded

into the movie. These frames went by so fast that people did not

consciously notice them, but it was reported that on nights with frames

present, Coke and popcorn sales were significantly higher than on days

they were left off. This led Congress to ban the use of subliminal

advertising. First of all, there is a question as to whether this experiment

ever took place or whether this information was simply made up.

Secondly, no one has been able to replicate these findings. There is

research to show that people will start to giggle with embarrassment when

they are briefly exposed to “dirty” words in an experimental machine.

Here, again, the exposure is so brief that the subjects are not aware of the

actual words they saw, but it is evident that something has been

recognized by the embarrassment displayed.

ORGANIZATIONAL BUYERS:

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A large portion of the market for goods and services is attributable

to organizational, as opposed to individual, buyers. In general,

organizational buyers, who make buying decisions for their companies for

a living, tend to be somewhat more sophisticated than ordinary

consumers. However, these organizational buyers are also often more risk

averse. There is a risk in going with a new, possibly better (lower price or

higher quality) supplier whose product is unproven and may turn out to be

problematic. Often the fear of running this risk is greater than the

potential rewards for getting a better deal. In the old days, it used to be

said that “You can’t get fired for buying IBM.” This attitude is beginning

to soften a bit today as firms face increasing pressures to cut costs.

Organizational buyers come in several forms. Resellers involve

either wholesalers or retailers that buy from one organization and resell to

some other entity. For example, large grocery chains sometimes buy

products directly from the manufacturer and resell them to end-

consumers. Wholesalers may sell to retailers who in turn sell to

consumers. Producers also buy products from sub-manufacturers to

create a finished product. For example, rather than manufacturing the

parts themselves, computer manufacturers often buy hard drives,

motherboards, cases, monitors, keyboards, and other components from

manufacturers and put them together to create a finished

product. Governments buy a great deal of things. For example, the

military needs an incredible amount of supplies to feed and equip troops.

Finally, large institutions buy products in huge quantities. For example,

UCR probably buys thousands of reams of paper every month.

Organizational buying usually involves more people than individual

buying. Often, many people are involved in making decisions as to (a)

whether to buy, (b) what to buy, (c) at what quantity, and (d) from whom.

An engineer may make a specification as to what is needed, which may be

approved by a manager, with the final purchase being made by a purchase

specialist who spends all his or her time finding the best deal on the goods

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that the organization needs. Often, such long purchase processes can

cause long delays. In the government, rules are often especially stringent

—e.g., vendors of fruit cake have to meet fourteen pages of specifications

put out by the General Services Administration. In many cases,

government buyers are also heavily bound to go with the lowest price.

Even if it is obvious that a higher priced vendor will offer a superior

product, it may be difficult to accept that bid.

1.3) DEFINITION OF THE PROBLEM:

As we know that today’s market is very competitive and full of

challenges, to expansion, company should search the market potential of product.

The size of a market in terms of revenue, number of buyers, or other factors

Estimated maximum total sales revenue of all suppliers of a product in market

during certain period. More competitors are attracted to the market as they see the

market potential to provide high profits. Competitors selling products customers

previously purchased to satisfy needs now addressed by the new product form

may be extremely aggressive ( may be entering the maturity stage of their

industries PLC) resulting in major price reduction. This may delay the adoption of

the new product form by some early majority to know the best consumer buying

behavior and demand into the minds of consumers because always consumer says

something and does something. There are many companies manufacturing the

edible oil into the market, at the same time as there are many companies

manufacturing idea about thinking of consumer on whether, what, how and for

whom to purchase edible oil. Therefore, research is required to measure present

consumer buying behavior at the purchase of edible oil. So the researcher problem

is to identify what are the criteria that prospective customer takes into

consideration before buying the edible oil.

1.4) OBJECTIVES OF THE STUDY:

The study has following objectives:

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To study the brand preference position in the market.

To know the levels of brand awareness among the Consumers of edible

oils.

To study consumers buying behavior.

To know the factors influencing the purchase Decision for edible oil.

To know the purchase and consumption pattern of consumers.

To study and analyze spatial and temporal aspects of area and price.

To understand farm economics, constraints/issues in production at farm

To understand the marketing aspects and identify different channels of

marketing and their efficiency.

1.5) SCOPE OF THE STUDY:

1. It will help to study the consumer behavior to make changes in the edible

oil.

2. It will help to find out role of advertisement in customer buying decision.

3. It will help to study the consumer behavior to make advertising strategies

for new product

CHAPTER NO 2

ORGANIZATIONAL PROFILES

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Consumer behavior is the study of when, why, how and where people do

or do not buy product. It blends from psychology, sociology, social anthropology

and economics. It attempts to understand the buyer decision making process, both

individually and in groups. It studies the characteristics of individual consumer

such as demographics and behavioral variables in an attempt to understand

people’s wants. It also tries to assess influences on the consumer from groups

such as family, friends, reference group and society in general.

Customer behavior study is based on consumer buying behavior, with the

customer plying the three distinct roles of user, player and buyer. Relationship

marketing is an influential asset for customer behavior analysis as it has a keen

interest in the re- discovery of the true meaning of marketing through the re-

affirmation of the importance of the consumer or buyer. A greater importance is

also place on consumer retention, customer relationship management,

personalization, customization and one-to-one marketing. Social functions can be

categorized into social choice and welfare functions.

EDIBLE OIL IN INDIA

The Indian edible oil market is the world’s fourth-largest after the

USA, China and Brazil. A growing population, increasing rate of consumption

and increasing per capita income are accelerating the demand for edible oil in

India. This paper analyses the trend in edible oil consumption and the prospects

for the Indian edible oil market in the coming years. The demand for edible oils in

India has shown a steady grow that a CAGR of 4.43% over the period from 2001

to 2011. The growth has been driven by improvement in per capita consumption,

which in turn is attributable to rising income levels and living standards.

However, the current per capita consumption levels of India (at 13.3 Kg/year for

2009-10) are lower than global averages (24 kg/year).1 The Indian edible oils

market continues to be underpenetrated and given the positive macro and

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demographic fundamentals it has a favorable demand growth outlook over the

medium-to-long term.

In terms of volumes, palm oil, soyabean oil and mustard oil are the

three largest consumed edible oils in India, with respective shares of 46%, 16%

and 14% in total oil consumption in 2010. Given the high price consciousness and

varied taste preferences of Indian consumers, ICRA expects these three oils to

continue to account for the bulk of edible oil consumption in the country.

BACKGROUND

Edible oils constitute an important component of food expenditure in

Indian households. Historically, India has been a major importer of edible oils

with almost 30-40% of its requirements being imported till 1980s. In 1986, the

Government of India established the Technology Mission on Oilseeds and Pulses

(TMOP) in order to enhance the production of oilseeds in the country. The TMOP

launched special initiatives on several critical fronts such as improvement of

oilseed production and processing technology; additional support to oilseed

farmers and processors besides enhanced customs duty on the import of edible

oils. Consequently, there was a significant increase in oilseeds area, production,

and yields until the late-1990s. However, in order to fulfill its obligations towards

various international trade agreements and also meet the increasing demand-

supply deficits, India began to reduce import restrictions on edible oils in the late

1990s; and it was gradually brought under Open General License. This led to a

significant slump in the domestic oil seeds market, as edible oil prices fell sharply

in line with the low international prices prevailing at that time. Subsequently, the

duty structure was modified so as to maintain a duty differential between crude

and refined varieties in order to protect the domestic industry. Nevertheless, due

to high import dependence, domestic edible oil prices remain highly correlated to

international edible oil price movement, and this has resulted in volatility in the

key credit metrics of rated edible oil companies. At the same time, ICRA notes

that edible oil companies with benefits of large-scale integrated operations, multi-

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product offerings and recognizable branded presence in retail markets have fared

better as compared to small/medium-scale domestic oilseed crushers.

KEY TRENDS & CREDIT IMPLICATIONS

The demand for edible oils in India has shown a compounded growth of

4.5% over the last 10 years and is estimated at 16.2 million tons for Oil Year

(OY) 2010-11. India plays an important role in the global edible oil market,

accounting for approx. 10.2% share of consumption; 7% share of oilseed

production; 5% share of edible oil production and 13.6% share of world edible oil

imports for OY 2009-10. As per USDA estimates, India is the third largest

consumer of edible oils (after China and the EU-27 countries); and will account

for 11% of global edible oil demand and 16% of global imports in OY 2010/11F.

India’s annual per capita consumption has shown a steadily increasing

trend from 4 kg in the 1970s to 10.2 kg in the late 1990s to current levels of ~13.5

- 14 kg. However, it still ranks well below the world average of around 24 kg (per

capita figures including consumption of bio-energy), thereby signifying the high

growth potential of the industry. Refer Charts 1 and 2 for trend in domestic

demand and per capita consumption of edible oils in India.

VARIOUS OIL BRANDS IN INDIA

2.1 GEMINI

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Gemini Edibles & Fats India Private Limited (GEF India), a Hyderabad

based company, is into the business of manufacturing and marketing of edible oils

and fats. The company is promoted and headed by Mr. Pradeep Chowdhry who

has over three decades of experience and has worked with ICI, Britannia & ITC

Agro Tech in leadership positions. Before promoting this company, he headed

Acalmar Oils & Fats Limited (JV of Wilmar International, Singapore) with an

annual turnover of Rs.1,100 crores. GEF India?s top management also has over

two decades of experience in the edible oils business.

The company has built a plant at Krishnapatnam (near Nellore) of

refining capacity of 800 MTS per day with an investment of Rs.135 crores and

acquired an existing refinery of capacity 200 MTS per day at another strategic

location, Kakinada.

Company Profile:

Company name: Gemini Edibles & Fats India Private Limited

Contact person: Mr. Govind Sewliker

Telephone: +(91)-(40)-67357857 / 67357849

Mobile/ cell phone: +(91)-9618416297

Fax no. : + (91)-(40)-23550522

Address: No. 8-2-334/70 & 71, Road No. 5, Banjara

Hills, Hyderabad, Andhra Pradesh - 500 034 (India)

Edible oil Products of company:

1) Refined Sunflower Oil

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Freedom is your right to do whatever you want to do. With this thought in

mind we have introduced a new brand of Sunflower oil.

Freedom Refined Sunflower Oil is your right to eat what you want to eat,

how much you want to eat and when you want to eat. This oil gives you the

freedom to cook for everyone in the family. Freedom is a healthy oil for your

complete family all year round.

Freedom Refined Sunflower Oil is cholesterol free and contains essential

fatty acids that our body needs and ample amounts of naturally occurring vitamin

E. To make the oil even healthier for you and your family we have added

Vitamins A & D in Freedom Sunflower Oil.

2.2) DHARA

The Dhara brand of edible oils was launched in 1989. Dhara's creation

added value to the return of the producers and provided a stable supply of quality

oil to the consumers at a fair price. For the first time in India, edible oil was made

available in tamper-proof tetra pak. Today, Dhara has a wide spectrum of edible

vegetable oils.

Dhara edible vegetable oils are packed at packaging stations all over

India. To ensure that the oil which reaches the consumer is of high purity, it

passes through stringent quality control tests using sophisticated analytical

instruments like High Pressure Liquid Chromatography and Thin Layer

Chromatography. These tests can even detect very low level of contamination

caused by adulterants.

Company Profile:

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Company name: Dhara Vegetable Oil & Foods Company Ltd

Contact person: Mr. HC Virmani ,Managing Director

Telephone: +91-2692 - 264896, 97 , 98

Email-id: [email protected]

Fax no. : +91-2692 – 264899

Address: Dhara Vegetable Oil & Foods Company Ltd, NDDB

Campus, NDDB, Anand – 388 001

Edible oil Products of company:

1) Dhara refined vegetable oil: 2) Dhara double refined

groundnut oil:

3) Dhara Rvo 1 ltr.

2.3 SAFFOLA:

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Over the years, the brand Saffola has become renowned for its expertise in

Heart Care, thanks to the consistent introduction of innovative product like heart

healthy cooking oil and foods. Saffola's products are the first in your line of

defense against heart diseases, making your transition to a healthier lifestyle a lot

easier.

As a responsible brand whose philosophy is to help people get the most

out of life, Saffola always promotes the adoption of a healthier lifestyle for your

heart. Towards this end, Saffola life conducts several events every year on the eve

of World Heart Day to spread awareness of the risk factors leading to heart

disease and the preventive steps against the same. In addition, events like

Walkathons and Health Check-up Camps are held frequently through the year.

BRAND BUILDING:

In April 2003, Marico reorganized its business and brought Nature Care,

Health Care and the International Business Group under a single division

Consumer Products.

This profit center comprised the operations of Marico Industries and Marico

Bangladesh Ltd. (MBL), a 100% subsidiary of Marico.

Company Profile:

Company name: Ventura foods pvt. Ltd.

Contact person: ----------------

Telephone: (714) 257-3700

Email-id: -------------------

Fax no. : (800) 421-6257

Address: 40 Pointe Drive Brea, CA 92821

Edible oil Products of Brand:

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1) Saffola gold cooking oil 1 ltr. 2) Saffola gold cooking oil 5 ltr.

3) Saffola kardi oil 5 ltr. 4) Saffola Tasty Blend Oil 1 Ltr.

5) Saffola Tasty 5 Ltr.

2.4) FORTUNE:

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The Fortune brand, flagship brand of Adani Wilmar Ltd, is a decade-long

national leader aspiring to be a global leader in cooking oil category. Quality,

health and customer satisfaction are the foundations of our business, and form the

core ingredients for all our innovations at Fortune.

Adani Wilmar Limited (AWL), a Rs. 6500 crore company; is a joint

venture between two global corporations, The Adani Group of India - the leaders

in international trading & private infrastructure, and The Wilmar International

Limited of Singapore - agri-business group and leading merchandiser and

processor of edible oils. The company has production infrastructure across the

country with a crushing capacity of over 6000 TPD (Tonnes per Day) and

Refining capacity of over 5000 TPD.

Company Profile:

Company name: Adani Wilmar Limited

Contact person: Mr. Arun Harne

Telephone: +91 79 2555 5650

Email-id: fortune [at] adaniwilmar dot in

Fax no. : +91 79 255 55621

Address: "Fortune House" Near Navrangpura Railway

Crossing, Ahmedabad 380 009, GUJARAT (India).

Edible oil Products of Brand:

Page 25


1) Fortune Refind Oil 15 Ltr. 2) Fortune Mustard Oil Pet 5 Ltr.

3) Fortune Soya 15 Ltr. 4) Fortune Sunflower 5Ltr .

5) Fortune Kachi Ghani Mustard Oil 1 Ltr. 6) Fortune Refined Soyabean Oil 1 Ltr .

CHAPTER NO 3

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RESEARCH METHODOLOGY

3.1) RESEARCH DESIGN:

To collect data needed to address the above mentioned objectives the

exploratory research design was used.

Exploratory research was design to describe something. It includes surveys

and facts finding enquiries of different kind. The research study is based on

collection of data and analysis to draw the conclusion.

3.2) METHODOLOGY:

The completion of research involved three phases:

First phase: Collection of Secondary and Primary data. Secondary data

were collected from books, magazines and websites, etc. And Primary

data was collected from the structured questionnaire and interview

schedule.

Second phase: Pilot study, Actual primary data collection, Editing and

tabulation of data.

Third phase: Data analysis using statistical tools. Inferences, conclusions,

suggestions based on data collected.

3.3) DATA COLLECTION:

Data means information required in the research. There are two types of data

sources, which have been helpful to carry out the research these are as follows:

Primary data

Primary data are those, which are collected a fresh and for the first time.

Primary data was collected through questionnaires & Interview schedule.

Secondary data

Page 27


Secondary data are those, which have already been collected by publication

of Governments, Periodicals of organization, newspaper, books, & internet etc.

Questionnaire

The questionnaire is one of the many ways through which data can be

collected. Questionnaire is widely used by researcher to collect information on

related study. Questionnaire is a method of getting data about respondent by

asking them than by observing and sampling their behavior. Questionnaire should

be standardized, its anonymity can be assured and questionnaire should be design

to meet the simple and native language to allow the use of large sample.

Sampling Universe

The first step in devolving any sample design is to clearly define the set of

objects, technically called the universe.

Sample universe includes users of edible oil.

Sample Technique

Sampling technique used for selection of sample non-probability,

‘Convenience sampling technique’.

A convenience sample is that where the sample is selected, in part or only a

limited attempt, to ensure that this sample is an accurate representation of some

larger group of population. The classic example of convenience sample is

standing at shopping mall and selecting shoppers as they walk by to fill out a

survey. A convenience sample chooses the individuals that are easiest to reach or

sampling that is done easy. Hence, convenience sampling was used for the

research.

Sample Size

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This refers to the number of item to be selected from the universe to

constitute a sample. The sample size is 100 users of edible oil. These users are the

families.

2.4) Limitation:

The limitation of this study is that sometimes the male or female

respondents may not give the proper and correct information regarding the price

and used brands of edible oils in their daily diets.

1) The study was limited to Amravati city

2) Due to limited time & money, it was not peruse to come whole entire,

hence the sample size was 100 respondents.

3) The study was limited to four brands.

CHAPTER NO 4

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DATA INTERPRETATION

The data so collected is scrutinized, tabulated and analyzed by the

help of some statistical tools and techniques and finally used for the study

purpose. Following are the major conclusions are drawn by the researchers.

Table No. 4.1 MONTHLY CONSUMPTION PATTERN OF EDIBLE OIL

Sr. No Quantity(in liters) Number of

respondents

Percentage

1 01 09 09

2 02 43 43

3 05 27 27

4 10 15 15

5 15 06 06

TOTAL 100 100

Fig. no. 4.1 MONTHLY CONSUMPTION PATTERN OF EDIBLE OIL

9%

43%27%

15%6%

Number of respondents1251015

Interpretation

From above data it can be concluded that, 43% of the respondent

consumes the 2 liter oil per month. 27% respondent consumes 5 liter oil per

month. 15% respondent consume 10 liter per month. 9% respondent consume

1liter per month. 6% respondent consumes 15 liter per month

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Table No. 4.2 BRAND DECISION MAKER FOR EDIBLE OIL

Sr. No Decision Maker Number of

respondents

Percentage

1 Wife 87 87

2 Husband 07 07

3 Both 06 06

TOTAL 100 100

Fig. no. 4.2 BRAND DECISION MAKER FOR EDIBLE OIL

87%

7%6%

Number of respondentsWife Husband Both

Interpretation

From above data it can interpret that, 87% from respondent take decision wife at

home. 07% decisions are taken by husband & 06% decision are taken by both of

them.

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Table No. 4.3 RESPONDENT’S PREFERENCE TOWARDS PACKAGE

SIZE OF EDIBLE OIL

Sr. No Package Size Number of

respondents

Percentage

3 Package Oil 73 73

4 Loose Oil 27 27

TOTAL 100 100

Fig. no. 4.3 RESPONDENT’S PREFERENCE TOWARDS PACKAGE SIZE

OF EDIBLE OIL

Package Oil Loose Oil0

10

20

30

40

50

60

70

80

Number of respondents


Interpretation

From the above data conclusion was drawn that, when consumers were

asked about their preference towards package size 60% of the respondents

preferred package size edible oil and 27% respondent preferred loose oil.

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Table No. 4.4 FACTORS AFFECTING ON BRAND DECISION MAKING

Sr. No Particulars Percentage

1 Price 29

2 Quality 33

3 Size of Pack 02

4 Advertisement 01

5 Package Design 02

6 Health Consciousness 33

Fig. no. 4.4 FACTORS AFFECTING ON BRAND DECISION MAKING

29%

33%

2%1%

2%

33%

Price Quality Size of PackAdvertisement Package Design Health Consciousness

Interpretation

From the above data it can be conclude that, health conscious is

the main reason where 33% peoples choose on the basis of health, 33% choose

because of its quality and 29% because of price, size of pack chooses 02%

respondent, advertisement chooses 01% people & package design chooses by 2&

respondent.

Page 33


Table No. 4.5 RESPONDENT’S PREFERENCE TOWARDS TYPE OF

OILS

Sr. No Type Of Oil Number of

respondents

Percentage

1 Kardi 32 32

2 Groundnut 15 15

3 Sunflower 42 42

4 Soya Bean 10 10

5 Palm 1 1

Total 100 100

Fig. no. 4.5 RESPONDENT’S PREFERENCE TOWARDS TYPE OF OILS

32%

15%

42%

10%1%

Kardi Groundnut Sunflower Soya Bean Palm

Interpretation

From the above data it can interpreted that, 42%

respondent prefer sunflower oil, 32% respondent prefer kardi oil, 15% respondent

prefer groundnut oil, 10% respondent prefer soya bean oil & 1% respondent

prefer palm oil.

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Table No. 4.6 BRAND AWARENESS FOR EDIBLE OIL

Sr. No Names Respondent Percentage

1 Dhara 24 24

2 Saffola 10 10

3 Fortune 06 06

4 Gemini 20 20

5 Rassoya 20 20

Fig. no. 4.6 BRAND AWARENESS FOR EDIBLE OIL

30%

13%

8%

25%

25%

RespondentDhara Saffola Fortune Gemini Rassoya

Interpretation

From the above data it can be conclude that, The

awareness of edible oil is maximum for Dhara i.e. 30% whereas Saffola, Fortune,

Rassoya and Gemini are close with 10, 06, 20 and 20 % respectively.

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Table No. 4.7 BRAND PREFERENCE FOR EDIBLE OILS

Sr. No Names Respondent Percentage

1 Dhara 24 24

2 Saffola 10 10

3 Fortune 06 06

4 Gemini 20 20

5 Rassoya 20 20

Fig. no. 4.7 BRAND PREFERENCE FOR EDIBLE OILS

Dhara

Saffola

Fortune

Gemini

Rassoya

0 5 10 15 20 25

Respondent

Respondent

Interpretation

From the above data conclusion was drawn that, The

preference of edible oil is maximum for Dhara i.e. 30% whereas Saffola, Fortune,

Rassoya and Gemini are close with 10, 06, 20 and 20 % respectively.

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Table No. 4.8 SOURCE OF INFORMATION FOR EDIBLE OIL

Sr. No Source Number of

respondents

Percentage

1 Advertisement 44 44

2 TV 36 36

3 Paper 10 10

4 Banner 10 10

Total 100 100

Fig. no. 4.8 SOURCE OF INFORMATION FOR EDIBLE OIL

Adver-tisement

TV Paper Banner0

5

10

15

20

25

30

35

40

45



Interpretation

From the above data it can be conclude that, 44% of the

respondents get information from Advertisements, 36% from TV, 10% from

Papers, 10% percent from Banners.

Table No. 4.9 SATISFACTION OF THE RESPONDENTS

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Sr. No. Feedback No. of

respondent

Percentage

1 Highly Satisfied 10 10

2 Satisfied 46 46

3 Average Satisfied 28 28

4 Unsatisfied 16 16

Fig. no. 4.9 SATISFACTIONS OF THE RESPONDENTS

Highly Satisfied

Satisfied

Average Satisfied

Unsatisfied

0 5 10 15 20 25 30 35 40 45 50

No. of respondent

No. of respondent

Interpretation

From the above data it can be interpreted that, 46% respondents are

satisfied with their edible oil brands. 28% respondents are average satisfied, 16%

are unsatisfied, and 10% are highly satisfied.

Table No. 4.10 PLACES FOR PURCHASING EDIBLE OIL

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Sr. No. Place No. of

respondent

Percentage

1 Retailer 50 50

2 Departmental

Store

10 10

3 Shopping Mall 10 10

4 Wholesaler 30 30

Fig. no. 4.10 PLACES FOR PURCHASING EDIBLE OIL

Retailer Departmental Store

Shopping Mall Wholesaler05

101520253035404550

No. of respondent

No. of respondent

Interpretation

From the above data it can be conclude that, 50% respondents

are purchase oil from retailer, 30% from wholesaler and 10% from Departmental

store and shopping malls.

Table No. 4.11 OPINION OF CONSUMERS FOR EDIBLE OIL

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Sr. No. Opinion No. of

respondent

Percentage

1 Excellent 10 10

2 Very good 10 10

3 Good 50 50

4 Poor 30 30


Excellent10%

Very good10%

Good50%

Poor30%

No. of respondent

Interpretation

From the above data it can be conclude that, 50% respondents are

gives opinion as good, 30% are poor and 10% are excellent and very good.

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Table No. 4.12 RESPONDENTS NATURE OF PURCHASING FOR

EDIBLE OIL

Sr. No. Nature No. of

respondent

Percentage

1 Impulsive 40 40

2 Planned 60 60


ImpulsivePlanned

0

10

20

30

40

50

60

No. of respondent

No. of respondent

Interpretation

From the above data it can be conclude that, 60% respondents are

impulsive nature for purchasing edible oil, 40% are planned nature.

Page 41


CHAPTER NO 5

FINDINGS, SUGGETIONS & RECOMMONDATIONS

5.1) FINDINGS:

1) After conducting the research the researcher found that, In case of buying

of edible oil by the consumer, the consumer involvement in the purchasing

of edible oil primarily depends upon basic need and ability to pay.

2) Female are mainly involve in purchasing of edible oil.

3) Advertising is major source to get the information for buying. Advertising

affect on consumer buying behavior than other promotional tools.

4) 64% of the respondents use branded oil and 36% use loose oil.

5) Researcher found that, Dhara has maximum brand awareness followed by

Saffola, Fortune, & Gemini respectively IN India and Maharashtra state.

6) Researcher found that, 35% of the respondents prefer 1litre and 30% 5

liters package size.

7) Researcher found that, Majority of the respondents consume 2 – 4 liters of

oil per month.

8) From this research process, it can conclude that respondent take very

much care of the health consciousness at the time of purchasing edible oil.

9) Dhara is mostly popular brand for preference factor of the respondent.

10) Mostly respondent are attract from the advertisement. That concludes 44%

and TV getting 36% attraction for the sources of information of edible oil.

11) In these research process, mostly respondent are satisfied with their

brands.

12) In another process, mostly respondent purchase the edible oil from retailer.

13) Here the respondent opinion is good with their existing edible oil brand.

14) And last one but not the list, 60% respondent planned purchase and 40%

respondent is impulsive purchase nature.

Page 42


15) In majority of the families interviewed during this course house wife is

the decision maker for the brand and type of edible oil to be used.

16) Health consciousness and quality of a particular brand are the important

factors in decision making.

17) Majority of the respondents use sunflower oil followed by kardi,

groundnut, soya bean, corn & kardi blend. Branded oil is preferred than

the loose oil in higher income class of the consumers.

18) Dhara has maximum brand awareness followed by Saffola, Fortune, &

Gemini respectively.

19) Majority of the respondents prefer 1 litre and 5 liters package size.

20) Majority of the respondents consume 2 – 4 liters of edible oil per month.

Page 43


5.2) SUGGESTIONS & RECOMMONDATIONS:

1. Edible oil manufacturer companies should try to decrease the cost of oil

because more consumers are belongs to the middle class so mo cost will

be Economical for them.

2. Companies should give more emphasize on quality and quantity.

3. Edible oil manufacturer are making the package sizes 1 liter, 5 liters, 15

liters this are not suitable for which purchase small size, and for that they

purchase loose oil.

4. Advertisement affected to the consumer’s behavior so companies should

try to make effective advertisement.

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