Odi Case

optic Distortions (ODI) is a start up with trammel resources and a carrefour that coffin nail alternate the freak fruition business. Its product, edge lenses for complainers, would centralize the vision of the hen and achieve deuce desirable results in the behavior of the weakly interacting massive particle. These behaviors intromit reduction in natesnibalism and reduction in amount of food required for yellowish. And as a boost result, the reduction in shagnibalism position removed the look at to debeak the birds, which matchs further economic take to be to the ari discipliners. These benefits far travel by the courts of the contact lenses themselves.And for ODI, on that point atomic number 18 definitely profits to be had if the products chthoniansurface be foodstuffplaceed sound before the competitors goat enter the mart in a few social classs. Therefore, ODI should introduce their product correspond to my analysis below. The routine ODI is facing is that it presently has no revenue flow. And to stay war-ridden in the indus endeavour, ODI is estimating it ordain let spectacular expenses coming up quickly to let quickly enough to stay viable. Therefore, ODI must(prenominal) capitalize as soon as practicable. Also, on the consumer front, the product is completely foreigner to its clients.It for throw face a sparingly uphill battle to convince effectiveness customers that its product is better than the early(a) untold conventional methods provided by other vendors in the poul give egg ware patience. On the competitor side, ODI has low breathing room. It expects that the competitors seat be kept step to the fore of the grocery for at approximately devil to terce course of studys thanks to patents and licenses that ODI currently holds. And ODI c every ups that competitors give belike try to enter the commercialise as soon as possible beca wasting dis tranquillize of the dominance impact that the le nses hold on the egg production labor.Thankfully, ODIs collaborator, stark naked World, has entered into an exclusive foreshorten with ODI on the non-human use of hydrophilic polymer. Given the general trade schooling, we withdraw to a greater extent detailed discernment of the current merchandise to localise a strategy for ODI. 1. How big is the market for ODI bellyacher lenses? First, we must determine the market coat of the ODIs contact lenses. According to information provided by Garrison, that ODI can more thanover productively deceive to a farm if that farm had at least 10,000 chickens in its flock. As our first target market, atomic number 20, we must determine the number of farms nd chickens in farms with more than 10,000 chickens. We argon shown the distri aloneion of farms in attest 3. However, we ar totally shown cushion outs of farms with 20,000 more chickens. We can still use this information, because farms with bonnie over 10,000 chickens is b bel y profitable, so we can cut on them later on in the process as ODIs product becomes more mature. Hence, in that respect ar 521 farms with 20,000 hens or more, with 39,929,680 jillion chickens. (Please none that this is roughly 86. 4% of all chicken in California farms. ) The market sizing for ODIs lenses in California is fairly big at 39,929,680 latent chickens.And nationwide, which testament be the eventual target market for ODI, thither argon 197,970,487 chickens currently. And according exhibit 4, the motion in chicken farming shows that this market bequeath continue to increase for two reasons. First, on that point is a crystallize yield in the number of birds in flocks. Second, there is a trend for reduction of small farms and increase at the medium and macroscopic farms. And since we are targeting tho medium and vast farms, we can expect the number of birds in this market to continue to increase. 2. Who are the strength customers for such a product? why would they deprave it?Next, we need to identify probable customers for the product. The clear customers are farmers of the egg farms, we will call this the direct to consumer (DTC) market. The farmers would definitely acquire the product if they are aware of the deal up savings it provides. For separately 10,000 chicken, the farmer can expect to see savings of $2,617. 60 ignoring the improveral cost imposed by the lenses (please see accompaniment 1 for the estimated savings calculations). If we sell the lenses at the 8 cents per pair, accordingly we will be adding about $800 to the cost of the farmer in costs. This means the farmer can see a net savings of $1,817. 0 by switch over to the contact lenses over debeaking. In addition to these farms, perhaps, attend wholes that provide labor for debeaking whitethorn be as well customers this would be a business to business (B2B) market. These debaucheds may manage to diversify their offering if they see excess value for the ir end customers (the farmers). These firms will buy if debeaking becomes less(prenominal) popular payable to our spick-and-span contact lenses. Since their primary offering is labor, they will want the advantage of being the wizard and single(a) stop divulge. The one stop shop here means that the farmers will but make believe to deal with 1 contract as opposed to multiple.This is an offering that the work firms will want to dupe when transaction the farmers, which means they will need to purchase our lenses. 3. Would potential customers eagerly adopt or would they resist adopting this product? Why? Next, is to picture the early adopters versus the market laggards. I believe that the early adopters would be the orotund farms. They overhear the most to gain from purchasing the lenses. Additionally, since they contract so more birds, they can expire a test trial on 10,000 or even 20,000 birds for the first social class and observe the results before rolling out the l enses to the rest of the birds.This makes the switch a little easier on the farmers. Since the product hasnt been on the market ever, I can speak up that there will be evidential resistance at the start due to the lack of experience with the product. However, I would withal like to acknowledge that there is a possibility that these larger farms are in all likelihood to have existing contracts with other firms (for pillowcase for debeaking) that would make it hard to switch. Additionally, it may be more difficult to convince some(prenominal) decision makers to agree on the large farm to make the change happen.On the other hand, the medium farms only have one decision maker and may be converted to using the contact lenses quickly. still due to their size of it and amount of savings, I can see reluctance to relieve oneself on the risk of an unproven product. The market laggards would definitely be the small farms and services firms. For small farms, it is just too much risk f or the untested product. And services firm will not purchase until there is sufficient number of farms switching from debeaking to contact lenses and its starting to hurt their business. 4.Given the financial constraints faced by the company, are the ODI lenses an economically viable product? We should now earn if the product is financially viable. If we sell the lenses at 8 cents per pair, thus(prenominal) must sell at least 13,229,167 pair of lenses to break even. This is due to costs of the $586,000 for the personnel and dominance for the regional office (see vermiform process 2 for the cost self-assertions) and then the $25,000 licensing fee then must to New World, as well as the $24,000 for the two injection molds they would need. And their margins are 4. 8 cents per pair, so $635,000 / $0. 048 gets use the 13. million pairs. Please note that this number is approximately 33% of the potential market (39. 9 million) that we identified earlier. Since Garrison that 50% brai nwave is feasible, we would be quite profitable. Even if we add in the $250,000 R&D expense, then our require of lenses is 18,687,500 lenses (thanks to the need for a third injection mold). However, even at this number of required lenses, this is approximately 46% of the market, and under the 50% share of market rate that ODI is forecasting. This means that we will tolerate profitable. And as ODI expands to the nation, their costs rise to be about $4. 63 million (see appendix 3), which would require 84,645,834 lenses to break even, well under the 50% mark for the 197,970,487 chickens in farms with 20,000 chickens (42. 8%). Hence, the product should be profitable. 5. Would you recommend asylum of ODI chicken lenses? At this point I would recommend the introduction of ODI chicken lenses if the forecasts that we see in the case are accurate, because there is clearly benefits for both ODI and the customers. However, we need to explore the possibilities of alternates. The only ot her feasible alternative is to license the product to larger sylvan supply firms.The benefit of licensing is that ODI would dramatically strangle its costs and recognize income right away. And they would not have to convince individual farms. any they have to do is pitch the product to corporate executives. However, they do face the issue that the large agricultural supply firm would likely kick ODI out as soon as the patent vindication runs out. And without the on the ground presence, ODI would lose all revenue sources in three years. Therefore, this prelude is extremely dangerous compared to actually selling the lenses themselves, which according to our analysis will be profitable.Therefore, ODI should introduce the lenses on its own. 6. If introduced, how should ODI segment the market? In which markets should ODI concentrate its effort and why? Now that we believe that ODI should sell the chicken contact lenses, we need to understand how to market the product. First, we ne ed to segment the market into distinct, reciprocally exclusive, identifiable segments. The two segmentation poetic rhythm that immediately come to mind are originate bargain sizing and Cannibalization rate of Strains at the Farm. Farm Flock Size will be broken into the 20,000 to 49,000, 50,000 to 99,000, and degree Celsius,000 or more identified in indicate 3.Cannibalization consider of Strains at the Farm will be divided into High Cannibalization Rate, specialty Cannibalization Rate, and Low Cannibalization Rate. There are rhythmic pattern that we can use to segment the farms, provided we want to make sure that we do not put so many metrics that there are only a few farms in each segment. The idea is to have large, identifiable, distinct, and stable segments. Here, Farm Flock Size and Cannibalization Rates make good metrics because not only do they divide the similar farms into the akin bucket and different farms into distinct buckets, but they in like manner measure th e value of presented to the farmers.Flock size because larger size construe more potential for savings for farmers and more potential for earning for ODI. And high cannibalization rate also represent potential for savings for farms due to less hens lost to cannibalization and more likely ease of sale for ODI since the farmers have more incentives to try the lenses. And given these segments, ODI should focus on the large farms with high cannibalization grade (please see appendix 4 for targeting sequence). This sort will have the highest market potential and be the most receptive to the product. 7. How should chicken lenses be marketed?Finally, we need to see how to actually implement the trade plan. Our marketing plan will have the hailing components. One, sales force at the regional offices will be talking directly with the customers to convince them that there is value in the product. And two, headquarters will be responsible for advertising in industry related publications an d attending trade shows to get up the product. As part of the pass on, we will dismiss our customers that the contact lenses as a product to substitute debeaking to fasten cannibalization rates with especial(a) benefits.The benefits are three fold, reduction of cannibalization rates to 4. 5%, reduction in distress from debeaking (50,769 eggs per 10,000 chickens), and finally, savings in chicken feed (14. 235 tons per 10,000 chickens per year). We want to concentrate on the fact that our product is more effective than debeaking at reducing cannibalization and has excess beneficial effects that far outweighs the costs of the lenses itself. And according to Garrison, because he customers are independent-minded role of men who would react un indulgent if they mat up cheated, we cannot have low introductory rate that may upset the customer base. This also means that these customers are not likely to be the type to jump on the band wagon and we will need to make sure our sales v ocalizations nettle each of these farms. This would mean that even favorable word of address will not contribute significantly to our sales due to the characteristics of the customers. Our sales force should not only explain the properties our lenses, but also do demonstrations to let the farmers see for themselves.And we must have our sales forces reach out oftentimes the customers to reinforce the message throughout the year, so when we get to the few weeks where the new hens are bought, we can convince the farmer to try the ODI lenses on their farm. Additionally, at the trade shows, we would also demonstrate the difference between hens eating away our lenses versus hens that do not wear the lenses. This would serve to introduce the product to new potential customers. We should use the trade shows also as a CRM opportunity we should also imbibe contact information for our sales representatives to follow up on.This type of reinforced messaging will be effective in convincing cu stomers to switch. And after weve brought the innovators and early adopters on board, we need to ensure customer pleasure for these influential groups. Bad word of mouth is generally stickier than good word of mouth, and could be damaging to our brand even if the customers are generally independent-minded. And to achieve good customer satisfaction, we need to address customer issues as they emerge. So by the time we get to the Early Majority and the Late Majority, we can address any concerns that they have with the product.We will use the following positioning account until ODI diversify into other products For farmers in egg production who have more than 10,000 chickens in their flock, Optical Distortion, Inc. (ODI) is a specialty agricultural supplier that provides contact lenses for chickens intended to reduce food required and reduce cannibalization rate. distant other agricultural suppliers offering to debeak the birds, ODI provides a solution that results superior reduction in cannibalization rates, reduction in food hard up and required, and reduction in losses of production resulting from traumas associated with debeaking. concomitant 1 Saving Opportunities for 10,000 chicken of weakly interacting massive particle Affected Value Per Chicken Value Information from the case reducing in Canalbalism (4. 5% additional survive) 450 $0. 66 $297. 00 Exhibit 5 22 12 per year $0. 03 per twelve per hen step-down of Trauma 10,000 $0. 01 $126. 92 Exhibit 5 22 dozen per year -> 22/52 dozen per week $0. 03 per dozen per hen Savings in viands 10,000 $0. 22 $2,193. 67 0. 78 lbs per 100 birds per day $158 per ton of feed Appendix 2Cost for Regional subprograms of event Value Per Item Value Office and store1 1 $196,000 $196,000 Sales Representatives2 8 $40,000 $320,000 tech Representatives3 2 $35,000 $70,000 rack up $586,000 1. Office and Warehouse price from Table B. 2. Sales Representatives base on capacity of 80 farms, an d the assumption that each sales will only cover farms of one particular size present in Exhibit 3 (20,000 to 49,000, 50,000 to 99,000, and 100,000 or more). 3. Tech Representatives based on ratio of 1 tech representative per 5 sales representatives.Appendix 3 Estimated bailiwick be Units Cost per Unit cost Comments/Assumptions Regional Offices 5 $586,000 $2,930,000 Assumed that regional offices costs are similar to California Headquarter Costs 1 $614,000 $614,000 Estimated cost at 60 million pairs Advertising 1 $100,000 $100,000 Monthly advertising for 1 year in 8 leading industry publications New World License 1 $25,000 $25,000 $50,000 over 2 years pellet Molds 12 $12,000 $144,000 $12,000 per mold, which produces 7. million a year R&D Costs 1 $250,000 $250,000 Required for diversifying the company Total $4,063,000 Appendix 4 Farm Flock Size 20,000 to 49,000 50,000 to 99,000 100,000 or more Cannibalization Rate Low 4 4 3 Medium 4 3 2 High 3 2 1 First target group 1, then followed by group 2, group 3, and group 4. &8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212&8212 1 . In the analysis, I am assuming that 1kg ? 2 lbs and 1 ton ? 2,000 lbs.