Documente Academic
Documente Profesional
Documente Cultură
Vanraj Mini-Tractors
Group 5, Sec C
Ankush Siddhu 135
Objectives:
Analysing different market segments : Small and Marginal farmers; Horticulture farmers.
Demographic Segmentation
Geographic Segmentation :
Analysis:
Total Revenues = Fixed Cost + Total Variable Cost (at break even point)
Assuming break even in 1st year itself (costs corresponding to 1st year only)
1.9*S = (12.5 + 100) + (1.55*S) + [(S*1.2/300) + (S*0.6/300)] + (5.04 + 3.94 + 1.44 + 1.43 + 4.80)
R A B C D
S = 380
Since sales are more than 300 (production in 1st year), we have to consider costs in 2nd year too.
1.9*S = (12.5 + 100) + (1.2 + 0.6) + (5.04 + 3.94 + 1.44 + 1.43 + 4.80) + (S-300)*(1.44+0.6)/330 + (6 +
4.32 + 1.8 + 1.36 + 4.56) C’
D’
D: Cost of salary, overhead, sales expense, depreciation and interest paid (fixed cost in 1st year)
D’: Cost of salary, overhead, sales expense, depreciation and interest paid (fixed cost in 2nd year)
In India, small farmers traditionally relied upon bullocks for all their agricultural needs. Therefore, the main
competitor for Vanraj Mini tractor were bullocks rather than other Chinese make cheap tractors which were
not suitable for Indian trying conditions.
Average land holding of marginal farmers was 0.4 hectares and small farmers was 1.4 hectares. Hence,
assuming that farmers in this segment would meet their farming requirements with a pair of bullocks, a
comparative analysis is presented below :
(ii) Challenges:
• Though, using a mechanized equipment rather than bullocks would increase efficiency in agricultural
methods, total cost incurred on Vanraj mini is 3 times more when compared with total cost incurred
on bullocks. Hence, it is not economical for small farmers.
• It is more economical for farmers to hire a big tractor. This way they would be saving time and work
more efficiently.
• The big tractors are unwieldy in negotiating their way through the small gap between the lanes in
horticulture farms. Vanraj’s small turning radius and mini-size would make it easy to maneuver it
through the small lanes of horticulture farms.
• The three-wheel convertibility option available in Vanraj would be of great use in interculture
operations in Horticulture farms.
Hence, Horticulture sector would serve as a niche market for Vanraj Tractors.
• Owners of such farms are well off and they can afford Vanraj as their second tractor for their special
needs where big tractors are unwieldy.
• Hence, making a reasonable assumption that 1 tractor is required for every 2 hectares ( i.e
approximately 5 acres ), then number of tractors required = 1308
= Rs 24.85 crores
(iii) Recommendations:
1. Horticulture sector presents a niche market for Vanraj. It is concentrated only in few pockets of
states. Hence, Vanraj marketing should focus on such areas to fully tap the market potential.
2. Area under Horticulture saw a decrease in states like Madhya Pradesh. Hence, Vanraj s.hould
interact with farmers in this region, find out the reasons and give them proper advice and hence
should try to create a market for them.
3. Market of small and marginal farmers is not a viable option according to the cost-benefit analysis
done above.