The Problem

The problem is that the company was up and running for four years but still had failed to attain a
profitable volume of sales.

The Causes of the Problem

The major causes of the problem are
1. Timing of starting Business: Shortly after the embargo on Quacker Oats in 1956 the Ganesh
Flour Mills of Delhi started developing and marketing quick cooking white oats under the
trademark Champion whereas VC which was organised in 1959, however it started to sell
nationally by 1961. Therefore, the market was already captured by Champion and it was
very late until VC stepped into the market.
2. Advertising: Once they started selling their product, Vora had invested Rs. 4000 in
advertising through sales representation with no apparent effect on the sale which
eventually led to discontinuing advertising.
3. Packaging and Trademarks: Blossom Oats were packaged in tins with their largest selling
package which was of 550gms as compared to that of Champion Oats which was 750gms. In
addition, the smiling girl used on the Blossom Oats tin could have been replaced with a
better ____________.
4. Distribution Channels and Terms for Sale: VC used agents for particular territories as
Distribution Channels. In, addition they also provided 10% and 2.5% commission to agents
and Salesmen respectively.
5. Cost and Pricing: The cost of Production for VC was 70.13; on the other hand they were
providing 10% commission in addition to 10% discount on a list price of Rs. 81 (North India)
and Rs.85 (South India) which made them run into losses
6. Sales: Sales averaged only 83 cases per month between June to November 1963 post the
improvements in the Processing.

Solutions to the Problems

1. Timing of starting Business: VC could have started much earlier when there was an embargo
laid upon Quacker oats in 1956. This would have given them an opportunity to
1. Capture the market.
2. Compete with Champion Oats better
2. Advertising: Instead of ceasing advertising, VC should have gone with a more aggressive
advertising campaign, not only with their sales representatives but also through other
channels.

3. Packaging and Trademarks: Since VC was using Tin packaging they could have used their
biggest package as 750gms as compared to 550gms. In addition, VC used an image of a
smiling girl on their packaging; they could have used a better _______________.
7. Distribution Channels and Terms for Sale: Instead of using territory specific agents, VC could
have gone through Wholesalers and a dedicated Sales Force. This could have increased the
sales and they could have saved more on commission.
4. Cost and Pricing: By cutting down on 10% discount provided to the agents, profits on the
balance sheet can be increased by up to 13%.
5. Sales: Since they improved on their processing in 1963, they could have aggressively
advertised to increase their sales. In addition, increasing the packaging size to 750gms would
also increase revenue.

Best Solution
1. Cost and Pricing: By cutting down on 10% discount provided to the agents, profits on the
balance sheet can be increased by up to 13%.