kof

KARNATAKA OIL FEDERATION SOCIETY (KOF)

CHAPTER-1

INTRODUCTION

This report represents a brief study on Edible Oil industry which is operating in

Chitradurga District, Karnataka. It gives report about its advantages and problems.

This report also aims at functional areas of company and their role in building and

shaping companies growth. The development and its problems are recognized through

the past and present performance of the company by means of different sources.

This report also gives brief account on consumer preference and awareness

level of company’s product “KOF” and company’s current position in the market. The

research approach has been based on the considerations of the company growth

prospects with respect to increasing its performance and market share.


GENERAL INTRODUCTION

Crude oil obtained by screw pressing and solvent extraction of oilseeds will

throw a deposit of so-called gums on storage. The chemical nature of these gums has

been difficult to determine. They contain nitrogen and sugar and can start fermenting

so they were at one stage thought to consist of glycolipids and proteins. Now we

know that these gums consist mainly of phosphatides but also contain entrained oil

and meal particles. They are formed when the oil absorbs water that causes some of

the phosphatides to become hydrated and thereby oil-insoluble. Accordingly,

hydrating the gums and removing the hydrated gums from the oil before storing the

oil can prevent the formation of a gum deposit. This treatment is called water

degumming. It is never applied to fruit oils like olive oil and palm oil since these oils

have already been in contact with water during their production.

Water degumming is the oldest degumming treatment and also forms the basis

of the production of commercial lecithin. I use the term ‘commercial lecithin‘here to

make a distinction from the use of the word ‘lecithin’ as the trivial name for the

compound phosphatidylcholine (PC). Similarly, phosphatidylethanolamine (PE) has

the trivial name ‘kephalin’. Since the water degumming process involves more water

than when crude oil is allowed to absorb moisture from the atmosphere, the gums

resulting from the water degumming process also remove hydrophilic substances such

as sugars from the oil.

Lecithin as obtained by drying the gums resulting from the water degumming

process contains a mixture of different phosphatised. The structural formulae of the

main phosphatised present in lecithin are shown in Figure 1 (further information on

phosphatised is available here.

SPECIFIC INTRODUCTION

"Vegetable oil" redirects here. For other uses, see Vegetable oil

(disambiguation).

Vegetable fats and oils are lipid materials derived from plants. Physically, oils

are liquid at room temperature, and fats are solid. Chemically, both fats and oils are


composed of triglycerides, as contrasted with waxes which lack glycerin in their

structure. Although many plant parts may yield oil,[1] in commercial practice, oil is

extracted primarily from seeds.

The melting temperature distinction between oils and fats is imprecise, since

definitions of room temperature vary, and typically natural oils have a melting range

instead of a single melting point since natural oils are not chemically homogeneous.

Although thought of as esters of glycerine and a varying blend of fatty acids, fats and

oils also typically contain free fatty acids, monoglycerides and diglycerides, and

unsaponifiable lipids.

Vegetable fats and oils may or may not be edible. Examples of inedible

vegetable fats and oils include processed linseed oil, tung oil, and castor oil used in

lubricants, paints, cosmetics, pharmaceuticals, and other industrial applications

NEED OF THE STUDY

Marketing is wide and compressive term. It teaches the practicing managers

what they need to do in pursuit of business goals. Marketing leads to righteousness in

every aspect of economic activates. The right product can be produced and distributed

to the right consumers, at the right price, at the right time, in the right way, at the right

place and the right purpose ends in this context it fell that the study of marketing oil

industry is quite is important and relevant.

OBJECTIVES

To study the complete structure and history of kof.

To get insight about the organizations functional areas.

To know the sales position of “KOF” PRODUCTS in CHITRADURGA

To offer the suggestions for improve the marketing of KOF OIL

PRODUCTS.

To study the drawbacks in the existing system of marketing.


SCOPE OF THE STUDY

The present study is made to know the study core components of this

organisation and to know the product movement of KOF .The study was conducted in

the chitradurga for the period of 4 weeks. It is intended to provide information about

sales of the KOF OIL PRODUCTS.

STATEMENT OF THE PROBLEM AND NEED FOR THE STUDY:

Every firm is having one or other marketing problems similarly KOF is also having

the several marketing problems they are:

Competitive market.

Price fluctuations.

Consumer awareness.

Product advertising.

Size of the firm.

Oil is one of the essential factors in cooking. The demand for oil is increasing

at higher rate. To meet the growing demand more number of manufacturers is coming

up in large scale sector. Oil at present at being produced by several industries in India.

Keeping in view of various needs of the study. The study entitled “marketing of

KOF” was conducted with an objective of gathering useful information recording

status of current market.

METHODOLOGY OF THE STUDY

The project work is undertaken by using both primary data and secondary data.

1) PRIMARY DATA

PRIMARY DATA HAS BEEN GATHERED

Direct interview

Observation.

Secondary Data


2) SECONDARY DATA HAS BEEN GATHERED.

Library

Research.

Indirect interview by sending questionnaire.

LIMITATION OF THE STUDY

The study was undertaken for academic purpose only.

It could not go deep into the topic because of time constraints.

The study is confined to KOF regional oilseeds growers’ co-op. societies’

union ltd.


REVIEW OF LITERATURE

Marketing is a comprehensive term it includes human activity directed

towards satisfying needs and wants. Once the need is identified, the product or service

is produced, stored, promoted, transported, the terms of exchange negotiated. Price

fixed and service assured. All these human activities will constitute marketing.

Marketing mix is blending of combination of four elements namely, product,

price, physical distribution or place and promotion.

According to prof. Kelley and Lazar "Marketing mix is composed of a large

battery of devices which might be employed to induce consumers to buy a particular

product ".

Marketing mix is an important tool used by marketing manager to design the

process of marketing in an organisation. It is a plan designed to analyses the

marketing problems.

It is a comprehensive term and includes all resources and a set of activities

necessary to direct and facilitates the flow of goods and services from producer to

consumers.

According to prof. Philip Kotler,

"Marketing is the analysis, planning, implementation and control of program

designed to bring desired exchange with target audiences for the adaptation"

It relies heavily on the adaptation and co-ordination of product, price,

promotion and place for achieving response.

Prof. Harry L H Anson in his title

"Marketing Text, Techniques and cases" defines "Marketing as the process of

discovery and translating consumer made and wants in to product and services

specification, crediting demand for these Products and services and than in term

expanding this demand".

LITERATURE REVIEW ON OIL MARKET MODELING AND OPEC’S BEHAVIOR

Ayed Al-Qahtani, Edward Balistreri, Carol Dahl


Division of Economics and Business, Colorado School of Mines, Golden Co. 80401

{[email protected], [email protected], [email protected]}March 29, 2008

INTRODUCTION

This literature review is divided into two parts (1) oil market modelling and (2) OPEC’s behaviour within the oil market. In the first part, we look at various oil market simulation and optimization models conducted to date with more emphasis on the optimization ones as we attempt building an oil market model of a similar nature. The second part of the review covers the literature on the efforts conducted to date on modelling, testing and analyzing OPEC’s behaviour within the oil market as such market behaviour is pivotal to the proposed model’s mathematical formulation and solution.

OIL MARKET SIMULATION AND OPTIMIZATION MODELING

The interest in oil market modeling grew rapidly right after the Arab embargo and the quadrupling of the oil price in 1973. Stephen Powel (1990) mentions that by the late seventies there were more than thirty publicly available oil market models. Since then the oil market modeling efforts have slowed down significantly. In this part of the review, we briefly present the more popular oil market models that were mentioned in surveys and studies conducted to date and then elaborate more on the optimization models as they are more related to our proposed model.

The survey by Fischer et al (1975) is one of the early surveys conducted on oil market modeling. In their survey, they listed and criticized seven world oil models including Blitzer-Meeraus-Stoutjestdijk, Kalymon-I & II, Bohi-Russel, US-Federal Energy Administration, Kennedy, Levy and Nordhaus models.

The models of Kalymon-I & II (1975), Bohi-Russel (1975) and Nordhaus (1973) were the only optimization models in their review. All these optimization models are discussed in greater details later in this part of the review. In a similar effort, Nazli Choukri (1979) compared the structures of twelve world oil market models. Four of these models were static simulation, four were dynamic simulation and fourwere optimization


models including Kalymon I & II (1975), Nordhaus (1973), Bohi-Russell (1975) and Hnyilicza and Pindyck (1976).

In 1990, Stephen Powel noted that most existing oil market models are either inter-temporal optimizationor behavioral simulation and listed three models as inter-temporal optimization models including ETAMACRO (Manne, 1981), Salant (1981) known as Salant-ICF, and Marshalla and Nesbitt (1981) known as DFI-CEC. Eight years later, Baldwin and Prosser (1998) conducted a similar survey and followed the same classification as that of Powel (1990) and believed that most of the oil market models belong to either recursive simulation models or inter-temporal optimization models.

A more comprehensive and critical survey was conducted by Cremer and Salehi-Asfahani (1991) where they surveyed fifteen years worth of economic literature on oil market modeling. In the survey, they divided modeling efforts into informal (with no or minimal mathematical symbolism), simulation and theoretical models. They further subdivided the informal models into two basic types according to behavior emphasis: monopolistic (cartel or dominant firm) and competitive modeling (backward bending supply curve, property rights or supply shocks). Simulation models were further subdivided into three groups including reduced form, optimization and energy balance models. Under the simulation models and without classifying they included Kennedy (1974), Nordhaus (1973), Blitzer-Meeraus-Stautjesdijk (1975), Kalymon (1975), Ben-Shahar (1976), Cremer and Weitzman (1976), Hnyilicza and Pindyck (1976), Gately-Kyle-Fischer (1977), Pindyck (1978), Ezzati (1978), Houthakker and Kennedy (1978), Daly-Griffen-Steel (1982), MacAvoy (1982), and Salant (1982). At the end of their survey, they covered econometric studies conducted on the oil market with hypotheses related to market structure and functioning.


CHAPTER SCHEME :

Dissertation study has been presented are all seven chapters including as follows:

Introduction

Industry profile

Company profile

Product profile

Functional departments

Survey analysis

Findings, Suggestion and conclusions.


CHAPTER-2

INDUSTRY PROFILE

India is amongst the largest producer and consumer of vegetable oils. It was

self sufficient in vegetable oils in the 1950s; however, by the 1960s the domestic

demand-supply equilibrium almost vanished. The turning point came in 1988, when

the country faced shortfall of 2 million tons (mt) of oil, necessitating imports worth

$1bn. Alarmed at this situation, government made a concerted effort to make oilseeds

more attractive to growers, through a combination of specialized extension campaigns

including the high-profile Technology Mission. As a result, the country became

almost self-sufficient (maximum 98% in 1992-93 and 1993-94) in edible oil.

In early 90s, the high prices of oils encouraged the entry of more firms into the

business, including some blue chips, in a major way. The result was a substantial

expansion of processing capacity and an unprecedented increase in oilseeds

production, in particular soybeans, by over 70 per cent in six years. However, the

liberalization of Indian economy at this point of time fundamentally changed the

import regime of India’s edible oil particularly in 1994 when as part of its obligations

under WTO rules, India eliminated the state monopoly on imports and placed the

imports under a privatized open general license (OGL) system. Under the new rules,

India also agreed to eliminate import quotas and placed upper bound limits on tariff

levels.

These changes made the rules governing edible oil import more transparent and

more responsive to market forces. Imports of edible oil which were 1.5 million tons in

1986-87 gradually declined to 0.1 million tones in 1992-93 but have now touched 4.3

million tones (2002-03). Population pressure coupled with better standard of living,

low oilseeds production due to aberrant weather for several years, and liberalization

of import-export policy, are the causes behind such an import scenario. The

corresponding export earnings however, have been much lower due to depressed

prices in the international market.


INDIA’S AREA, PRODUCTION AND PRODUCTIVITY OF

OILSEEDS

Oilseed crops account for 14.1% of the gross cropped area in India. Their area,

production and productivity (yield) in India have registered steady increase since the

inception of Technology Mission on Oilseeds and Pulses (TMOP) in April 1986 and

reached the peak of 26.23 million ha, 24.75 million t and 0.94 t/ha in 1998-99,

respectively. Nevertheless, area, production and yield (productivity) of oilseeds in

India have been fluctuating because of several biotic and abiotic stresses affecting the

crops. Another important factor contributing to insufficient domestic production/

productivity of oilseeds has been the small area under irrigation, which has increased

by merely 3% in the last one decade from 23.2% to 26.3%. India's domestic price

support programme, which has often favoured production of crops that compete for

area with oilseeds, is also responsible for such a scenario.

THE IMPORT OF EDIBLE OILS

Trade in oilseeds has been completely deregulated within a short span of time

and oils are now freely importable with relatively low incidence of custom duties. The

impact of this liberalization on the import of edible oil has been phenomenal and from

0.10 million tonnes in 1992-93 the country’s import has reached to 4.3 million tonnes

in 2002-03. The share of bills for the import of edible oil in the total agricultural

imports has ranged from 6% to 52% during 1991-92 to 2002-03. Almost four out of

12 years, the country has spent 50% of the total expenses on agricultural imports for

the import of edible oil. The dramatic decrease in self-sufficiency in the last 5 years is

a clean indication that globalization has already made an impact of far reaching

consequences in this sector. The country was almost self-sufficient in edible oils

during 1991-92 to 1994-95 when the sufficiency level was in the range of 95 to 98 %.

However, gradually it has declined to about 53% in 2002-03.

DEMAND PROJECTIONS FOR INDIA’S EDIBLE OIL

By 2010, India’s total requirement of vegetable oils for the projected population

of 1.25 billion at the projected per capita consumption of about 15 kg/annum is

expected to be around 19.0 million tonnes, which is roughly equivalent to 57.0 million


of oilseeds. This is a big challenge to achieve in a short time of six years from now,

considering the fact that the per capita edible oils consumption has gone up from a

mere 4.5 kg in 1981-82 to 9.5 kg in 1998-99.

GOVERNMENT OF INDIA’S FISCAL INCENTIVES FOR

MOTIVATING THE FARMER TO SHIFT TO OILSEED

CULTIVATION

During the early 1990s, Minimum Support Prices (MSPs) for food grains were

kept in check relative to oilseeds and the government controlled import monopoly

dramatically lowered oil imports. This contributed to a sharp improvement in

domestic oilseed prices relative to competing crops and increased the oilseed

production by 70% between 1987-88 and 1994-95. However, after mid-1990s, oilseed

prices declined relative to other crops, mainly due to the increased domestic oilseed

supplies and liberalization of edible oil imports initiated in 1994. MSP level for food

grains were raised more than for oilseeds since the mid-l990s. As a result,

increasingly favourable returns from rice and wheat have drawn area away from

oilseeds, lowering oilseed production. Since 1998-99, however, the MSP of the major

edible oilseeds have been moving upward more decisively, intending to lure the

growers towards the oilseed crops.

India is the fourth largest oil seed producing country in world, next to USA,

China & Brazil harvesting about 25 million Tons of oil seed, against the world

production of 250 million ton per annum.

Many verities of oilseeds along with the oilseeds originated from trees are

cultivated in India like soybean, Groundnuts, sunflowers Rapeseed, sesame seed,

linseed palm, Kernel. The Edible oil Industries of country comprises of 50000

expellers, 600 solvent Extraction Plants &300 vegetable oil refineries.

Edible Oils occupies a distinct position in Indian economy as it provides jobs

for millions of people & India mainly dependent on Rain to produce oil seed crops.

Indian’s more than one billion people annually consume about 11.5 million

tones of oils. Since Indian oil seeds crop is highly rain dependent and harvesting is

mainly done in the months of March or April.


BACKGROUND

Edible oil processing consists of three operations: crushing and expelling

(separating oil from the solids), solvent extraction (to chemically remove residual oil

from the oilcake solids), and oil refining. In many countries, these three separate

processing operations are conducted by one vertically integrated plant. In India,

however, only a small share of oilseed production undergoes solvent extraction and

oil refining. Instead, India’s oilseeds processing sector is made up of the three groups

viz Ghanis, solvent extractors and oil refiners engaged separately.

Edible oils constitute an important component of Indian households’

expenditure on food. According to NSS 60th Round (January-June 2004), average

monthly per capita consumption expenditure (MPCE) of edible oil in food was 8.2%

in rural India, and 8.2% in urban India. The share of edible oil has increased in

successive NSSO surveys.

According to the Second Advance Estimates released by the Ministry of

Agriculture on February 5, 2007, total oilseeds production during 2006-07 is expected

at 23.62 million tonnes (mt), representing a decline of 15.6% over 2005-06. The

decline in oilseeds production is due to lower output of rapeseed, groundnut and

castorseed.

SIZE

India is world’s third largest edible oil economy, after China and US. India’s

annual consumption is around 10 million tones vis-à-vis China’s 14.5 million

tones. However, India’s per capita consumption at 10.2 kgs per annum is

considerably lower compared to global standards.

India is also a leading producer of oilseeds, contributing 7-8% of world

oilseed production. India is estimated to account for around 6% of the world’s

production of edible oils. Though it has the largest cultivated area under

oilseeds in the world, crop yields tantamount to only 50-60% of the world’s

average.


India is the fifth largest producer of oilseeds in the world, behind US, China,

Brazil, and Argentina. Since 1995, Indian share in world production of

oilseeds has been around 8-10%.

STRUCTURAL CHARACTERISTICS

Broadly, edible oil/fat PRODUCTS can be categorized into four categories,

vegetable refined oil, hydrogenated oil (vanaspati), bakery fats/margarine, and

de-oiled cakes.

The Indian edible oil industry can be classified into the following segments.

Ghanis (over one lakh units), small-scale expellers (15,000 mills), solvent

extractors (600 units), oil refiners (400 units) and vanaspati manufacturers

(204 units).

Oil mills crush oil seeds and extract oil, 70% of which is sold in the open

market. The remaining 30% is refined and sold as branded oil. After the

extraction of oil, residual seeds are processed further by solvent extractors, to

make solvent-extracted oil. Most of the solvent extracted oil is used to make

‘vanaspati'.

The Indian edible oil industry is highly fragmented with a large number of

small scale producers. The ghanis belong to the SSI segment and usually serve

the rural markets.

Solvent extractors belong to the organised segment and are also the second

largest after the SSI segment, in the domestic edible oil industry. They use

modern technology to process low oil & high meal seeds (eg.soyabean,

cottonseed) into edible oil and de-oiled cake.

Oil refining also belongs to the organised sector and has recorded rapid growth

in recent times. Refiners generally refine both expeller oils and solvent

extracted oils.

Vanaspati is made by hydrogenation of refined oil to vegetable shortening or

spread and is similar to the milk product ghee and absorbs around 10% of the

total edible oil supply in India.

The production of edible oils in India is dependent on the production and

availability of oilseeds. While oilseeds production increased from 10.83

million tones (mt) in 1985-86 to 24.75 mt in 1998-99, yield per hectare


increased from 570 kg to 944 kg. during 1999 to 2003, oilseed output

stagnated and also declined. As oilseeds are mostly sown in the non-irrigated

regions of the country (viz, Rajasthan, Gujarat, Maharashtra and Madhya

Pradesh), its production suffers from high dependence on the monsoon.

Moreover, the raw material costs account for over 92% of the total cost of

sales due to volatile prices of oilseeds. Besides the increase in raw material

prices cannot be passed on entirely to the consumers, edible oil prices being

governed by trends in international prices due to substantial imports.

Therefore the edible oil industry is characterised by very low profit margins,

which is a manifestation of a variety of factors, the most important of all being

availability of oilseeds.

POLICY

In order to increase the domestic supply of oil seeds, the government has been

frequently freezing the MSP for wheat and rice while increasing the MSP for

oil seeds, thereby prompting a diversification from wheat-rice to oil seeds.

This is intended to improve the supply of oil seeds. However, despite these

measures, the demand-supply gap is likely to continue in the medium term.

Again this does not push up prices, due to availability of low priced imports,

as edible oil is the common man’s utility item.

Free imports (since 1994) have further lowered the entry barrier to the industry

as crude or refined oil can be imported, packed and distributed doing away

with the need of having manufacturing facility in the domestic market.

Customs tariff on edible oil continues to be the most important and dynamic

area of government intervention. India adopted a modified tariff schedule for

agricultural PRODUCTS in March 2000. The tariff bindings, subsequent to

revision in 1996 and renegotiations within the WTO in 1999, retain the overall

structure notified after the Uruguay Round: 100% for commodities, 150% for

processed PRODUCTS, and 300% for edible oils. Departures from this

pattern are mainly with respect of tariff lines that were negotiated as special

cases. India's bound rates for edible oil are as high as 300% ad valorem,

except for 45% on soybean oil, and 75% for rapeseed oil. On all other oils, the

GoI can raise the level of customs duty up to 300%.


OUTLOOK

The country’s consumption places India behind only China and the European

Union in total edible oil consumption. The growth in consumption of edible oil

has been driven by increased population and growing incomes.

With its large population and continued strong economic growth, India is likely

to register strong gains in total and per-capita edible oil consumption in the

medium term. Per capita consumption is expected to increase to 11 kgs in

FY2006 and 11.3 kgs in FY2007.

Production is expected to increase at a slower rate during OY2007 mainly

because of an expected decline in India’s oilseeds and edible oil production.

India’s production of vegetable oils has been stagnating except for a rise in

rapeseed oil. According to the Solvent Extractors Association of India (SEA),

India’s vegetable oil production is expected to decline 4.4% during OY2007 to

around 6.8 mt.

By 2010, India’s total requirement of edible oils for the projected population of

1.25 billion at the projected per capita consumption of about 15 kg per annum

is expected to be around 19 mt, which is equivalent to an estimated 57 mt of

oilseeds.

The industry has to contend with increasing competition from imports, the

rising cost of oil seeds and the expanding demand-supply gap. Since the

production of oil seeds is heavily dependent on monsoons, around 40% of the

demand for edible oils within the country has to be met by imports which may

continue.

MARKET

India accounts for 9.3 per cent of world oilseed production. It has the world's

fourth largest edible oil economy. Yet, about 43 per cent of edible oil available

in India is imported.

India ranked as the world's largest importer of edible oils, displacing China.

The bulk of edible oil India imports under the Open General Licence (OGL)

are RBD palmolein of Malaysian and Indonesian origin.

In most parts of the world, import duty on oilseeds is lower than that on oils.

But, in India, it is higher: 40 per cent. That is why no import of oilseeds or oil-


bearing material has taken place in India. The industry wants the duty to be

lowered from the present 40 per cent to 5 per cent.

Edible oils prices in the Indian market have crashed due to large imports by

multinational trading houses.

The edible oils industry is one sector in India that will see considerable reform

in the foreseeable future.

The government has banned export of edible oil for one year to check rising

domestic prices and control inflation. The ban will be in place till March 16,

2009.

Edible oil has a weight age of 2.76% in the wholesale price index (WPI) - higher than

cement (1.73%), wheat (1.38%) and rice (2.45%).


CHAPTER-3

COMPANY PROFILE

The Karnataka Co-operative Oilseeds Growers Federation Limited, Bangalore

was registered on 26th October, 1984 to implement the project "restructuring of edible

oil and oilseeds production and Marketing in Karnataka". The said project was

structured Anand Model of Milk Co.operative with the objects to increase oilseeds

production, procurement and processing of oilseeds and create the market for edible

oils and it’s by- PRODUCTS.

The project was initially envisaged to be implemented with a two-tier structure

and accordingly, primary Oilseeds Growers' Co.operative Societies at village level

were registered from time to time and got affiliated to the Federation at the State

level. To provide the better services to the oilseeds growers in a short time, the

structure was changed from two tire to three-tier during the month of June 1990 with

the formation of three Regional Oil Union at Hospet, Raichur and Hubli respectively.

Accordingly, the Regional Oilseeds Growers Co.operative Societies Union Ltd.,

Chitradurga (Earlier it was called as Hospet Union) was registered on 30th June, 1990

with its area of operation extending to three districts of Bellary, Chitradurga and

Tumkur. Consequent to this all village Oilseeds Growers Co.operative Societies

formed under the project area were affiliated to the Union which in turn was affiliated

to the Federation. During August, 1998 Davanagere was constituted as a new district

comprising of taluks from Bellary, Chitradurga, Shimoga districts; thereby taking the

number of districts in the project are is four. As on date 130 Oilseeds Growers'

Co.op. Societies are affiliated to the Union.

OBJECTIVES:

0.1 Organise and supervision of the Primary Oilseeds Growers Co.op. Societies.

0.2 To provide technical guidance to the Oilseed growers.

0.3 Increase the oilseeds production by undertaking improved seed production

activities through farmers.

0.4 Distribution of improved variety seeds, Agricultural Implements and other

inputs, Fertilizers, Chemicals & Gypsum.

0.5 Conducting of demonstrations.


0.6 Procurement of oilseeds from growers by providing fair prices.

0.7 Other agricultural activities which are useful to the farmers.

0.8 Arranging the trainings for farmers and Board Members of the Society.

0.9 Procurement of oilseeds with co.ordination of NAFED under Price Support

Scheme of Govt.

0.10 Processing and Marketing of Oilseeds and Edible Oils in consumer packs.

In this way Union is providing the services to the Oilseeds Growers Co.op. Societies

at villege level.

SHARE CAPITAL 31.03.2008:

Sl.No Particulars Amount (in lakhs)

01 From Oilseeds Growers Co.op. Societies Ltd. (OGCS) Rs. 43.780

02 From DOFCO, Anand Rs. 80.000

Total Share Capital Rs. 123.780

Source: From company

AREA OF OPERATION:

The Union is having its Head Office at Chitradurga and different District Offices at Davanagere, Hospet (Bellary Dist), Chitradurga and Tumkur. The details of OGCS affiliated to the Union are as follows.

Source: From company

INFRASTRUCTURE CREATED:

Sl.No District Taluk’s

Covered

OGCS Villages Members Oilseed Area

(in Hectors)

01 Chitradurga 04 20 200 9,524 29,140

02 Davanagere 02 05 49 2,295 1,865

03 Bellary 05 35 226 15,123 21,245

04 Tumkur 06 31 317 9,704 33,666

Total 17 91 792 35,646 85,916


To provide the better services to the Oilseeds Growers’ Co.operative Societies

(OGCS) at village level and to fulfill the objectives of the Union, the Union

approached the Karnataka Industrial Area Development Board, Davangere( KIADB)

for allotment of land, accordingly the KIADB has allotted the land to tune of 8753 Sq

mtrs at Plot No. 74/A, Kelgote Industrial Area, Chitradurga. In that plot the Union

has constructed two godowns to operate sowing seeds activities under the 50%

subsidy from Department of Agriculture under ISOPAM Project and set up

independent Oil Packaging Station in its own funds at the cost of Rs. 185 lakhs to

operate the Consumer Marketing activities of the Union under the brands of SAFAL,

SUNGOLD & SWAGAT. Also, recently the Union has purchased 0.5 acres of land

including one godown from KSFC in the tender process.

COMPANY VISION AND MISSION

VISION:

To become world-class oil producer committed to enhancing stakeholder

value.

MISSION:

Our mission reflects our core values and beliefs to which we practice and

abide-by everyday: We strive for survival in our markets through our promise of

quality, recognition and reputation. We strive for development and progression

through good faith, fairness and innovation. Through our core values to the

PRODUCTS we provide. We promise to enrich health and create harmony amongst

ourselves, our customers and to the environment that we live in.


PRODUCT PROFILE

Sungold Refined Sunflower Oil

These are the our company manufacturing PRODUCTS

Sunflower.

Swagath Oil.

Rice Rich Brand.

Suguna Palmolin.


Available In Consumer Packs Like

½ Ltr pouch

Ltr pouch Pet Bottle,

5 Ltr Jerry cans Pet jars and Bulk packing of 15 Ltr

15 kg Tins

100 kgs HDPE Barrels.

Sungold Refined Sunflower Oil is arrived from original Sunflower seed Oil,

light in colour without having odor 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 households and bulk users like Hotels, Canteens,

Sweet stalls, Caterers etc.. for its reusable quality without having any unliked odor.


CHAPTER-4

FUNCTIONAL DEPARTMENTS

HUMAN RESOURCE DEPARTMENT

HRM is a very important asset of the company, which is responsible for

properly assigning various functional roles of the company. HRM plays a vital role in

fulfilling business goals and objectives by its presence in every aspect of business.

Further human resource is properly managed by respecting their rights, duties

and responsibilities. So factors like bonus, wages, incentives, promotions and

demotions and even transfers are taken into consideration.

Hence different dispute settlement groups and agencies are maintained for

settlement of lockouts, riots, strikes, accidents and breakdowns, their duties and rights

are protected under government rules and companies’ rules.

Time scheduling is implemented for division of work as per talent and skills of

employees and workers are concerned to maintain quality in business activities.

POLICIES AND PRACTICES OF HRM:

1. Any form of demand and solving of problems should go through collective bargaining.

2. Employees should maintain respect and discipline in fields of work.

3. There is no child labour and time scheduling is done for distribution of work.

4. There is no discrimination in case of sex, age, income and occupation among employees and workers.

5. Agencies are organized to solve problems of lockouts, strikes, riots and other disputes.

6. Any form of reward is given by noticing the experience and talents in employees.

7. Suggestions and recommendations should be sought through top management in case of lacking knowledge in business activities.


RECRUITMENT, SELECTION AND TRAINING

RECRUITMENT:

Recruitment of workers and employees is made based on their qualification,

experience in machine handling.

MEDICAL FITNESS:

All the candidates who are listed are subjected to medical examination by a

qualified or registered medical practitioner and the medical certificate thus obtained

shall be maintained in the personnel files of the respective candidates.

TRAINING:

The systematic training shall be imparted to all the new incumbents by the

procedure has explained below

a) INDUCTION TRAINING. All the operatives and the technical personnel shall be exposed to

induction training of 6 days (48 hours), where the emphasis shall be laid on

the following aspects.

COMPANY’S IMAGE. Confidence building.

Sense of pride, sense of belonging and dignity of labour.

Work life and work ethics.

Housekeeping.

About the activities.

Quality.

Safety and accident prevention.

Health and hygiene.


b) SKILL DEVELOPMENT: Primary training and

Multiskill training.

c) PERFORMANCE APPRAISAL:

Performance assessment of each incumbent shall be made systematically after

every 3 months during the first year i.e., 4 assessments during the first year and later

the assessment shall be done every 6 months. The weightage shall be given to each of

the following parameters While carrying out the performance assessment (the model

format is enclosed)

Attendance 10%

Skill 50%

Knowledge 20%

Attitude 20%

Every assesses shall be informed about his or her performance, so as to enable

him \her to improve if there are any short comings.

TRAINING AND DEVELOPMENT

Training is one of the efficient tools that help any organization in avoiding

obsolescence of the knowledge of manpower so the need of training is-

1. Technological obsolescence

2. Motivation.

3. Attitudinal change.

4. Reduce manpower turnover

5. Improves the quality.

6. Increases the productivity.

7. Personal growth.


TRAINING IS CLASSIFIED INTO TWO TYPES.

a) In -house training.

b) External training.

a. IN -HOUSE TRAINING:

When the training is conducted within the organization it is called in- house

training. In MOIPL, training is provided for technicians, supervisors and workers. In

this type of training the trainer would be an internal or external source; usually an

expert in the field is called for, such training in the organization.

b. EXTERNAL TRAINING:

The training which is provided outside the organization is called external

training. These are the training program where all executives attain and is conducted

by the professional consultants from any part of India. This includes workshop that

are conducted in hotels and the programs are conducted by the professional bodies

and educational institution. The subject dealt include personality development,

industrial opportunities, stress management all are allowed to attend such programs

depending on the importance of the subject and the designation of the executive the

external training is usually for high grade employees.

PERFORMANCE APPRAISAL

Performance appraisal is a formal structured system of measuring and

evaluating and employ job related behavior and, outcomes to discover how and why

the employee is presently performing on the job and how the employee can perform

more effectively in the future so that the employee, organization and society are

benefited.

In the organization the authority maintain “Annual Confidential Report”

(A.C.R) of all their subordinates with the performance updated very often, it is kept


highly confidential and is available only to the senior authority. During the time of

performance appraisal the various positive and negative factors are discussed by the

committee, it comprises of the head of the department and higher decision making

authority.

In the organization the criteria for promotion is time bound and performance on

merit based. The promotion is given once in five years to the office staff and ones in

seven years for the workers, technicians and supervisors.

MOTIVATIONMotivation may be understood as the set of force that causes people to behave

in certain ways. In this organization the motivational concepts are

1. Promotion.

2. Increment

3. Rewards.

4. Incentives.

EMPLOYEE REMUNERATIONS:In the organization the remuneration paid to the employee is

1. Wage and salary.

2. Incentives

3. Fringe Benefits

Provident fund

Gratuity

Medical care.

Accident relief.

Group insurance.

Canteen.

4. PERQUISITES House rent allowance.

Petrol allowance.

OTHER BENEFITS


Sick leave

Child care leave.

Maternity leave.

Vacations

Traveling allowance.

Moving allowance.

Employee medical allowance.

RETIREMENT BENEFITS:

Individual who retired on completion of 58 years of age get some of the

benefits, if he has been in continuous service for past 3 years.

1. Provident fund

2. EPF (Employee Pension Fund)

3. Insurance.

4. Group Insurance

5. Gratuity.

DEATH:

In case of death of any employee during his service the organization will

provide all the benefits that are due to the nominee of provident fund, gratuity and any

savings during the course of service and any unsettled encashable leaves are allowed

for immediate payments.

CANTEEN:

Every employee, temporary or casual labour is provided by the canteen facility.

The food is available at a subsidized rate. Coffee\Tea is provided two times a day at

free of cost.

FUNCTIONS AND FESTIVALS:


There are many functions and festivals celebrated in the organization. Some

festivals and functions are from the side of administration and some are from

workers. They are

1. ADMINISTRATION.

a. Workers day.

b. Safety day.

c. Ayudha puja and

d. All national and state festivals.

2. WORKERS.

a. Ganesha festival

b. Factory sports day.

MARKETING DEPARTMENT

The company’s product SUNSHUDH is directly sold to whole sellers and

retailers so it is not having any strong marketing strategies so whole sellers and

retailers are the main source of marketing of this PRODUCTS. The company does

not have strong advertisements and promotional activities so product is lacking

publicity among consumers.

Company is having good sources of supply agents who are intermediaries

between company and outside dealers, product is placed in whole sale and retail shops

where it face competition from different competitive brands like Gemini, Priya, Gold

winner and palm oil..

Company adapts direct marketing by its suppliers through whom product will

reach market so company is having less expense in case of marketing activities and

even company does not conduct any strong advertisement and sales promotion

activities to highlight its product for creating brand awareness among consumers.


Further product can be advertised in local news channels and even in

newspapers, which will not have any strong impact in minds of consumers so mostly,

women are aware of product availability in the market due to their preference for this

brand in cooking factor.

MARKET ASPECTS

1. USERS

Oil - As unrefined vegetable oil, it could be sold in bulk to a firm that

would then refine and market it to individuals and restaurants as cooking or salad oil.

When treated with hydrogen, it may be an ingredient in fats and spreads like

margarine.

Feed - This is a feed stock used generally to feed animals. It is sold in bag and bulk.

Starch - This is similar to maize starch. It is suitable for a wide range of

industrial and food uses, where a thick, boiling starch is desired. Sales may be in bag

or bulk.

2. SUPPLIERSThe grain sorghum supply will come directly from farms or from country

elevators.

3. SALES CHANNELS AND METHODSSales of unrefined oil will be made directly to refiners. Sales of the

feedstuffs will be made through local brokers or to blenders of feeds. Sales of starch

will be to various users.

4. GEOGRAPHIC EXTENT OF MARKET

Markets for feeds are generally local or regional, but export is feasible.

Sales could be made to enterprises based on fattening animals for market or raising

fowl by mass methods, or to farmers when hay and silage are in short supply. Sales of

oil and starch may be regional or for export.


5.COMPETITION All of the PRODUCTS are standard commodities and are subject to

competition worldwide. The success of the venture depends on the isolation of the

market by transport cost, tariff, or subsidy. Some competition may come from local

small-scale projects making starch from cassava or white or sweet potato. These

operations will produce crude material, but since the capital cost is so low, they could

be Competitive in periods of depressed prices.

6. MARKET CAPACITY Because of the variety nature of the PRODUCTS, the market may be

national and international.


MARKETING DEPARTMENT

MANAGING DIRECTOR

GENERAL MANAGER

MANAGER

DEPUTY MANAGER

TECHNICAL OFFICER

MARKETING OFFICERS

OIL DESPATCHERS

COMPUTER OPERATORS

PEON/HELPER


FINANCE DEPARTMENT

Finance is like backbone of the company so that the company should have

appropriate funds to meet their expenses and to stay in market by having good funds

to survive in business, and this company is having good surplus and reserves

compared to last year which should be managed for future uncertainity in business

and even cash and bank balance has increased which shows companies good

performance in business and further companies income should be recognized

through financial statements and by companies growth and company has maintained

good working capital, capital structure and having good sources of funds.

OBJECTIVES OF FINANCE DEPARTMENT:

To protect the financial interest of the company

To help in achieving the interest/goal of the company

Monitoring collections and payments

To exercise cost control and cost reduction techniques

To monitor budgets and budgetary controls

Controlling the out flow and inflow of cash

THE MAIN FUNCTION OF THE FINANCE DEPARTMENT IS:

To handle the customer problems

To handling the executives reimbursements

To handle the petty cash

To keep track of inflow and outflow of cash

Preparation of capital budget, reporting and monitoring of capital budget and

capital expenditure analysis.


THE FINANCE DEPARTMENT STRUCTURE

Managing Director

Director

Auditors

Main Accountants

Assistants

Cash Book Ledger & Journal Branch Bank computer

incorporation Reconciliation Billing

Statement


PRODUCTION DEPARTMENT

PRODUCTION AND PLANT REQUIREMENTS

Requirements Annual Output:

1. Infrastructure, Utilities Small Plant Medium Plant Land 6-7 Hectares

Building 4400 m2

Power 140KW/Ton grind 28,000 kw/day

Fuel natural gas or oil 520,000,000 kcal/day

Water potable 434 m3/day

cooling 4211 m3/day

Sewer to municipal plant 200 m3/day at 2 Ton BOD

Equalization basin 100 m3

2. Major Equipment & Machinery Small Plant Medium Plant Tools & Machinery graind dryer elevators and

conveyors step tanks double runner mill germ hydro clone germ washing

creenbengerm press: germ dryer oil expeller filter press pin mill screen bed fibber

washing system fibber dryer disk stack centerifugegluten filter (vacuum drum belt

type) gluten dryer disk stack centrifugesluten filter (vacuum drum belt type) gluten

dryer search washing system of 13 stages of dorrclones starch ewatering centrifuge

with filtrate concentrator flash dryer support equipment & part struck and rail tracks

scales grain storage bins for continuity of operation office and equipment locker

rooms for labour mechanical and electrical shops with tools roads & rail, site drainage

transformer and electric rooms.

(*)TOTAL ESTIMATED COSTS

For 150 ton/day plant 30000rs/day

The costs provided are estimates; they are not intended to be used as absolute

prices. Costs still need to be determined on a case by case basis.


3. Materials & Supplies Small Plant Medium Plant

RAWMATERIALS

sorghum grain, groundnuts, sunflowerseeds, ricebran -- 200 Tons 12-15% moisture

Supplies

liquid sulfur dioxide 0.4 Tons

Detergent, alkaline to

ca. 10 pH for cleaning

PACKAGING:

Our PRODUCTS are available in attractive packs in different sizes ranging from

200ml, 500ml, 1litre, 5kg can and 15kg tin.

We also provide our PRODUCTS in laminated pouches and cardboard boxes.

Mustard oils are available in 200ml, 500ml, & 1 litre. pouches and bottles and in

2 lt, 5lt jars.

REFINERY BLOCK

PRODUCTION MANAGER PRODUCTION MANAGER

OPERATOR OPERATOR OPERATOR OPERATOR

REFINERY BLOCK




SOLVENT BLOCK


PRODUCTION PROCESS

The industry has production activities in both solvent and refinery.

WHAT IS A SOLVENT?

Improve

A solvent is either a liquid or gas that takes into itself a solute (which can be in

the state of a solid, liquid or gas) and creates a solution.

If we use a simple and easy example, we can get a handle on the idea. Take a

glass of warm water, put a teaspoon of table salt in it, and stir it. The salt will dissolve

in the water and "disappear" from view. The water is the solvent here, the salt is the

solute in this example, and the resulting salt water is a solution that we created. It's

that simple.


A SOLVENT IS ALSO THE SUBSTANCE THAT DISSOLVES

THE SOLUTE.

A solvent is a liquid that dissolves a solute. The solvent is the component of a

solution that is present in greater amount.

Perhaps the most common solvent in everyday life is water. Many other

solvents are organic compounds, such as benzene, tetrachloroethylene, or turpentine.

In chemistry, a common rule for determining if a solvent will dissolve a given

solute is "like dissolves like." Solvents composed of polar molecules, such as water,

dissolve other polar molecules, such as table salt, while nonpolar solvents, such as

gasoline, dissolve nonpolar substances such as wax. The degree that a solvent

dissolves a given solute is known as its solubility. Ethyl alcohol is highly soluble in

water, for example. Vinegar is very insoluble in oil, and the two substances will

quickly separate into two layers even after being shaken well.

An oil refinery or petroleum refinery is an industrial process plant where crude

oil is processed and refined into more useful petroleum PRODUCTS, such as

gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas.[1][2] Oil refineries are typically large sprawling industrial complexes with extensive

piping running throughout, carrying streams of fluids between large chemical

processing units. In many ways, oil refineries use much of the technology of, and can

be thought of as types of chemical plants. The crude oil feedstock has typically been

processed by an oil production plant. There is usually an oil depot (tank farm) at or

near an oil refinery for storage of bulk liquid PRODUCTS.

DIFFERENT TYPES OF REFINERIES ARE AS FOLLOWS:

Oil refinery, which converts crude oil into high-octane motor fuel

(gasoline/petrol), diesel oil, liquefied petroleum gases (LPG), jet aircraft fuel,

kerosene, heating fuel oils, lubricating oils, asphalt and petroleum coke;

Sugar refinery, which converts sugar cane and sugar beets into crystallized

sugar and sugar syrups;

http://en.wikipedia.org/wiki/Refinery

http://en.wikipedia.org/wiki/Oil_depot

http://en.wikipedia.org/wiki/Oil_production_plant

http://en.wikipedia.org/wiki/Chemical_plant

http://en.wikipedia.org/wiki/Chemical_process

http://en.wikipedia.org/wiki/Chemical_process

http://en.wikipedia.org/wiki/Fluid

http://en.wikipedia.org/wiki/Piping

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/Oil_refinery#cite_note-Leffler-1

http://en.wikipedia.org/wiki/Oil_refinery#cite_note-Handwerk-0

http://en.wikipedia.org/wiki/Liquefied_petroleum_gas

http://en.wikipedia.org/wiki/Kerosene

http://en.wikipedia.org/wiki/Heating_oil

http://en.wikipedia.org/wiki/Asphalt

http://en.wikipedia.org/wiki/Diesel_fuel

http://en.wikipedia.org/wiki/Gasoline

http://en.wikipedia.org/wiki/Petroleum_products

http://en.wikipedia.org/wiki/Crude_oil

http://en.wikipedia.org/wiki/Crude_oil

http://en.wikipedia.org/wiki/Factory

http://en.wikipedia.org/wiki/Industrial_process


Natural gas processing plant, which purifies and converts raw natural gas into

residential, commercial and industrial fuel gas, and also recovers natural gas

liquids (NGL) such as ethane, propane, butanes and pentanes;

Salt refinery, which cleans common salt (nacl), produced by the solar

evaporation of sea water, followed by washing and re-crystallization;

Metal refineries refining metals such as alumina, copper, gold, lead, nickel,

silver, uranium, and zinc;

Vegetable oil refinery.

WHAT IS A REFINERY?

Inside a maze of silver towers and pipes is a fascinating factory that changes

hydrocarbon molecules to make gasoline.

A refinery is a factory. Just as a paper mill turns lumber into legal pads

or a glassworks turns silica into stemware, a refinery takes a raw

material--crude oil--and transforms it into gasoline and hundreds of

other useful PRODUCTS.

A typical large refinery costs billions of dollars to build and millions

more to maintain and upgrade. It runs around the clock 365 days a

year, employs between 1,000 and 2,000 people and occupies as much

land as several hundred football fields. It's so big and sprawling, in

fact, that workers ride bicycles from one station to another.

Chevron has five gasoline-producing "Factories" in the United States

and another in Burnaby, British Columbia. ChevronTexaco has

refining capacities worldwide of over two million barrels per day.


These world class operations had surprisingly humble origins. In 1876,

company pioneers used wagons and mules to haul two primitive stills

to a spot near Pico Canyon, Calif., the site of California's first

producing oil wells. The stills, each about the size of a garage, were

used to heat oil at the prodigious rate of 25 to 40 barrels a day. This

"oil boiling" produced kerosene, lubricants, waxes and gasoline--a

clear, lightweight liquid that generally was discarded as a useless

byproduct. (Read more about Chevron's first refineries in the History

section.)

Gasoline's lowly status rose quickly after 1892, when Charles Duryea

built the first U.S. gas-powered automobile. From then on, the light

stuff from crude oil became the right stuff.

Today, some refineries can turn more than half of every 42-gallon

barrel of crude oil into gasoline. That's a remarkable technological

improvement from 70 years ago, when only 11 gallons of gasoline

could be produced. How does this transformation take place?

Essentially, refining breaks crude oil down into its various

components, which then are selectively reconfigured into new

PRODUCTS.

This process takes place inside a maze of hardware that one observer

has likened to "a metal spaghetti factory." Employees regulate refinery

operations from within highly automated control rooms. Because so

much activity happens out of sight, refineries are surprisingly quiet

places. The only sound most visitors hear is the constant, low hum of

heavy equipment.

The complexity of this equipment varies from one refinery to the next.

In general, the more sophisticated a refinery, the better its ability to

upgrade crude oil into high-value PRODUCTS. Whether simple or

complex, however, all refineries perform three basic steps: separation,

conversion and treatment.


BASE OIL PRODUCTION

The quality of Base Oil has evolved with the process technology. The first

generation of process technology was developed to remove aromatics and other

impurities. With the Solvent Processing Technology, it was possible to recover wax as

a byproduct and lower the pourpoint and the simply hydrofining also added to the

further reduction of impurities. In third phase the Hydroprocessing Technology was

developed and this changed the base oil business from “Physical separations” to

“Chemical transformations”. The technology could produce lighter viscosity grades,

which was a popular option for the refineries. Some refineries use also Wax

Isomeration to produce very high quality base oils.

LABOR SMALL PLANT OR MEDIUM PLANT

Skilled: Superintendent 3

foremen 8

chief operators 6

chemist 3

lab technician 3

plant engr. & maint. supervisor 8

general mechanics 5

electrician & instrument mechanic 4


SEMI-SKILLED:

Operators 60, loader

UNSKILLED:

Packers 32, warehouse 20, grounds 8, and cleaning 20

INDIRECT: Management and Sales 5

Secretary 1

Bookkeeper 5

Store & shipping clerk 5

IN A NUTSHELL THE BASE OIL PRODUCTION PROCESS WORKS AS FOLLOWS:

1. Feedstock is separated into distillates and vacuum gas oils

2. Waxy vacuum gas oil molecules flow to the hydrocracker to begin conversion

3. Hydrogen is introduced to saturate the molecules and remove impurities such

as nitrogen, sulfur, oxygen and heavy metals.

4. Hydrocracking, under conditions of extreme temperature and pressure in the

presence of a catalyst, converts aromatics molecules into saturated paraffins.

5. The altered stock is noticeably lighter in color due to the absence of

contaminants.

6. Long waxy paraffin molecules are restructured into shorter, branched

isoparaffins that resist gelling and improve low temperature pumpability.

7. Hydrogen is introduced again to remove any remaining aromatics and

impurities, enhancing the oxidation and thermal stability of the now

colorles oil.



THE CRUDE OIL IS SYSTEMATICALLY PURIFIED IN WELL

DEFINED STAGES, "NEUTRALIZATION, BLEACHING,

DEODORIZATION AND DE-WAXING".

CRUDE OIL

RAW MATERIAL

NEUTRALISATIOJN

BLEACHING

DEODORIZATION

DEWAXING

FINAL PRODUCT(OIL)


Firstly crude oil is purchased from different sources and it is brought to company

plant where the machineries and equipments are installed for producing the quality

PRODUCTS through modern technology process.

Oil should be extracted and purified to produce end product should go through

different stages of production like neutilisation, bleaching, deodorization and

dewaxing.

During this process waste materials like gums, wax and color reducing by

removing harmful chemicals and even reducing quantity of smell, further filtering is

done to create final product.

Crores of money is invested in machineries and equipments to carry on

production process to have good quality product, many workers and employees with

engineers are involved in production center with guidance of top management so that

they can maintain productivity and efficiency in production process.

All processes are digitally monitored. Machinery at the plant is inspected

periodically and preventive maintenance of equipments and lines is done to avoid

damages and untimely breakdowns. In observance to stipulated standards, routine

calibration of meters and control device are done.

Quality control is foolproof with continuous checks during raw material,

processing and end product stages, following Good Laboratory Practice

(GLP)guidelines.

They care for the environment:

kof understands its social responsibilities. That is why, this Pvt. Ltd. focuses

on environment friendly waste disposal with a top of the line effluent treatment plant

built in house. This industry adopts safe and healthy practices to protect the

environment.


CHAPTER-5

MARKETING MIX

Marketing is a comprehensive term it includes human activity directed

towards satisfying needs and wants. Once the need is identified, the product or service

is produced, stored, promoted, transported, the terms of exchange negotiated., price

fixed and service assured. All these human activities will constitute marketing.

Marketing mix is blending of combination of four elements namely, product,

price, physical distribution or place and promotion.

According to prof. Kelley and Lazar "Marketing mix is composed of a large

battery of devices which might be employed to induce consumers to buy a particular

product ".

Marketing mix is an important tool used by marketing manager to design the

process of marketing in an organisation. It is a plan designed to analyses the

marketing problems.

It is a comprehensive term and includes all resources and a set of activities

necessary to direct and facilitates the flow of goods and services from producer to

consumers.

According to the businessmen, marketing has twin activities:

(a) Matching the product or service with demand.

(b) Transfer of ownership and possession of the flow of goods from

Primary producers to ultimate consumers.

According to prof. Philip Kotler,

"Marketing is the analysis, planning, implementation and control of program

designed to bring desired exchange with target audiences for the adaptation"

It relies heavily on the adaptation and co-ordination of product, price,

promotion and place for achieving response.


Prof. Harry L H Anson in his title

"Marketing Text, Techniques and cases" defines "Marketing as the process of

discovery and translating consumer made and wants in to product and services

specification, crediting demand for these Products and services and than in term

expanding this demand".

Basic objective of Marketing Mix

The basic objective of marketing mix is safety and the needs of the customers

in the most economical manner. The emphasis of marketing mix is how to satisfy the

needs of the customer effectively

Nature of marketing mix:-

Marketing mix is a dynamic process. It changes with the changes in needs

of the customers. Marketing mix is a difficult task, as it involves the blending of

decision in four difficult areas of marketing, that is, the product, pricing, promotion

and place. In fact effectiveness of marketing efforts depends upon the decision made

in each of these four areas and their proper combinations.

Marketing strategy:-

Marketing strategy is the total and unbeatable instrument or a plan shaped and

designed specifically for attaining the marketing objectives of a firm. A marketing

mission and objectives tell us as to where to go and marketing strategy provides us

with the grand design for reaching out there.

Marketing is the pack of four sets of variables namely,

1. Product variables.

2. Price variables.

3. Promotion variables.

4. Place variables.

Elements of marketing mix

Marketing mix is made up of 4 elements namely, product, price, promotion,


and place

PRODUCT MIX

The product is the focus of marketing and marketing efforts Product is the sum

total of physical and psychological satisfaction it provides to the buyer. Product mix is

the composite offered for sale by the firm, over a period of time.

The variables:-

1. Product line and range

Product line is a group of closely related Products which are able to satisfy a

class of need, to be used together, to be sold to the same consumer groups, to be

moved through the same distribution channels or fall within a given price range.

Product range speaks of the depth of specialization in terms of varieties based on

consumer pockets and functional requirements,

2. Product design

The marketing decision starts with designing in a way which is required by the

target consumer. Product design is an important factor in the sale of many Products.

Products designed properly enhance their utility, attractiveness, safety and appeal.

Good design, therefore increases sales volume, minimises service costs and reduces

transportation charges.

3. Product package

Packaging is the general group of activities in designing the containers or

wrappers for Products. A good package protects the Products provides convenience,

increases economy and communicates, It makes possible easy brand identification,

prevents substitution and short weight and elements of advertising and sales

promotion.

4. Product quality

Establishment and control of quality standards is a basic in merchandising.

Standards quality is established for Products either by agreement among the producers

or by law. It is based on factors like texture, flavour, weight, appearance size and


other physical feature depending on the nature of the product.

PRICE MIX:-

Price is a major marketing tool and help in directing the product to a specific

customer segment. Price is the value of product expressed in terms of money. Price is

a powerful instrument in which both the buyers and sellers are keenly interested.

Variables:-

1. The pricing policies and strategies:

The price policies and strategies are the guidelines and framed within which

management administers prices so as to match them to the market needs. These

policies can be broadly identified as policies involving price variables geographical

price policies, policies involving price differentials or leadership imitation and

policies involving psycho of consumers.

2. Terms of credit

Credit, by expanding a market, can make a new firm, of production

economically worthwhile. The modern business is built up and expansion is based on

credit. No firm can think of surviving without this credit .It is a means of sales

promotion. Its significance is in its contribution to efficient selling.

3. Terms of delivery

Delivery of the goods to the dealers, to the middle men and customers is also

vital importance. Clear cut policies are to be spelled out regarding the terms of

delivery, time and place of delivery and the conditions of valid delivery.

4. Margin

Margin here refers to the difference between the final price paid by the

consumers and the total cost incurred in making available to him the product or

service. This includes margin of retailer, wholesaler and the producer.

The quoting of price is a very sensitive matter of marketing because the

consumer attitude influenced more by price of Products. The manufacturers of this

product are very few, so price quoted is in satisfactory manner for Products. The


terms of credit are available for short period. The delivery of product through agents

and also direct delivery to consumers who have placed their orders. It has simple

channel of distribution. Hence it requires smaller expenditure on intermediaries.

PLACE MIX

Place mix stands for the matching arrangement for the smooth flow of goods

and services from the producers to the consumers.

Variables:-

1. Transportation

A selection is to be made of the most efficient, economical and dependable

mode of transport for the firms Products taking into account roads, and motor trucks.

It is known fact that transport is creating place utility that widens market and

marketability for the Products of the firms.

2. Warehousing

Warehousing has its own place in distribution of goods that creates time utility

by adjusting supply and demand, preserving conditioning the product and obtaining

more favorable demand and Market price.

3. Inventory Levels:-

Merchandising is responsible not only for what to make available but also how

much to produce sufficient inventory must be on hand of different sizes, models and

varieties to make immediate shipment upon the receipt of orders.

PROMOTION MIX:

Promotion mix is the communication mix which deals with the personal and

impersonal persuasive communication about the product or services of the

manufacturer.


Variables:-

1. Advertising

Advertising is a very popular method of impersonal communication using a

wide variety of media vehicles. These Medias are indoor, outdoor, and display

advertising.

2. Sales Promotion:

It is the achievement of short-term marketing objectives. It is the function in

marketing of providing inducements to buy, offered for a limited period only, at the

time and place the purchasing decision is made, which are supplementary to a

Products nominal value.

3. Trade fairs and exhibitions:

An exhibition is the huge congregation of manufactures and dealers under a

single roof for displaying, demonstrating and selling their Products. On the other

hand, a trade fair is a mammoth gathering of prospects arranged by manufacturers and

dealers where fun and frolic and entertainment are prominent.

4. Public relations:

It involves the installation and maintenance of mutual understanding between

a firm and whole society likely to come in contact with it. These sections of society

are customers, shareholders, administrator’s staff and general public. It is the art and

science of developing reciprocal understanding and good will......

The promotion plays a vital role in marketing but in this product very less

expenditure on promotion activities. It just want awareness about the Products, its

purely hygienic and bio-degradable one everyone accepts that type of goods to avoid

the use of plastic. The brand and package is an important aspect to promote the

Products in a better way. It needs not want the advertising, sales persons, distributors

etc. as required in FMCG’s, because of few manufacturers of a product.


CHAPTER-6

CONSUMER SURVEY ANALYSIS

KOF OIL PRODUCTS happen to be a new product line recently launched in

the market. To ascertain the views and reactions of consumers and market potential

for KOF OIL PRODUCTS, a consumer survey was undertaken in Chitradurga City.

The sample size of consumers selected was 25. A structured questionnaire was served

to respondents to collect the required information. The survey data has been analysed

to a arrive at the conclusion regarding the response towards KOF OIL Products. For

the purposes of meaningful analysis of data, necessary tables have been prepared and

for easy and simple understanding charts have also been used. Following is the

outcome of survey analysis.


ANALYSIS AND INTERPRETATION

TABLE-1

CLASSIFICATION OF RESPONDENTS ON THE BASIS OF AGE

GROUP:

Age group (in years) No.of respondents Percentage

Below 20 3 12

20-30 10 40

30-40 5 20

Above 40 7 28

Total 25 100

Source: Survey data

Below 20 20-30 30-40 Above 40 Total0%

10%20%30%40%50%60%70%80%90%

100%

3 10 5 7 25

12 40 20 28 100

Series1 Series2

Interpretation:

The above table shows that 12% of the respondents are below 20

years of age, 40% are in the age group of 20-30 years, 20% are in the age


group of 30-40 years and the remaining 28% are in the age group of

above 40 years.

TABLE-2

CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

OCCUPATION:

Occupation No.of respondents Percentage

Business 9 36

Agriculturist 9 36

Professional 4 16

Others 3 12

Total 25 100

Source: Survey data

18%

18%

8%6%

50% BusinessAgriculturistProfessionalOthersTotal

Interpretation:


According to the above table 36% of the respondents are

businessmen, 36% are agriculturist, 16% are professionals and 12% are

others like students, Government employees etc.


TABLE-3


ANNUAL INCOME (Rs.):

Annual income (Rs.) No.of respondents Percentage

Below Rs.50000 7 28

Rs.50000-100000 3 12

Rs.100000-200000 11 44

More than Rs.200000 4 16

Total 25 100

Source : Survey data

Below Rs.50000

Rs.50000-100000

Rs.100000-200000

More than Rs.200000

Total

0 20 40 60 80 100 120 140

7

3

11

4

25

28

12

44

16

100

Series1 Series2

Interpretation:

As per this table, of the 25 respondents, 28% are having an annual

income of below Rs. 50000, 12% have Rs.50000-100000, 44% have

Rs.100000-200000, and 16% have above Rs.200000 as annual income.


ABLE-4


SOURCE OF INFORMATION:

Source of information No. of respondents Percentage

Relatives 9 36

Friends 10 40

Television 5 20

Others 1 4

Total 25 100

Source: Survey data

18%

20%

10%2%

50%

18%

20%

10%2%

50%

Relatives Friends Television Others Total

Interpretation:

The above table shows the source of information about the KOF

OIL PRODUCTS and related PRODUCTS, of the respondents, 36%

came to know about the KOF OIL Product Sthrough relatives, 40%


through their friends, 20% through TV channels and 4% through others

like retailers etc.


TABLE-5

CLASSIFICATION OF RESPONDENTS ON THE BASIS OF INFLUENCING FACTOR OF KOF OIL PRODUCTS:

Influencing factor No. of respondents Percentage

Quality 19 76

Price 3 12

Packaging 1 4

Attractiveness 2 8

Total 25 100


Quality Price Packaging Attractiveness Total0%

10%20%30%40%50%60%70%80%90%

100%

Series1 Series2

Interpretation:

The above table shows that 76% of respondents are influenced

purchase of KOF OIL PRODUCTS by its quality, 12% by price, 4% and

8% of respondents are influenced by packaging and attractiveness of

KOF oil products respectively.


TABLE-6


OPINION ABOUT PRICE OF KOF PRODUCTS:

Price opinion No.of respondents Percentage

High 3 12

Low 2 8

Reasonable 20 80

Total 25 100


6%4%

40%

50%

High LowReasonableTotal

Interpretation:

From the above table it is clear that 12% of the respondents

consider price as high, 8% as low and 80% of respondents as reasonable.


TABLE-7


OPINION ABOUT QUALITY:

Quality opinion No.of respondents Percentage

Satisfactory 24 96

Unsatisfactory 1 4

Total 25 100


Satisfactory Unsatisfactory Total0

10

20

30

40

50

60

70

80

90

100

Axis Title

Interpretation:

According to the above table 96% of the respondents are satisfied

with the quality of KOF OIL PRODUCTS and 4% are not satisfied with

the quality of KOF oil products.


TABLE-8


OPINION ABOUT AVAILABILTY OF KOF PRODUCTS:

Manufacturer service No.of respondents Percentage

Easy 4 16

Average 13 52

Difficulty 8 32

Total 25 100


Easy Average Difficulty Total0%

10%20%30%40%50%60%70%80%90%

100%

Series1 25

Series2 100

Axis Title

Axis Title

Interpretation:

The above table shows that of the respondents, 52% consider the

Availability as average, 32% as difficulty and 16% as easy.


TABLE-9


PERIOD OF USE:

Period of use No.of respondents Percentage

Below 1 year 5 20

1-2 years 14 56

2-3 years 5 20

Above 3 years 1 4

Total 25 100


10%

28%

10%

2%

50%

Below 1 year1-2 years2-3 years Above 3 yearsTotal

Interpretation:

As per the table, of the respondents, 56% are using the KOF OIL

PRODUCTS from the last 1-2 years, 20% each for less than a year and

for 2-3 years respectively and 4% for more than 3 years.


TABLE-10


COMPARISON OF QUALITY OF KOF OIL PRODUCTS WITH

OTHER OIL PRODUCTS:

Compared to Other Oil Products

No. of respondents Percentage

Excellent 11 44

Good 13 52

Average 1 4

Total 25 100


22%

26%

2%

50% ExcellentGoodAverageTotal

Interpretation:

The table shows the reaction of respondents to KOF OIL Products

as compared to other oil products, 52% of the respondents felt KOF OIL

Products as good, 44% as excellent and 4% as average.


TABLE-11


OCCASION OF USING KOF OIL PRODUCTS:

Occasion No.of respondents Percentage

Festival 3 12

Marriage 2 8

Birthday 1 4

Daily Usage 19 76

Total 25 100


6% 4%2%

38%

50%

Festival Marriage Birthday Daily Usage Total

Interpretation:

The table states that 12% of respondents use KOF OIL Products

on festivals, 8% on the occasion marriages, 4% on the occasion of

birthday and 76% on daily Usage.


TABLE-12


OPINION OTHER THAN KOF OIL PRODUCTS:

Other Products No.of respondents Percentage

Akshatha 2 8

Safolo 5 20

Gold winner 8 32

Gemini 10 40

Total 25 100


Akshatha

Safolo

Gold winner

Gemini

Total

0 20 40 60 80 100 120 140

Interpretation:

As per table 10 respondents are using Gemini, 8 customers are gold winner, 5 are safolo and 2 are using akshatha.


TABLE-13


OPINION ABOUT PURCAHSE OF KOF OIL PRODUCTS:

Kof Products No.of respondents Percentage

Sunflower 8 32

Sunshudh 2 8

Rice rich brand 5 20

Suguna palmolin 10 40

Total 25 100


Sunflower Sunshudh Rice rich brand

Suguna palmolin

Total0

20

40

60

80

100

120

140

Interpretation:

As per table 40% of the respondents are using Suguna Palmolin,32% as sunflower, 20% rice rich brand and 8% using sunshudh.


TABLE-14


OPINION ABOUT CONSUMER PACKS OF KOF OIL

PRODUCTS:

Consumer packs No.of respondents Percentage

Half ltr pouch 2 8

One ltr Pouch,Pet Bottle

10 40

Five ltr jerry cans 8 32

Fifteen kg tins 5 20

Total 25 100


Half ltr pouch One ltr Pouch,Pet

Bottle

Five ltr jerry cans

Fifteen kg tins Total0

20

40

60

80

100

120

140

Interpretation:

As per table, the 40% respondents are prefer to one ltr pouch pet bottle, 32% as five ltr jerry cans, 20% as fifteen kg tins and 8% as half ltr pt bottle.


CHAPTER-6

FINDINGS, SUGGESTIONS AND CONCLUSIONFindings:

1. Most of the know about the KOF oil products from their friends because of

lack of advertisement.

2. A KOF oil product is preferred by the people because of its good quality.

3. It has been found that price of the products is reasonable.

4. KOF oil products have made many of the people satisfied by its quality.

5. Thirteen customers felt that availability of products is average.

6. People are much happy with the quality of the product compared to other

products.

7. Nineteen respondents use KOF oil products as daily usage.

8. Palmolion is accepted by most of the people, where as sunshudh oil product

are not up to the mark and it is least preferred by the people.

9. It’s found that ten customer preferred to purchase one ltr pouch pet bottle

because of the cost advantage they get.

OTHER FINDINGS

1. The reputation of the company in community is good.

2. According to survey it is found co-operatively that the company treats

employees fairly well.

3. The employees often feel heavy about their work.

4. Most of the employees feel satisfied with the working conditions.

5. There is a good relation between employees and the higher officials of the

company.


SUGGESTIONS

1. The company should embark on a promotional campaign with concentration

on field promotion rather than media. Such has cutouts, pop displays,

hoardings, pomp lets etc.

2. Advertising message should concentrate on attracting women's as much as

possible.

3. The quality should be maintain at the same or high level.

4. Production & packaging unit should be increased in various branches, which In turn reduces prices of the PRODUCTS.

5. As people are much satisfied with quality, maintain the same.

6. The company has to strengthen its presence among retails outlets so that

maximum reach can be attained. This requires formulation of dealer schemes

to involve them in the affairs of the company.

7. Usually in big occasions, people prefer large quantity with low price so

quantity can be increased by reducing price.

8. Production of palm oil is should be increased as it is preferred by number of

respondents.

9. The awareness level of Sunshudh is not good hence the company should

concentrate on aggressive advertisement & sales promotions.

10. As customer want one ltr pouch pet bottle more, company should concentrate

on producing those bottle in large quantity by this company can get the

economics of sale(cost of production reduced )

11. Very important of all is their marketing department function that is it has to

good advertisement & builds brand awareness in the market.

12. Sales promotion activities should be introduced which influence sales such as,

gifts, prizes, sales contests etc.

13. Value engineering should be encouraged . It is a technique adopted to evolve

cheaper Products by substituting costly raw materials without sacrificing the

quality of Products.


CONCLUSION

Private sector units will have to resort to quality improvement techniques & get

more interested in what the customer wants rather than what the company can after in

order to retain their customer base &get new customers. Edible oil industry facing

many problems all these problems also affect the marketing activities of various

companies. The problems low output, high import duty on raw materials, adversely

affect the prices of the PRODUCTS.

It is already known that the price is the deciding factor to purchase the product

apart from various other factors. Though the company may be having alternative

feature but it ,is found that most of consumer is not aware of the existing feature due

to illiteracy, negligence etc. A branded product ultimately decided based on

consumer preference, perception & influencing factors etc.

If the problems of industry cannot be resolved then it is difficult to companies

to adjust their marketing activities to consumer expectation.


“LEARNING EXPERIENCE”

Exposure at KOF Oil Industry for a month gave me a new experience of

corporate world changed my view point about PSU s as to rigidness, non-

cooperation,

Management with a human touch’ can be made out by the facilities gives by

the company. It may be perks quarters, health services safety & transportation

services for all the employees.

Social responsibility’ is followed with a great spirit. The KOF oil industry has

adopted only challakere, Bijapur, surrounding areas, Tumkur & Davangere.

The Green Look’ at KOF OIL Industry pleases anybody to work there.

Good working conditions with high quality machineries and equipments

where quality of work can be recognized by the performance.

Staff employees and other workers are very responsive at the time of seeking

information during project.

Systematic arrangement of transportation vehicles in companies slot was very

interesting.

Company is far from city where disturbance and political interference was

avoided.

Duties of employees and workers are encouraged and motivated by top

management and sub ordinates.


Company is very ethical and follows fair business in all kinds of business

affairs.

Good working conditions in which staff employees manage business activities

systematically.

Time scheduling can be noticed for distribution of work on the basis of talents

and skills of employees and workers.


QUESTIONNAIRE

Dear sir/madam,

I am DHARSHINI.B.B. Student of Final year M.com, Govt First

Grade College, Hosadurga. As part of our academic syllabus, I have

undertaken the project work of “MARKETING OF PRODUCT OF KOF”.

I kindly request you to answer the following questions as accurately as

possible.

The information provided below will be used only for academic purpose.

Thanking you,

Yours faithfully,(DHARSHINI.B.B.)


Name: ____________________________________

Address: ___________________________________

___________________________________

___________________________________

Contact No:________________________________

1. . Age group: (in yrs)

a) Below 20 years [ ] b) 20-30 years [ ]

c) 30-40 years [ ] d) above 40 years [ ]

2. . Occupation:

a) Business [ ] b) Professional [ ]

c) Agriculturist [ ] d) others, specify___________

3. . Annual Income (In Rs):

a) Below Rs50, 000 [ ] b) Rs50,000-1,00,000 [ ]

c) Rs1, 00,000-2, 00,000 [ ] d) More than Rs2, 00,000 [ ]

4. . Do you know about areca KOF oil PRODUCTS

a) Yes [ ] b) No [ ]

(If yes, please continue)

5. . How did you come to know about KOF oil PRODUCTS

a) Relatives [ ] b) Friends [ ]

c) Television [ ] d) If any other, specify_________

6. . Which factors influences you to purchase KOF oil PRODUCTS

a) Quality [ ] b) Packaging [ ]

c) Price [ ] d) Attractiveness [ ]


7. What is your opinion about the price of KOF oil Products?

a) High [ ] b) Low [ ] c) Reasonable [ ]

8. What is your opinion about the quality of KOF oil Products?

a) Satisfactory [ ] b) Unsatisfactory [ ]

9. Your opinion at availability (supply) of KOF Products?

a) Easy [ ] b) Average [ ] c) Difficulty [ ]

10. From, how long you are using KOF oil Products?

a) Below 1 year [ ] b) 1-2 years [ ]

c) 2-3 years [ ] d) Above 3 years [ ]

11. Compared to quality of other oil Products, KOF Oil products are?

a) Excellent [ ] b) Good [ ]

c) Average [ ] d) Poor [ ]

12. On what occasion, KOF oil Products have been used?

a) Festival [ ] b) Marriage [ ]

c) Birthday [ ] d) Daily usage [ ]

13. Do you plan to use any other Oil company Products

a) Yes [ ] b) No [ ]

If yes, name the plate you would like to use______________________________________

14. Which product do you prefer other than KOF?

a) Akshatha [ ] b) Safolo [ ]

c) Gold winner [ ] d) Gemini [ ]


15. Which product do you purchase in KOF products?

a) Sunflower [ ] b) sunshudh [ ]

c) Rice rich brand [ ] d) Suguna Palmolin [ ]

16. Are you satisfied with packing of KOF products?

a) Good [ ] b) excellent [ ]

17. Which available consumer packs do you prefer in KOF oil products?

a) Half ltr pouch [ ] b) one ltr pouch pet bottle [ ]

c) Five ltr jerry cans [ ] d) Fifteen kg tins [ ]

18. Would you recommend the KOF oil Products to your friends or relatives?

a) Yes [ ] b) No [ ]

If No, please give the reasons

______________________________________

19. . Do you have any suggestions to the firm to improve the KOF oil Products

_____________________________________________________

______________________________________________________

______________________________________________________

Suggestions if any please specify:-______________________________________________

______________________________________________

______________________________________________

Thanks for your kind co-operation and spending your precious time.

Date :

Place : Signature of the respondent.


BIBLIOGRAPHY

Annual REPORTS Prepared by company

Demand survey studies report on edible oil extracts.

Economic Survey Report Prepared by ministry of finance

References

Human Resource Management by K.Ashwathappa Production and Operation management by

K.Ashwathappa Marketing Management by Philip Kotler

Website

WWW.Google.Com

http://WWW.Google.Com/

kof

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