(Prashant Narula (Roll No 078)

Section A

Assignment Name: Vanraj Mini - Tractors

Mentored by Professor Dr. Joffi Thomas

Early Inventor of the Vanraj Tractor - Bhanjibhai

 (Prashant Narula (Roll No 078)
Section A

Preamble

 M/s Pramal Farmatics Pvt. Ltd acquires the rights of manufacture & sale of Vanraj

 Its owned by three Entrepreneurs Shri. Jagdip Trivedi, Shri. Jayanti Bhai Patel and
Shri Pragnesh Patel, and set up a facility near Anand Gujarat

 At the onset it was a material handling company at early stage

 Seeing an opportunity the promoters are keen to manufacture and market the small 10
HP tractor under the brand name of ‘Vanraj’.

 Massive effort & belief tbe Company ensured it pursued and got the certification of
Central Motor Vehicle Rules (CMVR) from Central Farm Machinery Testing and
Training Institute (Budhni, MP).

 The company owing to its existence and lineage had technical and professional
experience before it decided that Vanraj was it wanted to do and entered in the
business
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Section A

PEST Analysis
 Political Factors – The company is not influenced largely by any such factor

 Economic Factors - The company identified small & marginal farmers, large as well and the
horticulturist etc.. the company was the into small scale industry seeking its best fitment
 Apart from the Government subsidy in the category the company got funding from the
government wing for the technological refinement

 Sociological Factors – the tractor or category was focused to cater small usage which was not
tackled by the current market operators and was under 1 %.

 Technological Factors - For buying the tractors, the farmer’s consider the HP as the main factor
but beside this there are other factors, the tractor is a status symbol, has its masculinity and
also it is the sign of prosperity. The tractor purchase by a farmer also has lot of other social
significance and was important. Most of the consumers were small and marginal farmers.
 (Prashant Narula (Roll No 078)
Section A

Vanraj Mini-Tractors
Q 1) Evaluate the attractiveness of different market segments for Vanraj?

Small and Marginal Farmers:

 Huge Market Potential as 82% of total landholdings did not own tractors.
 Price although expensive for unstructured and low technological competition, they
were cheaper compared to competitors with similar or lessor features, especially for
small and marginal farmers.
 Features, such as the three-wheel was innovative among its peers and what really
stood out was the tested Power Take-Off point, which are very useful for this
segment.
 Competitors completely lacked in these important features which made it a
leadership quality product.
 In comparison to traditional options as bullocks, Vanraj was much better, also its
options were costly and much more liable for amortization.
 The category normally serviced by Chinese tractors, which were a competition to
small tractors, in durability and tough Indian conditions (heat) could not match in
features.
 Indian farmers land holding was reducing year on year and it was continually
reducing for the size of land owned.
 No competition from large players in the market, who are mainly focussed on
medium and large tractors.
 The government also was helpful in the form of subsidies and credit, thereby
boosting sales.
Large Farmers (including Horticulture):

 The product was highly economical compared to other tractors available in the
market (both fuel cost as well as construction).
 The higher horsepower which was procured mainly by the large farmers owing to the
average size of their land was also continually growing towards the higher
horsepower
 Large farmers having the paying capacity and there need to purchase tractors was
integral
 Vanraj tractors were able to provide all the functions of big tractors at a much
smaller size and cost. Thus, if the product is viable – customers would replace large
tractors with Vanraj as it is more manoeuvrable and saves money.
 Definitely more economical than competitors (both buying cost and fuel cost).
 (Prashant Narula (Roll No 078)
Section A

Industries:

 Despite its size Vanraj tractors could easily handle 2 tonnes of load.
 There was an ease of converting the tractor from a farmer vehicle to industry vehicle
which worked in its favour and was a differentiator.
 The tractor can be used for a wide variety of industry functions (versatile).
 The market in this segment would be mostly Business-to-Business (B to B) rather
than Business-to-Customer (B to C).
 Sometimes B to B is much easier and hassle free to handle than B to C.
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Section A

Q 2) Which market segment would you target? Why?

The under 20 HP market and specifically the 10 HP market is extremely lucrative as it is a

untapped market. The small and marginal farmers seem to be the market segment that
should be target and the same can be fulfilled by Vanraj because of the following reasons:

 The largest and the most untapped, thereby qualifying as one of the biggest
customer needs
 It is the largest market segment (82%) and this segment does not own much farm
mechanization methods. Providing farm mechanization methods would greatly help
improve their output.
 It’s important for apart from the product fulfilling the major needs, the capture of
the market at the optimal time when there is no competition could catapult it in
leadership position.
 In order to garner true support the government can also be considered as a
stakeholder, and thus targeting this market segment would be in consideration of
the stakeholder and thus might be very helpful in the future.
 The demand in the northern states of Punjab, Uttar Pradesh and Haryana
traditionally account for dominant tractor sales, and there are clear opportunities for
Vanraj. These advantages hold the Vanraj tractors with an edge over their
competition, and this could help capture a very big chunk of the market.
 Trends showing that the population moving towards smaller farm sizes, thus catering
to the larger market.