Developing suitable strategies to market

“DEVELOPING SUITABLE STRATEGIES TO MARKET (KOF) SAFAL
EDIBLE OIL

1. EXECUTIVE SUMMARY
INTRODUCTION

The Regional Oilseeds Grower’s Cooperative Societies Union
Limited, Hubli is affiliated to with the Karnataka Cooperative Oilseeds
Grower’s Federation Limited, Bangalore. The union is spread over three
districts; Dharwad, Bijapur and Belgaum. Presently, the union is
undertaking production enhancement activities and marketing of edible
oilseeds and oil. It does not have its own processing facility. The
Karnataka Cooperative Oilseeds Grower’s Federation is having 50 TPD
oil crushing capacity plant at Davangere and oil packing unit at
Bangalore and Dharwad. The federation has appointed the union as
their distributors for sale of oil though its 110 primary oilseeds
cooperative societies comprising of 756 villages. In addition, the
Federation has appointed two private distributors (Dharwad and Hubli)
for sale of edible oil to retail outlets in the surrounding areas.

The title of the Study

EDIBLE OIL TO INDUSTRIAL CUSTOMERS”

Statement of the Problem

BABASAB PATILfreepptmba .com Page 1

EDIBLE OIL

The purpose of the study is to understand the purchase behaviour,
consumption pattern and potential demand of the industrial customers
and provide suggestions for improvement.

OBJECTIVES OF THE RESEARCH

1. To study the oil purchase behaviour of industrial customers
2. To study the consumption patterns of KOF oil among industrial
customers
3. To estimate the potential demand for KOF oil by the industrial
customers
4. To develop the database on the characteristics of the industrial
customers
5. To develop suitable strategies for marketing of oil to industrial
customers

SUB-OBJECTIVES OF THE RESEARCH
1. To know the competitors share in the same area.
2. Observation of the market
3. Suggesting areas for improvement vis-à-vis competitors practice

SCOPE OF THE STUDY
The study covers the purchase behaviour of industrial customers towards
KOF edible oil. The data was collected from the respondents across all regions
of Hubli-Dharwad. The total sample size for the study is 200. The study
involves ascertaining the purchase behaviour, consumption pattern and potential

EDIBLE OIL

demand of the industrial customers towards various areas such as quality, price,
and promotions offered, credit system and packing facility etc and get valuable
suggestions from them. So the study tried to get the responses almost all kinds
of industrial customers.

RESEARCH DESIGN

The type of the research design used was the Descriptive Research
design and the sampling procedure that was followed was non-
probabilistic convenience sampling.

METHODOLOGY
Research Methodology is a way to systematically solve research
problems. The research methodology includes the methods and techniques for
conducting a research.

SAMPLE:
Industrial customers are those who directly purchase oil for food and
other preparation to cater the clients. These are the types of industrial customers
 Hotels
 Industrial canteens
 Educational Institution canteens
 Bus and railway station canteens
 Bakeries
 Sweet marts
 Hostels
 Retail Shops


EDIBLE OIL

SAMPLE SIZE

The total sample size for the study is 200 respondents across all
regions of Hubli-Dharwad. Bar charts and other useful statistical tools
are used for the analysis of the study.

SOURCES OF DATA
 Primary data
Collected from personal interviews using a structured questionnaire
 Secondary Data
Data relating to oil marketing to industrial customers were collected from
 Telephone Directory
 District Statistic Office
 Hotel Association Hubli-Dharwad
 Company database, website, journals and
reports

SAMPLE TYPE
Type of sampling: The sampling is non-probability convenient sampling of
customers.
Sample size: The total sample size for the study was 200 respondents.

Limitations of the study
Every research is carried under some boundaries and this research is not
an exception.
The limitations of this research are:


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• The opinion of the respondents may not represent the whole population.
• Due to the limitations of time, a larger respondent base could not be
covered and was limited to a sample size of 200 respondents.
• There might have been tendencies among the respondents to filter their
responses under the given conditions.
• Analysis of data obtained from the questionnaire was done on the
assumption that honest and correct information had been given by the
respondents. Most of the industrial customers were busy with their
day2day business.

FINDINGS
• The survey consists of 41 % hotels, 6.5% Industrial canteens, 7.5 %
educational institution canteens, 3 % bus and railway station restaurants,
13.5 bakeries, 5.5 % sweet marts, and 23 % retail shops in and around
Dharwad-Hubli cities.
• Out of the sample surveyed 51 % of the sample purchase their required
oil from near by retailers, 21% purchase from associated agencies and
wholesale traders, 18 % directly from the mills around and 10 %
purchase from KOF Hubli.therefore retailers are the mainframe partners
for the company and then followed by dealers or traders.
• 77.5 % of the population is dealing with retailers, suppliers, agencies
through credit, hence providing good credit period and along with some
promos would also yield greater revenue.
• There is a greater demand for edible oil in the market as customers are
not arguing or striving to negotiate; they are ready for the market rate, as
86.5% population prefer the oil rate as high. So a greater proportion of
the market is price inelastic.
• 60 % of the customers will avail 1 week credit period, and 6.5 and 7 %


EDIBLE OIL

customers will avail fortnight and monthly credit period and rest 26.5 %
purchase directly by paying cash.
• 73.5 % of customers have oral communication sort of agreement between
their suppliers and the rest avail cash and carry business.
• Only 20 % of the population has restriction over ordering quantity and
rest can order as much as they require.
• 33.5 % customers enquire over a phone a and then places the order, 43 %
customers prefer personal means of procuring oil from dealers, 23.5 %
customers place order to the salesman of the dealer and get placed the
order.
• 6.5 % customers judge the quality of oil on the basis of colour, 40 % on
smell of the food, 26.5 % on taste of the food, 13.5 % on the burning
duration of oil and lastly 13. 5% on the basis of some other factors
• 13.5 % customers purchase branded oil because of packing, which
ensures quality of oil, 20 % because of convenience in handling, 33.5 %
prefer branded oil because its hygienic, 26.5 % customers prefer branded
oil because the containers reusable quality, and lastly the remaining 6.5
% prefer branded oil because of both ensuring quality and convenient
aspects.
• 48 % customers use edible oil for general cooking purposes, 23 % use for
reselling purposes, 17% for preparing sweets and lastly 12 % for
preparing special food.
• 24% customers opinion is their purchase pattern will definitely change
with the change in price, 21 % customers opinion is their purchase
pattern will remain the same with the change in price and 55%
customers opinion is their purchase pattern may change with the change
in price.
• Ruchigold, Fortune, Goldwinner, Saffola, Safal, DR, Sunflower, Gemini,


EDIBLE OIL

Sungold, Vijaylaxmi, Dhara, and some loose brands these are some of
the major edible oil players in and around the arcade of Hubli-Dharwad.
• Majority of the industrial customers of edible oil prefer palm oil in a
greater extent i.e. 28 %, then ground nut oil 23%, followed by vanaspati
14%, sunflower 13%, ghee 14% and Soyabean 8%
• Only 33.5 % have tried to shift from their earlier brands and rest 66.5 %
have sticked to their existing brands.
• 34 % of the customers have changed their brands because of the price
variation in the market, 7 % of the customers have changed because of
irregularity in the supply, and the rest are 59% are considered to be as
brand loyal customers. Greater extent of brand loyalty is being seen in
the market.
• From the above graph we can make out that majority of the industrial
customers of edible oil prefer palm oil in a greater extent, then ground
nut oil, followed by vanaspati 14%, sunflower 13%, ghee 14% and
Soyabean 8%
duration of oil and lastly 13. 1% on the basis of some other factors.
• 66.5 % of the customers prefer price is very high and the rest 33.5 %
prefer it as only high.

Recommendations
• Most customers who are aware of Safal or Sungold brands are under the
impression that these brands are meant for domestic consumption and not


EDIBLE OIL

for commercial consumption. Bulk quantity should be posed with greater
efforts to market, which would yield greater and instant sales.
• Company should concentrate on these industrial customers as they
constitute a greater portion of the market as they consume 37.4% of net
consumption. Personal selling approach, door-to-door selling and any
time availability by some effective distribution points in and around
Hubli-Dharwad cities are some approaches of acquiring greater market
share.
• Majority of the market is being price sensitive, penetration pricing can
help company to gain more price sensitive customers.
• Regarding promotions
o Credit facility- It should be extended to some needy customers
depending on their credit worthiness. In order to encourage cash
sales, the company should extend cash rebate to institutions who
prefer to buy oil on cash basis.
o Replacement guarantee- This facility is already available and
being extended by the competitors. The union should introduce
this service for quality complaints and damaged packing at the
time of delivery.
o Door-to-door Sales- An approach, which would give some
competitive edge by serving them at their places by knowing their
need, requirement and suggesting them some purchase tactics as
well because very few competitors have this tactic in market.
• Survey still speaks out the unawareness of the products of KOF, it
largely mentions that company has to take necessary steps regarding
basic ground level communication by the aid of;
o Economic medias like newspapers insertions viz. pamphlets
o Endorsing some economic programs around Hubli-Dharwad twin


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cities where large women population gathers ex children
associated competitions
o Road shows and acquiring customers during social gathering
• Shelf-spacing should be well planned and should be maintained in the
outlets, since it influences the buying behavior of consumers to a reasonable
extent, and similarly attracting the customer by making use of these shelf’s
in a proper way.
• As the competitors have come with strategies that are affecting the market of
KOF, therefore the company should come with strategies that can counter
react to these strategies with respect to pricing, effective promotion and
ease-of-availability of the products.
• Better incentive or margin can be provided to the retailers or dealers as they
act as a main connectivity to the customers (intermediaries).
• At most stress should be given to promotions of KOF products with the aid
of media like TV advertisements, road shows, celebrity endorsements which
are the effective tools to leave a strong impression in the minds of
customers.
• Packaging also plays an important role in the consumer market, attractive
packaging could also yield some greater market share.
• Majority of the market is being price sensitive penetration pricing strategies
can help company to gain more price sensitive customers.
• Providing hand pump and measurement jars with large quantity purchases
enabling them to takeout oil from those barrels or cans
• A locking system or tap kind of system can be provided to have a better
control over stocking oil for durations
• The union should advertise on Government Buses, Rickshaws and company
vehicles regarding KOF, products and offer specifications it will enhance
awareness and pulls the market towards it.


EDIBLE OIL

Conclusion
This project was a very challenging task to achieve. It gave me the
exposure to various strata of people. It also helped me in knowing the marketing
operations carried out in a Food industry. By this project I learnt many
marketing strategies and the tactics to communicate with various kinds of
people. Different types of people possess different types of attitudes and thus
behave accordingly. It is very difficult to deal with people without knowing
their behavior and this is what I have achieved in due course of this project by
studying human behavior, with specific to their most important type of attitudes
and buying behavior.
By this project I got tremendous experience and knowledge and also
helped me develop my personality, and also familiarized me with the talent
needed to deal with the customers, retailer’s industrial customers both existing
and potential in food chain as well as retail sectors.

2. INDUSTRY PROFILE

Importance of edible oils in the country’s 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 and accounting for the estimated production of 24.35 million


EDIBLE OIL

tonnes of nine cultivated oilseeds during the year 2004-05. India
contributes about 7-8% of the world oilseeds production. Export of
oilmeals, oilseeds and minor oils has increased from 3.36 million Tones
in the financial year 2004-05 to 4.98 (Prov.) million tons in the financial
year 2005-06. In terms of value, realization has gone up from Rs. 4613
crores to Rs.5299 crores. India accounted for about 6.4% of world oilmeal
export.

Types of Oils commonly in use in India

India is fortunate in having a wide range of oilseeds crops grown
in its different agro climatic zones. Groundnut, mustard/rapeseed,
sesame, safflower, linseed, nigerseed/castor are the major traditionally
cultivated oilseeds. Soyabean and sunflower have also assumed
importance in recent years. Coconut is most important amongst the
plantation crops. Efforts are being made to grow oil palm in Andhra
Pradesh, Karnataka, Tamil Nadu in addition to Kerala and Andaman &
Nicobar Islands. Among the non-conventional oils, ricebran oil and
cottonseed oil are the most important. In addition, oilseeds of tree and
forest origin, which grow mostly in tribal inhabited areas, are also a
significant source of oils.

Figures pertaining to estimated production of major cultivated
oilseeds, availability of edible oils from all domestic sources and


EDIBLE OIL

consumption of edible oils (from Domestic and Import Sources) during
the last few years are as under: -

Oil Year Production Net availability of Consumption of Edible
(Nov.- Oct.) of Oilseeds edible oils from all Oils (from domestic and
domestic sources import sources)
1998-1999 247.48 69.60 95.82
1999-2000 207.15 60.15 102.11
2000-2001 184.40 54.99 96.76
2001-2002 206.63 61.46 104.68
2002-2003 148.39 46.64 90.29
2003-2004 251.86 71.40 124.30
2004-2005
243.54 72.47 117.89
(Est.)
2005-2006
277.31 82.37 125.25
Prov.

Source : (i) Production of oilseeds : Ministry of Agriculture

(ii) Net availability of edible oils: Directorate of Vanaspati,
Vegetable Oils & Fat

1
Consumption Pattern of Edible Oils in India

India is a vast country and inhabitants of several of its 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/rapeseed oil. Likewise several pockets in the South have a

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%20Oil&ParentID=0&Parent=1&check=0

EDIBLE OIL

preference for coconut and sesame oil. Inhabitants of northern plain are
basically hard fat consumers and therefore, prefer Vanaspati, a term
used to denote a partially hydrogenated edible oil mixture. Vanaspati
has an important role in our edible oil economy. Its production is about
1.2 million tonnes annually. It has around 10% share of the edible oil
market. It has the ability to absorb a heterogeneous variety of oils, which
do not generally find direct marketing opportunities because of
consumers’ preference for traditional oils such as groundnut oil,
mustard oil, sesame oil etc. For example, newer oils like Soyabean,
sunflower, rice bran and cottonseed and oils from oilseeds of tree and
forest origin had found their way to the edible pool largely through
vanaspati route. Of late, things have changed. Through technological
means such as refining, bleaching and de-odourisation, all oils have
been rendered practically colourless, odourless and tasteless and,
therefore, have become easily interchangeable in the kitchen. Newer oils
which were not known before they have entered the kitchen, like those
of cottonseed, sunflower, palm oil or its liquid fraction (palmolein),
Soyabean and rice bran. These tend to have a strong and distinctive test
preferred by most traditional customers. The share of raw oil, refined
oil and vanaspati in the total edible oil market is estimated at 35%, 55%
and 10% respectively.


EDIBLE OIL

Major Features of Edible Oil Economy

There are two major features, which have very significantly
contributed to the development of this sector. One was the setting up of
the Technology Mission on Oilseeds in 1986. This gave a thrust to
Government's efforts for augmenting the production of oilseeds. This is
evident by the very impressive increase in the production of oilseeds
from about 11.3 million tonnes in 1986-87 to 24.8 million tonnes in
1998-99. There was some setback in 1999-2000 because of the un-seasonal
rain followed by inclement weather. The production of oilseeds declined
to 20.7 million tonnes in 1999-2000. However, the oilseeds production in
2005-06 is estimated to be 27.73 million tonnes. The other dominant
feature which has had significant impact on the present status of edible
oilseeds/oil industry has been the programme of liberalisation under
which the Government's economic policy allows greater freedom to the
open market and encourages healthy competition and self regulation
rather than protection and control. Controls and regulations have been
relaxed resulting in a highly competitive market dominated by both
domestic and multinational players.


EDIBLE OIL

Present Status of Vegetable oil Industry

Status of the Vegetable Oil Industry (As on August 2006)
Average
Type of Vegetable No. Of Annual Capacity
Capacity
Oil Industry Units (Lakh MT)
Utilisation
Oilseed Crushing 1,50,000 425
10-30%
Units (Approx) (In terms of Seeds)
313
Solvent
711 (In terms of Oil-bearing 31%
Extraction Units
Material)
Refineries
51
attached with 127 45%
(in terms of oil)
Vanaspati Units
Refineries
36
attached with 297 27%
(in terms of oil)
Solvent Units
Independent 35
585 36%
Refineries (in terms of oil)
122
Total Refineries 1009 35%
(in terms of oil)
53 (in terms of
Vanaspati, Bakery
Vanaspati Units 264 18%
Shortening &
Margarine)

Oilseeds crushing units include crushing units in the small-scale


EDIBLE OIL

sector as also in the organized sector. The capacity utilization generally
ranges from an average of 10% for the ghanis (small scale sector) to
around 30% in case of the expellers in the organized sector.

Oil Quality Monitoring

The monitoring of quality of edible oils and fats is done by the
DVVO&F in terms of the provisions of the Orders. For the purpose of
ensuring proper quality control, regular inspections of the units are
carried out by the Field Officers of DVVO&F posted in different zones,
in addition to surprise inspections by the Officers from Headquarters,

Irregularities pointed out by the Field Officers in their Inspection
Reports are considered for appropriate action against the
defaulting units. The samples drawn by the Officers are sent for
analysis for checking conformity with the prescribed requirements.

A well-equipped laboratory exclusively devoted to the analytical
work pertaining to oils and fats is available with DVVO&F. In the case
of failure of samples, appropriate action has been taken against the
defaulting units.


EDIBLE OIL

3. COMPANY PROFILE

A Profile and Success Story of KOF

Government of India in mid 1980's started the "Technology Mission on
Oilseed and Pulses" (TMOP) in order to enhance productivity in oilseeds and
make India self sufficient in edible oil. On 22.8.1984 Government of Karnataka
approved the implementation of Nation Dairy Development Board's (NDDB)
project "Restructuring Edible Oil& oilseeds Production and marketing' in
Karnataka keeping in mind the objectives laid down in the TMOP.
The Karnataka Co-operative Oilseeds Growers Federation Limited (KOF),


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the Agency Entrusted with implementation of the Project, Was registered on
26th October 1984, under the Karnataka Co-operative Societies Act. The
project, which was inspired by the Anand Model of Milk Co-operatives, is
designed to create an integrated Co-partite System of production, procurement,
processing of Oilseeds and marketing of edible oil and its bi-products.
This project aimed at establishing a direct link between the producer and the
consumer by eliminating middlemen. Village level primary co-operative
society’s were organized by making the oilseeds growers as members in turn
these primary co-operative societies became the members of the apex body at
the state level till June 1990.
During the second phase of the project the structure has been re-organized to
a three tier cooperative structure with the village level Oilseeds Growers'
Cooperative societies affiliated to Regional Unions organized at the district
level and in turn the Regional Unions have been affiliated to the state level
Federation.

The three Regional Unions, registred on 03rd June 1990, are as shown
below

 Union I : Raichur, Gulbarga, Koppal and Bidar districts.
 Union II : Bellary, Chitradurga, Davangere and Tumkur
districts
 Union II I: Dharwad, Bijapur, Haveri, Gadag, Bagalkot and
Belgaum districts.

Objectives of the Federation:

 To carry out activities conducive for economic and socio-economic

EDIBLE OIL

development of Oilseed growers by efficient marketing of
commodities.
 To carry out activities of production, procurement and processing of
commodities for economic development of oilseeds growers through
the affiliated oilseeds unions.
 To develop and expansion into such other allied activities as may be
conducive for the promotion of edible oil industry, improvement of
land, increase of productivity of oilseeds per ha. and economic
development of those engaged in oilseeds production

OILSEEDS GROWERS O-OPERATIVES (OGC).
At Village level as on 31.03.1999, 390 OGCS have been organized covering
3197 villages with member oilseed area of 3,65,315 hectares. The number of
members are 1,53,625.
Guidance and supervision from the Regional Unions

 To encourage production and productivity of oilseed by giving
guidance and technical assistance to members.
 To procure oilseeds from the Oilseed Growers at their door step.
 To undertake necessary agricultural extension for the benefit of
member growers.
 To provide technical input to member growers.
 To market edible oil and other products manufactured by the
Regional Unions.

Area Agronomic Centre, (Keremathihalli in Haveri District):


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The Federation has been giving highest priority for increasing the supply
of improved seed. Towards this end, the Federation has set up an Area
Agronomic Centre at Haveri with net cultivable area of 23.2ha, where various
techniques for multiplication of breeder seeds and adaptive research is carried
out. This farm is situated at Keremathihalli village in Haveri district where it
also functions as demonstration centre for trials and improved methods of
cultivation.

Training centre:

The federation has set up a training Centre along with the Area
Agronomic Centre to train the field staff, society secretaries, demonstration
growers, seed grower members etc.

Processing Plants:

The project has got a processing plant at Hospet in Bellary district with a
capacity of 250 tones per day Groundnut Crushing, a 50 TPD sunflower
crushing capacity, a 100 TDP solvent extraction plant and a 50 TDP continuous
refinery. This plant comes under Hospet Regional Union.

The Raichur Regional Union has an Oil Processing plant at Raichur with
facilities of 140 TDP oilseeds crushing,70 TDP solvent Extraction, 20 TDP
refinery and 100 TDP cottonseed preparatory section. The plant was purchased
from Karnataka Agro Proteins Ltd, at a total cost of Rs.2.46 cores during the


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year1992. The Federation under its direct control has a crushing unit situated at
Devanagere acquired from Karnataka Co-operative Marketing Federation with
50 TDP Groundnut crushing capacity, during July 1992 at a total cost of Rs.1.25
cores.

Oil Packaging station, Whitefield

KOF has modern edible oil packaging plant at Whitefield, Bangalore.
Various types of edible oils are packed in sachets, Bottles, jerry cans and
Barrels to suit the market requirements. NDDB also utilize the surplus capacity
of the packing plant to pack "Dhara Health"-a premium sunflower oil brand of
NDDB.

Marketing

KOF and its regional Unions are marketing edible oils consumer packs
the extent of 1300 MTs per month. OF is the brand leader in "Safal" Double
filtered Groundnut oil, since last 15 years Even in spite of server competition
from national players and Regional players KOF has a consistent growth in
consumer marketing activities. KOF’s major strength is consistent quality and
timely supplies. OF is also catering edible oils to major factory canteens (both
private and public sectors) in and around Bangalore. KOF has got strong
distribution network all over Karnataka which is the backbone in FMCG
marketing.

Brand Content


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KOF markets following edible oils under the corporate brand name of
"Safal" in consumer packs:

Safal - Refined/Filtered Groundnut
Oil
Safal Sunglod - Sunflower Oil
Safal - Refined Sunflower Oil
premium
Safal - Pure Coconut Oil
Safal - Pure Farm Fresh Peanuts.

All these Products carry the Government of India’s "AGMARK" seal which is a
certification that ensure the purity and quality of the products.

Financial Performance:
KOF and its three Regional Unions started posting profits consistently from
the last four years. During the year 2002-03. KOF and regional unions are likely
to post the net profit. Through the vegetable oil industry is sick due to edible
oils imports under OGL, KOF and its Regional Oil Union have survived and
started posting net profits. This achievement is possible to KOF because of
dynamic and dedicated Board, Officers, Employees, strong marketing network
and grass root village level farmers networks to source the raw materials.

Cost Cutting:
KOF and its Regional Unions have reduced its administrative overheads to
the tune of 35% and also reduced the man power strength by implementing
Voluntary Retirement Scheme (VRS) and almost 25% of the manpower is
reduced.


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PSS Operation:
KOF is acting as sub agent of Nafed in Karnataka for PSS operation. This
avoids distress sale of oilseeds by the farmer of Karnataka state. KOF procured
oilseeds under support price scheme from village level co-operative societies.
KOF has procured huge quantities of oilseeds during 1999-2000 up to
2002-2003.Farmers are happy with the PASS operation undertaken by KOF.

AWARDS:

 Second Best Productivity Award from the national productivity
Council during 1985-86
 Best Productivity Award during 1987-88 for its over all progress in the
Oilseeds sector form the National productivity Council.
 International Diamond Star Award for Quality form national Institute
of Marketing Mexico during the year 1994-95.
 Award for excellence and commitment to quality of the year 1995-96
by national Productivity Council.
 Certificate of Merit Award for the year 197-98 in the category of
Marketing and Oilseeds Federations sector from National Productivity
Council, New Delhi.
 Second Best Productivity Award for the year 1998-99 in the category
of Marketing & Oilseeds Federations Sector From National
Productivity Council, New Delhi
 First Award For the year 2002-03 and second Award for the year
2003-04 form National Productivity Council, New Delhi.

 Government of India in mid 1980’s started the
“Technology Mission on Oilseeds and Pulses” (TMOP) in


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order to enhance productivity in Oil-seeds and make India sold
sufficient in Edible Oil. On 22-08-1984, Government of Karnataka
approved the implementation of National Dairy Development Board’s
NDDB Project and hence the Karnataka Co-operative Oilseeds
Growers Federation Limited came in to existence.

Safal Double Filtered Groundnut Oil
Safal Double Filtered Groundnut oil is produced from selected farm fresh
Groundnuts in a very hygienic condition without loss of any natural vitamins,
original in nature having more shelf life without any artificial preservatives.
The oil contains all natural vitamins and rich in taste having traditional
importance called as king of oils. Safal Double Filtered Groundnut Oil is well
nutritioned oil preferred by all age groups / house holds and most popular /
highest selling brand in Karnataka. Safal Double Filtered Groundnut Oil is
available in consumer packs like ½ Ltr / 1 Ltr pouch / Pet Bottle, 5 Ltr Jerry can
and Bulk packing of 15 Ltr / 15 kg Tins / 100 kgs HDPE Barrels for usage by
Hotels, canteens, caterers, sweet stalls etc.

Safal Golden Refined Groundnut Oil
Safal Golden Refined Groundnut Oil is manufactured out of original
groundnut oil produced from selected quality Groundnuts. The oil is Refined
suit to modern taste / food style by reducing the colour / removing the odor
while maintaining all natural nutrition / vitamins. The most preferred refined oil
for preparing premium range sweets / other dishes by above middle class / high
income groups. Safal Golden Refined Groundnut Oil is available in consumer
packs like 1 Ltr pouch / Pet Bottle, 5 Ltr Jerry can and Bulk packing of 15 Ltr /
15 kg Tins / 100 kgs HDPE Barrels for usage by Hotels, sweet / confectionery


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units, Bakeries etc..

Sungold Refined Sunflower Oil
Sungold Refined Sunflower Oil is arrived from original Sunflower seed
Oil, light in colour without having odour and wax. The MUFA (Mono
Unsaturated Fatty Acid) in the oil helps in maintaining the cholesterol level in
the human blood and helps in protecting health from heart related diseases. The
oil is rich with “C” and “E” vitamins naturally available in the Sunflower oil
and most popular / widely accepted oil in refined oil range. The Sungold
Refined Sunflower Oil is pure and the only oil with AGMARK certification,
available at most reasonable price. The Sungold Refined Sunflower Oil is most
preferred refined oil by house holds and bulk users like Hotels, Canteens, Sweet
stalls, Caterers etc, or its reusable quality without having any un-liked odour.
Sungold Refined Sunflower Oil is available in consumer packs like ½ Ltr pouch
/ 1 Ltr pouch / Pet Bottle, 5 Ltr Jerry cans / Pet jars and Bulk packing of 15 Ltr /
15 kg Tins / 100 kgs HDPE Barrels.

Uttam RBD Palmolien
Uttam RBD Palmolien is good in quality and arrived out of imported
Palmolien does not have any odour, wax and having more shelf life for the fried
dishes. The RBD Palmolien helps in maintaining low cholesterol level in the
blood and economically priced reaching all the income groups customers and
most preferred by the commercial users like Hotels, Caterers, Bakeries,
Condiments / Confectionery Units etc. Uttam RBD Palmolien is available in
consumer packs like 200 Ml pouch / 1 Ltr pouch and Bulk packing of 15 Ltr /
15 kg Tins / 100 kgs HDPE Barrels.


EDIBLE OIL

Suguna Refined Soyabean Oil
Refined Soyabean Oil is rich nutrition and most popular / widely used oil
in western countries. Soyabean Oil is extracted from quality Soyabean seeds
and further processed to reduce the colour and fishy odor which is inherent in
the Soyabean. The Suguna Refined Soyabean oil is rich in nutrition with linolic
acid contents in the oil which is good for health. The Refined Soyabean Oil is
best priced in the refined oil range widely accepted by consumers and bulk users
preferably by modern world Hotels, Fast food centers, Pizza corners, chines
restaurants etc.

Safal Pure Coconut Oil
Safal Pure Coconut Oil is processed from selected copra arrived out of
well grown Coconuts in South Indian coastal belts, having pleasing flavour and
aroma finds extensive use in food, toiletry and industrial sectors because of its
unique characteristics. Safal Pure Coconut Oil is light in colour, ideal for deep
frying, better shelf life for fried products, ideal confectionery fat, gives better
taste for traditional rich coastal foods. Safal Pure Coconut Oil is also used as
best cosmetic alternative since it is skin friendly oil, superior baby oil, good
emollient on skin, skull and hair, gives softness to skin, protects skin from heat,
nourishes the hair roots and provide gloss to hair and contains vitamin “E”.
Safal Pure Coconut Oil is available in economy range bulk packs for edible /
cooking range like 1 Ltr / 1 Kg Jar, 5 Kg Jar, 15 Kg Tin / Jar and also available
in various small pack sizes like 50 Ml / 100 Ml / 200Ml / 500 Ml Bottles
convenient for cosmetic usage.

Safal Coffee Powder
Safal Coffee Powder is special blend manufactured from selected coffee
beans produced in Chickmaglur. Chickmaglur is World famous Coffee beans


EDIBLE OIL

producer and it’s quality having good flavour and aroma. Safal Coffee Powder
is of 65:35 blend, 65% coffee powder is mixture of selected arabika and robsta
beans. Coffee powder is available in both powder and filter farm. Our coffee
powder is specialized in good yield of coffee with good aroma smell and
flavour. Coffee powder available in 500 gm, 200 gm, 100 gm and 50 gm packs
at all leading counters in our area of operation.


EDIBLE OIL

4. DESIGN OF THE STUDY

OBJECTIVES OF THE RESEARCH
1. To study the oil purchase behaviour of industrial customers
2. To study the consumption patterns for KOF oil among industrial
customers
3. To estimate the potential demand for KOF oil by the industrial
customers
4. To develop the database on the characteristics of the industrial
customers
5. To develop suitable strategies for marketing of oil to industrial
customers

SUB-OBJECTIVES OF THE RESEARCH
1. To know the competitors potential in the same area.
2. Observation of the market
3. Suggesting areas for improvement vis-à-vis competitors practice

Scope of the study

• The data was collected from the industrial customers across Hubli-
Dharwad city
• The total sample size for the study is 200.
• The study involves ascertaining the customer perception towards various
areas such as product, price, quality, promotions offered, credit system
and packing etc and developing suitable strategies to market Safal (KOF)
oil.


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5. METHODOLOGY

Meaning:

A research design is a method and procedure for acquiring information
needed to solve the problem. A research design is a basic plan that helps in data
collection or analysis. It specifies the type of information to be collected, the
source and collection procedure. A good research decision will ensure that the
data collected is relevant to the objectives to be achieved.
Research Method
There are mainly five types of research methods used in a study.
They are:

 Observation
 Survey
 Analysis

For this study, the survey and analysis method were the more appropriate
methods among all methods because the study required the responses from the
respondents and survey method and their respective analysis suited the most.
The category of research undertaken for this study is the survey method.
The prime objective of this study is to develop suitable strategies to market
Safal Edible oil to the industrial customers. To know the purchase behaviour,
consumption pattern of retailers the observation was done at the 10
predetermined customers in Hubli-Dharwad cities as exponential research. This
was taken as the base to develop the questionnaire for industrial customers.


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Further the responses from 200 respondents were collected.

6. DATA TYPE

Primary data:

Primary data is the data, which is collected at the first hand either by the
researcher or by someone else especially for the purpose of the study.
Communication and observation are two basic means of obtaining primary data.
Communication involves the questioning of respondents to secure the
described information using a data collection instrument.
Observation does not involve questioning. Rather it means that the
situation of interests is checked and the relevant facts, actions and behaviour are
recorded.
The primary data for this study was collected through structured
questionnaires. This method of data collection is quite popular, particularly in
case of big enquiries. A structured questionnaire has been used to survey the
indusrial customers.
 Primary data
Collected from personal interviews using a structured questionnaire

Secondary data:
Secondary data includes those data, which are collected for some earlier
research work and are applicable in the study, the study researcher has presently
undertaken.
Efficacious use of secondary data can both save money and time of the
researcher. The researcher using secondary data must also know the


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fundamentals of the primary data collection. Secondary data is a valuable source
of data.
Though the secondary data is less expensive and can be collected within
a short period of time yet, they do not solve the research problems completely.
This may be due to different units of its measurement, different classes
employed to report data, which may become outdated by the time of its
publication, this data may not be adequately processed, it may not be sufficient
and so on.
The source of secondary data for this research are mainly
• The company website: http:/www.kof.co.in
• Union Manual
• Telephone Directory
• District Statistic Office
• Hotel Association Hubli-Dharwad
• Company database, website, journals and reports


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7. SAMPLING PROCEDURE

In the study of this kind primary data plays a vital role. Regardless of the
method used to obtain the primary data (experimentation, observation and
survey), the researcher has to decide whether the data to be obtained from every
unit of the population under study or only a representative portion of the
population will be used. The first approach, which is collecting data about each
and every unit of the population, is called census method. The second approach,
where only a few units of population under study are considered for analysis is
called sampling method.

Sampling plan

Type of sampling: The sampling is non-probability convenient sampling of
customers. The respondents are chosen according to the convenience of the
researcher.

Sample size: The total sample size for the study was 200 respondents.

Research Instrument


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The instrument used in the study is – a structured questionnaire.

Method of data collection

The data was collected by Personal interview and Telephonic interview
with the respondents.

Limitations of the study
Every research is carried under some boundaries and this research is
not an exception.
The limitations of this research are:

 The opinion of the respondents may not represent the whole
population.
 Due to the limitations of time, a larger respondent base could not be
covered and was limited to a sample size of 200 respondents.
 There might have been tendencies among the respondents to filter
their responses under the given conditions.
 Analysis of data obtained from the questionnaire was done on the
assumption that honest and correct information had been given by the
respondents.


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8. TOOLS OF ANALYSIS

a) Statistics
It is concerned with scientific method fro collecting, organizing,
summarizing, presenting and analyzing data as well as drawing valid
conclusions and making reasonable decisions on the basis of such analysis.

b) Statistical tools available for analysis 2

1. Classification and tabulation
It gives a proper understanding that is how the data is to be collected and also
provides genuine interest in handling numerical data. There are two types of
data that are to be collected and analysed in statistics. These are
i) Primary data- the data that are collected first hand by someone
specifically for the purpose of facilitating the study and
ii) Secondary data-any data that have been gathered earlier for some

2
Fundamentals of Statistics by J. C. Berry pp 23-196


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purpose are secondary data.
Which is further divided into qualitative data and quantitative data.

2. Graphical Representation
It is another way representing the data in the form of diagrams and graphs. It is
used to present the scattered, unorganised and ill structured data in a well
understandable and acceptable way. There are several types of graphical
representation methods such as
i) Range graphs
ii) Frequency graphs
a) Histogram b) Polygon c) Frequency curve
d) Ogive Curves e) Lorenz Curve f) Z-Chart.
iii) Ratio Scale graphs
iv) One dimensional diagrams
a) Line graph b) Simple Bar Diagram c) Multiple bars
v) Two dimensional diagrams
Circular or Pie Diagrams

3. Measures of Central Tendency (Measures of location)
Arithmetic Mean, weighted mean, the median, the mode, the geometric mean
and the harmonic mean these tools are very much essential to indicate the
characteristics of the entire data, to facilitate comparisons.

4. Measures of dispersion (Measures of variability)
It is the extended version of central tendency which not only characterizes the
data but also indicates the extent of variability in a distribution which is one step
ahead and near to the clear understanding of the pattern of the data. There are
four types of dispersion viz., the range, the inter-quartile range or the quartile


EDIBLE OIL

deviation, the mean deviation and the standard deviation.

5. Testing Hypothesis
A hypothesis is a proposition that we want to rectify. For example we
think that the companies manufacturing mobiles spend at least 20 percent of
their annual profits on advertising. This is a statement or a proposition that we
would like to verify whether it is true or not. For this we need to collect relevant
information, process it using statistical techniques and then test the above
hypothesis.
It consist of null hypothesis-it states a positive statement and it is indicated as
“Ho”
For ex: Ho: Companies spend 20 % of their annual income on advertisements
and a alternative hypothesis states a negative statement and its is denoted as
“H1”
For ex: H1: Companies do not spend 20 % of their annual income on
advertisements.
Later the analysis shows which statement is right by accepting a statement
which tends reject the other one and vice versa.

6. Regression Analysis

Regression is a statistical technique to predict one variable from another
variable and it is confined to bivariate data.
Multiple Regression is the further step to indicate the process of predicting one
variable from two or more variables instead of only one.

7. Correlation analysis
Correlation is to know the inter dependency of one variable over the other it


EDIBLE OIL

also provides enormous information to ascertain the association between two
variables such as relation between the two variables, relatedness or independent
ness of two variables, to know the nature and strength of the variables and also
to access the casual relationship between them. This means that the variation in
one variable causes variation in another.
Multiple Correlations is to ascertain the interdependency, relatedness between
two or more variables.

c) Tools used for analysis
• Frequency Ratios
• Quartile Percentiles
• Graphical and diagrammatic representation
• Cross Tabulations
• Factor Analysis
• Chi Square- Goodness of fit test


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9. ANALYSIS

1. Type of Business
Frequency Percent Valid Percent Cumulative Percent
Hotel 81 40.5 40.5 40.5
Industrial Canteens 13 6.5 6.5 47.0
Educational Institution 15 7.5 7.5 54.5
Canteens
Bus and Railway Station 6 3.0 3.0 57.5
Canteens
Bakeries 27 13.5 13.5 71.0
Sweet marts 12 6.0 6.0 77.0
Kirana Stores 46 23.0 23.0 100.0
Total 200 100.0 100.0


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2. Type of oil
Valid Groundnut 38 19.0 24.7 24.7
Sunflower 10 5.0 6.5 31.2
Vanaspati 12 6.0 7.8 39.0
Palm 64 32.0 41.6 80.5
Soyabeen 30 15.0 19.5 100.0
Total 154 77.0 100.0
Missing System 46 23.0
Total 200 100.0

3. Usage of any other brand
Valid Yes 52 26.0 33.8 33.8
No 102 51.0 66.2 100.0
Total 154 77.0 100.0
Total 200 100.0


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4. Reasons for changing the earlier brand
Valid Rate 17 8.5 63.0 63.0
Poor quality 1 .5 3.7 66.7
Irregularity of 9 4.5 33.3 100.0
supply
Total 27 13.5 100.0
Total 200 100.0

5. Mode of payment
Frequency Percent Valid Cumulative


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Percent Percent
Valid Cash 53 26.5 26.5 26.5
Credit 147 73.5 73.5 100.0
Total 200 100.0 100.0

6. Credit period
Percent Percent
Valid Week 120 60.0 82.8 82.8
Fortnight 13 6.5 9.0 91.7
Month 12 6.0 8.3 100.0
Total 145 72.5 100.0
Total 200 100.0


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7. Sort of Agreement for credit
Frequency Percent Valid Percent Cumulative
Percent
Valid Written Agreement 34 17.0 18.8 18.8
Oral Communication 147 73.5 81.2 100.0
Total 181 90.5 100.0
Total 200 100.0

8. Procedure of Purchase
Percent Percent
Valid Market 173 86.5 86.5 86.5
price
Negotiated 27 13.5 13.5 100.0
price
Total 200 100.0 100.0


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9. Opinion about Price
Percent Percent
Valid Very High 133 66.5 66.5 66.5
High 67 33.5 33.5 100.0
Total 200 100.0 100.0

10. Frequency of Purchase
Percent Percent
Valid Daily 62 31.0 31.0 31.0
Weekly 66 33.0 33.0 64.0
Fortnightly 46 23.0 23.0 87.0
Monthly 26 13.0 13.0 100.0
Total 200 100.0 100.0


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11. Ordering Procedure
Frequen Percent Valid Cumulative
cy Percent Percent
Valid Telephone 67 33.5 33.5 33.5
enquiry
Personal 87 43.5 43.5 77.0
enquiry
Supplier visit 46 23.0 23.0 100.0
Total 200 100.0 100.0

12. Judging the Quality of Oil
Frequency Percent Valid Cumulative Percent


EDIBLE OIL

Percent
Valid Colour 13 6.5 6.5 6.5
Smell 80 40.0 40.0 46.5
Taste of cooked 52 26.0 26.0 72.5
food
Burning duration 27 13.5 13.5 86.0
Others 28 14.0 14.0 100.0
Total 200 100.0 100.0

13. Reason for Preferring Branded Edible oil
Valid Packing ensures 27 13.5 13.5 13.5
quality
Correct weight 40 20.0 20.0 33.5
Convenient to handle 67 33.5 33.5 67.0
Packed oil is 53 26.5 26.5 93.5
hygienic
Packs can be reused 13 6.5 6.5 100.0
for some other
purposes
Total 200 100.0 100.0


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14. Preference of Package
Percent Percent
Valid Pouch 50 25.0 25.0 25.0
Pet Bottle 53 26.5 26.5 51.5
Jerry Can 40 20.0 20.0 71.5
Tins 20 10.0 10.0 81.5
Barrels 37 18.5 18.5 100.0
Total 200 100.0 100.0

15. Usage of Oil
Frequency Percent Valid Percent Cumulative
Percent
Valid General 96 48.0 48.0 48.0
cooking
Sweets 24 12.0 12.0 60.0
preparation
Bakery items 34 17.0 17.0 77.0
Resale 46 23.0 23.0 100.0
Total 200 100.0 100.0


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16. Variation in the Purchase
Percent Percent
Valid Definitely 48 24.0 24.0 24.0
varies
May Vary 110 55.0 55.0 79.0
Remains 42 21.0 21.0 100.0
the same
Total 200 100.0 100.0

17. Awareness towards Safal
Percent Percent
Valid Yes 155 77.5 77.5 77.5
No 45 22.5 22.5 100.0
Total 200 100.0 100.0


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18. Tried Safal Brands
Percent Percent
Valid Yes 65 32.5 67.3 67.3
No 134 67.0 32.7 100.0
Total 199 99.5 100.0
Missing System 1 .5
Total 200 100.0

19. Opinion about Contract with KOF


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Valid Will certainly buy 76 38.0 38.0 38.0
Probably would 57 28.5 28.5 66.5
like to buy
Not decided 26 13.0 13.0 79.5
Probably would 25 12.5 12.5 92.0
not buy
Definitely would 16 8.0 8.0 100.0
not buy
Total 200 100.0 100.0


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10. CHI-SQUARE TEST-GOODNESS OF FIT

Problem: In this marketing project, company faces the problem of selection of
appropriate sizes for package design. There are five different sizes of packaging
viz. pouch, pet bottle, jerry can, tins and barrels. Out of these five the packages,
which is the most preferred one?

Preference
Package Size
by Customers
Pouch 50
Pet Bottle 53
Jerry Can 40
Tins 20
Barrels 37
Total 200

Do the consumer preferences for package sizes show any significant difference?

Solution: If you look at the data, you may be tempted to infer that pet bottle is the
most preferred package size. Statistically, you have to find out whether this
preference could have arisen due to chance. The appropriate test statistic is the p ²
test of goodness of fit.

Null Hypothesis: All package sizes are equally preferred.

Alternative Hypothesis: They are not equally preferred


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Observed Expected
Package Size (O-E)2 (O-E)2/E
Frequencies (O) Frequencies (E)
Pouch 50 40 100 2.5
Pet Bottle 53 40 169 4.225
Jerry Can 40 40 0 0.000
Tins 20 40 400 10.00
Barrels 37 40 9 0.225
Total 200 200 16.95

Under the null hypothesis of equal preference for all package sizes being true, the
expected frequencies for all the package sizes will be equal to 40. Applying the
formula

χ 2=Σ (O E/E)
2

we get the computed value of chi-square (χ²) = 16.95

The critical value of χ 2 at 5% level of significance for 4 degrees of freedom is
9.488. So, the null hypothesis is rejected. The inference is that all package sizes
are not equally preferred; hence preference has not occurred by chance by the
customers. In particular, Pet Bottle is the most preferred one. The marketing
manager can introduce and enhance Pet Bottle package in the market.

11. CROSS TABULATION BETWEEN TYPE OF BUSINESS AND
TYPE OF OIL CONSUMPTION


EDIBLE OIL

Case Processing Summary
Cases
Valid Missing Total
N Percent N Percent N Percent
Type of Business * 154 77.0% 46 23.0% 200 100.0%
Type of oil

Type of Business * Type of oil Crosstabulation
Count
Type of oil Total
Groundnut Sunflower Vanaspati Palm Soyabeen
Type of Hotel 32 5 2 42 81
Business
Industrial 2 2 1 8 13
Canteens
Educational 4 3 1 7 15
Instn
Canteens
Bus and 6 6
Railway
Station
Canteens
Bakeries 4 11 12 27
Sweet marts 8 2 2 12
Total 38 10 16 76 14 154

Cross Tabulation continued


EDIBLE OIL

50

40

Type of oil
30
Groundnut

20 Sunflow er

Vanaspati
10
Palm
Count

0 Soyabeen
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Bu

Ba

Sw
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du

uc

ke
s

ee
el

st

an
at

rie

t
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io

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s
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ts
lI
an

lw
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te

ay
tn
en

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s

at
Type of Business


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12. OBJECTIVE WISE ANALYSIS
Table 1 shows the type of industrial customers viewed interviewed
Type Number of Percentage
Respondents (%)
Hotels 82 41 %
Industrial canteens 13 6.5 %
Educational 15 7.5 %
Institution canteens
Bus and railway 6 3%
station canteens
Bakeries 27 13.5 %
Sweet marts 11 5.5 %
Retail Shops 46 23 %
Total 200 100 %

Interpretation: The survey consists of 41 % hotels, 6.5% Industrial
canteens, 7.5 % educational institution canteens, 3 % bus and railway station
restaurants, 13.5 bakeries, 5.5 % sweet marts, and 23 % retail shops in and
around Dharwad-Hubli cities.

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Objective 1: Purchase Behaviour of the industrial customers
1. Place of Purchase

Kirana Stores

Associated Agencies and
w holesale Traders
Directly from mill

Direcly from KOF

Interpretation: As per the survey 51% customers purchase their
required oil from the nearby retailers, 21% purchase from associated agencies
and wholesale traders, 18 % directly from the mills around and 10 % purchase
from KOF Hubli.

2. Facilities offered by the suppliers
Facilities Frequency Percent
Credit Facility 54 26.7
Emergency 14 6.7
Services
Free Delivery 27 13.3
Bulk buying 14 6.7
discount
1+2 14 6.7
1+2+3 27 13.3
1+3+4 14 6.7
2+3+4 14 6.7
1+2+3+4 27 13.3
Total 200 100.0


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1+2+3+4

Credit Facility
2+3+4

1+3+4

Emergency Services

1+2+3

Free Delivary
1+2
Bulk buying discount

3. Mode of Payment

Cash

Credit

Interpretation: Only 26.7 % of the customers purchase directly by
paying cash and the rest 77.3 % of the customers are availing the facility of
Credit..


EDIBLE OIL

4. Credit Period offered by the suppliers

Missing

More than a month Week

Fortnight

Interpretation: 60 % of the customers will avail 1 week credit period,
and 6.8 and 6.7 % customers will avail fortnight and monthly credit period and
rest 26.7 % purchase directly by paying cash.

5. Sort of Agreement for credit facility


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Missing

Oral Communication

Interpretation: 73.3 % of customers have oral communication sort of
agreement between their suppliers and the rest avail cash business.

6. Restriction for ordering the quantity

Yes

No

Interpretation: Only 20 % of the population has restriction over
ordering quantity and rest can order as much as they require.


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7. Procedure followed while purchasing oil

Negotiated price

Market price

Interpretation: Only 13.3 % of the customers purchase by negotiating
and the rest 86.7% purchase by ruling rate i.e. at market price.

8. Customers opinion about price of the oil

High

Very High


EDIBLE OIL

Interpretation: 66.7 % of the customers prefer price is very high and
the rest 33.3 % prefer it as only high.
9. Ordering or procuring procedure of edible oil

Supplier visit

Telephone enquiry

Personal enquiry

Interpretation: 33.3 % customers enquire over a phone a and then
places the order, 43.4 % customers prefer personal means of procuring oil from
dealers, 23.3 % customers place order to the salesman of the dealer and get
placed the order.

10. Means of judging the quality of oil


EDIBLE OIL

Colour
Others

Burning duration

Smell

Taste of cooked f ood

Interpretation: 6.7 % customers judge the quality of oil on the basis of
colour, 40 % on smell of the food, 26.6 % on taste of the food, 13.3 % on the
burning duration of oil and lastly 13. 1% on the basis of some other factors

11. Reason of preferring branded edible oil

12
Packs can be reused
Packing ensures qual

Convenient to handle

Packed oil is hygien

Interpretation: 13.3 % customers purchase branded oil because of
packing ensures quality of oil, 20 % because of convenience in handling, 33.3
% prefer branded oil because its hygienic, 26.7 % customers prefer branded oil
because the containers reusable quality, and lastly the remaining 6.7 % prefer


EDIBLE OIL

branded oil because of both ensuring quality and convenient aspects.
12. Utilization of the product

General cooking
Resale
Bakery items
Special food

Interpretation: 48 % customers use edible oil for general cooking purposes,
23 % use for reselling purposes, 17% for preparing sweets and lastly 12 % for

13. Variation in purchase pattern with the change in price

Definitely varies

Remains the same Varies

Interpretation: 24% customers opinion is their purchase patter will definitely
change with the change in price, 21 % customers opinion is their purchase


EDIBLE OIL

pattern will remain the same with the change in price and 55% customers
opinion is their purchase patter may change with the change in price.

Objective 2: Consumption Patterns of the Industrial Customers

1. Different brands used by the customers
Ruchigold, Fortune, Goldwinner, Saffola, Safal, DR, Sunflower, Gemini,
Sungold, Vijaylaxmi, Dhara, and some loose brands these are some of the major
edible oil players in and around the arcade of Hubli-Dharwad cities.

2. Edible oil types and their consumption demand

Ghee Groundnut
14% 23%
Soyabean
8%

Vanaspati Sunflower
14% 13%

Palm
28%

Groundnut Sunflower Palm Vanaspati Soyabean Ghee

Interpretation: From the above graph we can make out that majority of
the industrial customers of edible oil prefer palm oil in a greater extent, then
ground nut oil, followed by vanaspati 14%, sunflower 13%, ghee 14% and
Soyabean 8%


EDIBLE OIL

3. Customers proportion earlier who were using some other brands

Yes

No

Interpretation: The above signifies that only 33.3% have tried to shift
from their earlier brands and rest 66.7 % have remained to their existing brands
because of some factors.

4. Reason for shifting from earlier brands


EDIBLE OIL

Missing

Rate

Irregularity of supp

Brand loyalty

Interpretation: 34 % of the customers have changed their brands because of
the price variation in the market, 7 % of the customers have changed because of
irregularity in the supply, and the rest are 59% are considered to be as brand
loyal customers.

5. Net branded oil consumption in Hubli Dharwad cities3

Sl. No. Type of oil Quantity Percentage
Kgs/Month
1 Groundnut oil 58623 38.4 %
2 Sunflower 25009 16.43 %
3 Vanaspati 8356 5.48 %
4 Soyabean 1258 0.8 %
5 Palm 59349 38.89 %
Total 1,52,595 kgs 100

6. Industrial customer’s consumption
Sl. Type of oil Quantity Percentage
No. Kgs/Month
3
District Statistic Office Gadget.


EDIBLE OIL

1 Hotels 89188 39.17
2 Industrial canteens 428 .19
3 Educational Institution 950 .42
canteens
4 Bus and railway station 1580 .69
canteens
5 Bakeries 31702 13.92
6 Sweet marts 62325 27.37
7 Hostels 1219 .535
8 Retail Shops 40284 17.69
Total 2,27,676 100
Kgs

7. Frequency of purchase

Monthly

Fortnightly
Daily

Weekly

Interpretation: 24.7% customers prefer daily purchases, 60 % prefer
weekly purchasing, 8.7% prefer fortnightly purchases and 6.6 % customers
prefer monthly purchases.

8. Utilization of the product


EDIBLE OIL

General cooking
Resale
Bakery items
Special food

Interpretation: 48 % customers use edible oil for general cooking
purposes, 23 % use for reselling purposes, 17% for preparing sweets and lastly
12 % for preparing special food.

Objective 3: Estimation of Potential Demand

1. Net branded oil consumption in Hubli Dharwad cities
Sl. No. Type of oil Quantity Percentage
Kgs/Month
1 Groundnut oil 558623 40.4 %
2 Sunflower 75009 5.425 %
3 Vanaspati 98356 7.11 %
4 Soyabean 91258 6.6 %
5 Palm 559349 40.465 %
Total 13,82,595 100
kgs

2. Industrial customer’s consumption
Sl. Type of customers Quantity Percentage

EDIBLE OIL

No. Kgs/Month
1 Hotels 289188 55.85
2 Industrial canteens 428 .08
3 Educational Institution 950 .18
canteens
4 Bus and railway station 1580 .30
canteens
5 Bakeries 51702 10
6 Sweet marts 92325 17.83
7 Hostels 1219 .235
8 Retail Shops 80284 15.50
Total 5,17,676 100
Kgs

3. Edible oil types and their consumption demand

Ghee Groundnut
14% 23%
Soyabean
8%

Vanaspati Sunflower
14% 13%

Palm
28%

Groundnut Sunflower Palm Vanaspati Soyabean Ghee

Interpretation: From the above graph we can make out that majority of
the industrial customers of edible oil prefer palm oil in a greater extent, then
ground nut oil, followed by vanaspati 14%, sunflower 13%, ghee 14% and
Soyabean 8%


EDIBLE OIL

4. Factors influencing quality of oil
50

40

30

20

10

Taste of cooked food

Burning duration
0

Others
Colour

Smell

Interpretation: 6.7 % customers judge the quality of oil on the basis of
colour, 40 % on smell of the food, 26.6 % on taste of the food, 13.3 % on the
burning duration of oil and lastly 13. 1% on the basis of some other factors

13. FINDINGS

• The survey consists of 41 % hotels, 6.5% Industrial canteens, 7.5 %
educational institution canteens, 3 % bus and railway station restaurants,
13.5 bakeries, 5.5 % sweet marts, and 23 % retail shops in and around
Dharwad-Hubli cities.
• Out of the sample surveyed 51 % of the sample purchase their required
oil from near by retailers, 21% purchase from associated agencies and
wholesale traders, 18 % directly from the mills around and 10 %
purchase from KOF Hubli.therefore retailers are the mainframe partners
for the company and then followed by dealers or traders.
• 77.5 % of the population is dealing with retailers, suppliers, agencies


EDIBLE OIL

through credit, hence providing good credit period and along with some
promos would also yield greater revenue.
• There is a greater demand for edible oil in the market as customers are
not arguing or striving to negotiate; they are ready for the market rate, as
86.5% population prefer the oil rate as high. So a greater proportion of
the market is price inelastic.
• 60 % of the customers will avail 1 week credit period, and 6.5 and 7 %
customers will avail fortnight and monthly credit period and rest 26.5 %
purchase directly by paying cash.
• 73.5 % of customers have oral communication sort of agreement between
their suppliers and the rest avail cash and carry business.
• Only 20 % of the population has restriction over ordering quantity and
rest can order as much as they require.
• 33.5 % customers enquire over a phone a and then places the order, 43 %
customers prefer personal means of procuring oil from dealers, 23.5 %
customers place order to the salesman of the dealer and get placed the
order.
duration of oil and lastly 13. 5% on the basis of some other factors
• 13.5 % customers purchase branded oil because of packing, which
ensures quality of oil, 20 % because of convenience in handling, 33.5 %
prefer branded oil because its hygienic, 26.5 % customers prefer branded
oil because the containers reusable quality, and lastly the remaining 6.5
% prefer branded oil because of both ensuring quality and convenient
aspects.


EDIBLE OIL

• 24% customers opinion is their purchase pattern will definitely change
with the change in price, 21 % customers opinion is their purchase
pattern will remain the same with the change in price and 55%
customers opinion is their purchase pattern may change with the change
in price.
• Ruchigold, Fortune, Goldwinner, Saffola, Safal, DR, Sunflower, Gemini,
Sungold, Vijaylaxmi, Dhara, and some loose brands these are some of
the major edible oil players in and around the arcade of Hubli-Dharwad.
• Majority of the industrial customers of edible oil prefer palm oil in a
greater extent i.e. 28 %, then ground nut oil 23%, followed by vanaspati
14%, sunflower 13%, ghee 14% and Soyabean 8%
• Only 33.5 % have tried to shift from their earlier brands and rest 66.5 %
have sticked to their existing brands.
• 34 % of the customers have changed their brands because of the price
variation in the market, 7 % of the customers have changed because of
irregularity in the supply, and the rest are 59% are considered to be as
brand loyal customers. Greater extent of brand loyalty is being seen in
the market.
• From the above graph we can make out that majority of the industrial
customers of edible oil prefer palm oil in a greater extent, then ground
nut oil, followed by vanaspati 14%, sunflower 13%, ghee 14% and
Soyabean 8%


Developing suitable strategies to market

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