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Odi Contact Lens' Marketing Strategy Essay

1130 words - 5 pages

ODI contact lens is a revolutionary new product, which is aimed at replacing the traditional de-beaking technique used by farmers to minimize cannibalism among chickens. Being unique, there is no competition to the product in the market and hence ODI has the first mover advantage. There is very little awareness about the advantages of ODI among potential customers (chicken farmers). This product is in the introduction phase of the Product Life Cycle and the ODI team is faced with the task of developing a marketing and pricing program for the ODI lens.ODI?s strengths include an exclusive patent on its technology and an exclusive contract with New World Plastics to manufacture lenses. However the company has limited cash ($200,025) and a very small sales force. Since this is a unique product, there is no competition to the ODI lens and, given the exclusive access to the market, there is unlikely to be any major competitors in the next three years. There are three main consumer segments; Small Farms (10,000 or fewer birds), Medium Farms (10,000-50,000 birds) and Large Farms (over 50,000 birds). Due to lack of awareness among consumers about the benefits of the product, the perceived value of ODI lenses is almost zero. Chicken farming is a very low margin industry and the number of innovators will be limited to those farms that have enough cash to try new products.ODI lens benefits include 1) decreased cannibalization rate (4.5% vs. 9% for debeaking), 2) trauma elimination from debeaking leading to loss of 1 egg per week and 3) reduced food and labor costs comparable to debeaking. The Accord Framework reveals the following: Advantage- Farmers have an advantage of potential economic savings of 23.9¢ per chicken (see Appendix 1); Complexity- Due to lack of experience with the product, farmers may perceive installation of the lenses as overly complicated. ODI must demonstrate that the process of lens insertion is easy; Compatibility (With present processes) - The product is completely new and is not compatible with current practice (debeaking). The costs and productivity of workers will be compatible once the training is performed; Observability (of Benefits) - The benefits are not easily observable by others. The successful use by early adopters is key; Risk (of Adoption)- As with any new product there is an inherent risk of product failure. In a low margin industry such as chicken farming, the investment in risky technology is much lower. The free trial is key to reducing the risk of future investment; Divisibility (Limited Trial) - It is possible, and in fact, desirable to try this product on a limited basis. The Pacific region is the logical choice, since ODI already has an office there and has conducted tests in the region.Three pricing strategies may be employed; 1) Penetration with no Free Trial, 2) Skimming with no Free Trial and 3) Skimming with Free Trial. For Penetration with no Free Trial strategy ? In order to break even at a low price...

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