Vanraj Tractors

Vanraj Mini Tractors

Prashant Yadav, PGP/21/219

1. Evaluate the attractiveness of different market segments for Vanraj?
2. Which market segment would you target? Why?

Answers

1. There are 4 identified market segments for Vanraj. They are:

1. Small and marginal farmers – Vanraj targets the small farmers and is pretty attractive for them due to its affordable pricing. It has a low fuel consumption of 1.5 litres diesel/hour compared to 4 litres/hour for bigger tractors. It has a design that helps in easy repair and maintenance. It has hardly any competition in this segment and being the first movers, they will have a clear advantage. Other tractors in this segment are not suited well for the Indian markets and tend to face wear and tear more frequently. Also, the small farmers can lend the tractors to marginal farmers to get higher output from it.
2. Large farmers – The 10 hp engine is not efficient for large land holdings of large farmers. Also, there is a strong market presence from big players like TAFE, Mahindra etc. With their limited budget, Vanraj will have a tough time getting recognised here.
3. Industries – The requirement for industrial sector is in material handling industry, warehouses etc. Though Vanraj can be modified for this, it will still face a stiff competition as there are already big players in this market. Also unlike agriculture, the market requires B2B selling rather than B2C selling. It will require a strong sales and distribution network.
4. Horticulture – This segment consists of large land holdings farmers. Though Vanraj is suitable for this market, the market size is only 261200 hectares and is a small segment.

1. I will target the Small and Marginal farmers segment through Vanraj’s Mini-Tractors. As this is an untapped segment with hardly any interest shown by the big players, I think this will be Vanraj’s best bet. They have an affordable machine with low fuel consumption, easy to maintain and repair design, and can be modified for various other purposes like material handling, transporation etc. This will provide an image of independence for the farmers and encourage them to replace their bullocks. Due to its multi utility, low competition and untapped audience, this will be their best bet. Other markets will have a high competition and Vanraj will face a tough time getting recognised there. They should wait for some time before they strategize for those segments.