Factors Influencing the Purchasing of Branded Vs. Non-Branded Coconut Oil – The Case In End Consumers of Coconut Oil in Sri Lanka


Factors Influencing the Purchasing of Branded Vs. Non-Branded Coconut Oil – The Case In End Consumers of Coconut Oil in Sri Lanka

Word Counts 15439



Executive Summary


1.1 Introduction

1.2 Background of the Study

1.2.1 Marina Foods (Pvt) Limited

1.3 Research Problem

1.4 Performance Gap

1.5 Justification for the research study

1.6 Research Objectives

1.6.1 Primary Objective

1.6.2 Secondary Objective


2.1 Introduction

2.2 Sri Lankan Edible Oil Industry

2.2.1 Coconut oil

2.3 Factors influencing the purchase intention

2.3.1 Product attributes and trust

2.3.2 Brand loyalty

2.3.3 Perceived economic situation

2.3.4 Income

2.3.5 Environmental Influences

2.3.6 Image reputation

2.3.7 Consumer attitudes

2.3.8 Perceived benefits

2.4 Factors influencing the Purchase Intention in relation with Coconut oil


3.1 Introduction

3.2 Purpose of the study

3.3 Conceptualization of the study

3.4 Operationalization

3.4.1 Perceived benefits and product attributes

3.4.2 Brand Loyalty

3.4.3 Trust

3.4.5 Customer attitudes

3.4.6 Environmental influences

3.4.7 Image reputation

3.4.8 Purchase intention

3.5 Hypotheses Development

3.6 Measurement and Data Analysis Methods

3.7 Research Design

3.8 Researcher Interference

3.9 Study Setting

3.10 Unit of Analysis

3.11 Time Horizon

3.12 Sample Design

3.12.1 Population

3.12.2 Sampling element

3.12.3 Sampling Unit

3.12.4 Time

3.12.5 Sampling Technique

3.12.6 Sample Size

3.13 Data Collection

3.13.1 Data Collection Method

3.14 Measurement and measures

3.14.1 Scaling

3.14.2 Coding

3.15 Reliability

3.16 Summary


4.1 Introduction

4.2 Analyzing the Sampling Profile

4.2.1 Filtering Question

4.2.2 Gender Composition

4.2.3 Age Composition

4.2.4 Educational Level

4.2.5 Average Monthly Income of the Respondents

4.3 Normality Test of Variables

4.4 Analysis of the Variables through Regression

4.4.1 Independent Variables

4.4.2 Multiple Regression Model

4.5 Summary


5.1 Introduction

5.2 Findings and Recommendations

5.2.1 Objective One

5.2.2 Objective Two

5.2.3 Objective Three

5.2.5 Objective Five

5.2.6 Objective Six

5.2.7 Objective Seven

5.2.8 Objective Eight

5.3 Research Limitations and Further Research Areas

5.4 Conclusions

5.5 Summary

Additional information


1.0 Title
Factors Influencing the Purchasing of Branded Vs. Non-Branded Coconut Oil – The Case In End Consumers of Coconut Oil in Sri Lanka.

Examine the identified determinant factors of coconut oil purchase intention of Sri Lankan
coconut oil industry is the main objective of this study. A variety of literature in the
particular fields was gathered in order to identify specific elements of determinant factors of
coconut oil purchase intention. Today, rationale consumers are extremely worried about their food safety and the quality of the edible oils they consume has become a major concern within the context. Therefore, it is vital for the companies in the Sri Lankan coconut oil industry to investigate the factors that affect the purchasing of both branded and non-branded coconut oil.

2.0 Introduction / Background

Within the scope of the proposed study; the researcher has identified the broad area related to the impact of the factors influencing the purchasing behavior on branded vs. non-branded coconut oil of end consumers in Sri Lanka.
Since Sri Lanka is an agricultural country, most of the economic activities are based on the agriculture. Mainly, tea, coconut and rubber are the main 03 crops that produce in Sri Lanka. Most of these agricultural products are used for both exports and local consumption. In this study, we concern only on coconut products in Sri Lanka. Among the coconut products, coconut oil is the main product category which we focus using the present study. As Sri Lankans, many households use coconut oil for their day today activities. Large number of people use coconut oil for various purposes such as household works (for cooking, for frying) and for religious activities (most of Buddhists and Hindus use coconut oil for their religious activities), and so on. Basically, coconuts are planted in different areas in Sri Lanka. There is a coconut triangle which we can find in Sri Lanka where coconuts are planted heavily in this area.
As per the “Sri Lanka Coconut Oil Production by Year” chart (Source: Colombo Page
News Desk), from the year 2009 to 2016 the growth rate of the production of coconut oil
in Sri Lanka is 0.00%. That means there is no growth rate in production of coconut oil in Sri Lanka. And also, the amount or quantity is only 43 (1000 MT). But, in 2015 and 2016, it has become 44 (1000 MT). That shows even though coconut oil is the main cooking oil in Sri Lankan end consumers, almost there is no growth we can find in that.
When mentioning about the branded coconut oil in Sri Lanka, there are a few players
engaged in this industry. Marina, Turkey, N-Joy and Fortune are some of players engaged
in the Sri Lankan coconut oil market. Most of them use new technology to produce
quality coconut oil for the end consumers. Many industry players have product manufacturing
facilities with internationally accepted and environmentally friendly manufacturing processes. As an example, Marina has obtained ISO 22000, HACCP, Halaal Certificate and GMP certificate and they use internationally accepted physically refining processes (www.marina.com). Some players’ use physically refining processes and others use chemically refining processes.
Even though Sri Lankan coconut oil manufacturers are capable of producing best quality coconut oil, palm oil and edible oil categories are increasingly becoming popular among Sri Lankan consumers, mainly due to the low cost involved. Many health experts believe that coconut oil is the safest out of all oil categories, however, current industry statistics do not reflect a growth in the coconut oil segment (Wijerathne, 2015). Hence, the Marina Foods (Pvt) Limited which is the organization of the study has decided to initiate a study investigating the factors that affect the purchasing of both branded and non-branded coconut oil in Sri Lanka.
“Coconut oil is the healthiest oil on Earth” (Bruce, 2015, p.45). And also, it provides a lot of health benefits like treatment for AIDS. Coconut oil is about 50% Lauric Acid. Dr. Jon J. Kabara and Dr. Mary Enig emphasize the importance and benefits of the Lauric Acid. Why has coconut oil brought down to such a low reputation in the recent past despite scientific facts in favor of it? The reason for negative propaganda against coconut oil is due to politics and economics. This has been a major issue for the global coconut oil industry. In the recent past, there were number of rumors against the coconut oil consumption, pointing out the health issues such as high blood pressure, cholesterol, etc. Nevertheless, many scientific research findings still advocate the coconut oil for its natural health benefits.

2.1 Marina Foods (Pvt) Limited

Marina Foods (Pvt) Ltd. is a fully Sri Lankan owned company which is a member of the group NMK Holdings. Marina is the flagship brand of the company and they are in the business of supplying high quality edible oil, margarine and fats to hotels, restaurants, bakery trade and industries. Being a home grown company, their main intention is to build a healthy and strong nation with safe premium quality products. Marina Foods (Pvt) Ltd. was incorporated in the year of 2009 and today it has an annual turnover slightly over 4 billion rupees. Using an internationally accepted physical refining process, Marina products are completely free from harmful chemicals with a high nutritional value. The company follows an environmentally friendly manufacturing process which signifies their social responsibility and commitment towards being a good corporate citizen. The manufacturing plants are equipped with ultra-modern laboratory facilities to ensure quality conformance and product safety. Most of the production processes follow the green concept and they expect to maximize customer value through these initiatives in both domestic and international markets.
However, with the growing myths against coconut oil consumption, their sales growth has recorded a decline which alarmed the senior management regarding the sustainability of the business model. Further, few of their recent customer and market related KPIs reflected some issues. These will be elaborated within the problem identification stage.

3.0 Problem Identification

Most of the companies or shops in Sri Lanka do not have a clear idea on what elements /
independent variables or factors influencing purchasing behavior of coconut oil should be
highly considered and how to handle these factors carefully. This may lead to the market
shares of branded (10%) and non-branded (90%) coconut oil in Sri Lanka which was
mentioned above (Samarajeewa and Gunatilake, 2014).
As identified above, Marina Foods (Pvt) Limited showcases a slow sales growth rate over the last few years. Further, their recent customer and market related KPIs have signaled that customer preference and the trust over their products are slowly deteriorating. A recent customer survey carried out by the marketing team revealed that customer satisfaction and the customer retention have significantly gone down.