Once the immediate need of the hour is met, i. e. the ceasing of the incurring of losses, Mr. Vora should focus on making money and making his business establishment a more viable process. We identified several key areas where he can invest money and thereby increase his market share through careful selection of market segments and product mix.
Changing Processes: currently Mr. Vora’s distribution is handled from Lucknow (Central India) alone. In this unit, the crates are packed and shipped to their regions directly.
This implies that there are increased costs due to increased freight. One way of reducing this can be to have decentralized packaging. Mr. Vora can set up two packaging units in north and south India. This will facilitate him to reduce costs at the Lucknow plant by shipping the contents in bulk to the packaging plants. These plants will act as distribution centers to the south and western region, and the north and eastern regions. Also, the cost of freight will reduce as there will be more content traveling per wagonload.
It was found that it works out to about Rs. 10. 55p (present Rates) per kilometer, per wagon load. It can be seen that the crate contains 36 tins. Each tin has a volume of 550 cubic mm. which gives a total volume of 19800 cubic MM. if this has to be redistributed over repackaged goods; it will work out to around 72 Rectangular boxes holding the same 550Gms of Blossom Quick cooking oats. This will enable Mr. Vora to repackage the goods into cardboard cartons and thereby increase the optimum utilization of the resources available to him.
Redesigning the packaging covers: As a methodology Mr. Vora should not claim he has a “Me too” product. He has to push for an independent brand and some sort of brand coverage. This can be achieved by redesigning the layout of the can, changing the colors and the graphics.