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Vanraj

In: Business and Management

Submitted By senthilorange
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Table I: Total Cost of Ownership for different options Other 10HP Tractors

Bullocks

Vanraj/

Big tractors (30-50)

Lifespan

8-10 years

8-9

8-9 years 1.7 lakhs

8-9 years

25000 Costs 25-30,000 Assembled 1.7 lakhs 1.9 lakhs Chinese One lakh (belt driven) Subsidy 30,000 Tending and Shed maintenance (Opportunity costs/Savings) 10-15% of s.price 15*1.7= 23500 2.4 lakhs 2.4- 4 lakhs 35: 2.5 l 50: 3.5 l

Price Investment

Service- life time costs Maintenance Running Costs Fodder/ Diesel Consumption

10-15% of s. price 15*1.9= 28500 Diesel consumption 1.5*40*1000*8= 4.8 lakhs

10-15% of sp 2.4 *15= 36000

8 years @ 15,000=1.2 lakhs (additional 3 year fodder costs) 1.45 lakhs (Additional 45,000)

4.8 lakhs

4 litres/hour 1000*4*40=1,60,000 1,60,000*8= 12.8 lakhs

Total Life time costs

6.985 lakhs High price; Lower maintenance; Useful features Compared to small tractors

6.74 lakhs

15.56 lakhs Rs. 50,000 more for a 35 BHP compared to Vanraj Symbol or power, masculinty and prosperity

Comparisons

Most economical, Low investment Labour intensive

Less costly than Vanraj

Table2: Characteristics of Market Segments Small & Marginal Farmers Difficult to assess? No of prospects Two million farmers in Gujarat alone; 35 million in four states May be required by a small percentage of the total s&Marginal farmers Subsistence farming. Low landholding size Use bullocks; economic viability is doubtful 82% of the total land holdings did not use tractors 35 MM of 42 MM (in four states). Use bullocks Difficult; low incomes; small land holdings 1.6 million in Gujarat; 10 Million in four states In thousands; across different states Orchard and Horticulture farmers Farmer concentrated in Southern and Central parts of Gujarat- Large land holdings

Characteristics

Big Farmers

Industry

Need for Tractors

Commercial farming; High Use

Material Handling; Tractors as well as other machines

Commercial farming; Inter culture operation; Spraying pesticides; Transportation of fruits/vegetables

Use of Tractors

Use of big tractors

Buy or lease material handling equipments

Large farmers in commercial farming. May own many types of tractors

Availability of finance

Yes

Yes

Yes

Table 3: Evaluating Market Segments (Pls. refer Page. 219 of text book) Small & Marginal Farmers Difficult Ability to buy to be assessed Orchard and Horticulture farmers

Criteria Measurable (size, purchasing power and relevant segment characteristics ) Substantial (Adequate potential and Profitable) Accessible (effectively reach & serve)

Big Farmers Yes; may be hetrogenous and may contain different sub segments & special needs ? (need medium/ big tractors) Yes

Industry

Yes

Yes

Large nos ; may not be profitable to serve Difficult Large nos & widely spread; Large nos difficult to reach; sell, service

Yes

Yes; Growing segment Yes; concentrated in certain regions; easier to access

Yes; personal selling may be required

Differentiable (relevant value proposition)

Yes

Yes; as an additional multipurpose tractor Yes; Place may pose problems

Yes; but may demand higher marketing efforts Yes; additional test /license requirement

Yes; niche segment; special needs; High (Few, concentrated customers)

Difficult ; Actionable however Place: (ability to develop sales and marketing service may not programs) be easy

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