PRICING STRATEGIES OF EDIBLE OIL
WITH FOCUS ON GREATER GHAZIABAD
Section C
Group 15
Aastha Anand
Atikant Jain
Faraz Zeeshan
Pramod Kumar
Sahil Kapoor
EDIBLE OIL
“Edible” refers to any substance that can be used as food, metabolized
to give energy and build tissue.
Oils are flammable substance and include animal and vegetable fats
which are sources of energy.
So edible oil can be defined as substance which can be used as food to
give energy to the body. They are used for cooking purposes.
Growth of Indian Edible Oil industry is 4-6% annually.
Edible oil is included under the FMCG sector.
The consumption of the Oil in the last fiscal year is worth $1.1 billion.
Major players in the market are Adani Wilmar Ltd., Marico, Agro Tech
Ltd. And others.
Market share
Marico (saffola)
15%
Agro Tech Ltd.
Others 13%
48%
Godrej Foods
11%
HLL (Flora)
Cargil 3%
12%
Types of Edible Oil
Vanaspati Rice bran Oil Coconut Oil
(Hydrogenated) (deep –frying) (Solid)
Groundnut oil Olive Oil
(Healthy for rural) (salad dressing)
Palm Oil Mustard oil
(high saturated fats) (pungent)
It all comes
down to this
Soyabean oil Sunflower oil
(PUFA for health) (all-purpose)
Rapeseed oil Argan oil
Safflower/Kardi oil
Corn oil Animal based oil
(Combination)
TOP SELLING EDIBLE OIL BRANDS
BRAND NAME COMPANY NAME
Saffola, Sweekar Marico
Fortune Adani Wilmar Ltd
Sundrop Agro Tech Foods Ltd
Dhara Mother Dairy
Dalda Bunge Ltd
Gemini, NatureFresh, Sunflower Cargill
Vanaspati, Sweekar, Leonardo and
Rath
Vimal Vimal Oil & Foods Ltd
Mahakosh, Nutrela, Ruchi Gold and Ruchi Soya Industries Ltd
Sunrich
Rasoya and Sunsafe Rasoya Protein Ltd
Ambuja Gujarat Ambuja Exports Ltd
Major Brands in Ghaziabad
Distribution Channel
K. R. Foods Limited
B- 16, Industrial Area, Bulandshahr Road, Ghaziabad, Uttar Pradesh 201009
Supplier and manufacturer of edible oil, refined oils, vanaspati
ghee
CARGILL INDIA PVT LTD purchases unrefined oil from the
neighboring countries such as Malaysia, Singapore, etc which is
refined in their oil refineries situated in Kandla, paradeep and
Pune. This refined oil is then distributed in various regions.
K.R. Foods Limited works as a jobber between CARGILL INDIA PVT
LTD (the manufacturing company )and the customers of Ghaziabad.
Various brands includes Leonardo range of olive oils, Gemini,
NatureFresh, Sweekar, Rath and Sunflower Vanaspati
Works on 3 level Marketing channel -- >
Contact Details:
Name : Anil Aggarwal
Ph. Number : 08265989863
Namaste India Foods Pvt. Ltd. ( NIF )
It is an Indian Dairy Company, the sister concern of 3500 Cr. RSPL Ltd.
Situated at Shivrajpur,31 km away from Kanpur Nagar provides the ghee products via road
to the Ghaziabad district
One of its prominent product is Namaste India Shudh Ghee
Sale representative is sent to small retailers and corresponding response to the
headquarters
Competitors decrease their products market price to attract the new customers – Oligopoly
Prices increases during the festivals such as Diwali when its demand increases
Available SKUs : 25 ml,200ml,500ml,1litre,15 kg
All these packs are packaged in 12 kg carton so 500ml product is packed in the quantity of
24 ( ½ * 24 = 12 Kg)
Package Size Price (Retail)
200ml [Tetrapack ] Rs 105
500ml [Tetrapack ] Rs 230
1 litre [Tetrapack ] Rs 400
15 Kg [ Tin ] -
Cost Comparison (1ltr.)
Cost Comaprison of Brands
120
100
80
60
Price INR
40
20
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Pricing Strategy : Saffola
Market segment:
Saffola is targeted towards middle and high end consumers who are health conscious.
Saffola is low on cholesterol and thus is suited for consumers whose jobs are not
physically demanding. When we talked to many of the retailers in Ghantaghar, all were of
the view that Saffola is being bought by people who are high end consumers and such
consumers were very few in Ghaziabad.
Manufacturing Cost:
Saffola is costlier because it offers a mix of safflower and rice bran oil whereas its
competitor like fortune contains rice bran primarily and cost associated with rice bran oil
is high.
Bundling of benefits:
Power of five antioxidants which help in reducing free radicals from the body.
Saffola Gold contains fatty acids to give you a balance of MUFA and PUFA.
Saffola Total offers the benefits of Multiseed Technology and Losorb Technology. Losorb
technology facilitates 10% lower absorbtion than olive oil.
Price objective:
Product Quality Leadership: Saffola is perceived as high on quality and targeted towards
high end users. Since very few people are consuming the product and it is high on cost, it
can be inferred that Saffola was perceived as a brand high on quality.
Pricing Strategy : Fortune
Market segment:
Targeted at common middle income people who are not inclined towards premium products and
want value for their money.
As per our discussion with a retailer at Ashok Kirana Store, people were not very conscious of
health use this brand.
Manufacturing cost:
Cost is low as they are manufactured in bulk and also cheaper than blending of different oils.
Bundling of benefits:
Rice Bran:
Promotes healthy heart
Keeps blood vessels clean
Provides balanced nutrition
Properties of anti-cancer substance
Refined fortune Soya Heath:
Light and odourless
Contains essential fatty acid-Omega 3
Price objective:
Maximum market share: They have set a low price. Higher sales volume will lead to lower unit
costs and higher long run profit. As per our discussion with retailers and distributors, profit
margin was very low around Rs 2-4 per litre. So it can be inferred that company is inclined
towards high sales.
Pricing Strategy : NatureFresh
Market segment:
They are also targeting middle income people who want value of their
money and want to be active and fresh for longer duration.
Bundling of benefits:
NatureFresh Acti-Lite refined oil makes a person active and light.
Gemini Oils is used in cooking of healthy foods and gives longer freshness.
Sweekar contains a blend of high Oleic sunflower oil for better heart.
Price objective:
Maximum market share: They have set a low price. Higher sales volume
will lead to lower unit costs and higher long run profit. Just like Fortune, it
is also inclined towards high sales.
Price Strategy : Manik
Market segment:
Targeted at local middle income people and those who have little
knowledge of brands and purchase oil by considering price factor
only .
Manufacturing cost:
Cost of manufacturing is low. It is a local brand and often sold to
retailers directly by the manufacturer thereby cutting logistics costs
because of less intermediaries and thus gives better profit margin.
Price objective:
Survival seems to be the pricing objective of Manik because increasing
prices may force consumers to look for other brands and there are lot
of popular brands competing for the market share.
Pricing Strategy : Ravindra
Market segment:
Highly prevalent in Dasna(a Kasba). Targeted at consumers who are
not aware of the other brands and are loyal to this brand. We even
talked to seven consumers in Dasna regarding their knowledge about
other brands. Two of them were of not aware of the brands like
fortune and five others were loyal towards Ravindra brand.
Price objective:
Maximum current profit: Since prices are high and costs associated is
not high and also intermediaries are less in the channel they seem to
be on the path of maximising profit by banking on rural consumers.
More Insights
Based on our market analysis we found that the customer’s buying behaviour is
dependent on following parameters
1) Income level
2) Brand Loyalty
3) Belief
Income Level
•Olive oil is bought by the people high on income level. The market price of olive oil
is around 4 to 5 times of other edible oil. Hence people buying olive oil in Ghanta
Ghar market ,Kirana Mandi and Turab Nagar market are very few. Most of the
shopkeepers do not keep olive oil due to the reason mentioned above.
•Soybean oil is mostly bought by the people belonging to the middle class section.
Hence it is the one of the best selling oil in the markets we visited.
•Palm oil is bought by the people low on income level. Hence small shops that make
biscuits or sweets are the major buyers of this oil.
Brand Loyalty
•Most of the people buy Fortune refined oil or Naturefresh oil which are
nationally known brands or local brands like Mahakosh and Manik.
•Even though Saffola is not a major player in Ghaziabad market ,people who are
health conscious or are suffering from heart diseases prefer to buy this brand.
The number of people buying this brand is very less.
Belief
•As per one of the retailer in Ghanta Ghar, the Muslim consumers are inclined
towards vanaspati more than any other product. The reason may be that most of
the mughlai dishes requires pure ghee to give taste to the product but as getting
pure ghee is too costly ,the consumers goes for the substitute (vanaspati) which
gives them the same taste and smell in their dishes.
•As vanaspati is thick and sticks within the stomach, people who are becoming
health conscious are leaving it and are slowly moving towards refined oil.
REFERENCES
Ashok Kirana Shore,417,kirana mandi,Ghaziabad
Mahroof Kirana Store,ward no 3,Dudhiya peepal wala road,Dasna ,Ghaziabad
Hariram Dharmpal Thok Vikretaa, 94, Govindpuram
[Link]
[Accessed on 09 September 2015]
[Link]
[Accessed on 09 September 2015]
[Link]
[Accessed on 09 September 2015]
[Link]
[Accessed on 09 September 2015]
Anil Agrawal, Area sales manager, K.R. foods ltd. Ph-08265989863
Kashif Kirana Store, Dasna
Haider Kirana Store, Dasna
Danish Kirana Store, Dasna
Shop no 5,173,133 Ghantaghar
Shop no 121, Kirana Mandi
Thank You…..
