Impact of Culture, Sub-culture and buying pattern on Edible oil Industry in India
INTRODUCTION
Indian culture and edible oil scenario
Edible oil has been a crucial part of Indian cooking having generous to modest
usage; as the Indian inhabitants prefer profuse to moderate spicy meals and
cuisines. Indians have developed diverse food habits, tastes, and preferences
due to the impact of many religions, cultures, and subcultures. Geographical
regions and religions are essential in the formation of sub-culture. The
preference of individuals who live very close to each other can be different.
Individuals belonging to different regions have different subculture values,
attitudes and social structures of the members of other sub-culture. These
differences, subcultural segmentation of the market activity has made an
important variable1. Although, oil is one of the major commodities consumed
in every household kitchen; health consciousness among the metro households
has altered its usage by the edible oil type, namely, refined or filtered (kachi
ghani) and the number of nutrients the edible oil encompasses2.
With advent of new innovations, changes in taste likes and dislikes related to
food items; consumers’ behavior keeps on changing frequently as the edible oil
is an important element household cooking3. In a highly fragmented Indian
edible oil industry, marketers of edible oils need to keep abreast of consumers’
tastes, forestalling the consumer preferences, vis-à-vis envisaging what
products/brands of edible oil would they opt for, from those available in the
market4. The marketers devise their marketing strategies for edible oil based on
the backdrop of Indian culture & subculture which is strongly entrenched in the
consumer psyche, and amidst changes in the social environment. Each year,
India consumes over 10 million tons of edible oils5. The importance of edible
oil in our daily diet was well recognized by our ancestors; as a result, it became
a part of our food. Oils and fats are basically esters of glycerol and fatty acids.
The fatty acids may be either saturated or unsaturated6. Conventionally, Indians
use two types of edible cooking mediums, namely vegetable oils and vegetable
ghee; wherein, the first cooking medium - vegetable oil - was extracted from the
seeds, like, groundnut, sesame, mustard, rapeseed, sunflower, etc. while the
inhabitants of Gujarat, Maharashtra, Andhra Pradesh, and Karnataka use
groundnut oil as a prime medium of cooking oil, the inhabitants of Tamil Nadu
use groundnut and sesame oil, whereas, North Indian inhabitants prefer
mustard/rapeseed oil, sesame oil or sunflower oil; while coconut oil is
extensively used in the state of Kerala, as Kerala being the number one state in
production of coconuts. Mustard, sesame, groundnut and coconut oils were
traditionally extracted through bullock-driven (wooden) cold presses, called
“kachi ghani” that extracted oils at the temperature below 480~500 Celsius,
which was the normal heat produced through friction.
Impact of Culture, Sub-culture and buying pattern on Edible oil Industry in India
The share of raw oil & refined oil in the total edible oil market is respectively
42.0% and 42.7% as per the Department of Food & Public Distribution6. At one
end, the affluent class uses virgin or extra virgin oil (price band Rs. 590/- ~ Rs.
896/- per liter), on the other end, the poor or lower class, which is a major class
in India, primarily uses palmolein oil (price band Rs. 40/- to Rs. 55/- per liter)2.
Newer oils, which were not known before have entered the kitchen, like those
of cottonseed, sunflower, palm oil or its liquid fraction, polyolefin, soybean, and
rice bran. All of them are again essentially bland, processed edible oils6.
Defining Consumer in the Current Scenario
Today’s Indian Urban customers are some of the most confident in the world.
They are value conscious, demanding and evolving bunch of buyers. They are
more experimental and willing to try out new products. One can witness this
with the growth and entry of foreign brands, like Wagga Wagga edible oil from
Australia. Their focus if shifting from regular FMCG products of soaps, edible
oils, creams to health and wellness product like Olive oils, Sugar substitutes,
Breakfast Cereals7. Today, the organized sector in Indian edible oil business
has emerged as one of the fastest growing sectors in recent times creating
branded oil sales, leaving a larger number of product choices before consumers
to choose from. Consumers are now able to compare many features such as
quality, price, and value for money, absorption capacity, brand image, etc. to
decide which product they want to buy for their need satisfaction8. The
consumption is a normal process that goes on from birth until death of any
animal, including a human being. An individual accomplishing the act of
consumption is referred to as the “consumer”. Currently, urban India accounts
for 66% of total FMCG consumption, with rural India accounting for the
remaining 34%9. In the above context, an attempt has been made to understand
as to how consumer buying pattern and culture & subculture results in
influencing the purchase decision of urban Indian households for branded edible
oils in urban India.
Role of Buying Pattern, Culture & Subculture Role of Consumer buying
Pattern in Changing the Purchase Decision of Urban Indian households for
Branded Edible Oil
Dawson and Boroadbridge (1988) have stated that as the economy and society
has changed over the years, the
consumer buying pattern has also changed, and so the retailers’ response, and
enormous alteration in the shopping as an activity10. There are incidences of
depleting asset base, reduction in savings, increased expenditure on education,
increased liabilities due to various types of loans an average urban household
has, which has impacted the consumption pattern of provisions vis-à-vis edible
Impact of Culture, Sub-culture and buying pattern on Edible oil Industry in India
oils amongst the Indian middle-class households11. Socio-cultural factors such
as religion, beliefs, food preferences, gender discrimination, education and
women’s employment all have a noticeable influence on food consumption
patterns in this region. Mass media, especially televised food advertisements,
play an important role in modifying dietary habits12. As stated by Neeraj
Kaushik& Deepak Gupta (2009) in their article, quality and price were found to
be the most important criterion for buying patterns in cosmetics, the same
factors have also been found to have an influence on the consumption pattern of
edible oil in urban Indian households13. The buying frequency of people was
observed to be a daily basis for a chocolate bar and milk, while items like edible
oil, bath soap and shampoo being purchased on weekly or monthly basis14.
(Brown et.al., 2000; Davis and Smith, 2004) have emphasized the need for
nutritional awareness, and the rise of disposable income which has led to fast
food preferences of young consumers in Malaysia; similarly, the Indian urban
households are also giving importance to the nutritional values of the edible oils
they consume15.
Role of culture & subculture as one of the key demographic variables in
changing the purchase decision of urban Indian households for branded edible
oil As per Jablonski (2012), cultural factors have a significant impact on
customer’s buying decision. Culture involves society’s thoughts, words, their
traditions, language, materials, attitudes, and feelings. One of the elements that
make culture is beliefs. Beliefs of the people in a community can show
similarities. One market segment that is breaking down cultural and global
boundaries in an unprecedented way is the urban segment. The urban segment is
a unique and diverse blend of ethnicities that is heavily influenced in tastes,
attitudes, which may influence the purchase decision of customers for edible
oils.
Consumer’s Buying Pattern
While investigating on consumers’ buying patterns Ehrenberg et.al. (1986,
1990, 1994, and 1995) have systematically identified several regularities
amongst which, some of the significant ones are: i) only about 10% of
consumers are 100% loyal to one brand over repeated purchases; ii) consumers
tend to show brand repertoire comprising of 3-4 brands among which they make
their choices; iii) every brand possesses a small share of 100% loyal consumers;
iv) each brand’s market share is distinct from that of other brands; v) an average
amount of product bought by consumers across repeated purchases shows little
variation, despite the brand they buy; vi) the number of purchases per period
(e.g.- 1 year) tend to be stable and similar for all brands; and vii) 100% brand
loyal consumers are not necessarily heavy buyers.
Impact of Culture, Sub-culture and buying pattern on Edible oil Industry in India
Questions
1. What are your observations on the influence of culture & subculture on
the buying behaviour of consumers of edible oil in India.
2. What are the buying patters and inferences you can derive from the above
case study for edible oil market in India.
