Vohra case
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Vora and Company began selling quick cooking oats under the brand Blossom in 1961 as a competitor to Champion oats. [1] However, by 1963 sales had failed to become profitable. [2] The product was still in the early introduction stage of its life cycle and not well established among Indian consumers. [3] Marketing efforts including a Rs. 4,000 advertising campaign did not increase sales enough to cover costs. [4] The company was losing over Rs. 3,000 per month based on current sales and overhead costs. [5] Changes were needed to the marketing mix and business operations to make Blossom oats successful.
Vohra case
- 1. CASE ANALYSIS VORA AND COMPANY A REPORT BY ABHISHEK MALOO
- 2. CONTENTS… SITUATION ANALYSIS PRODUCT LIFE CYCLE MARKETING MIX COST ANALYSIS THREATS OBJECTIVES ACTION PLANS
- 3. VORA AND COMPANY Executive Summary Mr. Vora’s family had been in the group business for several generations. In 1959 after the Government of India had stopped the importation of packaged cereals, Mr. Vora and his family decided 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 quick cooking 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 Company adopted a round heavy tin package similar to that which was being used for Champion. The management had adopted the trademark Blossom. The company had been organized in 1959, had started to sell its product nationally in 1961, but by December 1963 had failed to attain a profitable volume 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 habit of the consumers, because it is a food item and also meant for breakfast which is ingested inside the body. So changing the normal concept of breakfast food is a bit tricky.
- 4. PRODUCT LIFE CYCLE Here the Oats is in a very early part of the introduction stage of PLC. Moreover the product category comes into existence .The product is not much satisfactory and Blossom wants to get the results quicker.As it is a new concept of breakfast for the other parts of india other than South India where it is 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:
- 5. 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 the major cities in which he had sales representation. After spending some Rs. 4,000 without any apparent sales response to justify such expenditure, he ceased his advertising. Place: To secure distribution of its products Vora and Company appointed agents, who generally were selling non-competing food products, with exclusive regional rights. R.C. Ramanathan of New Delhi as exclusive agents for sale of the products to retailers.This firm also handled the products 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. They had 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 whom they gave 2½ per cent off list price out of their commission. Retailers were allowed a trade discount of 10 percent off Vora and Company’s list price. Thus, the company received from its sales, list price less 20 per cent. Real Loss Vs Opportunity Loss Here Champion was having high risk of maintaining inventories and bearing real loss if the salesman cannot meet the target but there is a pressure in case of Champion as the wholesalers are laden with inventories whereas in case Vohra the channel partners have to give orders and wait for the consignment to arrive. Cost Analysis Monthly Overhead Cost Direct 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
- 6. He is selling Rs 170 & half the break. So he has loss more than Rs 3000.