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 Q) Should Mr. Vora continue in this business? Mr. Vora must continue his business of Blossom Oats. Following are the observations in support. 1. Sales are irregular but the product is being sold in market. Average value should not be seen for further business and Mr.Vora should go for a segmentation study to find where the sales are lacking. 2. Mr.Vora is already aware of low sales in South India due to distribution agent issues and lack of sales force. The same can be addressed aggressively and by personally meeting the agents to let them understand the prospects of future business. 3. Competitor analysis is a missing link. (Input cost, Labor cost, Overheads, Capacity utilization, Volume of sales region wise) 4. ISI mark certified that the taste, quality and purity of Blossom Oats was found to be equal to or better than competing products in current market segment. 5. Mr.Vora is adopting the same strategy as adopted by competitor or import products and whereas there is room for improvement in terms of packaging size reduction.
Q) What are the major problems faced by Vora and Company?
The major problems faced by Vora and Co. are 1. Irregular sales. 2. Lack of market research in terms of Customer segmentation and market segmentation. 3. Communication lack between distributors, agents and Company. No personal touch and strategy briefing. 4. No strategy as such for improvement of sales or increasing volumes. 5. High input material cost and packaging cost. (63% of cost price)
Q) Should Vora make any changes in decisions concerning:
1. Product and Packaging:- a. Product is stable and been validated for taste so no major changes required except adding a distinctive advantage of different flavors and recipe with different combinations. b. Packaging size can be reduced to penetrate in the market so that person who can not buy the tin can use smaller pack to get a feel and taste of product. 2. Advertisements and Promotions a. Advertisement should have distinctive advantage over competitor where customer can identify it as a different brand all together. b. An aggressive promotional strategy should be adopted by organizing some competitions with an innovative way of using oat meal and additional weight can be added by recipe book with the name of innovator’s. 3. Pricing a. Price should be increased and smaller packing should be introduced. Agent margins should be reduced and incentive should be offered on bulk selling on quarterly basis. b. Work should be done on reducing the input cost like material and packaging. 4. Sales and distribution a. Market analysis and segmentation should be done, Experienced sales force and strategy for sales should be in place. Pitching point should be identified and product differentiation should be on top agenda along with superior quality. Mr.Vora should personally get in touch with Sales people and agents/distributors. Target oriented sales region wise should be the focus. b. Capacity should be utilized fully and an inventory should be built in at distributors’ end to have a quick and easy availability after the market research.
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