KOF Edible Oil Industry Report

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 companys product KOF and companys 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 lecithinhere 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 OPECS BEHAVIOR
Ayed Al-Qahtani, Edward Balistreri, Carol Dahl
Division of Economics and Business, Colorado School of Mines, Golden Co. 80401

{aalqahta@mines.edu, ebalistr@mines.edu, cdahl@mines.edu}
March 29, 2008
INTRODUCTION

This literature review is divided into two parts (1) oil market modelling and (2)
OPECs 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 OPECs behaviour within the oil market as such market behaviour is pivotal to
the proposed models 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 Indias 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.

INDIAS 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 countrys 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 INDIAS EDIBLE OIL
By 2010, Indias 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 INDIAS 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.
Indians 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, Indias 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 60
th
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 worlds third largest edible oil economy, after China and US. Indias
annual consumption is around 10 million tones vis--vis Chinas 14.5 million
tones. However, Indias 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 worlds
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 worlds
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 mans 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 countrys 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 Indias oilseeds and edible oil production.
Indias production of vegetable oils has been stagnating except for a rise in
rapeseed oil. According to the Solvent Extractors Association of India (SEA),
Indias vegetable oil production is expected to decline 4.4% during OY2007 to
around 6.8 mt.
By 2010, Indias 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 its 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 Taluks
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
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.
COMPANYS 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.

MOTIVATION
Motivation 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 companys 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. SUPPLIERS
The grain sorghum supply will come directly from farms or from country
elevators.

3. SALES CHANNELS AND METHODS
Sales 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 OPERATO
R
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;

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
NEUTRALISATIO
JN
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, administrators 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 FMCGs, 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

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
0%
20%
40%
60%
80%
100%
Below 20 20-30 30-40 Above 40 Total
3 10 5 7 25
12 40 20 28 100
Series1 Series2

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
Business 9 36
Agriculturist 9 36
Professional 4 16
Others 3 12
Total
25 100
Source: Survey data

Interpretation:
18%
18%
8%
6%
50%
Business
Agriculturist
Professional
Others
Total

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.)
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

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.

0 20 40 60 80 100 120 140
Below Rs.50000
Rs.50000-100000
Rs.100000-200000
More than Rs.200000
Total
7
3
11
4
25
28
12
44
16
100
Series1 Series2

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

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%
18%
20%
10%
2%
50%
18%
20%
10%
2%
50%
Relatives Friends Television Others Total

through their friends, 20% through TV channels and 4% through others
like retailers etc.

TABLE-5
INFLUENCING FACTOR OF KOF OIL PRODUCTS:
Influencing factor
Quality 19 76
Price 3 12
Packaging 1 4
Attractiveness 2 8
Total
25 100

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.
0%
20%
40%
60%
80%
100%
Series1 Series2


TABLE-6
OPINION ABOUT PRICE OF KOF PRODUCTS:
Price opinion
High 3 12
Low 2 8
Reasonable 20 80
Total
25 100

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.

6%
4%
40%
50%
90%
High
Low
Reasonable
Total

TABLE-7
OPINION ABOUT QUALITY:
Quality opinion
Satisfactory 24 96
Unsatisfactory 1 4
Total
25 100

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.

0
10
20
30
40
50
60
70
80
90
100
Satisfactory Unsatisfactory Total
Series1 24 1 25
Series2 96 4 100
A
x
i
s

T
i
t
l
e


TABLE-8
OPINION ABOUT AVAILABILTY OF KOF PRODUCTS:
Manufacturer service
Easy 4 16
Average 13 52
Difficulty 8 32
Total
25 100

Interpretation:
The above table shows that of the respondents, 52% consider the
Availability as average, 32% as difficulty and 16% as easy.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Easy Average Difficulty Total
Series1, 25
Series2, 100
A
x
i
s

T
i
t
l
e

Axis Title

TABLE-9
PERIOD OF USE:
Period of use
Below 1 year 5 20
1-2 years 14 56
2-3 years 5 20
Above 3 years 1 4
Total
25 100

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.
10%
28%
10%
2%
50%
Below 1 year
1-2 years
2-3 years
Above 3 years
Total

TABLE-10
COMPARISON OF QUALITY OF KOF OIL PRODUCTS WITH
OTHER OIL PRODUCTS:
Compared to Other
Oil Products
Excellent 11 44
Good 13 52
Average 1 4
Total
25 100

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.
22%
26%
2%
50%
Excellent
Good
Average
Total

TABLE-11
OCCASION OF USING KOF OIL PRODUCTS:
Occasion
Festival 3 12
Marriage 2 8
Birthday 1 4
Daily Usage 19 76
Total
25 100

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.
6%
4%
2%
38%
50%
Festival Marriage Birthday Daily Usage Total

TABLE-12
OPINION OTHER THAN KOF OIL PRODUCTS:
Other Products
Akshatha 2 8
Safolo 5 20
Gold winner 8 32
Gemini 10 40
Total
25 100

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

0 20 40 60 80 100 120 140
Akshatha
Safolo
Gold winner
Gemini
Total

TABLE-13
OPINION ABOUT PURCAHSE OF KOF OIL PRODUCTS:
Kof Products
Sunflower 8 32
Sunshudh 2 8
Rice rich brand 5 20
Suguna palmolin 10 40
Total
25 100

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

0
20
40
60
80
100
120
140
Sunflower Sunshudh Rice rich
brand
Suguna
palmolin
Total

TABLE-14
OPINION ABOUT CONSUMER PACKS OF KOF OIL
PRODUCTS:
Consumer packs
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

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.
0
20
40
60
80
100
120
140
Half ltr
pouch
One ltr
Pouch,Pet
Bottle
Five ltr jerry
cans
Fifteen kg
tins
Total

CHAPTER-6
FINDINGS, SUGGESTIONS AND CONCLUSION
Findings:

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. Its 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

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