Optical Distortion Inc (A)

SUBMITTED BY Section D - Group 10 Arpit Jain (12P189)Girish Chandra Joshi

(12P199)Kumar Abhinav (12P209)Varun Chopra (12P219)Santosh Garbham (12P229)Vikash (12P239)

ContextODI has an “idea” to reduce vision of poultry

chicken to obtain its good behavior by making a contact lens for it

ODI has transformed that “Idea” to “Product” and tested it technically on a number of farms in California and Oregon

This case is about transform that “product idea” into a “product concept” and launch as a “brand” with a marketing strategy

ODI targets introduction at least by spring 1975 and achieve national distribution by the end of 1977

Debeaking Vs. ODI lensDebeakingNeeds high

precision Limited time

windowTraumatizes

chickenReduces

productivity of chicken for a week

ODI LensSimple

techniqueCan be done on

adult chickenNo traumaChicken

productivity is not affected

Product ConceptRevolutionary Technology

Who – Poultry Farmers Benefits – Easy to use, cuts recuperating time and decreases costs When- At purchase of Starter Pullets

“If we pull this off , We would have revolutionized the business of Animal behaviour”

Ronald Olson, Vice President Marketing

Segmentation (Size of Farms)3 types of Farms in U.S.A.

Small Sized Farms (less than 10000 chickens)Medium Sized Farms (10000 -50000

chickens)Large Sized Farms (more than 50000

chickens)ODI Should target Medium sized and Large

sized farms with main focus on farms with more than 50000 chickensHigher profitability

A sales person covers 80 farms irrespective of the size of the farm

Declining number of Small sized FarmsNumber of small sized farms are reducing at a rate

of 25 % per year

Segmentation (Geography)South Atlantic Region has around 29 % of

the total chickens California accounts for about 16 % of the

total chickensODI should launch the product via a region

by region rollout starting from CaliforniaCalifornia is a large market with around 40

million chickensSouthern California has large farms (more

than 50000 chickens)

“Two Counties in South California contained 20 farms that housed 21 million chickens”

Segmentation (Geography) Contd..

ODI should enter Georgia and South Carolina after California “North Carolina, California and Georgia account for 25 % of the total chickens in USA”

Farmer’s Savings Calculation Farmer's savings

per 20000 birds 156lb/day 56940lb/yr

$ savings on feed per 20k birds 4014.78

per hen-year savings in $ 0.20075

per dozen egg savings in cents 0.9125 1 cent approx

9%-4.5% would save 50% cost(in $ per hen) from pecking 0.1

per dozen egg savings in cents 0.454545455

Total per dozen savings in cents 1.5 approz

savings/dozen 1.5 increase by 50%

egg dozens/hen-year 22

savings/hen-year 33cents

potential of a 20000 farm 660000

savings/year 6600

PriceThe Company should price the product in

the range of 12- 15 cents per pairODI should target maximum early

contributionThe estimated benefits for the farmers is

around 33 cents ,thus savings of 18-21 cents will be passed to farmers

It may be difficult to convince the farmers of the higher benefits, thus higher price may reduce sales

Chicken farmers may react unfavourably if we increase the price in the later stages

Market Skimming Pricing should be used as the objective is to maximize early contribution

PromotionODI should use personal selling involving specialized

techniciansPersonal Selling may also influence the Opinion Leaders

which would result in early adoption of the productIn subsequent years, ODI plans to advertise the product

in 8 leading poultry industry publicationsODI also plans to participate in important industry trade

shows which may also generate new product ideas for the future

Selling points:Substantial increase in Savings There is no productivity decrease due to traumatization of

chicken

Additional RecommendationsThis is a completely new technology. So, to

push to customers from “interest” to “trial”, we recommend “Free Samples” to customers with very large farms

In the long run, providing labor training service of insertion of lens for a fee. It would be a win-win situation for both ODI and the farmers

Profit AnalysisCost/Box 30

Projected Sales 20000000

Boxes 80000

Revenues 2400000 100

Office cost 184000 7.666666667

Depreciation of Patent 28000 1.166666667

Advertising 100000 4.166666667

sales staff 7 280000 11.66666667

technical person 70000 2.916666667

injection moulds 24000 1

glass 640000 26.66666667

costs 1326000 55.25

profit margin 1074000 44.75

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