MARKETING MANAGEMENT

VANRAJ CASE ANALYSIS NOTE

Group members:

Soumya Barman 348

Neha Sankhe 318
Yogendra Mistry 358
Sameer prakash 338
Raghav Bhasin 328
Aravind Balaji 308

Vanraj Case Analysis Notes Group 8Page 1

Contents

1. Segmentation and Targeting

2. Comparative analysis of Vanraj and other tractors
3. Break even analysis basis projected profitability

Segmentation and targeting

On the basis of usage of tractor

1. Agriculture

Vanraj Case Analysis Notes Group 8Page 2

 By 2020, 325 Million tonnes of food grains are required with per capita arable land decreasing
and average land holding in India has decreased from 2.3 Hectares to 1.57 Hectares which means
more marginal and small farmers and so is the urge per mechanization of firms.

Less fuel consumption i.e. 1.5 Lt of diesel per hour compared to larger tractor whose
consumption is 4 Lts of diesel per hour.

Advantages over Bullocks,

Hence, targeting the usage of tractor in agriculture will be reap maximum benefits because the
cost of Vanraj tractor is comparable/less than Bullock. Vanraj will serve as a major alternative for
use of bullocks.

2. Horticulture and cash crops:

Three wheel convertibility features are very useful for better maneuverability and controlling
farming operations specially in inter-culture operation for cash crops like cotton, ground nut and
horticulture crops.

It can be used for spraying pesticides, fertilizers and line marking in orchards.

3. Industry:

Vanraj Case Analysis Notes Group 8Page 3

 Versatile technology With few modifications it can be used in material handling industries,
warehouses, construction works and airports.

Municipal Corporation can also use them on narrow streets of cities for waste collection and
dispose of services.

On the basis of land holding

1. Small and holdings:

Most of them do not have tractors at field and this segment has huge potential for vanraj.

The benefits of the tractor are affordability, low maintenance cost, three wheel convertibility and
durability.

Moreover for small tractors the sales in India are just 1 % of the total sales this increases the
lucrativeness of this segment. Few companies do produce small tractors but their performance
has not been impressive.

Better maneuverability and control, it can reach every corner of the field.

It can be used as a power take off point which enables a tractors engine to be used as a generator.

2. Large holdings:
Tractors price is half the large tractors price but still it can carry almost the same amount of
weight (2 tones).

It is twice as fuel efficient as compared to the larger tractors (1.5 Lts of diesel per hour).

Vanraj has a single piece casting tractors so easy repair and easy maintenance.

On the basis of geographical area

1. North: U.P, Punjab, Haryana:

Marginal farmers are phenomenally in Punjab. They would prefer lower HP tractors. 10HP
tractors are new and its easy to penetrate in his market, it also has Alluvial soil thus requires
lower HP.

2. Western and South: Gujarat, Maharashtra, M.P and southern states:

Vanraj Case Analysis Notes Group 8Page 4

 In these states Small farmers are notable. As of now the market is not open but future sales
volumes are expected from here.

2. Comparative analysis of Vanraj and other tractors.

Vanraj Bigger Tractors

Cost of diesel (lit/hr) 1.5 4
Hourly utilization per year(hours) 1000 1000
Annual Diesel utilization for small farmers (lits) 1500 4000
Annual diesel expenditure (Rs.) 60000 160000
Life of a tractor (years) 8 8
Total diesel expenditure for small farmers (Rs.) 480000 1280000
Cost per tractor 190,000.00 320,000.00
Lifetime Maintainence cost per tractor (percentage) 12.50% 12.50%
Lifetime Maintainence cost per tractor (Rs.) 23,750 40,000
Total 503,750 1,320,000

Amount saved by small farmers on using Vanraj 816,250

Vanraj Case Analysis Notes Group 8Page 5

 3. Break even analysis basis projected profitability

Comments
1 year Capital 1,250,000
Building cost 10,000,000
Total Fixed cost 11,250,000
Effective fixed cost
I year fixed cost 1607142.86 for one year
Contribution from 300 tractors 1,636,000
Contribution from 1 tractor 5453.33333
No. of tractors required to be sold to reach break even 294.708348

2 Year Contribution from 330 tractors 1,744,000

Contribution from 1 tractor 5284.84848
Similar analysis for
the remaining 5
No. of tractors required to be sold to reach break even 304.103866 years

Therefore, Projected Sales are greater than break even sales

Vanraj Case Analysis Notes Group 8Page 6