Vanraj Case

Topics: Cost-benefit analysis, Farm, Costs Pages: 3 (1060 words) Published: April 5, 2011
Vanraj Mini Tractors

1. Product Analysis:
The 10 HP Vanraj Mini Tractor offers a new option to the tractor market where most of the existing players are catering to the needs of the big and commercial farms. The technology is built such that it offers cost benefits, fuel efficiency, availability of spare parts, easy maintainability, high manoeuvrability and compatibility with various farming implements. Also the attention given to aesthetic design and styling will add to the appeal for the product. Another feature of these tractors is its hauling capacity of 2 tonnes which caters to the transportation needs of the farmers. This feature can also be harnessed by the various industry players for their material handling needs. To hit the perfect market segment from available markets like small and marginal farmers, large farmers and horticulture farmers or industrial users, it is required to understand the cost benefit analysis from the consumer’s perspective. It is quite important to do cost benefit analysis because this is the basis on which a farmer buys, hence the price tag of the Vanraj tractors is crucial. 2. Cost Analysis:

| Bullock| Small Tractor| Vanraj| Chinese Tractor|
Life span| 8-10 yrs| 6-7 yrs| 8-9 yrs| Frequency of breakdown is high| Purchase Cost (Rs.)| 27000| 170000| 190000| 1,00,000|
Maintenance Cost (Rs.)| -| 40% of SP=68000| 15% of SP=28500| Very High, Unsuitable for Indian conditions| Operational Cost (Rs.)| Feed=200000| Fuel=1000hrs*40(rs.)*1.5(lt)=60000| Fuel=1000hrs*40(rs.)*1.5(lt)=60000| Fuel=1000hrs*40(rs.)*1.5(lt)=60000| Total Cost(Rs.)| 227000| 2,98,0000| 2,78,500| 1,60,000|

Small and Marginal Farmers: On the basis of calculations above it is quite clear that although using a mechanized equipment rather than bullocks would increase efficiency in agricultural methods, but total cost incurred on Vanraj mini...
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