IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828

Vol. 2, No.2, April 2013

A Study of Edible Oil Consumption in Raipur

city
Dr. J.H.Vyas - Professor, DIMAT , Raipur
Imran N. Siddiqui – Asst. Prof. DIMAT, Raipur
Jay K. Dewangan - Asst. Prof. DIMAT, Raipur

Abstract—
Edible oils constitute an important component of food income levels and living standards. However, the current
expenditure in Indian households. India is a vast country per capita consumption levels of India (at 13.3 Kg/year for
and inhabitants of several regions have developed specific 2009-10) are lower than global averages (24 kg/year). The
preference for certain edible oils largely depending upon the Indian edible oils market continues to be underpenetrated
oils available in the region. For example, people in the South and given the positive macro and demographic
and West prefer groundnut oil while those in the East and fundamentals it has a favourable demand growth outlook
North use mustard seed/rapeseed oil. Likewise several over the medium-to-long term.
pockets in the South have a preference for coconut and Through this paper the researcher tries to understand the
sesame oil. factors influencing purchase decisions for edible oils by the
The demand for edible oils in India has shown a steady households and the consumption patterns of the households.
growth at a CAGR of 4.43% over the period from 2001 to Authors have also tried to analyse the preference of
2011. The growth has been driven by improvement in per demographic clusters.
capita consumption, which in turn is attributable to rising
The current per capita consumption levels of India (at
Keywords: Edible Oil, Consumption pattern, preferences. 13.3 Kg/year for 2009-10) are lower than global averages
(24 kg/year). The Indian edible oils market continues to
I. INTRODUCTION : EDIBLE OIL INDUSTRY IN be underpenetrated and given the positive macro and
INDIA demographic fundamentals it has a favourable demand
growth outlook over the medium-to-long term. Globally,
The per capita income of Indian household has risen the demand and supply of oil is disproportionately
substantially in the last decade. This was supported by distributed, for example Middle East contributes 32
robust growth in the economy resulting in changes in percent of the world supply but demand is only 7.8
food habits and people getting more habituated to ready- percent, while Asia-Pacific has 30 percent of world
to-eat foods. With the change in per capita income, the demand but only 9.7 percent supply.
edible oil industry in India has also under gone significant Currently, in India, the refined oil segment has a growth
changes. For example, today the preference for packed oil rate of around 20 percent per annum; and for the branded
over loose has increased due to affordability and packed oil segment, the consumption growth is 6 percent.
increased attention to health and hygiene. The presence of The current per capita consumption of edible oil is low
many organized outlet has augmented this across the compared to the world average. Hence, in the future, there
country that sell packed oil. is tremendous opportunity to tap the potential and expand
India is a vast country and inhabitants of several regions the market of edible oil.
have developed specific preference for certain oils largely In the above context, an attempt has been made to
depending upon the oils available in the region. For understand the buyer’s behavior and preferences for
example, people in the South and West prefer groundnut edible oils in Raipur the state of Chhattisgarh.
oil while those in the East and North use mustard
seed/rapeseed oil. Likewise several pockets in the South II. REVIEW OF RELATED LITERATURE
have a preference for coconut and sesame oil.
Edible oil consumption is primarily a community-driven Angshu Malik, COO, Adani Wilmar Limited, notes: “The
phenomenon in India. Going by the traditional cuisines, dominant type is Palmolein oil, which has a market share
mustard and rapeseed oil are used in the northern and of roughly 40 percent. About 20 percent of the market is
eastern states of the country. Coconut, peanut and occupied by soyabean oil, followed by another 20 percent
sunflower oils are widely consumed in south India while by mustard oil. Sunflower oil is estimated at around 8 lac
peanut and cottonseed oils are the cooking medium of tonne, which is around 5 to 6 percent of the market.
choice in Gujarat. Rapeseed oil is popular in north east Another 5 to 6 percent is accounted for by groundnut oil;
India; soybean oil is more prevalent in central India.

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 IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828
Vol. 2, No.2, April 2013
5 percent by cottonseed oil; other oils such as rice bran to the marketers (Schiffman, Leon G. and Leslie Lazer
oil, coconut oil, and so on account for 10 percent.” Kanuk ,2007). These aspects highly motivated the
Extensive literature on personality in psychology and researcher to take up the present study.
other behavioral sciences has persuaded marketing
researchers to theorize that personality characteristics Some of the outstanding studies conducted on edible oil
should predict brand or store preference and other types marketing and purchasing practices, production, sales and
of buyer activity (Engel, 2006). Evans undertook this marketing strategies of business firms in respect of edible
study using 12 objective variables, such as age, income, oil products were thoroughly examined in the literature
and other demographics, to test the assumption that review. The main thrust of these studies is the evaluation
‘buyers differ in personality structure’. Marketers today of edible oil brand extension practices of some reputed
need to understand that ‘customer satisfaction is about brands preferences equity and the market share. In fact
‘attitude’; and customer value is about ‘behavior’’ (Butz the findings of the studies are very valuable for new
and Goodstein, 2006). Demographic variables are the researchers and marketers though who want to chalk out
most popular bases for segments the customer groups, edible oil branding strategies in a professional way
One reason is that consumer needs, wants, preferences regarding to this study, some eminent professors and
and usage rates are often highly associated with academician’s quality research papers review has been
demographic variables. Another is that demographic taken by studying their research papers on edible oils.
variables are easier to measure (Kotler, Philip, and Gary
Armstrong, 2006).
III. OBJECTIVES OF THE STUDY
The demographic environment is of major interest to The study has following objectives:
marketers because it involves people and people make up • To understand the factors influencing purchase
market (Kotler,2006). Most of marketers’ strategic decision for edible oils
decision making heavily depends on the demographic • To understand the buying and consumption patterns of
variables of people in the region where they focus on the product
marketing their products. Demographic variable make
• To understand the preference of demographic clusters
known the ongoing trends, such as shifts in age, sex and
income distribution that signal new business opportunities
Collection of Data
IV. RESEARCH METHODOLOGY
To complete this study primary as well as secondary collected from published thesis, books from library well
source of information is used. To study the market trends reputed journals, magazines and related Websites.
and brand preferences of edible oils, primary data is
collected by using a detailed questionnaire which was The data so collected is scrutinized, tabulated, analyzed
administered to a small sample of 50 families selected on and finally used for the study purpose. For the calculation
the basis of convenience sampling method. The study has and analysis of data statistical tools and techniques are
been carried out in Raipur city. The secondary data is used like Variance analysis and Cluster Analysis.
5.1 Demographic Analysis using Univariate Analysis

5. DATA ANALYSIS
Most of the people surveyed were in the age group of 31
to 40, followed by age group of 41 to 50 (fig.1.1) More than 50% of people were small family with 3 to 4
Figure 1.1 members in their family (fig 1.2).
Figure 1.2

Source : Compiled data collected through Questionnaire Source : Compiled data collected through Questionnaire

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 IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828
Vol. 2, No.2, April 2013
Almost 50% of the people were holding Masters degree
followed by Bachelors (fig1.3).
Figure 1.3

Source : Compiled data collected through Questionnaire

More than 50% of people surveyed have monthly

household income of 30 to 50K (fig 1.5)
Source : Compiled data collected through Questionnaire Figure 1.5

Majority of candidate surveyed were female (fig1.4).

Figure 1.4

Source : Compiled data collected through Questionnaire

5.2 Brand Preference

Around 30% people prefer Fortune, followed by 24%
people preferring Suffola. The third most preferred brand
in oil is Sundrop (fig 1.6). Interesting thing to note here is
the most of the people believe that different oils should be
consumed over a period of time, as different oil has
different content and nutrition value.

Vanaspasti Ghee “Dalda” which was the most selling

brand once upon a time has lost its market. We will see
using the other data in next sections, which more than
Brand, people are more Price Conscious and Taste Source : Compiled data collected through Questionnaire
conscious with respect to edible oil, and they prefer to
change oil brand from time to time along with type of oil.
Figure 1.6
5.3 Consumer Preference and Buying Patterns
Most of the household consume more than 5 Liters of Oil
every month (fig 1.7). This reflects that per capita
consumption of oil in India is very low.
Figure 1.7

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 IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828
Vol. 2, No.2, April 2013
Consumers purchase oil from local store and supermarket
(fig 1.10).
Figure 1.10

Source : Compiled data collected through Questionnaire

Almost equal liking is for Sunflower oil, Groundnut Oil

and Soybean oil (fig 1.8). Mustard Oil and Coconut oils
are not very prevalent in Central India, as compared to
South India, for example - Kerala and East India (Kolkata Source : Compiled data collected through Questionnaire
for Mustard Oil).
Figure 1.8 Maximum consumer purchase oil Once in a Month (fig
1.11). Buying oil is not a daily affair, hence the
production and stocking needs to be aligned with this
behavior.
Figure 1.11

Source : Compiled data collected through Questionnaire

The consumers generally give preference to Price when it

comes to Oil (fig 1.9). They are also Health conscious,
Brand conscious, and give preference to Taste while Source : Compiled data collected through Questionnaire
purchasing Oil. The packaging, or size of pack or
availability does not play a key role, however, The primary source of information for consumer
advertisement does influence buyer. regarding oil is TV Ads and Newspaper (fig1.12). So, the
Figure 1.9 Sales team can use this information to advertise their
products to reach maximum penetration.
Figure 1.12

Source : Compiled data collected through Questionnaire

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 IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828
Vol. 2, No.2, April 2013
Figure 1.13

Source : Compiled data collected through Questionnaire

Majority of the time, it is Male Adult in the family who

decides which Oil to buy, followed by Female Adult in
the family (fig1.13). The target audience for the company
should be this adult category to increase the sales.
Source : Compiled data collected through Questionnaire
5.4 Cluster Analysis
The cluster analysis has been done on the following ‐ Number of Clusters is 3, based on scale of 8 in
demographic variables:- the Dendogram
‐ Age, Gender, Family Size, Educational
Qualification, Income Group

Cluster 1: Mostly Male Group – Health is top most preference, followed by Price (Table 1.1).
Table 1.1
Price 4.166667
Brand 2.75
Availability 3.833333
Taste 4
Advertisement 3.857143
Package Design 2.428571
Size Of Pack 3.25
Nutrition Value-
4.75
Health
Cluster 2: Mostly Female Group with Middle Aged and Mid Size Family –
There preferences are distributed (Table 1.2).
Table 1.2
Price 3.4
Brand 3.882353
Availability 3.904762
Taste 3.583333
Advertisement 3.315789
Package Design 1.625
Size Of Pack 3
Nutrition
Value-Health 4.666667

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 Cluster 3: Senior Citizen – Preference is distributed, with Health, Taste and Brand as most preferred (Table 1.3). It can be
noted that none of the group has preference on package design and size of pack.
Table 1.3
Price 3.4
Brand 4.3
Availability 3.5
Taste 4
Advertisement 2.3
Package Design 1.5
Size Of Pack 2.3
Nutrition Value-Health 4.3

As majority of respondents were female and there is distinctly 2 clusters (male and female) is cropping up, to avoid any type
of biasness within the study the researcher have omitted one of the demographic variable Gender for further explanations.

After removing Gender from the demographic variables following results has come up:

Cluster 1: Young Group, Small Size Family with Low Income – Top preference is Health Conscious, followed by Taste and
Price (Table 1.4).
Table 1.4
Price 3.777778
Brand 3.428571
Availability 2.875
Taste 4
Advertisement 3
Package Design 2.25
Size Of Pack 2.444444
Nutrition Value-Health 4.666667

Cluster 2: Middle Aged, Mid-Size Family – Distributed preference, but Health remains the most preferred aspect (Table 1.5)
Table 1.5
Price 3.571429
Brand 3.8125
Availability 4.1
Taste 3.384615
Advertisement 3.529412
Package Design 1.8
Size Of Pack 3.222222
Nutrition Value-Health 4.705882

Cluster 3: Senior Citizen – Health receives the top most preference, followed by Taste and Brand (Table 1.6).
Table 1.6
Price 3.5
Brand 3.75
Availability 3
Taste 4
Advertisement 2.7
Package Design 1.5
 IRACST – International Journal of Commerce, Business and Management (IJCBM), ISSN: 2319–2828
Vol. 2, No.2, April 2013
Size Of Pack 2.1
Nutrition Value-Health 4.33

Conclusion:

Cluster analysis proves that Health factor plays a predominant role in selecting the brands among selected respondents.
As most of the respondents change their oil for better health, very strong brand loyalty is not displayed for oil
consumption.
The primary source of information for consumer regarding oil is TV Ads and Newspaper. Hence, it is recommended that
the cooking oil marketers could take maximum efforts in designing the advertisements in such a way that the
advertisements provide reliable and maximum information about the nutrition and health aspects, price of the oil. The
companies could increase the frequency of advertisements also in order to make the brands positioned in the minds of
the prospects and this will, definitely, help the prospects to consider those brands while the evaluation of alternatives.
Further, it is noted that advertisement does not create a need for cooking oil in the minds of prospects but at the same
time, prospects consider advertisement as an important source of information. Hence, it is recommended that
advertisements could be used only for the purpose of creating brand awareness among the prospects.
Generally, the prospects give higher importance to safety aspects, and the brand image of the cooking oil rather than the
other sales promotional schemes offered by the companies while they purchase the cooking oil. Hence, it is
recommended that the cooking oil marketers could concentrate on improving the safety aspects, quality and brand image
of the cooking oil instead of concentrating heavily on the sales promotional activities.

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