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

Page 1

consumption of edible oils is likely to reach 13.95, 14.83 and 16.17 kg by 20092010 in per capita income grows by 4%, 5% and 6% respectively.
India is the fourth-largest economy in the world and the fastestgrowing 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
Page 2

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
Page 3

(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 selfesteem. 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

Page 6

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 noncompensatory 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
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important is this product? How complex is the product? How obvious are
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
Page 9

the person or the situation (e.g., coffee is hot and stimulates--good on a cold
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
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advertisement and hope that this liking will ―spill over‖ into the purchase
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

Page 11

advertising to support this reality. Consumers were suspicious and
rejected this information, however.
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.

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PERCEPTION:
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.

Page 13

ORGANIZATIONAL BUYERS:
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 endconsumers. 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
Page 14

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 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.

Page 15

1.4)

OBJECTIVES OF THE STUDY:
The study has following objectives:
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

Page 16


CHAPTER NO 2
ORGANIZATIONAL PROFILES

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 reaffirmation 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.
Page 17

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
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 demandsupply 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
Page 18

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, multiproduct 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.

Page 19


VARIOUS OIL BRANDS IN INDIA
2.1 GEMINI
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)

Page 20

Edible oil Products of company:
1) Refined Sunflower Oil
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.

Page 21

Company Profile:
Company name:

Dhara Vegetable Oil & Foods Company Ltd

Contact person:

Mr. HC Virmani ,Managing Director

Telephone:

+91-2692 - 264896, 97 , 98

Email-id:

virmani@dhara.com

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.

Page 22

2.3 SAFFOLA:
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

Page 23

Edible oil Products of Brand:
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.

Page 24


2.4) FORTUNE:
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).

Page 25

Edible oil Products of Brand:
1) Fortune Refind Oil 15 Ltr.

3) Fortune Soya 15 Ltr.

2) Fortune Mustard Oil Pet 5 Ltr.

4) Fortune Sunflower 5Ltr .

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

Page 26


CHAPTER NO 3
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.

Page 27

Secondary data
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.

Page 28

Sample Size
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.

Page 29


CHAPTER NO 4
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

Percentage

respondents
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

Number of respondents
15%

6%

9%

1
2

27%

43%

5
10
15

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
Page 30

Table No. 4.2 BRAND DECISION MAKER FOR EDIBLE OIL

Sr. No

Decision Maker

Number of

Percentage

respondents
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

Wife

7%

Husband

Both

6%

87%

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.

Page 31

Table No. 4.3 RESPONDENT’S PREFERENCE TOWARDS PACKAGE
SIZE OF EDIBLE OIL

Sr. No

Package Size

Number of

Percentage

respondents
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

80
70
60
50
40

30
20
10
0
Package Oil

Loose Oil

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.

Page 32

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

Price

Quality

Size of Pack

Advertisement

Package Design

Health Consciousness

29%

33%

2%
1%
2%
33%

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

Percentage

respondents
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

Kardi

Groundnut

Sunflower

Soya Bean

Palm

1%
10%
32%

42%
15%

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.
Page 34

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

Respondent
Dhara

Saffola

Fortune

25%

Gemini

Rassoya

30%

12%

25%
8%

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.

Page 35

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

Respondent
Rassoya
Gemini
Fortune

Respondent

Saffola
Dhara
0

5

10

15

20

25

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.

Page 36

Table No. 4.8 SOURCE OF INFORMATION FOR EDIBLE OIL

Sr. No

Source

Number of

Percentage

respondents
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

45
40
35
30
25
20
15
10
5
0


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.

Page 37

Table No. 4.9 SATISFACTION OF THE RESPONDENTS

Sr. No.

Feedback

No. of

Percentage

respondent
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

No. of respondent
Unsatisfied

Average Satisfied
No. of respondent
Satisfied

Highly Satisfied
0

10

20

30

40

50

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.

Page 38

Table No. 4.10 PLACES FOR PURCHASING EDIBLE OIL

Sr. No.

Place

No. of

Percentage

respondent
1

Retailer

50

50

2

Departmental

10

10

Store
3

Shopping Mall

10

10

4

Wholesaler

30

30

Fig. no. 4.10 PLACES FOR PURCHASING EDIBLE OIL

No. of respondent
50
45
40
35
30
25
20
15
10
5
0

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.

Page 39

Table No. 4.11 OPINION OF CONSUMERS FOR EDIBLE OIL

Sr. No.

Opinion

No. of

Percentage

respondent
1

Excellent

10

10

2

Very good

10

10

3

Good

50

50

4

Poor

30

30


No. of respondent

Poor
30%

Excellent
10%
Very good
10%

Good
50%

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.

Page 40

Table No. 4.12 RESPONDENTS NATURE OF PURCHASING FOR
EDIBLE OIL

Sr. No.

Nature

No. of

Percentage

respondent
1

Impulsive

40

40

2

Planned

60

60


No. of respondent
60
50
40
30
No. of respondent

20
10
0
Impulsive
Planned

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.

Page 44

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