2013252 Sahil Modh Dr v K Singh

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Business Development & Market Survey on Edible Oil

SIP project report submitted in partial fulfilment of the requirements for the

PGDM Programme

By Sahil Modh

(2013252)

Supervisors: 1. Mr Sanjay Raval

2. Dr. Vipul Kumar Singh

Institute of Management Technology, Nagpur

2013-15

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Acknowledgements

The summer training being a part of the academic curriculum exposes a student to real life at

corporate world. It also gives him a chance to put his acquired theories to practice. Vimal oil

and food ltd. is the manufacture and processor of edible oils firm. It lays a great emphasis on

summer training programs with challenging and enriching tasks laid down for trainees. My

association with the company has contributed a great deal towards enriching my knowledge

and intellect and also led to enhancing my confidence to face all odds while working on field,

as a team towards the accomplishment of the project. I would like to thank for lending me this

opportunity to work on a live project. I would also acknowledge Mr Sanjaybhai Raval and

his team members for making it easier on field and making every experience a learning one

for me.

I would also like to thank my faculty guide Dr. Vipul Kumar Singh for his

continuous guidance during my summer internship program.

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Completion Certificate

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Table of Contents

Acknowledgement……………………………………………………………………..2 Successful Completion Certificate……………………………………………………..3 Table of Contents………………………………………………………………………4

1. Executive Summary……………………………………………………………5

2. Introduction and Objectives……………………………………………………6

3. About the Industry……………………………………………………………..7

4. Company Analysis……………………………………………………………9

a. Company Introduction………………………………………………...10

b. Department Description……………………………………………….10

c. Product line……………………………………………………………11

5. Research Methodology………………………………………………………...15

6. Market Survey and its Interpretations………………………………………….18

7. SWOT Analysis………………………………………………………………..26

8. Findings………………………………………………………………………..26

9. Recommendations……………………………………………………………..27

10. Limitations……………………………………………………………………..27

11. Appendices …………………………………………………………………….28

References …………………………………………………………………...30

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1. Executive Summary

The practical training is a part of studies of management. The practical training at MBA level

helps us to know the working problems of industries before we enter into any organization as

an employee or executive. This will help the student to bring out & exhibit the qualities which

is not way can be exhibit by theoretical training.

This report provides the full knowledge of edible market and its functioning, what are

the products are and a survey of Vimal‟s brand image and awareness. Which are the problems

Vimal is right now facing and what should they do to overcome it. You will get to about the

new market entrant Rice Bran oil and people‟s perception for it. And what can be done for

increase its sales.

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2. Introduction

The edible oil business is the important sustainers of the confident yearly economic growth

rates which India has experienced for over fairly long period of time. Demand of India for oil

has been rising at a rate of 8-9%/year. This gives loads of scope for growing in this sector.

The main thing about edible oil industry is it‟s a commodity market. The price of oil is

being fixed everyday morning. In my opinion that‟s the complex thing about edible oil market.

Objectives

To learn about edible oil industry market and its products

To work with senior traders and deal with all over Gujarat‟s Depot managers and brokers

To have market‟s on the field study for practical experience.

To do market survey for Vimal‟s Brand image and awareness

And to do market survey for new market entrant product Rice Bran Oil.

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3. About the Industry

1) Introduction: We know that there are three basic requirements food, cloth and home in the life cycle of the

humans. Clothing and home are necessary, but food is the most required thing, without that

human beings can‟t survive any more.

Particularly, In India edible oil is being consumed by all people. The typical habits of

Indian food prefer fried vegetables snacks.

In world's leading producers of oil seeds and oil India has its own standing, having

market share of 9.3% of world oilseed production, and After USA, Brazil and China, India is

the fourth largest oilseed producing country in the World to harvesting about twenty-five

million tons of oilseeds per annum.

Indian economy is very much rely on this sector, as this sector provides loads of jobs

to the people, has on an average a domestic turnover of around USD 10billion per year and

has foreign exchange of USD 90million per year.

India is privileged in having a various range of oilseeds crops grown in its diverse agro

climatic regions. Mustard/rapeseed, Groundnut, linseed, sesame, Niger seed/castor is the main

traditionally cultivated oilseeds. India is a big country and inhabitants of several of its regions

have developed specific preference for certain oils largely depending upon the oils available

in the region.

India is the world‟s largest importer of vegetable oils since 1998/99. Ever since that

time, the yearly imports have kept flying.

This sector is now one of the top sustainers of the positive annual economic growth

rates India has enjoyed for over a decade now. The demand of India for edible oil has been

growing at a rate of 8-9 per annum. The demand of whole nation for edible oil gives

investment chances into this industry. Trained labour, trainable labour as well as unskilled

labour is readily available for prospective investors in the sector to utilize.

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Considerable opportunities exist in the edible oil sector of the nationwide economy.

This sector has shown steady growth. Industrial production‟s index has been positive and this

trend is expected to continue over the foreseeable future.

2) Consumption pattern of edible oil in India India is a big country and inhabitants of several of its regions have developed specific

preference for certain oils largely depending upon the oils available at there. For example, the

West and South‟s people prefer groundnut oil while the Easters and Northern use

rapeseed/mustard seed oil. Same as in the South, households have a preference for Sesame

and coconut oil.

Residents of north plain are basically heavy fat consumers and therefore they prefer

Vanaspati, which is the term for partially hydrogenated edible oil mixture. Vanaspati has a

precious role in this oil economy. Its production is about 1 million MT yearly. It has around 13%

of market share which has the ability to absorb a mixed variety of oils which don‟t generally find

direct marketing opportunities because of consumers‟ preference for traditional oil such as

mustard oil, groundnut oil, sesame oil etc. For ex, newer oils like Soya bean, sunflower, rice bran

and cottonseed and oils from tree and forest sources have found their way to the edible pool

largely through Vanaspati route.

Of late, because of technical innovations things have changed means like refining,

bleaching and Deodouraisation, all of these oils have been rendered practically odorless, tasteless

and colorless so, have become easily interchangeable in the houses. Newer oils which were

unknown before have entered the consumption pattern , like those of sunflower, cottonseed, palm

oil or its liquid version, palmolein, Soya bean and rice bran. All of them are again essentially

bland, processed edible oils. About 60-70% predominantly groundnut and mustard seeds are used

to make non-refined or filtered oils. These tend to have a strong and distinctive test preferred by

lots of traditional customers.

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4. Company Analysis

About the company

Vimal Oil & Foods Ltd. (VOFL), the flagship company of Vimal Group, was started in 1993

inaugurated by Param Punjay Pramukh Swami Maharaj (Head BAPS), in Mehsana, Gujarat,

with a small 50 ton refinery, and today it has a fully integrated and automatic oil-processing

unit with an annual turnover of Rs.2000 crores, listed with NSE and Bombay Stock Exchange

(BSE).

With the immense experience of the Vimal Group, VOFL has earned a great

reputation for its vision, competitive edge and entrepreneurial spirit. But the focused

commercial aspects of their ventures, has not made the VOFL lose their human touch. They

care for its people, as much as for its products. And when we say „people‟, we refer to all its

stakeholders: the staff, suppliers, clients, and shareholders. And to its end-users –the customers, more so, as their products are meant for human consumption. In fact,

company‟s motto has been always to launch brands that will make “Healthy U, Happy U”

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Department Description :

There are four major department in VOFL that is purchase department, trading

department, finance department, HR department. The department who manages all trade

related activities and marketing activities is called there “Trading Room”. Trading

department has to consolidate all the depot across the Gujarat and regulate them.

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Product Line

1) Cottonseed Oil:

Cottonseed oil is having Vitamin E.Its features are light, non-oily consistency and

high smoke point. Unlike some oils, it has a long shelf life and does not deteriorate at

high temperatures. Refined and packed at our state-of-the-art refinery makes it the

most preferred edible oil.

Available Packs:

15kg Tin, 15L Tin, 15L Jar, 5L Jar, 2L Jar, 1L Bottle, 1L Pouch, 500ml bottle, 500ml

pouch

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2) Groundnut Oil

Vimal Refined Groundnut oil is made from specially picked groundnuts from Saurashtra

region. The natural groundnut flavor retained in this oil makes it highly desirable for

cooking authentic Gujarati cuisine. Manufactured under extremely hygienic conditions,

Vimal Groundnut Oil is the right choice for your everyday cooking.

Available Packs:

15kg Tin, 15L Tin, 5L Jar, 2L Jar, 1L Bottle, 1L Pouch, 500ml bottle, 500ml pouch

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3) Rice Bran Oil Vimal introduces the ancient Japanese anti-ageing secret – „Rice Bran Oil‟, the cooking oil

which helps you stay healthy & young.

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5. Research Methodology

“Research design is a plan, structure, and strategy of investigation conceived so as to obtain answer to research question and to control variance.”

The definition consists of three important terms-plan, structure, strategy. The plan is

an outline of the research scheme on which the researcher is to work the structure of research

is a more specific outline or the strategy shows the research will be carried out, specifying the

method to be used in the collection and analysis of data.

Types of Research design At the outset may be noted that there are several way of studying and tackling a problem. There is no single perfect design. As such the Researcher should not wait until he arrives at a unique and perfect research design.

Research design have being classified by various authors in different ways. Different

types of research design have emerged on account of the different perspectives from which a

research study can be viewed. However a frequently used classification system is to group

research design in three broad categories-

Exploratory Descriptive Causal

We have used Descriptive- Cross Sectional Design.

Descriptive studies

Descriptive studies are under taken in many circumstances. When the researcher is interested in knowing the characteristics of certain group such as age, sex, education level or income, a descriptive study may be necessary.

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Assumption of the Project I am making marketing research report so that is not perfect or completely perfect because

there are many assumption for taking different things for taking sample, the taking answer

from the respondent or the use land non user customer. Some assumption of the different

things is as under.

I have taken samples from the various kirana stores, super markets of various areas

of Ahmedabad city.

I am assuming that all respondents give truthful answer but it is exceptional case

they have given wrong answer even.

For the marketing report I have taken Ahmedabad city but it is possible they

perception of customers may vary in other parts of Gujarat.

There are no external factors affecting to the purchase of edible oil.

Some Facts about the Survey: I have taken samples based on two perspectives.

Types of store like typical Kirana stores to mega super market so that diversification can be maintained.

Types of area like posh areas to lower class people areas so that I can have all kinds

of customers range from lower class to upper middle class.

Based on this perspective, I have chosen sample size as 100.

Objective of the survey:

Major reason behind this survey is to know the where Vimal edible oil brand stands in the market of Ahmedabad, what‟s the problem in that, which are its strengths, on which point they can improve and ultimately grab the more market share in edible oil market.

This survey has another purpose is that VOFL has arrived with new product entrant

„Ricebran Oil‟ in the market just 2 year back. But the sales of that product isn‟t up to the

mark. So I have taken survey on that products awareness also. And come up with some

insights and solution to it.

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6. Analysis and Interpretation of the Survey

1) Select Your Age

Male

Female

Age

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87

Female Male

It shows that majorly the most chunk of buyers of edible oil is female. Whereas male affects the decision a liltle.

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2) Select your Age range 18-22 23-27 28-35 36-45 45 and above

Age Range

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37

18-22 23-27 28-35 36-45 45 and above

Respondents are divided into different age range, such as 18-22 is teen agers, 23-27 is mixture

of college going and working age range, range 28-35 is working woman as well as housewife

etc. Result shows us age range 28-35 is the main range of customers who buy the product out

which are majorly housewives.

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3) When you think of Edible oil, which brand comes into your mind 1st

?

Vimal Tirupati Fortune Saffola Gulab Ankur Any other

Brand Recognition

7 9

9

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15

23

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Vimal Tirupati Fortune Saffola Gulab Ankur Any Other

Result shows that Tirupati has good brand recognition along with Suffola and Fortune Brands. Means Major competitors of Vimal is Tirupati, Fortune, and Suffola. As when a customer goes to store for purchasing of edible oil she prefer these brands over Vimal.

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4) Have you heard about Vimal oil? Yes No

Brand Awareness

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68

Yes No Brand awareness for Vimal is quite good as more than half respondents have heard of Vimal‟s name in Edible oil Product. Which is a good indication.

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5) If yes then from which sources u get to know? TV ad Hoarding Newspaper Radio Friends or Relatives

Effective way for Communication

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TV Ad Hoarding Newspaper Radio Friends or Relatives

Majority of respondents are aware of brand through medium of Newspaper and Radio. Because people of Ahmedabad has so much used to listen to Radio as well they notice the advertise shown in the newspaper.

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6) Factors affecting your buying decision?

Price Quality Brand Name Service Health Concern

Factors affecting Buying Decision

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31

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Price Quality Brand Name Health Concern

Customer prefers price as well as quality and Brand name also when they go for buying edible oil. So brand has to provide these all things.

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7) Which kind of edible oil you are using? Cottonseed oil Groundnut oil Sunflower oil Rice bran oil Mustard oil Palmoline oil Soyabin oil

Polupar Cooking Oil

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4 9

Cottonseed Oil Groundnut Oil Sunflower Oil Rice Bran Oil

Mustard Oil Palmoline Oil Soyabin Oil

Result shows that most popular cooking oil is Cottonseed oil because regional tastes and preferences.

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8) Do you know about Rice bran oil? Yes No

Awareness of RiceBran Oil

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77

Yes No

Results shows this New entrant Rice bran oil has not that much of awareness among the respondents.

9) If yes then of which company you think of? Vimal Fortune Any other

Awared Brand of RiceBran

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70

Vimal fortune

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10) Are you aware of benefits of rice bran oil? Yes No

Awareness Of Ricebran Oil

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73

Yes No

Customers are unaware from the benefits of the rice bran oil.

11) Who had suggested you to use your current edible oil? Friend and Relative Advertisement Retailer Doctor

Influencer for chosing current oil

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Friend And Relative doctor advertisement Seller

Most of customers are got influenced by their friends and relatives.

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7. SWOT Analysis

The overall evaluation of a Company‟s strengths, weakness, opportunities, and threats are given below.

Strengths:

The firm has strong position in Gujarat‟s market.

High brand extension in Gujarat.

Having two manufacturing plant at strategic places in Gujarat.

Weaknesses:

Low brand awareness Low Domestic Sales Lack of Professional management

Only 4% expenditure on domestic advertisement, which cannot help in brand

preference.

Opportunities:

Growing rural market. Constant improvement in consumption of edible oil Increase in consumption of oil due to increase in population and urbanization.

Threat:

High competition from local as well as multinational firms. Less spending on advertisement and sales promotion tools. Highly dependent on Indian marketing.

8. Findings

Major findings from the survey is Vimal is having tough competition with Tirupati, Fortune, Suffola. The brand awareness of Vimal is good but brand preference is not so good. The effective way of communication is newspaper and radio for Vimal. Vimal‟s new entrant product rice bran‟s awareness is so less in the market and people are not aware of its benefits.

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9. Recommendations For new market entrant product Rice bran oil, Vimal is using Push Strategy as they pushes

their product through salesman on the shelves of retailers. But as this product is having great

health related benefits and it‟s totally for middle upper class people so their buying decision

can‟t be changed by less educated sellers of kirana stores.

So, company can use Pull strategy. In that can contact all Dieticians and Gym

owner to spread awareness for this product and also run campaign at theirs shops. So buyer‟s

decision can be affected by these people‟s advices as they are health concerned.

10.Limitations of the study Time – As this is two month of SIP so I can‟t go out of Ahmedabad‟s market.

Cost – For, New market entrant rice bran oil, I want to come up with one campaign

with all dietician and gym owners but for that I have to print loads of brochures which

cost me a lot.

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11. Appendices

Questionnaire

1) Select your Gender? a. Male b. Female

2) Select you Age? a. 20-30 b. 31-50 c. Above 50

3) When you think of Edible oil, which brand comes into your mind 1st

? a. Vimal b. Tirupati c. Fortune d. Gulab e. Ankur f. Rani g. Any other

4) Have you heard about Vimal oil? a. Yes b. No

5) If yes then from which sources u get to know? a. TV ad b. Hoarding c. Newspaper d. Radio e. Friends or Relatives

6) Factors affecting your buying decision? a. Price b. Quality c. Brand Name d. Service e. Health Concern

7) If yes then which kind of edible oil you are using? a. Cottonseed oil

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b. Groundnut oil c. Sunflower oil d. Rice bran oil e. Mustard oil f. Palmoline oil g. Soyabin oil

8) Do you know about Rice bran oil? a. Yes b. No

9) If yes then of which company you think of? a. Vimal b. Fortune c. Any other

10) R you aware of benefits of rice bran oil? a. Yes b. No

11) Who had suggested you to use your current edible oil? a. Friends b. Relatives c. Doctor

12) Which factors do you want to change in Vimal? a. Service b. Packaging c. Quality d. Price

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References

http://www.vimaloil.com/

http://wikipedia.com

http://icra.in/Files/ticker/Indian_Edible_Oils-note11072011.pdf