Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

Optical Distortion, Inc. (A) Market Plan for ODIs Contact Lens for Chickens 1. Existing Situation (during late fall 1974) Porters five force analysis: Existing Competition: As this a new product and the company acquired the patent for next 3 years, there will not be any threat until 1977 at the least Bargaining power of Supplier: Is low as the contract with supplier (to buy polymer for making soft plastic) New World Plastics is under terms of license, Bargaining power of Buyer: Is high as it involves a cost of switching. Threat of New entrants: The product can be easily replicated by the manufacturers of Human Contact lenses, who may be willing to diversify; they may collaborate with other players having deep pockets to beat the ODI, Threat of Substitutes: Debeaking method is in practice for past 50 years. Moreover, farmers are yet to get completely convinced about the reliability of new technology that it leads to less mortality rate

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

SWOT analysis: Is performed based on the above analysis Strengths: Monopoly for next 3 years because of patent rights, ability to reduce cannibalism without traumatization, low bargaining power of supplier Weakness: New technology takes timer for farms to rely and start adopting. Switching cost associated with it, no capability of recycling Opportunities: Entire Chicken farm market Threats: New entrants will come into this market by easily replicating the technology

2. Specific Objectives To become a multiproduct, multimarket company for withstanding the future competition by providing effective service anywhere in the country To gain 50% penetration among the chicken farms producing 10,000 or more chickens within five years Aggressive marketing across the nation within two to three years for making the most of market potential and thereby revolutionizing the business of animal behaviour by providing innovative products based on intense R & D

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

3. Identification of Problem To realize the Marketing plan with limit assets for gaining a significant market share and surviving the competition through new & innovative products Instilling faith among chicken farms about this product by explaining cost-benefit analysis - branding To target right geographies & segments Optimal pricing strategy enough to attract customers, increase market share as well as achieve margins enough to finance the R & D operations and cost of sales Building brand equity by effectively serving the customers through multi product solutions and increasing customer base through penetration in multi markets 4. Cost/Savings benefit to the farmer Vs. Debeaking (all figures in dollars) debeaked mortality feed labor egg laying .216 7.04 .034 .099 ODI .108 6.837 .033 --.411 Cost of lens Total savings per bird -.08 .331 savings .108 (Exhibit-2) .203 .001 .099

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

5. Determine the variable costs per pair of lens manufacturing cost injection 12000/15 million box Cost Plastic box filling cost order processing total .10 .14 .18 .42 .032 .0008 .00168

Divide by no. of lenses i.e. 250 ______ Total variable cost 6. Determine the fixed costs payment to new world office and warehouse headquarters expense (Assuming 20 million pair) salesmen technical representatives advertising and promotional trade shows total fixed costs 280,000 ( Exhibit-3) 70,000 100,000 100,000 $ 955,000 $25,000 196,000 ( Exhibit-1) 184,000 .03448

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

7. Pricing alternatives & Break Even Analysis: Assuming that the HQ cost is fixed for the volume of 20million pair of lenses, FC per unit = 955,000/20,000,000=0.04775 If we use price for pair of lenses variable costs fixed costs profits for ODI (per pair) $.24 .03448 .04775 $.1577 $.08 .03448 .04775 $(-.00223) $.30 .03448 .04775 $.2178

Subsequently, the break even units associated with those three price ranges would be: 4646750 & 3785927 for $0.24 and $0.30 respectively 8. Evaluation of Alternatives As the initial capacity is used for targeting 40 million lenses, alternative 1 seems to be achievable by the ODI firm ($0.24). Since, there are no competitors for ODI they can use this pricing for their advantage until next 3 years and use the remaining earnings for investing in R&D. Later they think of reducing it in the wake of new entrants coming into this market. 9. Recommendations For a successful market penetration, ODI have to convince the farms about the risk they can afford to in using the contact lens and benefits which they can through target promotions & education campaigns using the salesmen, newsletters & trade shows

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

ODI needs to target farms having capacity of chickens more than 50,000 (62.08% of total market share of the farms having more than 20000 chickens) for achieving break-even and therefore have to proceed with a B2B marketing strategy by building good sales network across different geographies

It is not just lenses but ODI should sell its entire product (guarantee, fixing of lens, packing, delivery, technical & financial assistance) to the farms for deriving maximum response

As ODI Head Quarters are located in California, it should roll out its product for the first time in this place and gradually expand to the more profitable areas in its neighbourhood (South Atlantic & West South Central) for saving distribution cost

10. Exhibit-1

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

11. Exhibit-2

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Group-3

Srikanth Kumar Sourabh Thadani Nikhil Gupta Tushar Gupta Varun Joshi Srivathsan Rangarajan

12. Exhibit-3

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