Fundamentals of Marketing

Semester #4

Assignment #1

Section C

Topic: Visiting a vendor and ask him questions

Submitted By:

Muhammad Arslan Hashmi L1S18BBAM0003

Saryan Ajmal L1S18BBAM0011

Muhammad Mohsin Waqar L1S18BBAM0007

Kahwish Mehmood L1S18BBAM0001

Date of Submission: 28th Nov, 2019

Submitted To:

Basharatullah Malik
 This assignment is based on a visit to a cart vendor who was selling Sweet Potato
(Shakarkandi) near UCP opposite to Shaukat Khanum Hospital. Our group of four members was
assigned to ask a few questions to him. We divided the work load between us. Each one of us
asked three questions to the vendor and then the workload of typing and editing the assignment
was also equally distributed. We went to him and asked him if he is willing to answer those
questions. He agreed. A description of the answers given by him is being mentioned below.

 What he sells? Any special reason for the selected product?

As we saw him and his cart, we saw that he was selling Sweet Potatoes only. When we asked
him the reason for selecting this product to which he replied that it is a seasonal product and is
only available in winters. So, in winters he sells Sweet potatoes and in summers he sells other
fruits. Another reason is that it could be sold at a higher rate than most of the fruits, so his profit
margin increases. Also, he has to support his family, so he needs maximum earning he can make.

 How he makes his product unique as compared to his competitors?

As we were looking for a vendor, we realized that not much of the vendors’ were selling sweet
potatoes. Most of the vendors had Bananas or Apples. So, this implies that he was the only man
selling at that place, but on other places he could face a little competition. To make his product
unique and tasty he used lemon and also some Masalas and served it in a paper plate and two
sticks.

 From where he procures? Any special reason.

Upon inquiring he told us that he buys the product from main sabzi mandi which is in Badami
Bagh. The reason is that it is one of the biggest markets of Lahore and he gets a wide range of
products depending upon the price and quality. Moreover, the place is cheaper as compared to
other places in his locality, so, as the cost would be less his profit margin increases.

 Where he sells and why?

He basically lived near Shadiwal Chowk and upon answering he told us that there is no fixed
place for selling. He keeps moving in different societies and around major roads and near
universities. But, his area is confined to within Johar Town. He stops where there is a rush of
people. He had no fixed place because he believed that it would confine his target market at a
limited place and he could earn more by moving around.

 What is the cost per unit and the price he charges per unit? What is the profit margin?
What is the basis of pricing?

He told us that he was selling boiled sweet potato for Rs. 240 per kg and from mandi he gets
the same amount for Rs. 120 to Rs. 130. So, the profit margin from the values mentioned would
be Rs. 110 to Rs. 120 per kg. As the product is seasonal, so the selling price keeps changing
depending upon the situation. If the product is on demand the price increases and when there is
less demand price decreases.

 Who are his customers? Why he selected that group, what are their attributes?

As he was moving around the road, we realized and also asked from him about his target
market. His customers consisted of university students and people moving around the roads, most
of them are from middle class or upper class because a person belonging to lower class would
never buy “Shakarkandi” for Rs. 240 per kg because they have other needs to fulfill. When we met
him, he was standing near to UCP so like us other students would also visit him to eat some healthy
thing before going to class or after that. Most of the students have enough money so that they can
buy it easily.

 How he communicates, gives messages that the product is available?

As there are very less vendors selling this product, only one at a particular place, so most of
the times he doesn’t need to communicate. People see him selling the product from the roads and
come to buy it and also because the quality of his product was good. But, this mostly happens in a
crowded place or where there are enough people around. When he moves in a society or in streets
he shouts “Shakarkandi aala” so that his voice could reach to the people living in those houses and
they would come out to buy the product.

 What are his daily fixed expenses?

He told us that his daily expenses consisted of the cost of the product (sweet potato) he buys
for selling. He daily spends around Rs. 1400 to Rs. 1500 on buying unboiled sweet potatoes. Apart
from this a small amount of gas is used for boiling the product, but that is of very small amount
and sometimes he gets it boiled from home.

 What is his investment?

Investment is necessary to start a business. So when we asked him about his investment he told
us that there is not much investment needed to start a cart. He only invested in buying the cart of
Rs. 10,000 on which he sells his product. Also, he bought a hard plastic sheet and a large metallic
pot in which sweet potato is placed and sometimes boiled. It amounted for almost Rs. 700 at the
time of purchase.

 Calculate Break Even?

Break-even is a point at which there is neither loss nor profit. So, in the current situation break-
even would be:

B.E= Total fixed expenses/price per unit- cost per unit

B.E= 1500/240-130

B.E= 13.6

 Is it a feasible business?

Yes, for him it is a feasible business. He sells the product to support his family and to fulfill
his family needs. He earns enough profit to keep his house expenditures running in an honest way.
He has a big profit margin as the product is in demand nowadays and he sells it easily to get enough
revenues. Though, he cannot afford any luxuries with this business, his basic needs are easily
fulfilled.

 Suggest him ways to improve his business and profits.

Though he was doing his business in a rightly manner and was earning good, improvements
are always necessary to increase the scale of business. There are some improvements which he can
make to increase his profits. He should focus on cleanliness as some of the customers are very
conscious of this and this is the reason that they don’t buy anything from carts. If the cart is clean
and also the product should be sold in a presentable way instead of offering it with matchsticks.
Moreover, he should fix a place for selling the place, be it a busy road or any other busy place.
This would increase his customers as most if the people would know where he would be and would
easily go to buy it when needed. Another suggestion is that he should reduce the selling price up
to some extent which is feasible for him. This would decrease his profit margin but it would
increase his target market as more people would be able to buy the product.