Q1) Should Mr.Vora continue in this business?

Yes, Mr.Vora should continue his business of Blossom Oats due to the
following reasons:
 Consumers have rated Blossom Quick Cooking Oats equal or better than
the competing product.
● Mr.Vora’s Blossom Oats is the only second product of its category in the
market.
So, market share won’t be shared with any third competitor.
The price of Blossom Oats is less than that of the Champion Oats ,
encouraging price sensitive customers to prefer it.
People of South India have widely accepted the product.
So, a large market can be captured in South India with proper marketing.
The product’s preparation takes only 5 minutes as compared to 30minutes
required for normal oats.

Q2) What are the major problems faced by Vora and Company?

Major problems faced by Vora and Co. are,

● Mr.Vora was not directly connected with the distributors, putting the
responsibility on sales agents for running the business.
● Inspite of high demand in South India for Oats, the sales decreased
because of unexperienced agents
● Insufficient interaction between the selling agents and Mr. Vora as
communication was done only through mails.
● There was improper communication between Vora & Co. and the selling
agents.
● Lack of proper research (about product and competitor) done before
entering the market in 1959.
● No proper advertising campaign was held to promote the product.

Q3) 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 carry out a comprehensive market research to
understand the consumer behaviors , their buying preferences and their
regions.
● Alternative packaging options must be identified as the current cost of
packing (while using tin) is about 36% of the total direct cost.
● The packaging can be done for different quantities rather than only 550
gram packs so as to cater to various segments of customers like large
families, small families, single people.

(B) Advertisements and promotions

● The tagline ‘Quick Cooking White Oats’ must be highlighted.
● More mediums of advertising such as newspapers, radio etc must be used
for promotion, especially in the regions where the popularity of Blossom
Oats is less.

(C) Pricing
● Commission of sales agents in sound India should be increased from 10%.
● The packaging price of Blossom Oats(while using tin) is about 36% of the
direct costs which must be reduced.

(D) Sales and distribution

● The employment of an inexperienced sales agent resulted less sales in
southern India.
So, experienced and efficient sales agents must be employed in the regions
of potentially high sales.
● More sub-distributors should be employed to increase penetration of the
product into bigger markets.
● Mr. Vora should have personal meetings with the distributors and
retailers to decrease the communication gap.
● The distributors & agents must maintain sufficient inventory of the product
for faster & efficient delivery to customers.
PROFIT-LOSS CALCULATION
● Average sales per month (cases)= 83
● Number of months=6
Direct Costs (in Rs.)
Material 24.12
Packing tins 21.6
Other packing materials 4
Direct labour 5.4
Railway Freight 4.8
Total Direct cost per case 59.92

Total Direct cost for all cases=59.92*6*83= 29840.16

Overhead Cost per case (in Rs.) 12.18
Total Overhead Cost for all cases (in Rs.)= 6065.64
Total Cost (in Rs.)= 29840.16+6065.64=35905.8

We assume Rs.66 (average of 64 and 68) as the average selling price of the
case.
Selling Price per case (excluding commissions and trade discounts)=66
Total Selling Price for all cases (in Rs.)= 66*6*83=32868
Loss = Total Cost - Total Revenue
Loss (in Rs.)=35905.8 – 32868=Rs.3037.80
3037.8
3037.8