Vora & Company Case Study PDF

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This is the solutions to the case study Vora & Company where Mr. Vora faces the problem of having tried to be too similar to the existing market leader and then in a dilemma of whether or not to change positioning strategy....

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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.

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

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) Number of months Total cases

Direct Costs (in Rs.) ● Material ● Packing tins ● ● ● ●

Other packing materials, wooden case waterproof paper, box strapping pads Direct labour Railway Freight Total Direct cost per case

83 6 498

24.12 21.6 4 5.4 4.8 59.92

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 Total Selling Price for all cases (in Rs.) Loss = Total Cost - Total Revenue Loss (in Rs.)

66 32868

35905.8 - 32868 3037.8...