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Prepared by :

Syed Tareq Muhammad Tanim

05 batch-BBA & MBA

Independent University, Bangladesh

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EXECUTIVE SUMMERY

Bangladesh accounts for 4.3 percent of world oilseed production. It has the world’s sixth
largest edible oil economy. Yet, about 43 percent of edible oil available in
Bangladesh is imported. The bulk of edible oil Bangladesh imports under the Open
General License (OGL) is RBD Palmolein of Malaysian and Indonesian origin.

The total import of edible oils during the period form November 1998 to October
1999 totaled 4.4 million tones valued at more than Rs. 9.000 cores. That was against a
demand –supply gap of 1.4 million tones in 1998-99. Imports have therefore deluged the
market.

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Originally, there was no discrimination between refined and non refined edible oil as far
as import duty concerned. The duty on both was 65 percent. Duty was the slashed to 30
percent for both, then to 20 percent in 1996 and 15 percent in then 1999-2000 budgets.

On December 30, 1999 a differential duty structure was introduced. Duty on


Refined oil was fixed at 27.5 percent (25 percent plus 10 percent surcharge) while that
on crude was retained at 16.5 percent (15 percent plus 10 percent surcharge) But only
actual users (as opposed to traders) are allowed to avail of this reduced duty on crude
oil.

Traders like Mostafa are nevertheless allowed to import crude at the reduced duty but
only to sell to actual users on a high seas basis. This requires that the actual users fills in
the import documents (and pays the reduced duty) but leaves the importing process to
the trader. In most parts of the world, the import duty on oilseeds is lower than that on
oils.

But, in Bangladesh it is higher 40 percent. That is why no import of oilseeds of oil


bearing material has taken place in Bangladesh. The industry wants the duty to be
lowered from the present 40 percent to 5 percent. Edible oils prices in the Bangladesh
market have crashed due to large imports by multinational trading houses see table.

Among the Vegetable Oil refineries, Mostafa Vegetable Oil Industries Limited is one of
the biggest Projects in Bangladesh as it is now producing highest quantity of refines
Soya bean oil covering all three units. With the changing demands of the country the
company has come forward to set up the 3rd unit in the name of Mostafa Vegetable Oil
Industries Limited. The products of Mostafa Vegetable Oil Industries particularly Soya
Bean Oil is refined, pure and Cholesterol free.

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Introduction

Mostafa Group has been engaged in business since 1952 and developed the business
activities in commercial Trading, import, export, manufacturing of steel products, Iron,
MS Rod, Ship Breaking (Scraping of ocean going vessel), Artificial Leather, Rexine,
Shrimp cultivation, processing & Export, Textile & Ready made Garments, Papers,
Refining of Palm Oil, Soybean Oil, Coconut Oil, Vanaspati Ghee, Refine Iodized Salt, Tea
Plantation & Export, Transport Sector, IT sector and also engaged in the financial sector
such as Bank & Insurance , Health & Education sector .

Mostafa Group of Industries has been set up a Group of highly experienced, well-
educated and financially sounds Bangladeshi promoters who have excellent track record
in Industrial and trading business operation. They have gained commendable practical
experiences in various type of manufacturing and trading business. At present Mostafa
Group is one of the largest and leading private enterprise initiatives in Bangladesh.

Various concern of Mustafa Group

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• Mostafa vegetable oil limited

• Mostafa Textile Sector

• Mostafa Properties Development Sector

• Mostafa IT Sector

• Mostafa Chemical Sector

• Mostafa Food and Agro Product

• Mostafa Container Terminal

• Mostafa Flour Milling and Food Complex Plant

• Mostafa Fertilizer

• Mostafa foundation

Company profile & History

The Unit 1(one) under the banner of Mostafa Vegetable Oil Industries Limited was
established in the year of 1989 at Bhatiary Industrial belt, Sitakunda Under Chittagong
District in order to manufacturer of refine, pure, Edible Soya bean oil from imported
Crude degummed Soya bean oil (CDSO ).

Among the Vegetable Oil refineries, Mostafa Vegetable Oil Industries Limited is one of
the biggest Projects in Bangladesh as it is now producing highest quantity of refines
Soya bean oil covering all three units. With the changing demands of the country the

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company has come forward to set up the 3rd unit in the name of Mostafa Vegetable Oil
Industries Limited.

The products of Mostafa Vegetable Oil Industries particularly Soya Bean Oil is refined,
pure and Cholesterol free. Palm oil and Vegetable Ghee are also pure, demandable and
popular in the market for its high quality. All these items, produced by Mostafa
Vegetable Oil Industries Limited are international standard. That is why the demands of
these products are increasing day by day in our market.

Project and production

The production capacity of the 1st unit of Mostafa Vegetable Oil Industries Limited is
27,000 Metric Tons of refine Soya Bean Oil , 2nd unit for 1,50,000 Metric Tons and 3rd
Unit 35,940 Metric Tons of Vegetable Ghee annually. The 2nd unit was installed and
operated in the year of 1992. All machinery and equipments of the 2nd unit are of
German origin.

The 3rd unit was in operation by the year 2000. Tanks of various capacities for soya
bean oil, palm oil, packaging machinery, Generators, and Boilers are procured from
local sources. To produce refine soya bean oil, palm oil and vegetable ghee, Raw
materials mainly Crude degummed soya bean oil/crude palm oil /crude Palmolein ,
bleaching earth, phosphoric acid, caustic soda etc are used and all these raw materials
are imported from abroad.

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Environment
The total project is free from Air pollution and there is no possibility for pollution of
environment as because the by product Flee fat acid which we get at the time of refining
soya bean oil is used and consumed in the soap making industries. For refining Soya
bean oil, imported Boiler will create any problem. The temperature which is needed for
the production of refining soya bean oil, the imported boiler has the capability to utilize
the needed temperature. Under the same system and management, there is a full
pledged Laboratory to examine its products and quality. There is no need for separate or
independent Testing Laboratory for examine/ testing purposes.

Investment
The company has invested total an amount of Bangladesh Taka 118.17 for this Project
with independent 3-units of edible oil refineries in the name and style of Mostafa
Vegetable Oil Industries Limited.

Quality

The company has registered with Bangladesh Standard Testing Institution and got the
BSTI quality certificate for the items produced under “MOSTAFA” Brand edible oils
and “Shakti” Brand Vegetable Ghee. Mostafa Vegetable Oil Industries Limited is also
planning for submission of papers and documents in order to get “ISO
CERTIFICATE” for its products.

The Future of the Project is prospective and bright as it is food item and as well as it is
needed for our day to day use in domestic purposes and industrial purposes. So

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Government should encourage this sub sector “Edible oil refinery and hydrogenation
“and as such should withdraw duties and taxes imposed so that users and consumers
can purchase these unavoidable edible oils within their buying capacity and financial
ability

Company Management

The Management of Industries is managed, controlled, well conversant and monitored


under a corporate management system having its corporate head office at M Rahman
Chamber, 277 Khatungonj, Chittagong headed by a higher qualified, experienced
corporate financial consultant.

Chairman
Mr. Hefazatur Rahaman

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Managing Director & CEO
Vice Chairman
Mr. Jahir Uddin
Mr. Shafique Uddin

Directors

Mr. Kafil Uddin Mr. Rafique Uddin Mrs. Mostafa Bagum

Mr. Jashim Uddin Mr. Kamal Uddin

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Their mission is the realization of vision through solution for customer’s daily needs
strictly on ethical and perfect standards at very reasonable cost for the satisfaction of
consumers ensuring optimum benefits to the society

• To meet the clients commitment by taking excellence service to new heights.


• To be more competitive.
• To strive hard to optimize profit through conduction of transparent deals;
• To ensure more revenue to the nations.
• To create adequate jobs
• To ahead with our slogan “For a Bright Future

• Safety: protecting employees, the environment and installations.


• Confidence: honoring our relationships.
• Commitment: Complying exactly our obligations.
• Quantity: improving continuously the requirements
• Quantity Polities: Reaching the leadership in our market, exceeding the
expectations of the client, through the prompt delivery of products and services,
with world class quality and competitive prices

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Their concept of business germinates from their vision which sees it's as a means to the
wellbeing of the stakeholder, employees, and members of the society at large by creating
new wealth in the form of goods and services that for ultimate customers satisfaction, in
respect of socio-economic-ecological responsibility in the process of advance technology
”For A Bright Future”.

Industry analysis
Threat of Substitutes:
Low

Edible oil, as a product category, is


irreplaceable in the Bangladeshi food
basket. Therefore, at the industry
level, the threat of substitutes is low.
However, the threat of substitution of
domestically manufactured oil by
Bargaining Power of imported oil and that of branded oil
Suppliers: Bargaining Power of
by oilInter--
sold loose Buyers:
Low Firmexists for High
Rivalry: domestic
Low to Medium
Continued growth in edible oil
As oilseeds production is demand is attracting new As edible oil is a consumer
widely dispersed, supplier players/capacity addition in the product, buyers are widely
power per se is weak. sector. Refining capacity dispersed dispersed because of which
because of which bargaining power bargaining power of an
of a being added near ports to refine average consumer is low.
imported crude oil. Trader-
importers are also making efforts to
build brands to differentiate the
product, secure
11 higher realization
and build sales resiliency.
Barriers to entry: Low

Select areas still offer fiscal


incentives to set up new capacity. As
approximately 60% of edible oil is
sold loose, brand identity may not
pose as a barrier.

Structure of the industry

Bangladesh is populated country and inhabitants of several of its regions have


developed specific preference for certain oils largely depending upon the oils available in
the region.

Mostafa has an important role in our edible oil economy. It has around 10% share of the
edible of the market. It has the ability to absorb a heterogeneous of oils, which do not
generally find direct marketing opportunities because of consumer’s preference for
traditional oil.

For example newer oils like rice bran and cottonseed and oils from oilseeds of tree and
forest origin have found their ray to the edible pool largely through Vanaspati route.
Through technological means such as refining, bleaching and de-odouraisation, all oils
have been rendered practically colorless. Odorless and tasteless, and therefore, have
become easily interchangeable in the kitchen.

Newer oils, which were not known before they have entered the kitchen, like those of
cottonseed, sunflower, palm, oils or its liquid fraction (Palmolein) soya bean and rice
bran.

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About 60-70% predominately groundnut and mustard seeds are used to make non-
refined or filtered oils. This tends to have a strong and distinctive test preferred by most
traditional customers. The share of raw oils refined oils and Vanaspati in the total edible
oil market is estimated at 42%, 48%and 10% respectively.

MAJOR INDUSTRY PLAYER

The dominant feature which has had great significant impact on the present status of
edible oilseeds/oil industry has been the programme of liberalization under which the
Government’s economic policy allows greater freedom to the open market and
encourages healthy competition and self regulation rather than protection and control.

Controls and regulations have been relaxed resulting in a highly competitive market
dominated by both domestic and multinational players.

Number one position holding player in this industry is

Others are

TRIPTI TEER DADA

FRESH PUSTI 13 QUALITY


JAYA S.Alam

Demand for Edible oils rises in Bangladesh:-

Bangladeshi food industry continues to show a strong commitment to oils imports


following drop in domestic demand, says industry body.

Fresh figures from the Solvent Extractors Association of Bangladesh (SEAB) revel that
edible oils imports increased by some 21 percent for the first six months to April
2009.Imports jumped to 2.2 million tones in the first half of 2008-2009 up from 1.82
million tones for the same period last year. Imports are expected to be much higher this
year because of a drop in domestic oilseeds production.

Purchases of edible oils by Bangladesh are expected to reach around 5 million tones this
year from. Soya oil in particular saw strong growth. Imports of crude soy oil leapt to
735.352 tones in the November 2007 to April 2008 period up from 236.990 tones in a
year earlier. Crude palm oil purchases rose 10.8 percent to 1.01 million tones from
911,520 tones.

In Bangladesh oilseed output for 2009 is estimated to be around 21.8 million tones, a
fall of 6.4 percent from 23.3 million tones last year.

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The processed vegetable oil market is enjoying decent growth in India, pushing up
demand for oils. The Bangladeshi branded vegetable oil market grew last year by over 5
percent, according to outpacing the global average growth rate 4 percent.

Situation analysis

After salt, edible oils are possibly the most important ingredient in cooking. One of the
most interesting facts about household consumption patterns in Bangladesh is the high
rate of growth of branded edible oils.

Even today, especially in rural Bangladesh and small towns, the majority of households
purchase cooking oil from the nearby oil press or the grocer who sells unbranded oil that
comes in wholesale packs. Till about fifteen years ago branded cooking oils were seen to
be an item of middle class and elite consumption, mostly produced by multinational
companies through their Bangladeshi arms.

The total size of the indigenously produced and branded edible oil consumer market in
Bangladesh is about 360,000 metric tones per year, consumed by some 29 million
households (Source: Bangladesh Retail Audit).

In the highly competitive consumer-pack user segment for branded edible oils, Mostafa
has the largest market share at 10%. It has a total consumer base of 3.05 million
households (Source: IRS 2008), while its turnover exceeds Rs. 3.3 billion.

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Achievements

Mostafa at the forefront of the branded edible oil market, leading its consumer pack
segment. It has also been rated as top five fastest growing brands in the FMCG sector in
Bangladesh in 2009.

Through its value creating strategies and emphasis on purity and quality, the brand has
consistently created benchmarks for the entire edible oil industry, including
Bangladeshi subsidiaries of multinational brands.

It has successfully addressed the changing needs and tastes of the consumer and
introduced variants from time to time. Mostafa can also justly take credit for bringing
world-class practices in packaging of edible oil to the country. It introduced tamper-
proof aseptic packaging to guarantee that only the purest quality reached consumers.

Even today, Mostafa is the only edible oil in the country that uses the tetra pack
technology with six-layer packaging and undertakes more checks and tests than any
other brand in the industry.

WHAT RETAILERS HAVE TO SAY


1) Low margin: - Most of the retailers complained that they get very low margin
from different brands.
2) Leakage problem: -The retailers also complained about the leakage problem,
but other companies are giving them full replacement of leakage packages.
3) Feed back problem: - The retailers also complained that they get very less
feed back from the company, like whenever any scheme is introduced by the
company, they are not even made aware of the scheme.

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4) MRP Problem: - Retailers also complained that in the days of rising prices,
sometimes it happens that MRP is less than the price at which they have
purchased it from the distributor.

WHAT CUSTOMERS HAVE TO SAY


1) MRP problem: - customers complaint that sometimes they have to pay more
price then the MRP
2) Leakage problem :- customers even told that sometimes they have to face
leakage problems
3) DISCOUNT schemes: - customer’s complaint that there are very less discount
schemes on soya oil as compared to other refined.

Market share of different brand

Name of brand Market share in %


Rupchanda 37%
Mostafa 10%
Teer 13%
Tripti 10%
Fresh 8%
Pusti 7%
Quality 5%
Jaya 3%
Dada 5%
S.Alam 2%
Other 3%

Source: Bangladesh Retail Audit-2009

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Marketing objectives

Their long term objectives are to be successfully present in the Bangladeshi market and
establish a base in Bangladesh. The first goals specifically aimed at the Bangladesh are
stated below.

Objectives/Goals

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Market share: aims are set at achieving a 15-20% market share in the next 2 years.

Brand awareness: they want to get and increase brand awareness in the next 18
months.

Strategy statement

Market share:

1. They want to contract major supermarkets and promote the products in the
supermarket. This forces the market to make a decision on different brands on
the spot.
2. They want to offset products to whole sale as bigger parties require bigger
amounts and the market wants to buy in big amounts.

Brand awareness:

1. They want to advertise in-house magazines and magazines aimed at students.

2. They want to lower the price to make sure people consider buying products and
therefore know about our existence.

3. They want to bring our products to the customer. This allows the customers to try
our product before buying it and feel positive about our product.

Market analysis

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Market research

In 2009, middle class households spent an average amount of 2, 70,120 taka per year
on food. This means 19% of all food is frozen, snacks or eaten at parties. This means
there is a big opportunity for us to this market.

Market potential

A number of related parties, functions, weddings, club meetings etc. have been held in
the Bangladesh and the number is 4175 (app). Multiplied by the percent growth of the
population between 2002 and 2007, we can expect a number of 66,800 parties being
held in future. This is good market to start in as well as expand in.

Competitive and environmental factors

In the Bangladesh, there aren’t many pastry snack packs available but there is a lot of
competition on rice, beef, chicken, drinks, fish , vegetables, toasts with spiced butter,
peanuts and small blocks of cheese as this is very commonly found at informal parties
and perhaps part of culture to provide this as a basis.

However, people do tend to do something extra and this can vary a lot. This can be fruit,
olives, sausage or something else. This is where promotional strategies can focus on – a
different kind of extra party food.

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Competitor analysis

(I) Competitor A: Rupchanda

Rupchanda is the product of Bangladesh edible oil and they have the largest
market share. As of early November, the promotional campaign of rupchanda
includes the editing official website, press release for their new oil packaging, posters
and posters in public transport. The rupchanda considered as the main competitor
because these are under the same genre. It draws the attention of our target audience
due to the well-known products.

(ii) Competitor B: Teer

It has become one of the best-selling oil industries in 2009. They do not only contain
unique elements in their products but an educational message as the main character
strives to achieve the market share. Apart from the release of the new soundtrack,
posters in public transport and on newspapers, the Calcutta actress will come to
Bangladesh for a promotion.

(iii) Competitor C: Tripti

In order to differentiate from the main competitors, Tripti promoted as a mothers


first choice. They took huge promotional campaign to get rid of the target market’s
confusion between it and Teer. The poster design adopts a black and white color tone to
portray this feeling. In order to attract a larger audience and make them aware of this

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product, creative promotional campaigns with some noises are taken. They are trying to
make online campaign interactive and fun. Apart from this, since Bangladeshi people
rarely watch movie in cinema hall, and it therefore is identified as the weakness because
many company can advertise their product in the screen before starting the film. . In
order to let more people, their target group in particular, to notice that they having a
function collaborating with well-known restaurants in the Dhaka-chittagong highway.

Marketing strategies

Assumptions

Bangladeshi informal parties tend to start with Biriani, Mattoon, Chicken followed by
beef, salads and other main courses.

Bangladeshi formal functions and dinners etc. are started by with the same thing
followed by a drink and a small bite, often with a speech of someone followed by an
extensive range of premium foods.

Segmentation, targeting and positioning

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Market segmentation

Market segmentation is resorted to for achieving certain practical purpose. For example,
it has to be useful in developing and implementing effective and practical marketing
programmes Mostafa Consumer market segmented on the following customer
characteristics

1. Geographic segmentation

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Potential customers are in a local, state, regional or national marketplace segment. If a
firm selling a product such as farm equipment, geographic location will remain a major
factor in segmenting target markets since their customers are located in particular rural
areas. While for retail store, geographic location of the store is one of the most
important considerations, in this case city areas are preferred. Preferred segmented area
of Mostafa is Chittagong because it is a Chittagong based company and people of
Chittagong division use extensive amount of cooking oil. It is a nation wide brand but no
they are focusing on the rural people.

2. Demographic segmentation

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Income Household with higher income
House hold with average income
House hold with lowest income

Mostafa divided their demographic segment in three parts, like: house hold with higher,
middle and lower income. Important Segmentation is done on the basis of income level
of a household because 5 liter Mostafa soybean oil priced at 460 taka. But usually people
with average and lowest income buy 1-1, 5 liter. That’s why Mostafa segmented the
market in that way.

3. Physiographic segmentation

Social class Household upper class


House hold middle class
House hold lower class

Mostafa segmented the physiographic stratification into three types’ as Upper, middle,
and lower class. For each segment, they differentiate their products. Like, they are
producing 5 liter for upper class people. They are targeting the each class of social
stratification. In each class, their main focus area is the women because they are a bit
caring about the family.

4. Behavioral segmentation

Variables Types
Benefit Quality Service Economy
sought

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User status Non user Regular Potential
Loyalty Medium Strong Absolute
status

According to the purchase decision, they segment the household who regularly sought
quality, service and economic price. They segment the user status as non-user, regular
and potential. They also were segmenting the loyalty status as medium, strong and
absolute. User statuses are important issue here because people seeking quality
products with premium price. Household seeks quality products because of good health.

TARGET MARKET STRATEGIES

A company can follow several different target-market strategies and Targeting strategies
usually can be categorized in various ways:

‘’ Mostafa target market strategies is full market coverage’’

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Full market coverage –

Mostafa attempts to serve the entire market. For This coverage the are following mass
market strategy in which a single undifferentiated marketing mix is offered to the entire
market, or by a differentiated strategy in which a separate marketing mix is offered to
each segment

For Full market coverage, they are differentiating same products in various ways. For
that coverage, they have to achieve potentiality from each segment.

In the above picture, we can see that, these are the products of Mostafa and
performing the same task. But their accommodation is different for
different customer.

Simply we can see it through their social classification ‘

• High Income
We generally knows that, house hold with high income, generally purchase 5 liter . high
income does not mean the rich people. People from upper middle class and mid middle
class also generate high income in respect to their class.

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• Middle group:
Middle class house holds mainly focusing on quality and their purchase decision varies
time to time with price.

• Lower-income people:
Lower- income consumers give more influence on price not on quantity. That’s why they
are targeting lower-income group with plastic pack.

Other than household activities, they are targeting business people as well.
They are targeting all types of restaurants, residential hotel and motel in
Bangladesh.

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POSITIONING:-

We know that Mostafa oil is a big brand but their market position is not very good one.
Even their market share is high though it is potential company in Bangladesh. That’s
why, The main positioning strategy is developing or reinforcing a particular image for
the brand in the mind of the customer.

The main approach to positioning strategy is: - The price-quality approach.

Price quality approach:

Mostafa attempts to offer more in term of service, feature, quality, or performance. They
charge higher prices partly to cover the cost and partly to communicate the fact that they
are of high quality.
In fact in the same product category there are brands, through comparable in qualities,
which appeal on the basis of price.

For example

Brands like Teer and fresh use quality and price positioning technique respectively.
Teer competes for quality and Fresh competes for price. It is difficult to use both quality
and price positioning together because there is a risk that high quality-low price
positioning technique may infer the image of the product in the mind of the consumer.

QUALITY LEXUS
MARKETR

SERVICE, QUALITY, IMAGE,


PREMIUM
MOSTAF
MARKET
A
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SCOPE OF PRODUCT LINE

MASS
MARKET

S.Al
ECONOM am
Y

PRICE

In our example, product S.alam is positioned unfavorably. It is too expensive for the
mass market and its quality is not good enough for the premium segment.

Mostafa is in premium level and they are providing the high quality products with
cheaper rate. As we early discussed, they are positioned at price quality strategy. From
the positioning graph, we can see the exact situation.

Lets look the scenario in the positioning map.

Quality

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Rupchanda

Mostafa

H L
Teer
Fresh
Price

Marketing Strategies

Marketing strategies includes marketing mix decisions are known as 4 P's of product,
price, place (distribution), and promotion.

Product

The product decisions should consider the product's advantages and how they will be
leveraged. Product decisions should include:

Product Quality

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Mostafa promises the highest quality for all of its products. As such the products are also
manufactured to the highest standards. The consistency in Mostafa promises and the
delivered product please consumers.

Product Features

Their product’s features can set it apart from the competition and differentiate it for
competitive advantage.

Mustafa vegetable oil:

• It is Ultra-refined cooking oil, with the best taste, and also better consistency
and coloring.
• Lower in cholesterol and better tasting.
• Lighter and healthier than most other oils.
• Emulsified vegetable oil with rich taste for special cooking’s.
• Cooking oil which tastes like ghee for those who want the best of both worlds.

The total customer value analysis helps us to determine what product the consumer is
getting in the end. It also helps somewhat in the determination of the key features of
Mostafa vegetable oil products.

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Product Design

Design is more than skin deep, it goes to the heart of the product and a good design
contributes to the product’s usefulness. When we talk about oil products the design
element means how the oils and fats themselves are formulated and how their
compositions influence their market.

Mostafa Vegetable oil

Philosophy

“Must be consumer focused and technology driven- a world wide commitment”

Mostafa Vegetable oil has once again demonstrated its compliance with its customer
oriented policy by the extension in its current product category, that’s a unique product
with enriched features. It is altogether a new product, packaged in a 50 gram packet.

Branding

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Branding is an aspect of marketing at which Mostafa oil seems to excel especially when
we think of the Mostafa brand. Since its introduction so many years ago Mostafa has
retained the same motherhood and cooking expert image something which is hard to do
for so long. There are typically four levels of meaning conveyed by a brand name. The
following is an analysis of what Mostafa brand names convey

Brand
Level Mostafa vegetable
oil
Attribute Premium quality,
high prestige
Benefit Tasty food, ease
cooking
Value Motherly love,
tradition
Personality Cooking expert,
tradition

Brand Equity

Brand equity is the amount of power and value a brand name carries in the market.
Firms can capitalize on high brand equity to increase profits and market share. Brand
equity is measured on a three-level scale such as awareness, preference and loyalty.
Here’s how Mostafa vegetable oil brands stand:

Brands
Levels Mostafa vegetable oil

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Awareness High
Preference Medium
Loyalty High

Mostafa oil is probably the most widely known of all products and its equity in the
market is high. Mostafa positioning is that of cooking expert and its equity has built up
that image. Those who buy Mostafa vegetable oil remain more or less loyal to it. Some
buy it because their mothers and grandmothers bought it and some because they deem
it the most dependable. In either case the product does not disappoint the purchaser.
The brand seems to be doing very well in its target market and is building up its equity.

Packaging:

The packaging design for the Mostafa vegetable oil is extremely exciting The packaging
makes the products look more contemporary. It ensures more emphasis on the variants
that have already been a part of the product but never been communicated to the
customer that well.

• PHB – the plastic packaging

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The biopolymer poly-3-hydroxybutyrate (PHB) is polyester produced from
renewable raw materials. Its characteristics are similar to those of the petrochemical-
produced plastic polypropylene. Interest in PHB is currently very high. Companies
worldwide are aiming to either begin production of PHB or to expand their current
production capacity. Some estimate that this could result in a price reduction to fewer
than 5 Euros per kilogram. However, that is still four times the market price of
polyethylene at February
2007.

• Poly

Poly (lactic acid) has become a significant commercial polymer. Its clarity makes it
useful for recyclable and biodegradable packaging, such as bottles and wrappers that
Mostafa used. In biomedical applications, it is used for sutures, prosthetic materials,
and materials for delivery.

• Plastics produced by bacteria

They use the Biodegradable natural plastics can also be manufactured from bacteria.
Within bacterial cells, granules called poly hydroxyalkanoate (PHA) are stored.
Bacteria can be easily grown in bulk culture, and the plastic harvested. Genetic
engineering can also be deployed as a novel biodegradable plastic generating tool. Corn
plants containing the bacterial gene for producing PHA have been shown to produce the
same variety of plastics within their cells.

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But environmentalists argue that the cheaper price of traditional plastics does not reflect
their true cost when their full impact is considered. For example, when we buy a plastic
bag we don’t pay for its collection and waste disposal after we use it. If we added up
these sorts of associated costs, traditional plastics would cost more and biodegradable
plastics might be more competitive.

Price

Discuss pricing strategy, expected volume, and decisions for the following pricing
variables:

• List price

Products Net weight Packaging Retail price

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25 ltr. Tin
Mostafa 5.00 ltr. Plastic bottle 460
vegetable oil
2.50 ltr. Plastic bottle 220
2.00 ltr. Plastic bottle 180
1 ltr Plastic bottle 95
.5 ltr. Plastic bottle 55
100 gm Polyester packet 15

Price Structure of the Market

The market for oil products in Bangladesh seems like a monopolistically competitive
market. That means that it is a market in which many buyers and sellers trade over a
range of prices rather than a single market price and the reason being that sellers can
differentiate their products from each other using quality, features, style and
accompanying services. There are a very large number of buyers and also a large
number of sellers.

Many of the sellers such as tripti, Pusti, Quality and fresh etc. can differentiate their
products from the rest with the different features they offer. Fresh offers UHT treated
oil, Quality sell its ghee in Poly bags Mostafa and Rupchanda differentiate themselves
from the entire market on the basis of quality and so on.

Pricing Strategy

Mostafa market price objective is primarily to tap the upper-middle and upper class
segments. For this they need to achieve product quality leadership and in doing so
they incur high R&D costs. To cover these costs they use value-based pricing and
premium pricing strategies, relying on consumers’ perceptions of their products’
values. Needless say that to support an image/perception of high quality, they have to
provide high quality products as well. The promotion as discussed in the coming section
is also targeted mostly at the affluent section of the market with the advertisements
showing well-to-do families. The cookery program is also to attract affluent housewives

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away from satellite channel cookery programs to local TV where they can view Mostafa
vegetable oil advertisements.

• Discounts

 Distributors get commission from the company. That is known as


distributor commission.
 Wholesaler gets 10% of a product price.
 Retailer got 5% from the product price.

Distribution (Place)

Mostafa vegetable oil limited believes in synergy that is a perfect blend of all the
components of the marketing mix. Proof lies in it having one of the most efficient and
largest distribution (networks) systems in our country.
Mostafa group claims that it takes six weeks for the product to move from the factory to
the shelf. The product travels to the primary distributors within one and half week, then
to the secondary distributor within one and half weeks and finally to the trade level
within three weeks.

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Decision variables include:

• Distribution channels, such as direct, retail, distributors & intermediates


• Motivating the channel - for example, distributor margins
• Criteria for evaluating distributors
• Locations
• Logistics, including transportation, warehousing, and order fulfillment

CHANNEL LEVELS

Mostafa vegetable oil limited aims to achieve maximum retail coverage and is not
selective in its distribution technique. It has direct interaction with its wholesalers and
retailers and they has a network of about 1300 distributors located in Bangladesh.
They used Multiple distribution channels are used.

Sales Setup

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Promotion

Promotional activities are taken to introducing the products to consumer. It’s a way of
influencing buyer to buy the products. Through promotional activates a company wants
to show his products or services value and benefits. The most concentrated promotion
techniques used are television Advertisements. Its ads are shown on deshi channels. The
ads are re-launched after sometime to maintain interest of the consumer and when the
product is modified. Mostafa uses Visibility marketing and Media marketing.

Visibility marketing

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Mostafa oil concentrates most on visibility and availability. They pay a lot of attention
towards this form of advertising. This includes print advertisements, price cards, posters
at vendor’s shops, sign boards, buntings, flags etc.

Media Marketing

Mostafa oil uses different news papers and magazines in promoting their oil but the
major emphasis is on advertisements, shown at the times loving mothers are watching
TV the ads also run at different times of the day specially between 7.30 to 8.30.

Promotional massages

Mostafa oil use Six categories for the promotional packages, including “natural,”
“organic,” “single serving,” “quick,” “fresh,” and “low or no fat,” The low-carbohydrate
craze is testimony to the responsiveness of the cocking oil industry to changes in
consumer preferences, as well as to the difficulty of anticipating consumer demands.

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Sales Promotion

It also plays its role in promoting Mostafa oil by arranging different events like
Channel I ‘’ Ghore Bhaire’’ cooking contests, Ashiyan City & Mostafa vegetable oil
games shows- ‘’Tumio Parbe’’ telecast on Desh T.V.

Personal Selling

There is no personal selling in case of Mostafa oil brand, only business products of
Mostafa group are promoted and sold through this process.
When Mostafa come up with its cocking oil, it gives the trade off to the retailers.

Other mediums

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Print ads in magazines such as Binodhon Bichitra, Jay Din etc. and those read by the
average but literate housewife. Buntings, posters, trade flags (hung at the retailers)
inducing consumers to try the latest taste for Mostafa oil etc.

Besides this, the cookery program that runs every Tuesday evening in ATN bangle is a
good promotion tactic as it shows use of the Mostafa oil in a variety of dishes. They
deliver a massage through that program and that is a housewife’s best friend in every
way.

 The symbol and the color of the tin is also a good way to communicate to the
business and household consumer who can’t read but can easily recognize the tin
by the leaf symbol or the yellow color scheme. There is an advisory service for the
convenience and help of the consumer a cookbook to gift and keep.

 Sales promotion is done to increase sales build image of product in the


consumers so called “black-box” and develop a relationship with your consumers.

 Premiums are offered during Ramadan or offers like a free chat masala packet,
etc. to increase sales. Different sizes (poly bag, plastic bottle, 2.5/ 5 Liter bottle)
are available for convenience of the consumer and to target all segments of the
market. Packaging sent abroad to maintain standards. Brand positioning used is
about benefits of the product itself.

SWOT-analysis

 STRENGHTS

1. Mostafa products have the good market share in Bangladesh in oil and market.
2. They have very high customer loyalty.
3. They take care in keeping the highest quality of the products it produces.
4. They have very brand awareness.

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5. They are the only fat free brand.

 WEAKNESSES

1. Mostafa is a very good brand and their has been very no change in oil color since ages,
people feel that the new better color brands have better products.

 THREATS

1. It is also sold loose to a large rural market.


2. The market is now being entered by quality and Fresh ,these are being bought by
health conscience people this will lead to Mostafa oil decline in market share.
3. The overall market of cooking oil is declining.

 OPPORTUNITIES
1. They have a large market share in the Chittagong, Shylet and Khulna.
2. People in the metropolitan areas are inclined towards branded products.
3. The fat free is still popular and can be advertised to gain the market in health
conscious people.

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