(In partial fulfillment for the requirement of the Two year Full time Post Graduate Program in Management, 2012-14)
ACKNOWLEDGEMENT
I express my deep sense of gratitude to Mr. Umesh Chauhan, for his expert guidance and valuable inputs that gave me an exquisite insight about the project on “ANALYSIS OF CONSUMER BEHAVIOR IN FORTUNE KGMO”.
I am highly obliged and thus express my gratefulness to him.
I am also thankful to the Prof. S. K. Jain, for giving me an opportunity to apply my knowledge of “Marketing Management” in this Research work.
I share the pleasure of this achievement with all my colleagues for moral and emotional support in completing this research work in the area of “Consumer Behavior”, successfully.
Sikander Singh
PGDM - General
LBSIM, New Delhi
LETTER OF TRANSMITTAL
To: Prof. V.K. Mehta
From: Sikander Singh Date: 30th June 2013
PGDM (General), 2012-14 Batch
Subject: A Report on “Analysis of Consumer Behavior in Fortune KGMO.”
Sir,
I, Sikander Singh, hereby, submit to you the Summer Internship project report on Analysis of consumer behavior in Fortune KGMO at Adani Wilmar Ltd.
I, under the guidance of Mr. Umesh Chauhan (ZSM, Adani Wilmar Ltd.) and Prof. S K Jain (Mentor) was able to successfully complete the project.
This report comprises of the learning and the job performed at the above stated prestigious organization.
I also declare that the content of this report is my original work and has not been submitted to any other university or institute either in full time or part time for the award of any degree, diploma or fellowship.
Yours sincerely
Sikander Singh
156/2012
PGDM- General
Lal Bahadur Shastri Institute of Management
INDEX Particulars | Page No | 1. Introduction | 1 | 1.2 Company Details | 1 | 1.3 Edible Oil and Types | 2 | 1.4 Overview | 3 | | | 2. Literature Review | 7 | | | 3. Methodology | 9 | 3.1 Research Design | 9 | 3.2 Nature and Scope of the Study | 9 | 3.3 Area of Study | 10 | 3.4 Sources of Data | 10 | 3.5 Sampling Procedure and Size | 11 | 3.6 Statistical Tools used | 11 | 3.7 Chi Square Test | 11 | 3.8 Limitations of the study | 13 | | | 4. Analysis and Interpretation | 14 | 4.1 Wholesaler and Retailer Survey | | 4.1.1 Classification of Outlets | 16 | 4.1.2 Market Share Branded and Unbranded | 17 | 4.1.4 Market Share at A class outlets | 18 | 4.1.4 Market Share at B class outlets | 19 | 4.1.5 Market share at C Class outlets | 20 | 4.1.6 Other Major Insights from Wholesaler and retailer survey | 21 | 4.2 Major Insights from Distributor Survey | 23 | Particulars | Page No | 4.3 Economic Profile of People | | 4.3.1 Age Group of Buyers | 24 | 4.3.2 Gender of Buyers | 25 | 4.3.3 Occupation of Buyers | 26 | 4.3.4 Income wise Classification of Buyers | 27 | 4.3.5 Education Level of Buyers | 28 | 4.4 Consumption Pattern of the Buyers | | 4.4.1 Choice of Mustard oil Brand | 30 | 4.4.2 Factors influencing buying behavior | 32 | 4.4.3 Factors influencing consumer preference | 33 | 4.4.4 Usage Pattern of Buyer | 34 | 4.4.5 Purchase Frequency | 35 | 4.4.6 Timing of Purchase | 36 | 4.4.7 Pack size preferred by Buyer | 37 | 4.4.8 Monthly Family Consumption | 38 | 4.4.9 Various uses of Commodity | 39 | 4.5 Consumer Attitude about Fortune KGMO | 41 | 5.4 Relationship between Brand and sourcesfrom where customers know about brands | 42 | 4.7 Relationship between Education and Brand Preference | 44 | 4.8 Relationship between Income and Brand Preference | 45 | | | 5. Finding and Conclusions | 46 | 5.1 Findings | 46 | 5.2 Conclusions | 47 | 5.3 Recommendations | 48 | | |
EXECUTIVE SUMMARY
The study conducted is about analyzing the factors affecting the Consumer behavior in Fortune Kachi Ghani Mustard oil. The research was basically aimed at collection of primary data with the help of questionnaires with a direct interaction with the wholesalers, distributors and customers. The questionnaire was aimed at the analysis of various variables that affect the buying decision of Mustard oil. The sample size was 101 respondents living in diverse backgrounds with different income segments and usage.
The survey makes an attempt to find answers to following questions a) What is the economic profile of the consumer based on variables such as Age, Sex, Education, and Income etc.? b) What is the consumptions pattern of the consumer based on variables such as Brand Preference, Factors influencing, Consumer preference, pack size, purchase frequency and timing etc.? c) Consumer attitude towards Fortune KGMO.
It entails both Primary and Secondary (Exploratory) Research. Firstly, through exploratory research I have tried to find the market share of branded and unbranded products, various issues that shopkeeper were facing while selling Fortune KGMO and what company should do to increase sales of Fortune KGMO. The primary research was mainly focused on “Analyzing the consumer behavior in Fortune KGMO”, the main objectives are already given above.
The specific findings and summary of results are then elaborated. An effort has been made to identify factors influencing consumer buying decision or preference.
Analysis of results suggests that overall there is a lack of awareness regarding branded mustard oil. Based on this, specific recommendations has been suggested to get public more aware about branded mustard oil especially Fortune KGMO.
1. INTRODUCTION 1.1 CONSUMER BEHAVIOR |
Consumer Behavior is the study of when, why, how, and where people do or do not buy a product. It blends elements from psychology, sociology, social anthropology and economics. It attempts to understand the buyer decision making process, both individually and in groups. It studies characteristics of individual consumers 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 groups, and society in general.
The aim of the project is to study the behavior of consumers or buying decision involved in purchasing Fortune KGMO. 1.2 COMPANY DETAILS |
ADANI WILMAR LTD. – AHMEDABAD * The company was established in the year 1998. * Mr. Gautam Adani is the current chairman of the company. * Adani Wilmar Limited, a Rs. 12,000 crore company, is a 50:50 joint venture between two recognized Multinational Corporations – the US$7 Billion Adani Group, the leader in International trading, Power Sector and Private infrastructure, and Wilmar International Limited, Singapore, Asia’s leading Agri business group with revenues exceeding US$ 44.7 Billion. * The Adani Group and Wilmar Group have set up India's first port based refinery at Mundra, Gujarat. Today the Mundra refinery is one of India's largest and most sophisticated oil refineries. FORTUNE, King's, RAAG, Bullet, Fryola and JUBILEE are the brands under which AWL sells its range of edible oil, vanaspati and bakery shortening. * Its flagship brand “Fortune” has maintained market leadership continuous for last 12 years. * The company has production infrastructure across the country with a crushing capacity of over 5750 TPD (Tonnes per Day) and Refining capacity of over 9000 TPD. * The company also has packing operations at Kadi [Gujarat], Latur [Maharashtra], Jaipur [Rajasthan], Dharwad [Karnataka], Dewas [Madhya Pradesh], Nagpur [Maharashtra], Jagroan [Punjab] and Cochin [Kerala]. * With 85 Stock points, 5000 distributors, 600 Super Stockiest catering to 1 million outlets, AWL's products reach to 20 million households across India. * Following the success in India, AWL introduced branded Edible oil to Middle-East and is now exporting its products to more than 19 countries in the Middle-East, South East Asia & East Africa.
Company Vision Statement
“A globally competitive India focused MNC, with Leadership in Edible oil business providing Branded Products and Services to the delight of Customers and Stakeholders.” 1.3 EDIBLE OIL AND TYPES |
Cooking oil is purified fat of plant origin, which is usually liquid at room temperature (saturated oils such as coconut and palm are more solid at room temperature than other oils).
Some of the many different kinds of edible vegetable oils include: olive oil, palm oil, soybean oil, canola oil, pumpkin seed oil, corn oil, sunflower oil, safflower oil, peanut oil, grape seed oil, sesame oil, mustard oil and rice bran oil. Many other kinds of vegetable oils are also used for cooking.
1.4 OVERVIEW |
Edible Oil Consumption
Edible Oils
17.55 Million MT
Oils
16.15 Million MT
Vanaspati
1.4 Million MT
Sunflower
(43%)
Mustard
(23%)
Groundnut
(14%)
Kardi
(9%)
Soya
(9%)
Others
(2%)
BACKGROUND
* India – one of world’s leading producers of oil seeds (9.3%) * Technology Mission on oilseeds set up in 1996 * There’s no support price mechanism for oilseeds and Government does not procure oilseeds. * India – Largest importer of edible oils (57% of total consumption) * Vanaspati – a substitute for ghee, formed by hydrogenation of crude vegetable oil. * Oil Season – November to October
MAJOR PLAYERS Company Name | Brand Names | Head Quarters | Adani Wilmar Ltd. | Fortune, Jubilee, King | Ahmadabad | Cargill India Private Ltd. | Gemini, Nature Fresh | Gurgaon | Ruchi Soya Industries | Ruchi, Mahakosh | Indore | Bunge India Private Ltd. | Dalda, Gagan | Mumbai | Emami Biotech Ltd. | Emami | Kolkata | Marico Industries | Saffola | Mumbai |
* Apart from these major players, there are numerous small extractors and producers of edible oils at regional, state and local levels.
MARKET
Industry Structure * Highly Fragmented Market * The Indian edible oil industry is consisted of some 15000 oil mills, 600 solvent extraction units, 250 vanaspati units and about 400 refining units. * Major Oil Brands – Saffola, Fortune, Gemini, Sweekar, Dhara * Vanaspati Brands – Dalda, Rath
Market Size * Edible oils and vanaspati markets – 17.55 million MT * Oils market growth rate for last year was 4.19% * Vanaspati Market stagnating at around 1.4 million MT
1.5 OIL SCENARIO |
(i) 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 28.21 million tons of nine cultivated oilseeds during the year 2007-08. India contributes about 6-7% of the world oilseeds production. Export of oil meals, oilseeds and minor oils has increased from 5.06 million tons in the financial year 2005-06 to 7.3 million tons in the financial year 2006-07. In terms of value, realization has gone up from Rs. 5514 cores to Rs.7997 cores. India accounted for about 6.4% of world oil meal export.
(ii) 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 preference for coconut and sesame oil (til 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 1.4 million tons 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 soybean, 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-odouraisation, 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 (palmolein), soybean and rice bran. These tend to have a strong and distinctive taste 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.
2. LITERATURE REVIEW
‘Marketing problems of edible oil industry in the state of Tamil Nadu’ Venkateshwaran P.S, Lecturer, PSNA college of engineering and technology, Indigo. The research is about the problems faced by edible oil industry in the marketing sector, in the state of Tamil Nadu. The authors focus only on the aspects of marketing problems in the edible oil market.
The author has used a descriptive method for obtaining data from the respondents (owners), by asking variety of questions. The data related to marketing of edible oils were collected through interview schedules.
The total oil manufacturers in southern district of Tamil Nadu are 732 units; the author has selected 366 units as a sample size for the study.
Authors - Suggestions and recommendations * The owners of edible oil units should be trained to get more marketing knowledge to market their products. * The small units are unable to compete with large units because of their week financial strength, so they should form clusters of small units to produce high quality oil. * All manufacturing units should sell their products in attractive packets. * The owners are advised to boost their sales through many promotional and advertising techniques. * The important marketing problems in the edible oil market are finance, customers, competitors and intermediaries, the owner cannot avoid them but they can manage them with the help of application of scientific principles of management.
A pragmatic study on the Buyers of edible Oil – Preference towards buying behavior of consumers - by Dinesh Babu S, Professor, JJ college of engineering and technology, Tiruchirappali. In this research, the author has tried to find out that how people take various decisions regarding the purchase of oils and we also tried to understand their consumption pattern.
The author has used a descriptive method for obtaining data from the respondents, by asking variety of questions. The data related to marketing of edible oils were collected through interview schedules.
The author has selected 120 respondents as sample size. The data was collected in Dehradun city.
The basic findings were: * Fortune was the most preferred brand among the respondents. * Mostly the consumers were spending 500 – 1000 Rs. Per month on edible oil. * TV advertisement was the main factor influencing the consumers buying behavior.
Consumers give more preference to safety and health while purchasing the edible oil.
3. METHODOLOGY
Research methodology is a way to systematically solve the research problem. It deals with the various steps that are generally adopted by a researcher in studying the research problem along with the logic behind them. 3.1 RESEARCH DESIGN |
A research design is the arrangement of conditions for collection and analysis data in a manner that aims to combine relevance to the research purpose with economy in procedure.
The type of research design selected for this study is Descriptive in nature. A descriptive research uses a set of scientific methods and procedure to collect raw data structures that describe the existing characteristics of a defined target population of a market structure. The data and information generated through this descriptive design can provide the decision makers with evidence that can leave to course of action.
3.2 NATURE AND SCOPE OF THE STUDY |
The study was conducted to analyze the consumer behavior for Fortune Kachi Ghani Mustard Oil. The main aim of this study is to know about the usage patterns, usage purposes and effect of various factors on consumer buying behavior. It was basically a primary collection of data with the help of a questionnaire. It is a simple and easily categorized way to gather information directly from customers. For optimal success, the questionnaire was distributed to random sampling of your target audience, as opposed to a general audience.
For the analysis of data Chi- Square and ANOVA tests were conducted.
A chi-square test (also chi squared test or χ2 test) is any statistical hypothesis test in which the sampling distribution of the test statistic is a chi-square distribution when the null hypothesis is true, or any in which this is asymptotically true, meaning that the sampling distribution (if the null hypothesis is true) can be made to approximate a chi-square distribution as closely as desired by making the sample size large enough.
ANOVA is a particular form of statistical hypothesis testing heavily used in the analysis of experimental data. A statistical hypothesis test is a method of making decisions using data. A test result (calculated from the null hypothesis and the sample) is called statistically significant if it is deemed unlikely to have occurred by chance, assuming the truth of the null hypothesis. A statistically significant result (when a probability (p-value) is less than a threshold (significance level)) justifies the rejection of the null hypothesis.
3.3 AREA OF STUDY |
The area selected for the study of buying behavior of consumers for a product (Kachi Ghani Mustard Oil) is Ludhiana city.
3.4 SOURCES OF DATA |
The sources of data are primary in nature. For the purpose of collection of data, a questionnaire is prepared.
Data collection is the process of obtaining information from the respondents. It can be obtained from primary or secondary sources. Primary data are the data obtained firth stand by the researcher. Here the data is collected through primary sources.
The method used for collecting data is through a structured questionnaire that is personally administered. The researcher has personally met the population consuming edible oil. By personally administering the questionnaire the researcher could collect all responses within a short period of time and the doubts of the respondents are clarified on the spot.
3.5 SAMPLING PROCEDURE AND SIZE |
Sample size refers to the number of items to be selected from the respondents to constitute a sample. This acts as a representative to the whole respondents where the results and suggestions are derived from analyzing representative samples.
On the basis of reliability and accessibility, sample size was arrived at 100 for the study. The sampling unit was concentrated on customers who are consuming mustard oil.
3.6 STATISTICAL TOOL USED |
The following statistical tools are used in the study for the analysis and interpretation of data.
* Pie Chart * Bar Chart
3.7 CHI SQUARE TEST |
Pearson's chi-square (χ2, pronounced kī-square) test is the best-known of several chi-square tests – statistical procedures whose results are evaluated by reference to the chi-square distribution. Its properties were first investigated by Karl Pearson in 1900. In contexts where it is important to make a distinction between the test statistic and its distribution, names similar to Pearson Χ-squared test or statistic are used.
It tests a null hypothesis stating that the frequency distribution of certain events observed in a sample is consistent with a particular theoretical distribution. The events considered must be mutually exclusive and have total probability 1. A common case for this is where the events each cover an outcome of a categorical variable. A simple example is the hypothesis that an ordinary six-sided die is "fair", i.e., all six outcomes are equally likely to occur.
Pearson's chi-square is used to assess two types of comparison: tests of goodness of fit and tests of independence. * A test of goodness of fit establishes whether or not an observed frequency distribution differs from a theoretical distribution. * A test of independence assesses whether paired observations on two variables, expressed in a contingency table, are independent of each other – for example, whether people from different regions differ in the frequency with which they report that they support a political candidate.
The first step in the chi-square test is to calculate the chi-square statistic. In order to avoid ambiguity, the value of the test-statistic is denoted by Χ2 rather than χ2 (i.e. uppercase chi instead of lowercase); this also serves as a reminder that the distribution of the test statistic is not exactly that of a chi-square random variable. However some authors do use the χ2 notation for the test statistic. An exact test which does not rely on using the approximate χ2 distribution is Fisher's exact test: this is significantly more accurate in evaluating the significance level of the test, especially with small numbers of observation.
The chi-square statistic is calculated by finding the difference between each observed and theoretical frequency for each possible outcome, squaring them, dividing each by the theoretical frequency, and taking the sum of the results. A second important part of determining the test statistic is to define the degrees of freedom of the test: this is essentially the number of observed frequencies adjusted for the effect of using some of those observations to define the "theoretical frequencies".
The value of the test-statistic is
X2=i=1n(Oi-Ei)2Ei
Where
Χ2 = Pearson's cumulative test statistic, which asymptotically approaches a χ2 distribution.
Oi = an observed frequency;
Ei = an expected (theoretical) frequency, asserted by the null hypothesis; n = the number of cells in the table.
Based on the chi – square concept, researcher has done the following testing: * Testing for the independency between brand and sources from where customers know about the brand * Testing for the independency between education level and brand preference * Testing for the independency between income level and brand preference
3.8 LIMITATIONS OF THE STUDY |
* The research may be biased on the part of researcher and customers. * Time at the disposal research was limited. * Sample size is restricted to only 101
4. ANALYSIS AND INTERPRETATION
The term analysis refers the examination and evaluation of the relevant information to select the best course of action from among various alternatives. It also means an investigation of the component parts of a whole and their relations in making up the whole. In the process of analysis, relationships or differences supporting or conflicting with original with what validity data can be said to indicate any conclusions. Analysis of data in general way involves a number of closely related operations which are performed with the purpose of summarizing the collected data and organizing there in such a manner that they answer the research questions. The objectives of the study on the basis of which analysis and interpretations are done are as follows:
4.1 Wholesaler and Distributor Survey 4.1.1 Classification of Outlets 4.1.2 Market Share of branded and unbranded products 4.1.3 Market share of branded and unbranded at A Class outlets 4.1.4 Market share of branded and unbranded at B Class outlets 4.1.5 Market share of branded and unbranded at C Class outlets 4.1.6 Other major insights from wholesaler and retailer survey+
4.2 Interpretations from Distributor Survey
4.3 To know the economic profile of the people buying edible oil 4.3.1 Age Group of Buyers 4.3.2 Gender of Buyers 4.3.3 Occupation of Buyers 4.3.4 Income wise classification of Buyers 4.3.5 Education Level of Buyers
4.4 To know the consumption pattern of Buyers 4.4.1 Choice of brand of Mustard oil 4.4.2 Factors influencing buying behavior of Buyers 4.4.3 Factors influencing consumer preference 4.4.4 Usage Pattern of buyer in a day 4.4.5 Frequency of Purchase 4.4.6 Timing of Purchase 4.4.7 Pack Size preferred by buyer 4.4.8 Monthly Family consumption 4.4.9 Various uses of commodities
4.5 To know consumer attitude about Fortune KGMO
4.6 To know the relationship between brand and sources from where customers know about brands
4.7 To know the relationship between education level and brand preference
4.8 To know the relationship between income level and brand preference
4.1 WHOLESALER AND RETAILER SURVEY |
TABLE – XVII
4.1.1 CLASSIFICATION OF OUTLETS
CLASSIFICATION | NUMBER OF OUTLETS | PERCENT | A | 95 | 59% | B | 31 | 19% | C | 35 | 22% | Total | 161 | 100% |
The above table shows us the classification of the outlets surveyed, 19% of the shops fall in B Class and 22% fall in C class. The majority (95%) of shops fall in A Class. The criteria for classification are as given below:
A Class: Monthly Sales of Mustard Oil more than 25 C/s
B Class: Monthly Sales of Mustard Oil is between 10 C/s and 25 C/s
C Class: Monthly Sales of Mustard Oil is less than 10 C/s
TABLE – XVIII
4.1.2 MARKET SHARE OF BRANDED AND UNBRANDED PRODUCTS
The above table shows us the market share of branded and unbranded products at various outlets included in this market survey, 16.67% is the market share for branded, while majority sales volumes are of unbranded cheap local products or loose oil.
TABLE – XIX
4.1.3 MARKET SHARE OF BRANDED AND UNBRANDED AT A CLASS OUTLETS
The above table shows us the market share of branded and unbranded products at A Class outlets included in this market survey, 15.07% is the market share for branded, while majority sales volumes are of unbranded cheap local products or loose oil.
TABLE – XX
4.1.4 MARKET SHARE OF BRANDED AND UNBRANDED AT B CLASS OUTLETS
The above table shows us the market share of branded and unbranded products at B Class outlets included in this market survey, 35.61% is the market share for branded, while majority sales volumes are of unbranded cheap local products or loose oil.
TABLE – XXI
4.1.5 MARKET SHARE OF BRANDED AND UNBRANDED AT C CLASS OUTLETS
The above table shows us the market share of branded and unbranded products at C Class outlets included in this market survey, 50.70% is the market share for branded and 49.30% sales volumes are of unbranded cheap local products or loose oil.
Note: As we move from A Class to C Class outlets, market share of branded products shows high volumes.
4.1.6 OTHER MAJOR INSIGHTS FROM WHOLESALER AND RETAILER SURVEY
* The Punjab state can be divided into four major parts, as given below:
Customer Profile at large for each of these belts as given below:
Rural Belt a. Low Education Level b. Lack of awareness about branded products c. Low standard of living d. Rural customers mostly dependent on farming e. Local brand Luxmi Chaap has a good presence in this area, but major sale if of loose Mustard oil f. People prefer cheap oil that is the reason why double filtered mustard oil is in major demand
NRI Belt a. People have good money with them as well as high standard of living, but we cannot generalize this for all. b. Fragmented Market: No particular brand has hold in this market c. Education levels are medium-high, many people are US, UK, Canada or other countries return. d. Customer is ready to spend money for good quality, but there’s a lack of awareness. e. Shopkeeper can mould customer according his/her preference.
Industrial Belt a. People here have a high standard of living as compared to other reasons of Punjab. Most of the people dine out once a week. b. P-Mark is undisputed leader in the market. c. Migrant labor also forms a big chunk of customers in this area, but they spent money on cheap local brands d. Education levels are high, because of some good regional institutes in this area e. People have good brand awareness in this area, and they are also brand conscious.
Pepsu Belt a. Education Levels are low b. Mostly rural customers with very low awareness of branded products c. Farmer community form the major chunk of customers d. Many farmers are rich in this area, but still their life style has not upgraded. They have big cars or SUVs, but eating standards are still same. They will drink liquor every evening, but won’t spend money on dinner in a good hotel or restaurant. e. In other words, customers are not brand conscious in this area.
* Frequent shortages of 02 Ltr and 05 Ltr pack sizes * Very few market visits by sales persons * Lack of color-transparency is major problem especially in NRI and Rural Belt * No Wall- Painting or TV Advertising from Fortune KGMO * No special incentive for retailers to push Fortune KGMO in the market * Target schemes will work better than Display schemes
DISTRIBUTOR SURVEY
A total of 19 distributor locations were being visited during this survey. It includes all major towns like Ludhiana, Amritsar, Jallandher, and Patiala, Pathankot, Mohali and other small towns.
4.2 MAJOR INSIGHTS FROM DISTRIBUTOR SURVEY |
* Oil Color is major problem in towns such as Amritsar, Jallandher and Pathankot. a. Fortune KGMO is of blackish color b. People prefer light color oil in this territory
* Lack of sales support from company a. All small town distributor were angry with company on this point b. Lack of visits is the major problem c. Also they are not getting POP material for newly launched products
* Supply side issues a. Pack sizes of Fortune KGMO 02 Ltr, 05 Ltr are always in short supply b. Frequent delays in supply especially from Jallandher and Bhathinda depot c. Small town distributors are mainly suffering because of supply side constraints
* Pricing Policy a. Lack of Flexibility in Pricing policy of Fortune KGMO b. Lack of competitiveness in pricing
* Marketing Support a. No Wall Painting at all b. No commercials for Fortune KGMO on air or TV
4.3 ECONOMIC PROFILE OF PEOPLE WHO BUY MUSTARD OIL |
TABLE – I
4.3.1 AGE GROUP OF BUYERS AGE GROUP | NUMBER OF PEOPLE | PERCENT | Less than 30 | 31 | 31% | 30 – 40 | 59 | 58% | 40 – 50 | 8 | 8% | More than 50 | 3 | 3% | Total | 101 | 100% |
The above table shows that age group of the buyers, 31% of them were less than 30 years, while 58% of them were between 30-40 years, 11% percent were between age group 40 – 50 and more than 50 years. The majority of respondents were less than 40 years of age (89%).
In case, specific to Fortune KGMO, 96% of the respondents were less than 40 years of age.
TABLE – II
4.3.2 GENDER OF BUYERS
SEX | NUMBER OF PEOPLE | PERCENT | Female | 80 | 79% | Male | 21 | 21% | Total | 101 | 100% |
From the above table referred to gender of the buyers, 79% of them were female and 21% were male. The majority of respondents were female (79%).
The majority of respondents, who buy Fortune KGMO, were female (72%), While rest of them was male.
TABLE – III
4.3.3 OCCUPATION OF THE BUYERS
OCCUPATION | NUMBER OF PEOPLE | PERCENT | Private | 35 | 35% | Government | 7 | 7% | Business | 9 | 9% | Housewife | 50 | 50% | Total | 101 | 100% |
The above table showed the occupation of the buyers, 7% of them were government employees, 35% of them were in private sector, 9% of them were doing their own business and 50% of them were housewives. The majority of respondents were housewives (50%).
The majority of respondents, who consume Fortune KGMO, were housewives (45%).
TABLE – IV
4.3.4 INCOME WISE CLASSIFICATION OF BUYERS
INCOME GROUP | NUMBER OF PEOPLE | PERCENT | Less than 10K | 6 | 6% | 10K – 15K | 14 | 14% | 15K – 25K | 33 | 33% | More than 25K | 48 | 48% | Total | 101 | 100% |
The table shows the income of the buyers, 6% of the buyer’s falls in between the income less than 10,000 a month and 14% were the respondents who fall in between 10,000 – 15000 a month. 33% of the buyers were in category of more than 15,000 and less than 25,000. The majority of respondents were belonged to income category more than 25,000 (48%).
In case specific to Fortune KGMO, 74.45% of buyers were from income bracket more than 15,000 a month.
TABLE – V
4.3.5 EDUCATION LEVEL OF BUYERS
EDUCATION LEVEL | NUMBER OF PEOPLE | PERCENT | Others | 4 | 4% | Matric/+2 | 33 | 33% | Under Graduate | 50 | 50% | Post Graduate | 14 | 14% | Total | 101 | 100% |
The above table shows the education level of respondents, 33% of the buyers went to at least High School, 14% of the respondents went to complete the Master Course. But the majority of the respondents went to college for their Graduation (50%).
The majority of respondents who consumes Fortune KGMO were gone to at least Grad College (65%).
BUYER PROFILE FOR FORTUNE KGMO
Profile Features | Data | Age | Less than 40 (96%) | Occupation | Housewife (45%) | Monthly Family Income | More than 15,000 (74.50%) | Education Level | At least Grad School (65%) |
So if we want to define a typical buyer profile for Fortune KGMO. It will be:
4.4 TO KNOW THE CONSUMPTION PATTERN OF THE BUYERS |
TABLE – VI
4.4.1 CHOICE OF MUSTARD OIL BRAND
BRAND NAME | NUMBER OF PEOPLE | MARKET SHARE | P-Mark | 20 | 20% | Luxmi Chaap | 2 | 2% | Local | 33 | 33% | Gagan | 1 | 1% | Fortune | 43 | 43% | Dhara | 1 | 1% | Dalda | 1 | 1% | Total | 101 | 100 |
The above table shows us the market share of various brands available in the market, 20% of the respondents were consuming P-Mark, 43% of them were consuming Fortune KGMO and 33% of them were consuming Local or other brands (such as Dalda, Dhara, Nature Fresh, Mahakosh, Local Cheap Brands etc.)
The major reasons for data skewed towards Fortune brand are: * The survey was conducted inside Modern Trade stores (Easy Day) * The city chosen was Ludhiana (where Fortune has a good market share overall) * The store was located near posh areas of Ludhiana city * The researcher was more interested in knowing buyer profile who consumes Fortune KGMO
TABLE – VII
4.4.2 FACTORS INFLUENCING BUYING BEHAVIOR OF BUYERS
FACTORS | NUMBER OF PEOPLE | PERCENT | Retail Shop | 44 | 44% | TV Commercials | 29 | 29% | Newspaper & Magazine | 10 | 10% | Friends and Relatives | 18 | 18% | Total | 101 | 100% |
The above table shows us the factors influencing buying behavior of consumers, 29% respondents were being affected by TV commercials, 10% of them were being affected by Newspaper & Magazine and 18% by Friends and Relatives. The majority of them were being affected by Retail Shop displays or retailer suggestions (44%).
In case specific to Fortune refined, 49% of the buyers were being influenced by TV Commercials.
TABLE – VIII
4.4.3 FACTORS INFLUENCING CONSUMER PREFERENCES
This table shows us the factors influencing consumer preferences on a Likert scale; * A low mean score for Reasonable Price means that Reasonable Price has a very low influence on consumer preference. * A high mean score and low standard deviation for Safe/Healthy, tells us that this is the factor that affects consumer preference in a big way. * A mean score of 2.66 for Advertising, tells that advertising does have an influence but not very strong. * Similarly, Packaging has a mean score of 2.45, which is not very big influencer.
TABLE – IX
4.4.4 HOW OFTEN THE BUYERS USE MUSTARD OIL IN A DAY
USAGE PATTERN | NUMBER OF PEOPLE | PERCENT | Once | 29 | 29% | Twice | 55 | 54% | Thrice | 16 | 16% | Rarely | 13 | 13% | Total | 101 | 100% |
The above table shows the usage pattern of Mustard Oil in a day, 29% of the people use mustard oil once in a day, 16% use thrice in a day and 13% use rarely. The majority of people use mustard oil twice in a day (54%) and that is in the morning and evening.
The majority of people (84%) consuming Fortune KGMO, use the commodity at least once in a day.
TABLE – X
4.4.5 HOW FREQUENT DO THE CONSUMERS BUY MUSTARD OIL
FREQUENCY | NUMBER OF PEOPLE | PERCENT | Daily | 0 | 0% | Weekly | 6 | 6% | Monthly | 80 | 79% | Whenever | 15 | 15% | Total | 101 | 100% |
The above table shows the purchasing frequency of Mustard oil, 6% of the respondents said they buy weekly and 15% of them said they buy whenever required. The majority of the people about 79% said they buy once in a month.
The majority (75%) of consumers, which consumes Fortune KGMO, buy once in a month.
TABLE – XI
4.4.6 TIMING OF PURCHASES DURING THE MONTH
TIMING | NUMBER OF PEOPLE | PERCENT | First Week | 27 | 27% | Second Week | 39 | 39% | Third Week | 19 | 19% | Fourth Week | 16 | 16% | Total | 101 | 100% |
The above table shows us the timing when consumer’s purchases mustard oil in a month, about 35% of the respondents said they make their purchase in the second half of the month. While the majority (65%) of them said they make a buy in the First half of the month.
The majority (60%) of the consumers of Fortune KGMO said they make a buy in the first half of the month.
TABLE – XII
4.4.7 WHAT PACK SIZE IS PREFRRED BY CONSUMERS
The above table shows the consumer preference for various pack sizes, 27% of respondents purchase 05 Ltr, 4% of them purchase 02 Ltr and 5% of them purchase other pack sizes. The majority (64%) of them purchases 01 Ltr pack size.
The majority (about74%) of consumers in Fortune KGMO, purchases 01 Ltr Pack size.
TABLE – XIII
4.4.8 WHAT IS THE MONTHLY FAMILY CONSUMPTION
MONTHLY CONSUMPTION | NUMBER OF PEOPLE | PERCENT | Less than 02 Ltr | 48 | 48% | 02 Ltr – 05 Ltr | 42 | 42% | 05 Ltr – 10 Ltr | 11 | 11% | More than 10 Ltr | 0 | 0% | Total | 101 | 100% |
The table shows us the monthly family consumption of mustard oil, 11% of the respondents said they consume between 05 Ltr – 10 Ltr, 42% of them consume 02 Ltr – 05 Ltr a month and about 48% of them consume less than 02 Ltr a month.
The majority (about 58%) of consumers of Fortune KGMO consume less than 02 Ltr a month. Consumption depends on many factors, namely Family Size, eating habits, various usages habits etc.
TABLE – XIV
4.4.9 VARIOUS USES OF MUSTARD OIL
OPTIONS | NUMBER OF PEOPLE | PERCENT | Cooking | 98 | 97.03% | Hair Oil | 21 | 20.79% | After Bath Oil | 25 | 24.75% |
Above table shows us the various uses of Fortune KGMO, while majority of people use commodity for Cooking. The additional uses are as Hair Oil (20.79%) and after bath oil (24.75%).
TABLE – XV
BUYER PROFILE OF FORTUNE KGMO PROFILE FEATURES | DATA | Major Influencer | TV commercials (49%) | Preference | Safe/Healthy (mean score – 4.94) | Usage Pattern | At Least Once (84%) | Purchase Frequency | Once in a month (75%) | Timing of Purchase | First Half of the Month (60%) | Pack Size Preferred | 01 Ltr bottle (74%) | Monthly Family consumption | About 02 Ltr (58%) |
So if we want to define a typical buyer profile for Fortune KGMO. It will be:
The above table shows us the attitude of a consumer of Fortune KGMO, based on various parameters mentioned in the table.
A high mean score (3.28) for Overall Quality tells us that consumer thinks of Fortune KGMO as of good quality product, but at the same time standard deviation (1.03) is also high in this case.
Similarly, the consumer perception about Taste of Fortune KGMO is very positive with a mean score of 3.74 and low standard deviation of 0.82.
The consumer perception about Color Transparency is neutral with a mean score of 2.56 and standard deviation of 0.88.
The Pungency Level of Fortune KGMO is low, so same result has been reciprocated by the survey.
The Packaging of Fortune KGMO has gotten a mean score of 3.00 and standard deviation 0.95. It tells us that consumer perception about is just good.
4.6 TEST OF INDEPENDENCY BETWEEN BRAND AND SOURCES FROM WHERE CUSTOMERS KNOW ABOUT BRANDS |
To know the significance of the independency between Brand and Sources from where customers know about brands, a chi-square test has been run.
Ha (Alternate): There is No significance relationship between Brand and Sources from where customers know about brands
Ho (Null): There is significance relationship between Brand and Sources from where customers know about brands
Chi-Square Tests | | Value | df | Asymp. Sig. (2-sided) | Pearson Chi-Square | 36.301a | 15 | .002 | Likelihood Ratio | 34.256 | 15 | .003 | N of Valid Cases | 101 | | | * 16 cells (66.7%) have expected count less than 5. The minimum expected count is .10. |
In above table, P (calculated) = 0.002, P (calculated) < P (observed)
Null Hypothesis is accepted here, and we can say that a statistically significance relationship exists between Brand and Sources from where customers know about brands.
4.7 TEST OF INDEPENDENCY BETWEEN EDUCATION AND BRAND PREFRENCE |
To know the significance of the independency between Education Level and Brand Preference, a chi-square test has been run.
Ha (Alternate): There is No significance relationship between Education and Brand Preference
Ho (Null): There is significance relationship between Education and Brand Preference
Chi-Square Tests | | Value | df | Asymp. Sig. (2-sided) | Pearson Chi-Square | 19.530a | 15 | .191 | Likelihood Ratio | 21.385 | 15 | .125 | N of Valid Cases | 101 | | | a. 17 cells (70.8%) have expected count less than 5. The minimum expected count is .04. |
In above table, P (calculated) = 0.191, P (calculated) > P (observed)
Null Hypothesis is rejected here, and we can say that a statistically significance relationship does not exist between Education and Brand Preference.
4.6 TEST OF INDEPENDENCY BETWEEN INCOME AND BRAND PREFERENCE |
To know the significance of the independency between Income and Brand Preference, a chi-square test has been run.
Ha (Alternate): There is No significance relationship between Income and Brand Preference
Ho (Null): There is significance relationship between Income and Brand Preference
Chi-Square Tests | | Value | df | Asymp. Sig. (2-sided) | Pearson Chi-Square | 31.407a | 15 | .008 | Likelihood Ratio | 32.960 | 15 | .005 | N of Valid Cases | 101 | | | a. 17 cells (70.8%) have expected count less than 5. The minimum expected count is .06. |
In above table, P (calculated) = 0.008, P (calculated) < P (observed)
Null Hypothesis is accepted here, and we can say that a statistically significance relationship exists between Income and Brand Preference.
5. FINDING AND CONCLUSIONS
5.1 FINDINGS |
Mustard oil is most common item used in our daily lives. People do not give much importance to it, but taking decisions regarding the purchase of different types of oil and choosing the best brands from the multiple available brands in the market is the most difficult decision. So from this report we are trying to find out that how people take various decisions regarding the purchase of oils and we also tried to understand their consumption pattern.
The basic findings are: * Fortune KGMO is the most preferred brand at least in Easy Day stores in Ludhiana. * TV advertisement is the main factor influencing the consumers buying behavior in Fortune KGMO. * Consumers give more preference to safety and health while purchasing the Mustard oil. * Majority of Consumers use commodity at least once in a day, it means 365+ interactions in a year. * A typical consumer makes their buy once in a month, and mostly they buy in the first half of the month. * The most preferred pack size is 01 Ltr bottle. * The main use of mustard oil is for Cooking, but additional uses are as hair oil and after bath oil.
In order to find out the dependency between the various variables and how some variable create an impact on the buyers mind to purchase decisions we conducted a Chi Square test.
This test helped us to evaluate the variables dependency.
Here are the findings: * Brand is dependent on the sources from where customer knows about the brand. * Education level is independent of Brand preference * Brand preference is dependent on Income Level
5.2 CONCLUSIONS |
* Fortune has a Top of Mind Awareness as a brand. * Most people associate Fortune with Refined Soybean Oil only. * Consumers at large have a low level of awareness about branded mustard oil. * P-Mark is the biggest competitor to Fortune KGMO in the market. * TV Commercials are the most influencing factor affecting buying decision and Retail Shops are the second most influencing factor. * With proper sales support and removing supply side bottlenecks, sales of Fortune KGMO can be increased substantially. * Distributor sales persons can full fill the gap, which has been created due to lack of company sales force. * There’s a need to focus on small town distributors, they are the one that suffer most due to supply side bottlenecks and lack of sales support. * To sell Fortune KGMO, company should focus majorly on Industrial belt and NRI belt.
5.3 RECOMMENDATIONS |
As Edible Oil industry is one of the most competitive industry in India, so any company, who wants to be number one in this industry, cannot take the risk of losing even a single customer to its competitor. So keeping this in mind, I am here purposing some of the major recommendations that company can implement in order to increase its market share.
Every company’s sales strategy can be divided in two parts: * Push Strategy * Pull Strategy
Push Strategy
A push strategy uses marketing channels, such as trade promotions, to "push" a product or service through to the sales channel. So based on the type of commodity we have, following are the some recommendations that can be implemented:
* Low Placement: Because of Fast consumable commodity, its placement on shop shelves very important. The major reasons for non-placement are: (i) Few Sales visit to the market (ii) No Specific outlet targeting strategy for Fortune KGMO
The main steps to improve the placement in the market are: (a) Increase sales visit to the market (b) General Stores, and outlets with sales volume less than 10 C/s a month should be targeted for KGMO sales
* Shortage of Sales Staff: Sales staff performs a major role in generating sales leads in oil industry. But we have shortage of company sales staff, especially at Jallandher, Amritsar and Bhathinda HQ. This problem can be handled by optimum use of DSM’s.
* Lack of interest by Distributors: Some our distributors have shown lack of interest in selling Fortune KGMO, especially small town distributors. So there is a need to motivate them for pushing stocks of Fortune KGMO into the market.
* Lack of interest by DSM: Distributor’s Sales persons can be the biggest asset in company’s sales effort, but only if used optimally. My observations while working with them in the market: i. DSM’s are not interested in selling Fortune KGMO ii. They are more interested in selling Fortune Soya, Avsar Vanaspati and Raag Gold, the products that are easy sell
They need to be motivated by some type of rewards on time-to-time basis, so that they put in more effort in converting sales, every time whenever they visit the market.
* Supply Side Constraints: Because of the very nature of the commodity, availability of stocks at depot, stockiest or distributor point is very critical. During my visit to various towns, the below mentioned issue brought to fore by concerned persons: * Frequent shortages of Fortune KGMO 02 Ltr and 05 Ltr * Delay in Supply of stocks from depot
* Promoter Training for Modern Trade: In store promotion is of high importance, because this is the moment when customer would have a direct interaction with company representative. My observation while working with Promoter at easy stores: * Promoters didn’t know about various oils and its features * The customer handling was very causal * There were no dress code
Company should devise some kind of training program for promoters working in modern trade stores, so that every customer of Adani Wilmar Limited would have a happy experience with the company.
Pull Strategy
A pull strategy is where interest for a specific product or service is created within a target audience that then demands the product from channel partners. Recommendations based on Consumer behavior: * Improve Awareness: There’s an immediate need to improve awareness of Fortune KGMO with target audience. Because in consumer survey about 97% of the consumers were not able to recall any advertisement of Fortune KGMO. Recommendations: * TV Commercials will be most appropriate medium for advertisement * TV commercials aired in first 10 days of the month will have highest impact, because most of the consumer make their buy in first half of the month * Apart from TV commercials, Wall paintings can be used to improve the awareness among rural consumers (Wall Paintings must be in local vernacular) * Target Pickle Season: Pickle season is another area where company should focus in summer’s to increase the sales of Fortune KGMO. Based on discussion with distributors, wholesalers and retailers: * Pickle season in Punjab starts from 20th May till mid-July * Sales of Mustard oil usually increases by 25%-30%
Company can introduce some special packing with a recipe booklet for preparing various kinds of pickles. * Booklet (Containing Information about all types of oils and their features): During consumer survey at easy day stores, I have observed that many customers were confused about what type of oil they should purchase i.e. they were confused whether Raag Gold would be healthier for a heart patient or not. So I purpose here, that there should be a booklet in every modern trade and general store providing all the information regarding various types of oils and their features. And this book should be in all the local languages. * Improve packaging of 01 Ltr bottle, so that every time a customer uses that bottle, she would have a happy experience.
BIBLIOGRAPHY & REFERENCES
1. Malhotra, N. K. & Birks, D. F. (2006) Marketing Research: An Applied Approach, Europe: Pearson Education Limited 2. Kotler, P. (2003) Marketing Management. 11th Edition, New Delhi: Prentice Hall of India Pvt. Ltd 3. Venkateshwaran , P.S (2009) Marketing problems of edible oil industry in the state of Tamil Nadu 4. Babu, S (2011) A pragmatic study on the Buyers of edible Oil – Preference towards buying behavior of consumers
