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) are RBD
Palmolein of Malaysian and Indonesian origin. The total import of edible oils during the period
from November 1998 to October 1999 totaled 4.4 million tons valued at more than Rs. 9.000
crore. That was against a demand –supply gap of 1.4 million tons in 1998-99. Imports have
therefore deluged the market. 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 the 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.

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, Rexene, Shrimp cultivation,
processing & Export, Textile & Readymade 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

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 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.

Environment

The total project is free from Air pollution and there is no possibility for pollution of
environment as because the byproduct 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 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.
Mission

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.

Objectives

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 go ahead with our slogan “For a Bright Future.

Values

Safety: protecting employees, the environment and installations.

Confidence: honoring our relationships.

Commitment: Complying exactly with 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

Vision

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

Threats 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 imported oil and that of branded oil.

Barrier 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.

Bargaining power of suppliers low

As oilseeds production is widely dispersed, supplier power per se is weak.
Bargaining power of buyers low to medium
As edible oil is a consumer product, buyers are widely dispersed because of which bargaining
power of an average consumer is low.
Inter firm rivalry high
Continued growth in edible oil demand is attracting new players/capacity addition in the sector.
Refining capacity dispersed because of which bargaining power of a being added near ports to
refine imported crude oil. Trader importers are also making efforts to build brands to
differentiate the product, secure higher realization.
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. 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. 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 Rupchanda, Bangladesh Edible
oil limited. Others are-TRIPTI, TEER, DADA, FRESH, PUSTI, 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 tons in the first half of 2008-
2009 up from 1.82 million tons 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 tons this year. Soya oil in particular saw
strong growth. Imports of crude soy oil leapt to 735.352 tons in the November 2007 to April
2008 period up from 236.990 tons in a year earlier. Crude palm oil purchases rose 10.8 percent to
1.01 million tons 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 tons last year. 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 tons 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.
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
feedback from the company, like whenever any scheme is introduced by the
company; they are not even made aware of the scheme.

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%

Teer 13%

Mostafa 10%

Tripti 10%

Fresh 8%

Pusti 7%

Quality 5%

Dada 5%

Jaya 3%

S.Alam 2%

Other 3%
Source: Bangladesh Retail Audit-2009, Pie chart.

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

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

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.

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 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, Mutton, 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

Corporate & Marketing Objectives

Segmentation:

• Consider variables for segmenting markets

• Look at profile of emerging segments

• Validates segments emerging

Targeting:

• Decide on targeting strategies

• Decide which & how many segments should be targeted

Positioning:

• Understand customer perceptions

• Position products in the mind of customers

Marketing Mix

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 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 nationwide brand but no they are focusing
on the rural people. Pie Chart: Segmentation Ctg40%.Dhk13%.Khulna20%.Shylhet 27%.

2. Demographic segmentation

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 sought Quality Service Economy

User status Non user Regular Potential

Loyalty status Medium Strong Absolute

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”

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. (Bottle,Tin & Packet)

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. ( Bottle of
5ltrs)

Middle group:

Middle class house holds mainly focusing on quality and their purchase decision
varies time to time with price. (Bottle of 2-3 ltr)

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.

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 LEX
US

PRE MA
SERVICE, QUALITY, IMAGE, MIU RK
SCOPE OF PRODUCT LINE M ET
Mosta R
MAS
fa MA
S
RK
MA ET
RK
ECO ET S.Ala
m
NO
MY

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.

 H

Rupchanda Quality

Mostafa

H L

Teer

Price

Fresh

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 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.

Mostafa 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 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.

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

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

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 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.

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.

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

25 ltr. Tin

Mostafa vegetable oil 5.00 ltr. Plastic bottle 460

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 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.

Factory Depot Distributor Wholesaler

 Retailer

Customer

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

Sales Controller

GSM TMM

Branch Manager Sales Category Manager

Area Managers

LDMs or Territory Managers & JMs

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 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.

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

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.

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.