Optical Distortion, Inc. Case
...were the only full-time employees of the firm, and $200,000 in venture Capital. 4. Confusion over pricing and marketing strategy Different market size, different pricing strategy Recommendation ODI should in fact go forward with their plan to sell their lenses, and persuade chicken farmers to purchase their product. ODI has to convince chicken farmers of the benefits (see table 1) of wearing the ODI lens. Then, there would be a much greater chance to persuade chicken farmers to buy the lens. (Table 1) ODI contact lens Debeaking Methods Wearing soft contact lenses on chickens' eyes. The lens: slightly larger with a red tint, a distortion built into the crown Cutting of the upper and lower mandibles of the chicken's beak at different lengths Effects No peck emerged Longer time of the establishment of the peck order No trauma Great trauma No weight loss Weight loss No reduction in egg retardation of egg production for at least a week Reducing mortality from 25% to 4.5% Reducing mortality from 25% to 9% Greater feeding efficiency Fees The same labor expense, 225 birds/hr, $0.08 per pair Labor expense: an experienced crew of three, $2.5/hr, 220 birds/hr Benefits Presumably much greater than $0.08/chicken N/A Target the California medium to large chicken farms Because the patent and license protection will hold off competition for at least three years, ODI must make use of these advantages to promote their product, penetrate the market and gain a dominant market share. Most medium (10, 000-50, 000 birds) and large farms (over 50, 000 birds) are concentrated in California. By dealing with those farms, ODI can decrease the negotiation cost because, comparing with the many small farm owners, ODI only need to negotiate with a few chicken farm owners. And large farms represent big flocks of chickens which mea...