VORAANDCOMPANY1

InDecember1963,M.C.Vora,pr
opri
etorofVoraandCompanymanuf act
urersofBlossom
Quick-
CookingOat
slocatedatLucknow,soughtcounself r
om theSmal lI
ndustri
esService
Inst
it
uteatLucknow regar
dingstepsthatmi ghtbet akent oincreaset hesalesofhi s
company . Thecompanyhadbeenor ganizedin1959,hadst artedt osellit
spr oduct
nati
onall
yin1961,
butbyDecember1963hadf ai
ledt
oat tainaprofi
tablevolumeofsales.

Mr .Vor a’
sfamilyhadbeeni nt hegroupbusi nessf orseveralgener at
ions.In1959,some
foury earsaft
ertheGov ernmentofI ndiahadst oppedtheimpor tat
ionofpackagedcer eals,
Mr .Voraandhi sfami l
ydecidedt oenterthebusi nessofpr ocessingandsel li
ngapr oduct
similart o Quakerbrand ofqui ck-cooking roll
ed oats,a pr oductoft heQuakerOat s
Companyoft heUni t
edSt at
es.Forsomey earspr evi
oustot heGov ernment ’
sembar go,t
his
producthadbeeni mportedintoIndiabythef i
rm ofMul l
erandPhi pps,whichactedassol e
selli
ngagent s.Thef ir
m hadadv erti
sedt heproductinmanyI ndi
anci t
iesandr eport
edly
hadat t
ainedatleastamoder atev olumeofsal es,parti
cularl
yi nSouthI ndi
a,inthestates
ofKer alaandMadr as.

In1956shor tl
yaftertheembargoonQuakeroats,t
heGaneshFlourMi l
l
sofDel histarted
todev elopandmar ketaquickcooki
ngwhi t
eoatsundert
hetrademarkChampi on.Af ter
somet hreey ear
sofex peri
mentalmarket
inginnearbyar
eas,GaneshMi l
lsextendedi ts
distr
ibution nati
onall
y,devoti
ng a moderate amountto advert
isi
ng in ci
ty mar kets
throughoutIndia

ThemanagementofVor aandCompanydev el
opedt hemachi neryandt hemet hodof
processingit
sproductonat r
ialanderrorbasis.Thefi
rstproductof f
eredwasnotdeemed
sati
sfactorybythemanagementandwaswi thdrawnfrom themar ket.Notunt i
l1961was
thecompanysat isfi
edwit
hthepr oduct’
squalityandwithitsprocessingequi
pment ,which,
whenper f
ected,couldproduceonaoneshi f
tbasis500casesamont h,eachcase
consist
ingof36t i
nsof550gr amseach.Whi teoatsoffinestqualit
ywereimpor t
edf r
om
Austral
iaunderGov er
nmentlicence,sinceIndiagrownoat sofr equi
redcharacteri
sti
cs
werenotav ail
able.

Theper fectedproductwassubmi tt
edt otestamongconsumer sandwasr atedbyt hem as
equaltoorbet t
erthant hecompet i
ngproduct .Themanagementhadmadeappl i
cati
onf or
permissiont o uset hemar koft heI ndianSt andar
dsI nsti
tutionandl earnedt hatt he
productandi t
sprocessi ngmeasur edupt or equir
edstandards.Mr .Vor aanti
cipatedear l
y
arri
valoft hepapers,whi chwoul dper mitthecompanyt oplacet heI.S.Icert
ifi
cati
onmar k
onitspackagesandt or efertothemar ki ncompanyadv er
ti
singandsel li
ng.Hel ooked
upont heI.S.Icert
if
icati
onmar kasav al
uabl eai
dt owardsbuildingar eputati
onamongt he
tr
adeandconsumer sast othequalit
yandpur i
tyoftheproduct .Thecompet i
ti
vepr oduct
Champi onbor etheI .
S.Icer ti
fi
cat
ionmar koni t
spackages.

Whenenter
ingt
hebusinessMr.Vor
ahadnodef
ini
tedatar
egar
dingthev
olumeofsales
t
hathadbeenobtai
nedbyMull
erandPhi
ppsf
orQuakerOat
sbeforet
heembargo,
nordid

1
Caseprepar
edbyNeilH.Borden.Thiscasewasmadepossi
blebyt
hecooper
ati
onofSmal
lIndust
ri
es
Extensi
onTrai
ningI
nst
it
ute,
Hyderabad.
1
heknowt hesalesf i
guresf orChampi onOat s.Hedi dknowt hatoat mealporr
idgewast he
l
eadinghotbr eakfastcerealint heUnitedSt at
esandsomeEur opeancount r
ies.Hehad
beeni nformedt hatthecostoft heimpor t
edpr oducthadr estri
ctedi t
ssaleinIndia,to
famili
eswi thhighmedi um tohi ghincome.Mor eover
,hef oundt hatitsusehadgai ned
wideraccept ancei nSouthI ndiathaninot herpar t
soft hecountry.Fr om hi
sdiscussion
with agents Mr .Vor al i
sted demand f orqui ckcooked oat si n orderofquantitati
ve
i
mpor tancebyr egionsasf oll
ows:( 1)Kerala,(2)My sore,(3)Madr as,(4)Bombay ,(5)
Calcuttaand( 6)Northernregioncompr isedofDel hi
,UP&Raj asthan.

Apartfrom thehi ghnutrit

ivevalueofoat mealporridge,itstastewheneat enwi thmi lkand
sugarorwi thbut t
erorsy r
upwasl ikedbymanypeopl e. Thequi ckcooki ngoat shad
appealtomanyhousewi vesbecauset heyhadt obeboi ledf oronl
yfourt of i
vemi nutest o
bereadyt oser v
e,wher eastheol derv ariet
y,roll
edoat sr equir
edaboutt hi
rtymi nutesof
cooking.Mor eover,
sincethehousewi fehadt oexer ci
secar et opr
ev entthepor r
idgef rom
sti
cki
ngt othepanandscor ching,eitherbyst i
rri
ngf r
equent l
yorcooki ngov eralowf i
re,or
bycooki nginadoubl eboi l
er,t
hel ongcooki ngt y
pewasl essappealingt hant henewqui ck
cookingt ype.Thequi ck-cookingt ypewasmadepossi blebypr e-
cookingi nmanuf acture
aft
ertheoatgr ai
nhadbeenspl itandr olled.

PACKI
NGANDTRADEMARK

VoraandCompanyadopt edar oundheav yt i

npackagesi mil
artot hatwhichwasbei ng
usedf orChampionQuick-cookingOat s,which,intur
n, waspresumabl ypatt
ernedafterthe
packagei nwhichQuakerOat shadbeeni mpor t
ed.Themanagementhadadopt edt he
tr
ademar kBlossom.Thel abelwaspr int
eddi r
ectlyont heti
n.Abr ightgreenbackgr ound
hadthebr andnamei nl argeredt ypeatt het opoft hecan.Di rectl
ybelow thiswasan
i
ll
ustrati
onofsev er
alsheav esofoat sandasmi l
i
nggi rl
. Beneatht helefthalfoft he
i
ll
ustrati
oninlargewhitet ypewast hephr aseWhi teOat swiththewor dWhi teov erthe
wordOat s.Thephr asequi ckcookingi nsmal lertypewast other i
ghtoft hewhi t
eoat s
l
etter
ing.

Thecompet
ingt
inofChampi
onoat
scar
ri
edt
hesmi
l
ingf
aceofay
oungboy
.

TheBl
ossom ti
ncontained550gr
amsofoats,
thequanti
tycont
ainedi
nwhatwast
hought
tobet
helargestsel
l
ingpackageofChampi
onOats,al
thoughGaneshMil
lsal
somar
keted
ati
ncont
aini
ng750gr ams.QuakerOat
shadbeensoldina500-
gram t
in.

Thecasei
nwhichthepr
oductwasdel
i
ver
edt
oret
ail
erscont
ained36t
ins.TheChampi
on
caseal
socont
ained36t
ins.

DI
STRI
BUTI
ONCHANNELSANDTERMSFORSALE

Tosecuredistr
ibutionofitspr oductsVor aandCompanyappoi ntedagent
s, whogenerall
y
weresel
li
ngnon- compet i
ngf oodpr oducts,withexcl
usiv
eregi
onalright
s.Forinstance,
for
theStat
eofPunj ab,U.P.,Rajasthan,JammuandKashmi randf ortheDelhiter
rit
orythe
managementappoi nt
edmesser s.R. C.Ramanat hanofNewDel hiasexcl
usiveagentsfor
sal
eofthepr oductst oretai
lers.Thi sfir
m alsohandledthepr
oduct sofalargeandwel l
-
knownfir
m ofpackagedf oodmanuf actur
ers.
2
Messrs.R.C.Ramanat hanwasgr antedacommi ssionof f10percentofl
istpri
ce.They
had threepermanentsal esmencov eri
ng thei
rt erri
tory.Int ur
n,theyappoint
ed sub-
di
str
ibutorsinlargetownorci ti
essuchasDel hi
,Agr a,Gwali
orandMussori
et owhom they
gave2½ percentof flistpr i
ceoutoft hei
rcommi ssion.Retai
ler
swer eall
owedat r
ade
di
scountof10per centof fVoraandCompany ’slistprice.Thus,thecompanyr ecei
ved
fr
om itssales,
listpri
cel ess20percent.

Thecompanyappoi ntedagentsforther emaini

ngst at
esont hesamet erms.Theagent s
andsub-agentsdi dnotactasfullf
ledgedwhol esaledistri
butorsperformingthef uncti
ons
ofbuy i
ng,stocki
nganddi str
ibuti
ngBl ossom Oat sintheirterri
tori
es.Theyact edr at
her
merelyasindentingagents,t
akingordersi ncaselotsfrom retail
ersforshipmentbyVor a
andCompanyf rom Lucknow.Theagent smerelyguaranteedaccept anceofdel iveryand
paymentofor ders. Vorashi
ppeditspr oductsfordestinati
onwi t
hbl ankdraftat
tachedt o
i
nvoice,whichwasr el
easedfordeli
veryoft heshipmentonpay mentoft hedraft
.

Mr .Vorareport
edt hatinSouthIndiaintheStatesofMadr as,Keral
aandMy sore,which
wer ethe lar
gestconsumerofOat s,saleshad been v erydisappointi
ng. The agent
appointedfortheseSt ateswasnew t othesaleoff oodpr oducts.Theagencyf irmfor
somet i
mehad no sal esmanofi tsowncal li
ng onr etai
lersand t hesub-dist
ribut
ors
appointedwithsell
ingr i
ghtforvari
ousareaswi t
ht hetotalareahadpr oducedv eryli
ttl
e
businessforBlossom Oat s.Inli
ghtofthesluggishnessoft hesub-agent
stheagenthad
recentl
yreport
edempl oy mentofsal
esment opusht hesal
eofBl ossom Oats.

Mr.Vor
ahadnotmadeapr
act
iceofv
isi
ti
nghi
ssel
l
ingagent
s,butcommuni
cat
edwi
th
t
hem bymai
l
.

PRI
CING

Thelistpri
cesforBlossom Oat
sasofDecember1963, var
iedbysecti
onoft hecountry.In
NorthIndia,t
helistpri
cewasRs.81percaseof36t i
ns.InBombayandSout hIndiathe
pri
cewasRs.85. Asst atedpr
evi
ously,thepr oductwassol dF.O.R desti
nation;the
commi ssi
ont oagentswas10percentof flist
;sub-agent
swer egrant
ed2. 5percentof f
l
istouroft heagent’s10percent;t
her et
ail
erswer egrantedatradediscountof10per
centoffli
st.ThusVor aandCompanyrecei
vedf r
om thesaleofeachcasethef ol
lowing:

I
nNor
thI
ndi
a Rs.64.
00(
Rs.81.
00l
ess20%)

I
nBombayandSout
hIndi
aRs.68.
00(
Rs.85.
00l
ess20%)

Mr .Vorastatedthatrepor
tsreceivedfrom thet r
adegavet helistpri
ceofChampionOats
i
nNor thIndi
aasRs.93. 00percase. Mor eover,hewast ol
dt hattheagentsforthi
s
productrecei
v ed7½percentof fl
istascommi ssi
onandt hetradegotadiscountof7½per
centfrom thelist
.Championr eportedl
ysolditslargersi
zetinsatal i
stpr
iceofRs.108.
00
foracaseof36t i
ns.Theseagent sboughtandcar ri
edstocksofChampi onOat
sintheir
godownsf ordel i
ver
ytoret
ail
ers.

3
SALES

SalesforBlossom Oatsinthetwoy earsfoll

owingimprovementoftheprocessi
nghad
beenirr
egularandhadav er
agedfarbel
owpl antcapaci
ty.Forthesi
x-mont
hper i
odJune-
Nov emberend,1963,
salesaver
agedonly83casespermont h.

COSTS

Mr.Vor agav ethefoll

owingf actsregar
dinghiscostspercaseasdet
ermi
nedf
rom t
he
accountingdataoftheJune-Nov emberperiodr
efer
redtoabove:
Dir
ectCost spercaseof36t i
nsof550gr .each
Material Rs.24.
12
Packingt i
ns Rs.21.
60
Other packi ng mat eri
als, wooden case Rs.4. 00
waterproofpaper,
boxst r
appingpads
DiectLabour2
r Rs.5.
40
Rail
wayFr eight Rs.4.
80

OVERHEADCOSTS
Monthlyover
headcostswer
est at
edt
obeasf ol
lows
Permont h Rs
Rent 165.00
El
ectr
icit
yandWat er 50.00
Coal 50.00
Depr
eciati
ononPlant@5%( Rs.Onel
akhi
nvestment 500.00
I
nter
estonwor ki
ngcapit
al 250.00
1,015.00

Whenthi
sov
erheadwasal
locatedagai
nstt
he500casesal
esoft
heper
iod,t
heov
erhead
cost
scamet
oRs.12.
18percase.

I
ntheabov
efi
gur
esMr
.Vor
adi
dnoti
ncl
udeanysal
aryf
orhi
msel
f

ADVERTI
SING

From thest ar
toft henati
onaldist
ri
butiontheselli
ngagentshadur gedMr .Vor
at o
advert
iseBlossom Oats.Forsomemont hsheunder t
ooksuchadvert
isinginthemajor
ci
tiesinwhichhehadsal esrepr
esentat
ion.Afterspendi
ngsomeRs.4, 000wi t
houtany
apparentsal
esresponsetoj
usti
fysuchexpendit
ure,
heceasedhisadver
tising.

Whil
eMr .Vor
ahadsuffer
edconsi
der
abl
elossessi
ncethelaunchi
ngofhi
senterpri
se,he
wasstil
lanxi
oustomakeasuccessofi tandwaswi l
li
ngtoputmor emoneyi nt
ot he
vent
urei
fsuggest
edchangesf
orhi
smarketi
nggavepr
omi seofbri
ngi
ngpr
ofi
tabl
esales.

2
Mr .Vor
a’smont
hlywagebi
llwasRs900.
00butthewor kforcewasusedatl easthal
ftheti
meofanother
pr
ojectonwhichMr .Vor
awasengaged.Inli
ghtoftheirr
egulari
tyofproduct
ion,t
helabourcostgi
venis
pr
obablyascomparedwit
hwhatitwoul
dbeift
heplantwereoperati
ngatornearcapaci
ty.
4
Quest
ionsf
orDi
scussi
on:

1.Shoul
dMr
.Vor
acont
inuei
nthi
sbusi
ness?

2.Whatar
ethemaj
orpr
obl
emsf
acedbyVor
aandCompany
?

3.Shoul
dVoramakeanychangesi
ndecisi
onsconcer
ning (i
)pr
oductandpackagi
ng
(i
i
)adver
ti
sement
sandpromoti
on(i
i
i)Pri
cingand(i
v)sal
esanddi
str
ibut
ion?