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Group - 01 Kalpesh Agarwal  - PGPM508_01 Sivaram Gunavel  - PGPM508_12 Chetan Mahindra  - PGPM508_23 Manish Raj  - PGPM508...
<ul><li>India – fourth largest edible oil consuming economy after USA, China and Brazil </li></ul><ul><li>India accounts f...
 
<ul><li>Extreme variation in consumption. The country’s top 10% of the population consumes 20 kg per capita and the bottom...
Edible Oils 12.7 million MT Oils 11.2 million MT Vanaspati 1.5 million MT
<ul><li>Semi-Processed and Processed </li></ul><ul><li>Ready to Eat and Snack food </li></ul>Competitors Players National ...
<ul><li>Highly fragmented industry </li></ul><ul><li>Over 600 oil extraction units, 166 Vanaspati manufacturing units - on...
 
 
 
<ul><li>Inputs </li></ul><ul><li>Edible Oils - Oilseeds (such as Groundnut, Sesame, Mustard, Sunflower), oil cakes and bra...
<ul><li>Oils: primarily a  commodity market  - price sensitive </li></ul><ul><li>Effective  distribution chain  - through ...
<ul><li>Oils and Vanaspati substitutes can be freely imported under OGL  </li></ul><ul><li>Large scale imports of oils and...
<ul><li>Demand </li></ul><ul><li>Macroeconomic factors: Population; per capita income; purchasing power; oilseeds </li></u...
 
<ul><li>Social: </li></ul><ul><li>Consumers </li></ul><ul><li>Increase in per capita income and population </li></ul><ul><...
<ul><li>Political </li></ul><ul><li>Liberal policies for edible oil imports </li></ul><ul><li>Imports of all edible oils w...
 
<ul><li>Oil accounted for one of the highest monthly cash outlay in a typical household </li></ul><ul><li>Consumer was ext...
<ul><li>Most brands positioned on taste </li></ul><ul><li>Shots of “Happy family enjoying food” used across advertising </...
 
<ul><li>Income </li></ul><ul><ul><li>High – catering to highly health conscious market segment. Eg. Premium branded vegeta...
<ul><li>Taste & Odor </li></ul><ul><ul><li>High pungency mustard oil. Eg. Kachi Ghani </li></ul></ul><ul><ul><li>Nutty fla...
<ul><li>“ Sehat se jeena hai” </li></ul><ul><li>Positioned on a “preventive platform” </li></ul><ul><li>Saffola had always...
<ul><li>“ Healthy Oil for Healthy People” </li></ul><ul><li>Competitor Saffola (Safflower oil) used the health platform bu...
<ul><li>“ Fortune Hai Light. Thoda Aur Chalega” </li></ul><ul><li>Products  </li></ul><ul><li>Fortune (sunflower, kachi gh...
<ul><li>http://www.a meft.com/ </li></ul><ul><li>http://www.n caer.org/ </li></ul><ul><li>http://www.e rs.usda.gov/ </li><...
 
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Marketing Edible Oil Industry Slide 1 Marketing Edible Oil Industry Slide 2 Marketing Edible Oil Industry Slide 3 Marketing Edible Oil Industry Slide 4 Marketing Edible Oil Industry Slide 5 Marketing Edible Oil Industry Slide 6 Marketing Edible Oil Industry Slide 7 Marketing Edible Oil Industry Slide 8 Marketing Edible Oil Industry Slide 9 Marketing Edible Oil Industry Slide 10 Marketing Edible Oil Industry Slide 11 Marketing Edible Oil Industry Slide 12 Marketing Edible Oil Industry Slide 13 Marketing Edible Oil Industry Slide 14 Marketing Edible Oil Industry Slide 15 Marketing Edible Oil Industry Slide 16 Marketing Edible Oil Industry Slide 17 Marketing Edible Oil Industry Slide 18 Marketing Edible Oil Industry Slide 19 Marketing Edible Oil Industry Slide 20 Marketing Edible Oil Industry Slide 21 Marketing Edible Oil Industry Slide 22 Marketing Edible Oil Industry Slide 23 Marketing Edible Oil Industry Slide 24 Marketing Edible Oil Industry Slide 25 Marketing Edible Oil Industry Slide 26 Marketing Edible Oil Industry Slide 27 Marketing Edible Oil Industry Slide 28
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Marketing Edible Oil Industry

It describes the Edible oil Industry from marketing perpective.

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Marketing Edible Oil Industry

  1. 1. Group - 01 Kalpesh Agarwal - PGPM508_01 Sivaram Gunavel - PGPM508_12 Chetan Mahindra - PGPM508_23 Manish Raj - PGPM508_35 Jaspal Singh - PGPM508_47
  2. 2. <ul><li>India – fourth largest edible oil consuming economy after USA, China and Brazil </li></ul><ul><li>India accounts for 9.3 % of world oilseed production </li></ul><ul><li>Production of oilseeds and edible oil is far below the requirement </li></ul><ul><li>In 2007-08, the country could produce only about 8.2 million MT of edible oil, 35-40% of the demand had to be met by imports, implying heavy reliance on imports </li></ul><ul><li>High penetration of 90% in India </li></ul>Edible Oils Vanaspati National Dairy Development Board (Anand) Hindustan Lever (Mumbai) ITC Agro-Tech (Secunderabad) Wipro (Bangalore) Marico Industries (Mumbai) Rasoi (Kolkata) Ahmed Mills (Mumbai) Avi Industries (Mumbai Adani Wilmar (Mundra Port)
  3. 4. <ul><li>Extreme variation in consumption. The country’s top 10% of the population consumes 20 kg per capita and the bottom 30%, less than 5 kg per capita </li></ul><ul><li>Strong regional preference for ‘first press’ oils with natural flavour – mustard, groundnut, coconut oils </li></ul><ul><li>Erosion of self-reliance in edible oils and rising dependence on imports. </li></ul>Per capita consumption of edible oil (year wise)
  4. 5. Edible Oils 12.7 million MT Oils 11.2 million MT Vanaspati 1.5 million MT
  5. 6. <ul><li>Semi-Processed and Processed </li></ul><ul><li>Ready to Eat and Snack food </li></ul>Competitors Players National Dairy Development Board – Dhara Adani Wilmar Ltd – Fortune Agrotech Foods Ltd – Sundrop Hindustan Lever Limited – Flora Panak Foods – Gemini Ruchisoya – Soyum Marico Indus. – Saffola Kaneria Oils – Rani Geepee Ceval – Chambal NK Proteins Ltd – Tirupati Aravali – Aravali Cargill – Nature Fresh
  6. 7. <ul><li>Highly fragmented industry </li></ul><ul><li>Over 600 oil extraction units, 166 Vanaspati manufacturing units - only 10 edible oil units and 8 Vanaspati units have national reach </li></ul><ul><li>Over 50% of the units - sick or  under utilised due to surplus capacity </li></ul><ul><li>Idle capacities among these units due to shortage in feedstock supply </li></ul><ul><li>Major oil brands - Sundrop, Dhara, Saffola, Sweekar, Fortune </li></ul><ul><li>Vanaspati brands - Dalda, Rath </li></ul><ul><li>Market Size </li></ul><ul><li>Edible oils and Vanaspati markets – 12.7 million MT </li></ul><ul><li>Oils market growing at 8.7% CAGR </li></ul><ul><li>Installed CAPACITIES and Production – In MT / Year </li></ul>Vanaspati Edible Oil Capacity Production 2,720,000 990,534 30,368,000 6,250,000 Utilization 36% 21%
  7. 11. <ul><li>Inputs </li></ul><ul><li>Edible Oils - Oilseeds (such as Groundnut, Sesame, Mustard, Sunflower), oil cakes and bran </li></ul><ul><li>Vanaspati  - Minor (solvent extracted) edible oils - Sunflower oil,  Soybean oil,  Ricebran  oil </li></ul><ul><li>Raw Material </li></ul><ul><li>Comprises 70% of the production cost </li></ul><ul><li>Oilseeds - the largest cash crop </li></ul><ul><li>Poor productivity - 873 Kg/ hectare (global average of 2000 kg/ hectare) </li></ul><ul><li>Though oilseeds have 14.5% share in gross cropped area, only 25% of  it is under assured irrigation </li></ul><ul><li>Technology </li></ul><ul><li>Refining technology freely available indigenously </li></ul>
  8. 12. <ul><li>Oils: primarily a commodity market - price sensitive </li></ul><ul><li>Effective distribution chain - through a complex network of C&F agents, wholesalers / stockists & retailers (kirana shops, supermarkets) </li></ul><ul><li>Oil sold in bulk (tin, HDPE containers) to institutions; In retail packs (PET bottles, cans, jars, pouches) to small customers </li></ul><ul><li>Most vegetable oil is purchased by household or industrial buyers, food processors, restaurants and hotels. </li></ul><ul><li>Seasonal demand for oils & Vanaspati - September to November (peak season) </li></ul><ul><li>Regulation : Under the Edible Oils Packaging (Regulation) Order, 1998,  edible oils cannot be sold ‘loose’ but can be sold only in ‘packed’ form  </li></ul><ul><li>Oil consumption - North is largest market, followed by South, West & East zones </li></ul>
  9. 13. <ul><li>Oils and Vanaspati substitutes can be freely imported under OGL  </li></ul><ul><li>Large scale imports of oils and Vanaspati substitutes  - primarily to check price rise and meet supply shortages </li></ul><ul><li>Imports during 2007-08 is 5.46 million  MT  </li></ul><ul><li>Estimated imports by 2010 is 7 million MT  </li></ul>
  10. 14. <ul><li>Demand </li></ul><ul><li>Macroeconomic factors: Population; per capita income; purchasing power; oilseeds </li></ul><ul><li>Other factors: Prices – domestic/international, Availability - oil, oilseeds </li></ul><ul><li>Influence of branded products – ‘ health ’ message </li></ul><ul><li>Growing preference for convenience foods </li></ul><ul><li>Key Success Factors </li></ul><ul><li>Raw material sourcing:  focus on improving yields,  getting better quality oilseeds, ensuring regular supplies - through symbiotic relationship with farmer </li></ul><ul><li>Branding essential for success (Oils – Sundrop/Dhara/Sunflower, Vanaspati – Dalda) </li></ul><ul><li>Better distribution network to improve reach </li></ul><ul><li>Efficiency in operation - to become price competent and withstand competition </li></ul><ul><li>Proposed future trading in edible oils will help curtail price volatility and lend knowledge-based assistance to farmers to eliminate unofficial markets </li></ul><ul><li>Future </li></ul><ul><li>This industry is a high volume, medium growth sector characterized by excess/idle capacities owing to in efficient operations. Imports have been influencing prospects, leading to domestic industry crisis </li></ul>
  11. 16. <ul><li>Social: </li></ul><ul><li>Consumers </li></ul><ul><li>Increase in per capita income and population </li></ul><ul><li>Change in tastes and preferences </li></ul><ul><li>Increased Health consciousness and low-cholesterol cooking medium </li></ul><ul><li>Industry </li></ul><ul><li>Industry players – 60% - 70% are small refining units and so are unable to import huge quantities and may be forced to close down </li></ul><ul><li>Low capacity utilisation. The installed capacity is only 36 million tonnes annually but utilization is only 40%. </li></ul><ul><li>One of the most polluting industries in India </li></ul><ul><li>Technological: </li></ul><ul><li>Low productivity in the domestic oilseed sector </li></ul>
  12. 17. <ul><li>Political </li></ul><ul><li>Liberal policies for edible oil imports </li></ul><ul><li>Imports of all edible oils were also placed under Open General License (OGL) since April 2004 </li></ul><ul><li>The period from 1994 can broadly be divided into two distinct phases: </li></ul><ul><li>First between 1994 and 1998, when customs duty on edible oils progressively came down to reach a low of 15% in July 1998, </li></ul><ul><li>Second after 1999, when such duties witnessed a general upward trend to reach a high of 92.2% for refined palm oil in April 2005 </li></ul><ul><li>Free imports, low import duties & slump in global prices lead to dumping </li></ul><ul><li>Economic </li></ul><ul><li>Annual Rainfall in time and area under oilseed crop </li></ul><ul><li>Increase (decline) in Tariff increases the price and depresses (increases) the consumer surplus </li></ul><ul><li>Global oil prices fluctuations </li></ul><ul><li>While tariffs can increase producers’ revenue the actual impact on profit depends on oilseeds prices (which also increases) </li></ul><ul><li>Cost of raw materials. Raw materials cost is 70% of Sale price </li></ul>
  13. 19. <ul><li>Oil accounted for one of the highest monthly cash outlay in a typical household </li></ul><ul><li>Consumer was extremely price sensitive </li></ul><ul><li>Brand loyalty low </li></ul><ul><li>Desired tangible attributes: Taste, Quality, Health and Value For Money </li></ul><ul><li>Intangible promises: Healthy Family, Affection, Loving Mother, Great Cook </li></ul><ul><li>Target Consumer: 21-44 years old, modern, aware, educated housewife using refined branded groundnut oil, concerned about family well being </li></ul>
  14. 20. <ul><li>Most brands positioned on taste </li></ul><ul><li>Shots of “Happy family enjoying food” used across advertising </li></ul><ul><li>New oils such as Saffola, Flora positioned on health </li></ul><ul><li>Saffola had strong franchise of consumers with heart problems : seen as an oil for the unhealthy </li></ul><ul><li>Flora offering a promise of ‘light’ food </li></ul>
  15. 22. <ul><li>Income </li></ul><ul><ul><li>High – catering to highly health conscious market segment. Eg. Premium branded vegetable oils like sunflower oil, soya bean oil, PUFA oils </li></ul></ul><ul><ul><li>Medium – blended oils like sunflower & soya blend. Eg. Raag refined soya bean oil </li></ul></ul><ul><ul><li>Low – oil sold in loose. Eg. Bulk oil manufactured by local players </li></ul></ul><ul><li>Region </li></ul><ul><ul><li>North – Mustard, rape </li></ul></ul><ul><ul><li>South – Groundnut, coconut </li></ul></ul><ul><ul><li>East – Mustard, rape </li></ul></ul><ul><ul><li>West - Groundnut </li></ul></ul>
  16. 23. <ul><li>Taste & Odor </li></ul><ul><ul><li>High pungency mustard oil. Eg. Kachi Ghani </li></ul></ul><ul><ul><li>Nutty flavor - Eg. Groundnut oil </li></ul></ul><ul><ul><li>Coconut oil </li></ul></ul><ul><li>Usage </li></ul><ul><ul><li>As salad oil – used in Mayonnaise, salad dressing. Eg. Fortune refined cotton seed oil </li></ul></ul><ul><ul><li>For deep frying - Eg. Refined groundnut oil </li></ul></ul><ul><ul><li>For preservatives and traditional flavor – Eg. Mustard oil </li></ul></ul><ul><ul><li>For frying – Eg. Fortune Fryola especially used in hotels </li></ul></ul>
  17. 24. <ul><li>“ Sehat se jeena hai” </li></ul><ul><li>Positioned on a “preventive platform” </li></ul><ul><li>Saffola had always focused on the heart. The brand's image had suffered a setback in the early 2000s with the ambulance commercial, which portrayed that one had to rush to the hospital if he did not use Saffola. </li></ul><ul><li>As the overall health positioning failed, Saffola moved from the family health positioning, once again to the original heart care positioning in 2004 </li></ul><ul><li>In February 2004, Marico launched a fresh advertising campaign for Saffola after a gap of two years </li></ul><ul><li>Target Customers </li></ul><ul><li>Engage the young adults. “World Heart Day” used to appeal to them to bring their parents for a check up. This programme also gave us an opportunity to talk to these young adults about the preventive heart care for themselves. </li></ul><ul><li>Direct to Office Initiative : The busy executives and professionals all are looking for lifestyle interventions necessary to counter the stresses of personal and professional life </li></ul><ul><li>Direct to Consumer Programme, the low cal recipe demo and the lottery leveraging house wives interest areas </li></ul>
  18. 25. <ul><li>“ Healthy Oil for Healthy People” </li></ul><ul><li>Competitor Saffola (Safflower oil) used the health platform but was associated with heart patients and less taste. But Sundrop promised health without compromising taste </li></ul><ul><li>‘ Sundrop’ name chosen to cue category and purity </li></ul><ul><li>Finding the middle ground between ‘tasty’ oils and ‘healthy’ oils </li></ul><ul><li>Young, modern, premium feel </li></ul><ul><li>The Message of ‘Health’ </li></ul><ul><li>Was related to maintenance of good health </li></ul><ul><li>Was applicable to all members of the family </li></ul><ul><li>Was characterized by lively energetic people </li></ul><ul><li>Growth </li></ul><ul><li>Within 6 months, Sundrop became the largest selling refined sunflower oil </li></ul><ul><li>Redefined the category and expanded the Sunflower oil segment from 2.71% to 23% in 6 months, and 42% in 1997 </li></ul><ul><li>Still the largest selling sunflower oil brand holds 15% of branded oil market. </li></ul><ul><li>The ad was shown for over 10 year </li></ul>
  19. 26. <ul><li>“ Fortune Hai Light. Thoda Aur Chalega” </li></ul><ul><li>Products </li></ul><ul><li>Fortune (sunflower, kachi ghani) & Raag </li></ul><ul><li>Target </li></ul><ul><li>Different brands for different customer types - Fortune & Raag </li></ul><ul><li>Vitamin–E fortified sunflower oil to target Health conscious customers </li></ul><ul><li>What did they do? </li></ul><ul><li>Provided a mix of all elements like product differentiation, backward integration and entered market at the right time </li></ul><ul><li>Set up its oil refinery at Mundra, Mumbai </li></ul><ul><li>Decreased logistics & transportation cost </li></ul><ul><li>Decreased the time to market edible oil </li></ul><ul><li>The above factors helped shave off a rupee from the selling price of a litre of oil </li></ul><ul><li>Conducted health check-up programs for health conscious people </li></ul>
  20. 27. <ul><li>http://www.a meft.com/ </li></ul><ul><li>http://www.n caer.org/ </li></ul><ul><li>http://www.e rs.usda.gov/ </li></ul><ul><li>http://www. financialexpress.com/ </li></ul><ul><li>Report on oilseed and edible oil sector in India from TAER </li></ul><ul><li>http://www.indiaonestop.com/ </li></ul><ul><li>http://www.cseaofindia.com/ </li></ul>
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It describes the Edible oil Industry from marketing perpective.

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