Questions for Vanraj case

1. What is the dilemma in this case?

2. What are the different segments that could be targeted for the mini tractor? Compare
them in detail?

3. Compare the cost of operations of Vanraj tractor with other segments? (You can take your
assumptions)

4. Which segment is the most viable for launching a mini tractor and why? Explain in detail
using the criteria for declaring a segment viable? (Evaluation of segments)?

5. What were the advantages and disadvantages of the Vanraj tractor? Could it replace
bullocks?

6. Did the company really understand the consumer behavior of tractor customers? What do
you think is the consumer decision making process of the segment that as per you will show
interest in this tractor?

Q1. What is the dilemma in this case?

M/s Pramal Farmatics faces a choice: target small, large farmers, industries, or horticulture for
Vanraj tractors. Small farms offer latent demand but fierce competition; large farms, stability but
saturation. Industries and horticulture present unique niches. Expanding to UP and MP offers
growth potential, but Gujarat and Maharashtra ensure a controlled launch.

Q.3. What were the advantages and disadvantages of the Vanraj tractor? Could it replace
bullocks?
Advantage over Big Tractors:
Vanraj tractors offer several advantages over larger tractors. They are budget-friendly for small
farmers, with a lifespan comparable to big tractors. Their cost-effective design makes them an
appealing choice, with lifetime repair costs about 10-15% of the selling price, much lower than
larger tractors. Their compact size and three-wheel convertible frame enhance accessibility,
especially in smaller fields. Vanraj is versatile, serving various applications, including pesticide
and fertilizer spraying. It also includes a Power Take Off (PTO) for alternate power generation.
These qualities make Vanraj a strong alternative to traditional large tractors.

Advantage over Mini-Tractors:

Compared to other mini-tractors, Vanraj stands out with several key advantages. It introduces
innovative features such as a tested Power Take-Off (PTO) point with variable speed and a
unique three-wheel convertible feature. These attributes enhance its versatility and functionality,
setting it apart from competing mini-tractors. Additionally, Vanraj's reliability in challenging
conditions, attributed to its geared design, distinguishes it from some imported mini-tractors that
have encountered issues like breakdowns in harsh Indian environments. Though priced higher
than certain brands, Vanraj's advanced features make it a preferred choice for farmers seeking
enhanced performance in a compact tractor.

Advantage Over Bullocks:

Vanraj emerged as a viable alternative to traditional bullock-driven plowing and farming
activities. Despite being relatively more expensive than a pair of bullocks, Vanraj proves to be a
cost-effective investment over time. Unlike bullocks, which demand year-round attention for
feeding, cleaning, and maintenance, Vanraj requires minimal ongoing care. The tractor's
functional superiority and versatility further contribute to its appeal, offering farmers a convenient
and efficient solution for various agricultural tasks. With a comparable lifespan to bullocks and
without the limitations associated with the sale or disposal of aging animals, Vanraj presents a
modern and efficient substitute for traditional bullock-based farming.

Disadvantages:
Despite these advantages, the higher initial cost, when compared to some other mini-tractors
and pairs of bullocks, may pose a barrier for certain farmers with limited financial resources.
Additionally, though maintenance costs are estimated at 10% to 15% of the selling price, this
factor may still influence the decision-making process. Careful consideration of the initial
investment and ongoing maintenance expenses is crucial for farmers evaluating the adoption of
Vanraj tractors for their agricultural operations.

In evaluating the viability of launching a mini tractor in a specific market segment, several
criteria should be considered. These include the size of the market, the level of competition, the
purchasing power of the target audience, and the potential for growth. Based on these criteria,
small and marginal farmers emerge as the most viable market segment for Vanraj tractors. This
segment represents a significant portion of the Indian agricultural landscape, with a latent
demand for tractors. Additionally, the limited competition in this segment provides an opportunity
for Vanraj to establish itself as a leading player.

In conclusion, Vanraj tractors present a compelling case for their adoption in the agricultural
landscape. The advantages over big tractors, mini-tractors, and traditional bullock-driven
farming showcase the versatility, efficiency, and cost-effectiveness of Vanraj. While the initial
cost and maintenance expenses pose considerations, the tractor's innovative features, fuel
efficiency, and overall performance position it as a valuable asset for farmers looking to
modernize their agricultural practices. The advantages offered by Vanraj underscore its potential
to transform farming practices and contribute to the sustainable and efficient cultivation of small
and medium-sized plots

2. What are the different segments that could be targeted for the mini tractor? Compare
them in detail?

Demographic Segmentation

(On the basis of land holdings)

1.Small and Marginal Farmers: Only a small portion of India's landholdings—82% of them were
owned by small and marginal farmers—possessed tractors, contributing to the country's
relatively low degree of farm mechanization. This meant that a sizable percentage of the market
was underutilized in this way.This market segment was non targeted by any big player.
For all other load-carrying tasks, including tilling their soil, these farmers mainly relied on
bullocks. Because of this, they can be the ideal target market for the Vanraj Tractors promotion.
Farmers at all levels were more accepting to "Tractorization" as a result of the growing need for
food grains. Additionally, there was a favorable association between mechanization and the
famers' level of income.
Cheap finance was widely available in line with the Government of India's initiative to guarantee
affordable credit to small and marginal farmers. Tractor demand would therefore rise in the
event of a successful planting season.The larger tractors were unable to satisfy the needs of the
small and marginal farmers.

2.Large farmers: Though they belong to a minority, these farmers are significantly wealthier than
the majority of the populace. They accounts for a sizable portion of India's tractor market. They
are already heavily mechanized since they have a lot of money and land. Most of the major
existing tractor manufacturers are already meeting their needs. With its comparatively cheaper
cost and PTO services, which can help large farmers operate their machinery and equipment,
the Vanraj tractor might have an advantage over larger tractors. Overall though, there might not
be much usage of mini tractors in this segment.

(On the basis of Sector)

3.Industries: The Vanraj mini tractor is incredibly adaptable. Its ability to be modified made it far
more useful for the industry, airports, and towns than other tractors in its class. Its reduced size
allows it to be used in urban environments for waste collection from streets and narrow roads.

4.Farmers in Horticulture: This sector has seen a growth in cultivated area over time due to its
lucrative potential, particularly in the states that Vanraj Tractor is targeting, namely Maharashtra
and Gujarat.It necessitates intercultural procedures such as weed removal and soil formation.
These activities could be well fulfilled by tractors with "three wheel convertible features" as seen
in Vanraj tractors.However, there is already a good deal of mechanization in place because
horticultural growers are thought of as a subgroup of large farms. As a result, mini-tractors'
range of applications is restricted.
Geographic Segmentation

1.Northern India (UP): Soil is majorly alluvial and fertile.Generally requires lower horsepower
tractors.
2.Southern and Western India(Gujarat,MP,Maharashtra): Harder laterite and Black Soil.
Generally prefers higher horse power tractors.

Product Segmentation(Engine Horsepower)

Mini tractor: Tractors with less than 20 horsepower are considered mini tractors, and Vanraj is
one of them.
Small tractor: Tractors with horsepower ranging from 21 to 30 HP are classified as small.
Medium tractor: Tractors of 31 to 40 horsepower were included in this category.
Large tractor: Tractors with more than 50 horsepower were listed in this category.

3. Compare the cost of operations of Vanraj tractor with other segments? (You can take your
assumptions)