A STUDY ON CONSUMER BRAND PREFERENCE ON THE

CONSUMPTION OF COOKING OIL OF VARIOUS INCOME GROUPS

IN CHENNAI

N. Rajaveni,
Asst. Prof. National Institute of Management studies & Research scholar, Management studies,
Sathyabama University, Chennai.

Dr. M.Ramasamy,
Dean(Academic & PG Studies) Madha Engineering College, Kunrathur, Chennai&
Research Supervisor, Sathyabama University, Chennai.

Abstract
Indian markets from low-involvement to high-involvement product categories have been
experiencing sweeping changes in the past decade. Changing lifestyles, fragmented market
segments and consumer preferences, and intense competition from the brands of
multinational corporations (MNCs) have made branding strategies a prerequisite for
marketing success. India has been going through radical changes in the marketing arena in
the last decade. Globalization in terms of multinational corporation (MNC) brands entering
Indian markets, the emergence of young professionals in urban areas, the opening up of
luxury and leisure markets, the impact of mass media and the influence of Westernization are
some of the critical aspects which have forced Indian marketers to adopt branding strategies.
These strategies have been formulated against the backdrop of an Indian culture which is
strongly entrenched in the consumer psyche, and amidst changes in the social environment.
Each year, India consumes over 10 million tonnes of edible oils. Edible oils have a high
penetration of 90% in India. However, per capita consumption of edible oils is around 11 kg
per year. The Indian edible oil market is the world’s fourth-largest after the USA, China and
Brazil. A growing population, increasing rate of consumption and increasing per capita
income are accelerating the demand for edible oil in India. This paper analyses the trend in
edible oil consumption and also attempt has been made by the researcher to assess the
consumer behavior on consumption of edible oils from various income groups. In India, most
vegetable oil is purchased by household or industrial buyers (food processors, restaurants and
hotels) for frying or baking needs and is sold as loose oil or vanaspati (partially hydrogenated
vegetable oil). Only a small percentage of edible oils are sold in branded form at the retail
level. Therefore Efforts will be made by the researcher to find out what kind of edible oil
people consume, since there are varieties of edible oil like Palm oil, soya bean oil, mustard
oil, groundnut oil, rice barn, and cotton seed oil and so on. For this purpose the researcher
would be undertaking a survey taking using a pre planned structured questionnaire to test the
influence factors of the customers to buying a particular brand of oil, to buy particular edible
oil, amount of consumption, point of purchase and so on. Cluster sampling technique will be
followed as customers of edible oil from high income, middle income and low income will be
considered for this study. Based on the responses the researcher will have an idea about the
fastest moving and the most preferred brand of edible oil , choice of a particular variety of
edible oil , amount of consumption of edible oil and so on , most importantly all these
information will be gathered based on the demographic profile of the consumers based on
income composition .

Electronic copy available at: http://ssrn.com/abstract=1894093

INTRODUCTION

Indian markets from low-involvement to high-involvement product categories have been

experiencing sweeping changes in the past decade. Changing lifestyles, fragmented market

segments and consumer preferences, and intense competition from the brands of

multinational corporations (MNCs) have made branding strategies a prerequisite for

marketing success. India has been going through radical changes in the marketing arena in

the last decade. Globalization in terms of multinational corporation (MNC) brands entering

Indian markets, the emergence of young professionals in urban areas, the opening up of

luxury and leisure markets, the impact of mass media and the influence of Westernization are

some of the critical aspects which have forced Indian marketers to adopt branding strategies.

These strategies have been formulated against the backdrop of an Indian culture which is

strongly entrenched in the consumer psyche, and amidst changes in the social environment.

Each year, India consumes over 10 million tonnes of edible oils. Edible oils have a high

penetration of 90% in India. However, per capita consumption of edible oils is around 11 kg

per year. The Indian edible oil market is the world’s fourth-largest after the USA, China and

Brazil. A growing population, increasing rate of consumption and increasing per capita

income are accelerating the demand for edible oil in India. But there is extreme variation in

consumption. The country’s top (high income ) 10% of the population consumes 30 kg per

capita and the bottom 30%, less than 5 kg per capita.

This study analyses the trend in edible oil consumption and also attempt has been made by

the researcher to assess the consumer behavior on consumption of edible oils to find out what

kind of brands are preferred by the consumers in various income groups. In India, most

vegetable oil is purchased by household or industrial buyers (food processors, restaurants and

hotels) for frying or baking needs and is sold as loose oil or vanaspati (partially hydrogenated

vegetable oil). Only a small percentage of edible oils are sold in branded form at the retail

Electronic copy available at: http://ssrn.com/abstract=1894093

level. Therefore Efforts will be made by the researcher to find out what kind of edible oil

people consume, since there are varieties of edible oil like Palm oil, soya bean oil, mustard

oil, groundnut oil, rice barn, and cotton seed oil and so on and also to find out what kind of

brands are preferred by the consumers in various income groups. Therefore the main

objective of the study is to understand the buying behavior of the consumers of cooking oil in

the market of Chennai.

1.1 RATIONALE BEHIND THE STUDY

Fats and oils are recognized as essential nutrients in both human and animal diets.

Nutritionally, they are concentrated sources of energy and a carrier for the oil soluble

vitamins A, D, E, and K. They also enhance the foods we eat by providing texture and mouth

feel, imparting flavor, and contributing to the feeling of satiety after eating. Edible oils ,as a

protective food, are an integral part of human diet and their demand from year to year ,like

any food commodity, would vary in accordance with natural growth rate of population,

growth of per capita income, changes in edible oil prices and ,changes in the prices of

available substitutes.As result of the recent food crises, consumer feels more concerned with

food quality and safety, demanding more transparency in the food- chain and more

information on the diverse qualitative. Nowadays, food safety is an issue that regards

credence and trust on food products, which is becoming more and more important for

consumer. The present demand of consumers for receiving information on food quality and

safety, determines in great measure the characteristics of the food chains and the strategies to

develop by the industry .The search of products with a better quality has become one of the

main strategic priorities of the food industries .Among the numerous factors affecting diet

choices, nutrition knowledge and beliefs about foods and health. Or-diet- health information

in short’s the most amenable to change. A persistent positive correlation between education

and health suggests that a person with more education is better able to maintain his or her
own health than a person with less education. Variables such as education, income and

household structure, which may account for information differences among individuals, has

been used as proxies to capture information effects. The structural shift in consumption

pattern is an account of the consumption diversification effect because of easy access to

supply, changed tastes and preferences and change in relative prices.

Domestic consumption of edible oils has been growing at 4.0-5.0 percent a year. The

consumption in 2001-02 was around 25.75 million tons. Nearly 75.0 percent contributed by

packaged oils, branded oils constitute of consumption in both urban and rural markets. Newer

oils which were not known before have entered the kitchen, like those of cottonseed,

sunflower, palm oil or its liquid fraction (palmolein), soya bean and ricebran. These tend to

have a strong and distinctive taste preferred by most traditional customers. As we prowl

through the supermarket shelves and grocery stores in search of the right cooking oil, we are

often confronted with a variety of brands and a host of health claims about their respective

benefits. This paper analyses the trend in edible oil consumption and also attempt has been

made by the researcher to assess the consumer behavior on consumption of edible oils from

various demographic variables. In India, most vegetable oil is purchased by household or

industrial buyers (food processors, restaurants and hotels) for frying or baking needs

Therefore Efforts will be made by the researcher to find out what kind of edible oil people

consume, since there are varieties of edible oil like Palm oil, soya bean oil, mustard oil,

groundnut oil, rice barn, and cotton seed oil and so on and also to find out what kind of

brands are preferred by the consumers in various income groups in Chennai, and To find out

the most effective media in the area of creating awareness of edible oil.

2. NEED FOR THE STUDY

Extensive literature on personality in psychology and other behavioral sciences has persuaded

marketing researchers to theorize that personality characteristics should predict brand or store
preference and other types of buyer activity (Engel, 2006). Evans undertook this study using

12 objective variables, such as age, income, and other demographics, to test the assumption

that ‘buyers differ in personality structure’. Marketers today need to understand that

‘customer satisfaction is about ‘attitude’; and customer value is about ‘behavior’’ (Butz and

Goodstein, 2006). Demographic variables are the most popular bases for segments the

customer groups, One reason is that consumer needs, wants, preferences and usage rates are

often highly associated with demographic variables. Another is that demographic variables

are easier to measure (Kotler, Philip, and Gary Armstrong, 2006). This is because marketers

have to formulate their marketing strategies in order to fulfill the needs, wants and preference

of consumers on the bases, Moreover, demographic variable make known the ongoing trends,

such as shifts in age, sex and income distribution that signal new business opportunities to the

marketers (Schiffman, Leon G. and Leslie Lazer Kanuk ,2007) . These aspects highly

motivated the researcher to take up the present study.

3. SIGNIFICANCE OF THE STUDY

The most obvious significance of the study is for developing an appropriate marketing

strategy—i.e., for making better marketing campaigns. By understanding that new products

are usually initially adopted by a few consumers and only spread later, and then only

gradually, to the rest of the population, we learn that, companies that introduce new products

must be well financed so that they can stay afloat until their products become a commercial

success and it is important to please initial consumers, since they will in turn influence many

subsequent consumers’ brand choices. (Festinger, 2004). The demographic environment is of

major interest to marketers because it involves people and people make up market (Kotler,

2006). Most of marketers’ strategic decision making heavily depends on the demographic

variables of people in the region where they focus on marketing their products. This study

will give revelation for the cooking oil manufacturers and distributors in India about the
expectation of a consumer of cooking oil based on the importance of various variables

involved in a purchase of cooking oil.

4.METHODOLOGY OF STUDY

For purpose of analysis the researcher has undertaken a survey using a pre planned structured

questionnaire to test the influence factors of the customers to buying a particular brand of oil,

to buy particular edible oil, amount of consumption, point of purchase and so on. Cluster

sampling technique is followed as customers of edible oil from high income, middle income

and low income will be considered for this study. This study is conducted on 215 consumers

of cooking oil in Chennai.

5.RESULTS OF THE STUDY

This survey on the impact of the advertisement on the awareness of the consumers of edible

oil was conducted on 215 consumers of edible oil in Chennai. The results of the survey are

summarized as follows.

5.1 Demographic profile of the study

Nearly 66% of the respondents are females while the remaining 34% of the respondents are

males. Almost 32% of the respondents are in the age group 26 years to 30 years, while nearly

23% of the respondents are in the age group 31 years to 35 years, another 22% of the

respondents are in the age group less than 25 years, whereas 13% of the respondents are in

the age group more than 40 years and a few 12% of the respondents are in the age group 36

years to 40 years. While questioned on the family income level of the respondents almost

29% of the respondents are in the monthly income category of Rs. 10,000 to Rs. 20,000,

whereas 22% of the respondents are in the monthly income category of less than Rs. 10,000,

while 21% of the respondents are in the monthly income category of Rs. 21,000 to Rs.

30,000, another 17% of the respondents are in the monthly income category of Rs. 30,000 to
Rs. 40,000 and finally 11% of the respondents are in the monthly income category of more

than Rs. 40,000 .

5.2 Brand Recalling and influential media

When it comes to brand recalling, the brand which comes to the consumer mind at first is

supreme. Nearly 22% of the respondents have acknowledged this while 20% of the

respondents are in favor of Fortune, which is followed by Gold Winner, where nearly 15% of

the respondents responded favorably for gold winner as brand to be recalled immediately,

while 14% of the respondents are for SVS brand, 13% votes for Roobini and 10% response

for saffola. When questioned about the media of influence for choosing a particular brand,

most of the consumers of edible oil are influenced by retailers’ influence which forms about

23% of the total respondents a equal number of respondents that is 23% are influenced by

Newspaper advertisements , while 18% of the respondents are influenced by Television ,

nearly 15% of of the respondents are influenced by internet , 13% of the respondents are

influenced by Doctor’s advice and finally 6% of the respondents are influenced by Window

display.

5.3 Awareness of facts about edible oil

While the consumers of edible oil where questioned about their awareness of the nutritional

benefits or the hazards caused by edible oils , nearly 61% of the respondents are not aware of

such things while the remaining 39% of the respondents are aware of the nutritional benefits

or the hazards caused by edible oils. The surprising factor is more than the unawareness of

the nutritional benefits or the hazards of edible oil among the consumers of edible oil in

Chennai, almost 41% of the respondents are not at all interested in knowing such facts and

information, while only 29% of the respondents are interested to a large extent and another

29% of the respondents are interested to some extent about the facts regarding the nutritional
benefits or the hazards of edible oil. Although various kinds of fats are associated with edible

oil, lead to obesity, most of consumers of edible oil in Chennai are not aware such things,

which is clear from the survey that 77% of the respondents are not aware of the presence of

saturated fats in the edible oil, while 73% of the respondents are not aware of the presence of

poly saturated fats in the edible oil , whereas 65% of the respondents are not aware of the

presence of mono saturated fats in the edible oil , nearly 67% of the respondents are not

aware of the presence of trans fats in the edible oil , another 68% of the respondents are not

aware of the presence of hydrogenated fats in the edible oil , whereas 62% of the respondents

are not aware of the presence of omega fats in the edible oil , while 71% of the respondents

are not aware of the presence of animal fats in the edible oil and another 67% of the

respondents are not aware of the presence of vegetable fats in the edible oil .

5.4 Opinion on change of consumption habits through effective media information

One healthy news from the survey is that nearly 70% of the respondents are ready to change

their consumption habits when special awareness is created for pros / cons of edible oils

through advertisements, only the remaining 30% of the respondents are not ready to change

your consumption habits when special awareness is created for pros / cons of edible oils

through advertisements. Finally when asked about the effective media to convey such facts ,

nearly 26% of the respondents responded that retailers suggestion would be the best media to

create an awareness about the edible oil , while 23% of the respondents responded that TV

would be the best media to create an awareness about the edible oil and another 26% of the

respondents responded that newspapers would be the best media to create an awareness about

the edible oil , while 16% of the respondents responded that radio would be the best media to

create an awareness about the edible oil and another 12% of the respondents responded that

internet would be the best media to create an awareness about the edible oil .
6.IMPLICATIONS AND DISCUSSIONS OF THE STUDY

This study has proved that most of the theories attached to the consumer buying behaviour

are proved with precision as propagated by various authors. This is explained as follows.

Mahatoo (2005) defines Consumer Behavior decision making process consisting of a number

of steps that begin before the purchase and reaches beyond the buying act. The following are

some of the steps, where the consumer buying behaviour models have been discussed with a

support theory through the results of the study.

6.1 ROLE OF FAMILY IN DECISIONS

According to Kurtz (2008), family Decision Making plays a major part in consumer buying

behavior process. Individual members of families often serve different roles in decisions that

ultimately draw on shared family resources. Some individuals are information

gatherers/holders, who seek out information about products of relevance. These individuals

often have a great deal of power because they may selectively pass on information that favors

their chosen alternatives. The decision makers have the power to determine issues such as:

whether to buy; which product to buy (kind of cooking oil); which brand to buy; where to

buy it (source); and when to buy (frequency). This is proved in the study by the fact that

nearly 65% of the consumers of cooking oil in Chennai decide to purchase through the

influence of spouse.

6.2 CONSIDERATION OF BRAND IMAGE

Because the consumer needs a great deal of information to establish a set of criteria for

evaluating alternative brands and a corresponding large amount of information concerning

each of the brands to be considered. (Kotler, 2005). Almost 73% of the respondents agree that

brand is the influential factor for purchasing cooking oil .

6.3 INFORMATION SEARCH

Baker (2000) states that, if there is a sufficiently high level of involvement or engagement

with the problem, the consumers are likely to engage in complex and extensive information

search and if the involvement level is low, they are likely to use very simple or limited

information search. Window display is one of the search methods, and nearly 64% of the

respondents choose to buy a particular brand of cooking oil influenced by window display.

6.4 INFLUENCE OF REFERENCE GROUPS

According to Markin, R. (2009), reference groups come with various degrees of influence.

Primary reference groups (in this study it will be retailer’s suggestion) come with a great deal

of influence and nearly 64% of the respondents choose to buy a particular brand of cooking

oil influenced by retailer’s suggestion.

7. SUGGESTIONS OF THE STUDY

As we prowl through the supermarket shelves and grocery stores in search of the right

cooking oil, we are often confronted with a variety of brands and a host of health claims

about their respective benefits. So, how do we differentiate between the ones that would

improve our heart health and help keep excess weight away and the ones that would plaque

our arteries and increase the risk to diseases? Whilst it’s important to note that all oils

(cooking and dressing) are similar as per their calorie content, (each tablespoon contains

approx. 120 cal) and should be used only sparingly, as part of an otherwise healthy diet, the

oils do differ in parameters like methods used for oil extraction, composition and heat

tolerance. The methods used for extraction would determine whether an oil is refined

(extracted from oil cakes involving solvent extraction) or unrefined (cold pressed). Unrefined
oils are considered better and recommended due to the presence of a wide range of bioactive

compounds, flavors and Vitamin E content, which tend to prevent rancidity in them.

Sunflower is popular cooking oil available under many brand names. This oil is rich in

PUFA, particularly linoleic acid that lowers the levels of both good and bad cholesterol.

Hence, this oil cannot be used as the only cooking oil; it could also be used along with other

cooking oils such as red palm oil or palmolein oil that are low in linoleic acid (you could use

sunflower oil on one day and red palm oil the next day). Palmolein contains MUFA and is

low in linoleic acid, hence it is healthy to use in combination with other oils. Available in the

market under the brand name of Saffola, it also contains PUFA in the form of linoleic acid.

Like sunflower oil, this oil too should be used in combination with red palm oil or palmolein

oil.

For consumers of edible oil who are in the age category below 25 years , retailers suggestions

would help them to take wise decisions on the purchase and usage of edible oils , while for

consumers of edible oil who are in the age category of 31 years to 35 years , newspaper

advertisements would help them to take wise decisions on the purchase and usage of edible

oils , so this age group should be targeted by newspaper advertisements and same strategy

can be applied even for customers in age group of 36 years to 40 years , while for consumers

of edible oil who are in the age category of above 40 years , TV advertisements would help

them to take wise decisions on the purchase and usage of edible oils . (For details refer

exhibit 7.1)

Domestic consumption of edible oils has been growing at 4.0-5.0 percent a year. The

consumption in 2001-02 was around 25.75 million tons. Newer oils which were not known

before have entered the kitchen, like those of cottonseed, sunflower, palm oil or its liquid

fraction (palmolein), soya bean and ricebran. These tend to have a strong and distinctive
taste preferred by most traditional customers. In order to derive maximum benefits from oil,

it is beneficial to consume a mix of oils in order to maintain a balance between the three fatty

acids. As using a combination of two oils may not be a practical thing to do, today a number

of blended oils are available in the market. For instance, blends of ricebran and sunflower oils

(brand names include Sunrise, Sundrop Heart, etc) are the best buys and are suitable even for

frying. This study has clearly shown that most of the consumers of edible oil are not aware of

various nutritional facts about edible oil, various hazards attached to edible oil because of the

presence of various types of fats. But the encouraging fact is that most of the consumers of

edible oil willing to change the consumption habits if the information is conveyed to them

through an effective media. So based on the output of the study further studies can be taken in

detail to find out solutions to counter attack the problem of obesity caused of because of

consumption edible oil without proper awareness .

8. CONCLUSIONS OF THE STUDY

The prospects, generally, collect information about the cooking oil from their friends,

neighbors, peer groups and spouse. Hence, it is recommended that the cooking oil marketers

could take maximum efforts in designing the advertisements in such a way that the

advertisements provide reliable and maximum information about the nutrition and health

aspects, price of the oil. The companies could increase the frequency of advertisements also

in order to make the brands positioned in the minds of the prospects and this will, definitely,

help the prospects to consider those brands while the evaluation of alternatives. Further, it is

noted that advertisement does not create a need for cooking oil in the minds of prospects but

at the same time, prospects consider advertisement as an important source of information.

Hence, it is recommended that advertisements could be used only for the purpose of creating

brand awareness among the prospects. Generally, the prospects give higher importance to
safety aspects, and the brand image of the cooking oil rather than the other sales promotional

schemes offered by the companies while they purchase the cooking oil. Hence, it is

recommended that the cooking oil marketers could concentrate on improving the safety

aspects, quality and brand image of the cooking oil instead of concentrating heavily on the

sales promotional activities.

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The Dryden Press.

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Macmillan.

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pp 78 – 104

 Butz, E.H. & Goodstein, D.L. (2006). ‘Measuring Customer Value: Gaining the

Strategic Advantage’, Organizational Dynamics, Vol.24, No.3, p63.

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