Indian Institute of Management Indian Institute of Management IndoreIndore

Case Analysis:Case Analysis:Vanraj Mini – TractorsVanraj Mini – Tractors

Is Small Beautiful?Is Small Beautiful?

Submitted By:

Group 3

Abhinav Raj | Amit Pant | Bhavya Negi | Ishu Kumar

Under the Guidance of:Prof. Pratik Modi

Vanraj – Mini TractorVanraj – Mini Tractor Innovation by Bhanjibhai Nanjibhai Mathukia of kalawad

village

Made by a junk jeep powered by 10HP engine

Spotted by GIAN & SRISTI

In oct, 2004 three technopreneurs acquired the technology and floated M/s Pramal Farmatics to manufacture “Vanraj”

It has a payload capacity of 1 to 2 tonnes

Can serve the agricultural needs as well as transportation & industrial requirements

Advantages of VanrajAdvantages of Vanraj

Affordability – it is ranged around 1.9 lacs with a comparable life span as that of high capacity tractors

Lower cost of operation – because of low engine size it consumes less fuel per hour

Ease of repair and maintenance – single piece casting with simple design makes vanraj easyto maintain and repair

Advantages of VanrajAdvantages of Vanraj

Smaller wheelbase – it makes vanraj easily maneuverable and it can reach small corner where big tractors can manage

Adjustable Wheelbase – It is the first tractor that can be converted into three wheel drive which is useful in different types of crops

Power take off(PTO) Point – its engine can be used as a power generator

Advantages over the mini Advantages over the mini tractorstractorsVanraj had competition with 3 other brands

of 10HP tractors i.e. Field Marshal, Trishul and captain

These were assembled tractors and costs around 1.7 lacs as compared to 1.9 lacs

Handling of vibration and shocks

Power take off point

Three wheel convertible

Tractor IndustryTractor Industry It started in 1962, with licensed capacity of 11000

tractors

Since then it has grown to 2.5lakh unit per year by 2004-05

India have huge potential market as currently we have 8 tractors per 1000 hectares of land

Most competitive industry with 12 major national brands and 4 major international brands

Despite the robust growth in recent years, major player are still operating with 50% capacity utilization

Market SegmentationMarket Segmentation The market was segmented

according to engine horsepower

< 20 horsepower was considered as mini-tractor segment and contributes to only 1 %

20 to 30 HP represents small tractors which contributes to 26% of market

31 to 40 HP was the largest segment with 55% market share

41 to 50 HP were large tractors with 15% market share

Factors affecting demandFactors affecting demandHeavily dependent on agriculture

Level of agricultural production and Minimum support price(MSP) causes an effect on tractor sales

Ease of availing the tractor finance is also one of most important criteria

Apart from this the purchase decision was based on the HP, design, price, fuel efficiency and ease of maintenance

ProblemProblemWhich would the most

appropriate target market and strategy for Vanraj?

SuggestionsSuggestionsVanraj should be targeted towards the

small and marginal farmers segment◦ High HP tractors remain underutilized so low

HP tractor will be preferred

◦ Small and medium farmers segment have wide base

◦ Less competition

◦ Vanraj will serve many purpose for small and medium farmers

◦ Lower selling price will lessen the default rate

THANK YOUTHANK YOU