Reka Enterprises

Situation Analysis

M/s Ramson & Co., a firm dealing in chemicals, started cement paint manufacturing business in February 1985 under the firm name M/s Reka Enterprises. It was a small scale organisation employing 8 workers with an initial investment of Rs. 1,50,000. The installed capacity of the plant on a single shift basis was 100 tons pa. The production started in April.

The paint was both decorative and durable. It had to be applied within one hour of mixing and required constant stirring during use. It was marketed under the brand name Rekacem. The product was to be sold only in Tamil Nadu, Kerala and Andhra Pradesh.

In June 1985, product was launched for sale with a few dealers in Madras and as a promotional offer; coins worth Rs. 2.50, notes for Rs.5 and Rs. 10 were placed in packings of 1.5kg, 5kg and 25kg respectively.

By the end of October 1985, the volume of sales was 15 tons. The details of the sales are:

Packing Volume Sold Units Sold (Col.2/Col.1) Sales Value (appx) Discount Offered Amount spent on discount (appx)

1.5