CASE ANALYSIS VORA AND COMPANY A REPORT BYABHISHEK MALOO
CONTENTS…SITUATION ANALYSISPRODUCT LIFE CYCLEMARKETING MIXCOST ANALYSISTHREATSOBJECTIVESACTION PLANS
VORA AND COMPANYExecutive SummaryMr. Vora’s family had been in the group business for several generations. In 1959 after theGovernment of India had stopped the importation of packaged cereals, Mr. Vora and his familydecided to enter the business of processing and selling a product similar to Quaker brand of quick-cooking rolled oats. After this the Ganesh Flour Mills of Delhi started to develop and market a quickcooking white oats under the trademark Champion and soon it extended its distribution nationally,devoting a moderate amount to advertising in city markets throughout India. Vora and Companyadopted a round heavy tin package similar to that which was being used for Champion. Themanagement had adopted the trademark Blossom. The company had been organized in 1959, hadstarted to sell its product nationally in 1961, but by December 1963 had failed to attain a profitablevolume of sales.Situational Analysis 1. Product: Quick Cooking Oats. 2. Need/Want :It is to be created. Combination of need & want creates demand. Competition is between : 1.Product 2.Generic (normal breakfast food items). Here competitor is champion & all breakfast foods, and it is very difficult to change the habitof the consumers, because it is a food item and also meant for breakfast which is ingested inside thebody. So changing the normal concept of breakfast food is a bit tricky.
PRODUCT LIFE CYCLEHere the Oats is in a very early part of the introduction stage of PLC. Moreover the product categorycomes into existence .The product is not much satisfactory and Blossom wants to get the resultsquicker.As it is a new concept of breakfast for the other parts of india other than South India where itis been adapted well by the people as a breakfast item.Product features which will attract new consumers: 1. Nutritive factor – an important factor for customer. 2. Good to taste.- 3. Easy and fast to cook.- meant to attract the housewives. Marketing mix or 4 P’s: Product – The Blossom tin contained 550 grams of oats, the quantity contained in what was thought to be the largest selling package of Champion Oats, although Ganesh Mills also marketed a tin containing 750 grams. Price: The list prices for Blossom Oats as of December 1963, varied by section of the country. In North India, the list price was Rs.81 per case of 36 tins. In Bombay and South India the price was Rs. 85. As stated previously, the product was sold F.O.R destination; the commission to agents was 10 per cent off list; sub-agents were granted 2.5 per cent off list our of the agent’s 10 per cent; the retailers were granted a trade discount of 10 per cent off list. Thus Vora and Company received from the sale of each case the following:
In North India Rs. 64.00 (Rs. 81.00 less 20%) In Bombay and South India Rs. 68.00 (Rs. 85.00 less 20%)Promotion: From the start of the national distribution the selling agents had urged Mr.Vora to advertise Blossom Oats. For some months he undertook such advertising in themajor cities in which he had sales representation. After spending some Rs. 4,000without any apparent sales response to justify such expenditure, he ceased hisadvertising.Place: To secure distribution of its products Vora and Company appointed agents, who generallywere selling non-competing food products, with exclusive regional rights. R.C. Ramanathan ofNew Delhi as exclusive agents for sale of the products to retailers.This firm also handled theproducts of a large and well-known firm of packaged food manufacturers.Messrs. R.C. Ramanathan were granted a commission off 10 percent of list price. Theyhad three permanent salesmen covering their territory. In turn, they appointed sub-distributors in large town or cities such as Delhi, Agra, Gwalior and Mussorie to whomthey gave 2½ per cent off list price out of their commission. Retailers were allowed atrade discount of 10 percent off Vora and Company’s list price. Thus, the companyreceived from its sales, list price less 20 per cent.Real Loss Vs Opportunity LossHere Champion was having high risk of maintaining inventories and bearing real loss ifthe salesman cannot meet the target but there is a pressure in case of Champion as thewholesalers are laden with inventories whereas in case Vohra the channel partners have togive orders and wait for the consignment to arrive.Cost AnalysisMonthly Overhead CostDirect cost : Rs 60/case (for ease of calculation).Revenue per case64.809 (N.India) 75.68(S.India)Contribution = Sales-variable cost = Rs (66-60) = Rs 6 per case Breakeven loss=170. Sales= Rs 500 over per month
He is selling Rs 170 & half the break.So he has loss more than Rs 3000.