A Study on the Customer Preference and Purchase Decision of Refined Oil and Cold-Pressed Oil among Households in India

Kanimozhi S.¹, Hariharan P.²

¹Assoicate Professor, Hallmark Business School, Santhapuram, Trichy - 620102, Tamilnadu, India.

²MBA Student, Hallmark Business School, Santhapuram, Trichy - 620102, Tamilnadu, India.

*Corresponding Author E-mail: kaniatcruz@gmail.com; hariharanp3111998@gmail.com

ABSTRACT:

Recent decades have witnessed the sudden shift by majority of the people towards the use of refined oil for both domestic and commercial purposes to prevent them from heart attack, cholesterol, blood pressure, etc. However, cold pressed oil consumption is also attractive nowadays owing to its health benefits. This research study is significant to understand the customer preferences towards edible oil such as refined oil and cold-pressed oil. The study aimed to analyse the factors affecting the purchase decision of the customers towards refined oil and cold-pressed oil. The results revealed that the purchase of refined oil or cold-pressed oil depends upon the consumers’ interests, attitudes and their willingness to buy. The consumers of refined oil, cold-pressed oil or both preferred it for its quality and health benefits. There was a drastic shift from refined oil to cold-pressed oil, owing to health factors, advice from their doctors and peer influence. A majority of the respondents preferred using cold-pressed oil because they were influenced by their ancestors, advertisements and recommendations by friends and relatives. There was no significant difference in the preference of consumers towards the price factors of refined oil, cold-pressed oil or both. The customers of cold-pressed oil show greater preference towards it and like to continue the same as they are conscious about the health benefits. However, the packaging of the cooking oil should be taken care.

KEYWORDS: Purchase decision, Customer preference, Cold-pressed oil, Edible oil, Consumer behavior.

The Statista Research Department conducted a survey in April 2022 which shows that the most common type of edible oil used for cooking by Indian households was sunflower oil (25%) and (2%) of households used palm oil for cooking purposes¹.

In ancient times, all oils were cold-pressed and always considered a valuable food with medicinal properties¹. People visited oil stores with empty containers to buy cold-pressed oil from the retailers over five decades which has transformed into the purchase of edible oils packed in cans, pouches, jars, and bottles to ease the purchase of edible oils for households. The Indian consumption of vegetable oils including oil from coconuts, sesame, cottonseeds, palm, olives, groundnuts, soybean, canola and sunflowers accounted for over 22 million metric tonnes in the fiscal year 2022. Figure 1 depicts the change in edible oil consumption due to price increase in India as of April 2022.

According to the survey by Statista.com on the change in consumption of edible oil by Indian households due to the increase in prices, 50% of the respondents consumed the same amount of edible oil as before and spent it from their savings. On the contrary, 24% of the respondents have reduced their monthly consumption as well as their spending on edible oils¹. Cold-pressed oil retains its biological properties such as nutritional and medicinal values. In ancient times, all oils were cold-pressed and always considered a valuable food with medicinal properties. Recent decades have witnessed the sudden shift by majority of the people towards the use of refined oil for both domestic and commercial purposes to prevent them from heart attack, cholesterol, blood pressure, etc. However, cold pressed oil consumption is also attractive nowadays owing to its health benefits. This research study is significant to understand the customer preferences towards edible oil such as refined oil and cold-pressed oil. The study also aims to analyse the factors affecting the purchase decision of the customers towards refined oil and cold-pressed oil.

LITERATURE REVIEW:

Hasan S.A., and Khan M.Z., (2009) investigated the impact of packaging characteristics on consumer’s brand preference in perspective to edible oils and identified that packaging characteristics was the significant variable for consumer brand preference in edible oils³. Ali Z., Aslam M., and Rasool S., (2013) in their study identified major factors affecting consumption of edible oil. The study suggested that edible oil prices should be reduced to a certain level to enhance the affordability of the majority of the consumers⁴. Santhoshi E., Kodali S., (2022) stated that the consumers are turning towards healthy cooking oils like cold-pressed edible oils in spite of its higher cost compared to refined edible oils⁵. Arya V., Vikash and Kiran, (2021) conducted a study to understand the factors influencing purchase decision for edible oils, buying and consumption patterns of the product, the preference of demographic clusters, the frequency of changing edible oil type, the effect of promotional activities on purchasing habits and found out the extent of brand loyalty among consumers⁶.

Ali E.M., Begum A.A.V., (2019) found out in their study that majority of Indian food items are prepared by utilising edible oil. Consumer behaviour frequently changes as per the new innovations, changes in taste, likes and dislikes related to food items. Through this study, the researcher has highlighted the brand references for edible oil by consumers. Efforts have been made to understand the various factors which were taken into consideration while purchasing edible oil⁷. Mittal S., (2010) stated that Edible oil industry was rapidly changing due to change in customer requirements and also the availability of oils. Changes in lifestyle and purchasing power pushed edible oil industry to find new ways to cater the needs of the customer. The researcher has focused on the global emerging trends in the edible oil industry and also highlighted the changing requirements of customer and corresponding changes in edible oil industry to satisfy those customer needs⁸. Kumar M.P.S, (2014) in his study explored the consumer preferences for oil brand, oil variants, factors influencing their purchasing decisions. The study highlighted the brand image, price, health consciousness and quality of a particular brand as the most important factors influencing consumer decision making towards edible oil purchasing. He stated that the success of any marketing activity largely depends on the ability to anticipate what buyers will do and what they prefer from available products⁹. Srivastava T. K, (2018) in his study revealed that quality, price, purchase intention, and sales promotion play significant role in developing the customer loyalty among Generation Z for edible oils in India. It adds value to the understanding of the purchase behaviour of Generation Z towards consumption of edible oil in the emerging markets like India¹⁰. The previous researches portray the existence of gap in the underlying factors influencing the purchase decision towards edible oil, especially refined oil and cold-pressed oil.

Pandey, A., et al. (2014), RehaanMasoom, M. et al. (2015), Pani, D. and Pradhan, S.K. (2017), Pandi D., et al. (2017), Dey, T. and Sharma, L.S. (2017), Shridhar, R. and Srivatsava, R. (2018) and Ardey., R. et al. (2018) also studied on consumer buying behaviour in different perspectives. Bhardwaj, R. (2017) studied on the impact of organic foods towards the attitude of students and revealed that females were more health conscious and have higher attitude towards organic food. Shekhar, S.K. and Raveendran, P.T. (2016) studied that packaging is a crucial factor in the consumer decision making process. Hence, this research study would add value to the understanding of the various factors that influence the purchase decision of the customers towards refined oil and cold-pressed oil.

RESEARCH METHODOLOGY:

Sample description:

This study was conducted among the households in India using a well-structured questionnaire and interview methods. 100 usable responses collected through convenience sampling method were analysed through SPSS. Among the respondents, 72% were male, 62% belonged to urban areas, 63% were employees working in private and government sectors and 77% were graduates. The majority of the respondents, that is 21% earn between Rs.20001-30000 and 25% earn between Rs.30001-40000. The family size of the respondents comprised of 3 members (26%), 4 members (43%) and more than 4 family members (25%).

RESULT:

It is observed that 15% of the respondents were using refined oil for more than 10 years, 25% of them were using cold-pressed oil for 2-5 years and 19% were using both these oils for more than 10 years. The average edible oil consumption for their cooking purposes accounted to 2-4 litres. There was a drastic shift from refined oil to cold-pressed oil (54%), a few of the respondents directly started consuming cold-pressed oil (20%) and 25% of them use refined oil without any second thought. The paradigm shift from refined oil to cold-pressed oil happened owing to health factors (23%), advice from their doctors (1%) and peer influence (17%). The majority of the respondents preferred using cold-pressed oil because they were influenced by their ancestors (21%), advertisements (8%) and recommendations by friends and relatives (32%).

Descriptive Statistics:

The descriptive statistics of this study using SPSS provides an insight into the survey responses. The data was collected among the households who purchase refined oil and cold-pressed oil for domestic cooking purposes. Understanding the differences by locality level among respondents in the purchase decision of edible oils is known to be a significant issue in consumer purchase decision process.

H₀: There is no significant association between the demographic profile and the purchase decision of refined oil and cold-pressed oil.

Table 1. Differences in Purchase Decision of Refined oil and Cold-pressed oil by Gender, income and family size

Demographic profile	Chi-square value	Degrees of freedom	Sig
Locality	6.551	2	0.038
Income	31.693	10	0.000^*
Family Size	11.368	8	0.182

From the above table 1, it is concluded that 1 out of 3 demographic profile has a significant value of <0.05. In case of locality of the respondents, the calculated value is 6.551 and it is significant at this level of 0.038 at degrees of freedom 2. There is significant association between the purchase decision of refined and cold-pressed oils and the locality of the respondents. In case of the family income of the respondents, the calculated value is 31.693 and it is significant at this level of 0.000 at degrees of freedom 10. There is significant association between the purchase decision of refined and cold-pressed oils and the income of the respondents. In case of the family size, the calculated value is 11.368 and it is significant at this level of 0.000 at degrees of freedom 8. There is no significant association between the purchase decision of refined and cold-pressed oils and the income of the respondents.

Table 2. Ranking Analysis - Preference of consumers towards the features of Refined oil and Cold-pressed oil

S. No	Factors	Refined Oil		Cold-pressed oil		Both
S. No	Factors	Score	Rank Assigned	Score	Rank Assigned	Score	Rank Assigned
1	Quality	158	1	260	2	90	2
2	Health Benefits	77	2	289	1	104	1
3	Taste	44	3	182	3	68	3
4	Price	34	4	123	4	48	4
5	Packaging	17	5	61	5	22	5

Table 3. Ranking Analysis - Preference of consumers towards the price factors of Refined oil and Cold-pressed oil

S. No	Factors	Refined Oil		Cold-pressed oil		Both
S. No	Factors	Score	Rank Assigned	Score	Rank Assigned	Score	Rank Assigned
1	Reasonable price	67	1	244	1	86	1
2	Gift Coupons	18	4	63	4	29	4
3	Offers	43	2	160	2	58	2
4	Discount	40	3	141	3	47	3

Overall, the respondents preferred cold-pressed oil in the order of its quality, health benefits associated with it, taste, reasonable price with any offers, gift coupons or discounts on the product and packaging. From the ranking analysis, it is evident that the consumers of refined oil, cold-pressed oil or both preferred it for its quality and health benefits. Similarly, there was no difference in the preference of consumers towards the price factors of Refined oil, Cold-pressed oil or both.

DISCUSSION:

The advertisements and social media play a major role in bringing awareness to the consumers towards the consumption of edible oils for their cooking purposes. The consumers of cold-pressed oil were reluctant to shift to refined oil as they have high nutritional value, higher Omega 3 fatty acids and more antioxidants. They were willing to refer others to consume cold-pressed oil. The respondents were ready to try same product from another brand which clearly shows the chance for new players in the market. The consumers expect a reasonable price on the well available product apart from the freebies such as offers, gift coupons and discounts. Hence, the manufacturers must focus on offering cold-pressed oil at a reasonable price. New entrants shall make use of the discounts, offers and gift coupons to attract the potential target segment. Based on the study, it is found that majority of the respondents are satisfied with the edible oil what they purchase and consume. The customers of cold-pressed oil show greater preference towards it and like to continue the same as they are conscious about the health benefits. However, the packaging of the cooking oil should be taken care. Usage of polythene bags and plastic bottles should be avoided to ensure that the oils are organic in a complete sense. The purchase of refined oil or cold-pressed oil is depending upon the consumers’ interests, attitudes and their willingness to buy. Hence, the marketers must consider collecting feedback from the customers to ensure the consistency in its quality, affordability and satisfaction towards using refined oil or cold-pressed oil.

CONCLUSION:

The family size of four members is affordable with the cost of the cold-pressed oil with the average consumption of 2-4 litres of oil per month. People show interest towards purchasing cold-pressed oil as they are health conscious and the marketers may expect a shift in the demand for the same. Necessary measures have to be taken to ensure the supply to match the rising demand of the cold-pressed oils. Government shall take measures to motivate entrepreneurs towards the vegetable oil industry to curtail depending upon the import of edible oils. The rising trend in the preference towards cold-pressed oils shows the demand for oils manufactured using conventional methods which is the sign of the tremendous potential for the edible oil market in both the tapped and untapped markets. Future researches may include the reasons for the gap in the supply and demand of the edible oils to encourage the industry to reduce import oils and improve production.

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Received on 21.07.2022 Modified on 26.10.2022

Asian Journal of Management. 2023;14(1):52-56.

DOI: 10.52711/2321-5763.2023.00009