SITUATION ANALYSIS: Optical Distortion Inc. (ODI) markets lenses that distort the vision of chickens. These lenses are used instead of debeaking. Lensed chickens are more likely to survive from cannibalism among the chickens. The lenses are also supposed to reduce the amount of feed per chicken per day than that for debeaked chickens. Using lenses do not lead to any trauma among chickens and therefore do not affect their egg laying capacity. The objective of the case is to present a financial and marketing analysis of ODI with an inside view.
ODI Managers believe direct sales to chicken farms are the best way for sale of the product. They have determined that it is profitable to sell lenses in those farms which have a chicken flock of more than 10000. The market consists of three segments- large, medium and small farms. ODI considered it feasible to sell lenses to the medium and large farms. SWOT ANALYSIS Strengths •First mover advantage, innovator •Technological patent holder •Monetarily beneficial to the poultry farmer Weakness •No awareness about the product.
•Credit crunch for the firm •Difficult to market to smaller farms Threats Threat of bigger players entering the market in the near future •Possibility of no sale of product (i. e. the farmers do not buy the lenses). Opportunities •To develop new products for this category •Entering bigger markets such as South Atlantic region PROBLEM STATEMENT: Since there is lack of awareness about the product, it is very difficult to convince the poultry farmers to buy the lenses. So how these lenses should be marketed in order to not only recover the costs incurred but also to carry out the Research and Development so as to face the competition in the near future. ANALYSIS
The Excel analysis has been given in a seperate file. We compared the number of chickens in California and South Atlantic and found that the number of chickens in South Atlantic was greater than that of California by 16. 13%. The use of lenses on chickens is more economical than debeaking of the chickens and also doesn’t traumatize the chickens and so doesn’t affect egg laying capacity. On doing break even analysis we found that the company will incur loss if it tries to penetrate the market selling the product at $0. 8. The losses increase with increase in the percentage of market penetration.
For making profits the selling price of the product needs to be increases to $0. 105 so as to have a 70% market penetration ALTERNATIVE MARKETING STRATEGIES: 1. Media based advertising driven: Advertising through print and electronic media is one of the best ways to create awareness about a new product and tell the consumers about its features and benefits. 2. Sales driven strategy/ using sales persons to visit the farms: It is one of the BTL marketing strategy in which the people are hired to go to the individual consumers and make them aware about the utility of the product.
Since the contact lenses for chicken is a very new and unconventional product, it is very hard to convince the consumers about its benefits only through advertising by using media. There has to be salespersons involved so as to not only create awareness about the product but also convince farmers about its benefits and getting them to buy the product. So, sales driven marketing strategy is the best one to use for this product. Recommendations •Increase the selling price of the lenses •Start the sale of lenses from South Atlantic instead of California •publicity of the product to make the farmers aware of the product