lOMoAR cPSD| 3695496

Case analysis

Summary of the fact

This case deals about the company started by the M.C Vora. Vora and company manufactures of
blossom quick-cooking oats. The company is facing problem to establish the product in the market,
as the product the company makes if good in quality and I.S.I approved but due to some
communication and marketing strategy problem the company is not getting success.
Mr. vora is looking for the solution which might help them to increase their business
Analysis of the problem

 The first problem that is faced by the company is due to the improper data and figures and
without a proper market survey.
 The product fail in south india which were the largest market for oats.

Product
The product made by the vora and company was I.S.I marked, company is producing high quality
oats , as tested on the consumer and was rated by them equal to better than the competing
product.
Pricing
Proper pricing was done by the blossom oats as the price selected by the company is less then their
competitor in the market. The listed price of the product in north region is 81 per case of 36 tins. In
Bombay and south india the price was rs 85.
Promotion
The advertising was not done properly the spending on advertisng was rs 4000 without any
apparent sales response to justify such expenditure .

1. Should Mr.Vora continue in this business?

Mr.Vora should continue his business of Blossom Oats as
● The product quality and the taste of Blossom Oats was found to be equal to or
better than competing products.
● Mr.Vora’s Blossom Oats is one of the only two competitors that are serving the market.
● Close to 3 years is an insufficient quantum of time for the business to comment on the
viability of operations. Initially, Champion also took around 3 years to get established in
the national market.
● There are numerous drawbacks (mentioned in Question 2) of the current operating and
marketing model which can be easily rectified.

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2. What are the major problems faced by Vora and

Company? The major problems faced by Vora and Co.

are,

● Lack of market research, analysis and information and data about operating model of the
competitor.
● The total cost to the company was greater than the total revenue generated by the
company. Calculations are attached at the end.
● The current distributors merely take orders from retailers and supply the same from Vora
and Co. With no stocking and delivering by distributors, there were shortcomings in its
logistics.
● Mr.Vora was not connected with the distributors, leaving the responsibility solely on the
agents
● The packaging price of Blossom Oats is about 36% of the direct costs which has to be
reduced.
● With communication only through mails, the interaction between the selling agents and
Mr. Vora was minimum.
● USP of the product, which is “Quick-cooking”, is not prominently highlighted in the packets
● No proper advertising campaign.

Q 3) Should Vora make any changes in decisions concerning:

(A) Product and packaging
(B) Advertisements and promotions
(C) Pricing
(D) Sales and distribution

(A) Product and packaging

● The company has to do a comprehensive market research to understand the demands of

various regions.
● The current cost of the packing tin is around 40% of the direct cost incurred. This cost
needs to be brought down by looking into alternative packaging options.
● The packaging has to innovative and differentiable from its competitors like ‘Champion
Oats’.
● The packaging can be done in other measurements rather than only 550 gram packs
which would be able to cater to various segments like larger families depending upon the
consumption.
● Their USP is ‘Quick Cooking’ and it should be highlighted.

(B) Advertisements and promotions

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The picture of ‘Smiling Girl’ should be changed as it is very similar to that of Champion Oats.There
should be a provision of incentives for retailers and distributors according to the quantity of
sales.Given that Mr. Vora is ready to put in the funds, so there is no dearth of funds. Thus a more
effective and aggressive promotional strategy should be implemented which can lead to an
increase in the penetration of the product.

(C) Pricing

● Alternative packaging solutions should be developed which can help in reducing the cost.
● The commission to agents should be kept marginally above that of Champion Oats so
that they can lure some of the bigger agents from Champion Oats.

(D) Sales and distribution

● The disappointing sales in the southern India, which was considered to be the biggest
market, were result of the employment of an inexperienced sales agent. So in the areas
of potentially high sales, experienced and efficient sales agents must be employed.
● The distributors & agents must keep inventory of the product for faster & efficient
delivery to customers as improvement of the sales & distribution channels is immensely
essential.
● Distributors should employ more sub-distributors to branch out the process and reach a
bigger market.
● Mr. Vora should have personal meetings with the distributors and retailers for better
communication.

PROFIT-LOSS CALCULATION

● Average sales per month (cases) 83

● Number of months 6
● Total cases 498

Direct Costs (in Rs.)

● Material 24.12
● Packing tins 21.6
● Other packing materials, wooden case waterproof paper, box
strapping pads 4
● Direct labour 5.4
● Railway Freight 4.8
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● Total Direct cost per case 59.92

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Total Direct cost for all cases 29840.16

Overhead Cost per case (in Rs.) 12.18

Total Overhead Cost for all cases (in Rs.) 6065.64

Total Cost (in Rs.) 35905.8

Regarding the selling price of the cases, since it is different in southern & northern region,
& as mentioned in the case that southern region sales were disappointing, we assume Rs.
66 as the average selling price of the case after paying commissions to all the agents and
distributors.

Selling Price per case

6
6
Total Selling Price for all cases (in Rs.)
328
68

Loss = Total Cost - Total Revenue

Loss (in Rs.) 35905.8 - 32868
3037.8

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