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    Optical Distortion Inc Answers

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    Mirza Šrndić
    ODI should focus its marketing efforts on larger chicken farms in California and the South Atlantic states. It should calculate the savings from its contact lenses, including reduced mortality and feed costs and increased egg production. Using these savings, ODI can set its price below farmers' current costs but above its variable costs. A realistic goal by 1978 would be to get larger farms to trial the lenses and repurchase them based on the financial benefits.

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    Optical Distortion Inc Answers

    Uploaded by

    Mirza Šrndić
    4K views2 pages
    ODI should focus its marketing efforts on larger chicken farms in California and the South Atlantic states. It should calculate the savings from its contact lenses, including reduced mortality and feed costs and increased egg production. Using these savings, ODI can set its price below farmers' current costs but above its variable costs. A realistic goal by 1978 would be to get larger farms to trial the lenses and repurchase them based on the financial benefits.

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    ODI should focus its marketing efforts on larger chicken farms in California and the South Atlantic states. It should calculate the savings from its contact lenses, including reduced mortality and feed costs and increased egg production. Using these savings, ODI can set its price below farmers' current costs but above its variable costs. A realistic goal by 1978 would be to get larger farms to trial the lenses and repurchase them based on the financial benefits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    4K views2 pages

    Optical Distortion Inc Answers

    Uploaded by

    Mirza Šrndić
    ODI should focus its marketing efforts on larger chicken farms in California and the South Atlantic states. It should calculate the savings from its contact lenses, including reduced mortality and feed costs and increased egg production. Using these savings, ODI can set its price below farmers' current costs but above its variable costs. A realistic goal by 1978 would be to get larger farms to trial the lenses and repurchase them based on the financial benefits.

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    © All Rights Reserved
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    Optical Distortion Inc.

    Questions for Discussion


    1. What characteristics of the ODI contact lens are likely to make it appealing or
    unappealing to different types of chicken farmers? [If desired, this question can be
    rephrased to include a specific reference to literature on diffusion of innovations.]
    The most important characteristic of ODI that makes it appealing to farmers is the
    reduced cannibalization and pecking among the animals, which in turn has a positive
    impact on productivity of the farm. Another benefit is the removal of the traumatic
    experience of debeaking for the chickens by a more humane method of lenses.
    2. In what geographic areas should ODI focus its efforts?
    ODI should focus on the geographic areas of California and South Atlantic states
    (Florida, Georgia, Carolinas). Because of the small scale of startup capital maybe they
    should focus for the beginning on California alone.
    3. On what market segments (in addition to geographic) should ODI focus its effort?
    They should focus on larger farms primarily and then on medium ones. The reason
    for this is that it is much easier to make bigger farms try out new innovations, their
    labor force should understand the process more quickly and of course the savings on
    the product are far greater with greater number of chickens.
    4. What pricing policy should ODI adopt?
    First benefits and savings for the farmers need to be calculated;
    The lower mortality saving from 9% to 4,5%
    Old price without lenses was 2.61 per chicken, and new is to be calculated
    0,91:X=0,955:2.61 and new price is 2,49$.
    Savings here are 2.61-2.49=0.12=12
    Feed savings feet depth reduced: 156/2 [Savings for feet per day] X 1/20,000
    [savings per chicken] X 158/2000 [savings/lb]* X 365 days=11.25
    There is 2000 in a metric ton
    So the savings are 11.25
    Savings on egg production
    Because of the less trauma there is a increase in production of one egg per chicken. If
    we divide income per one carton by 12(a dozen) we will get savings increase for one
    egg more 0.53/12=0,04445=4,5
    Total savings are 27,75

    With these savings we get a price ceiling and proceed to the calculation of the price
    floor which are the variable costs.
    Variable costs: The variable costs are 3.2 cents for manufacturing. Packaging
    variable are 0.17 cents. The injection molds cost $12,000 for 15 million pieces and
    are 0,0008$ or 0,08 cents. Total variable costs are 3.45 cents.
    Management does not want to go under 8 cents anyway so they are already over the
    price floor
    5. What level of marketing efforts should ODI be considering? In particular, what
    information, incentives, and technical assistance will be required to induce (a) trial
    and (b) repurchase?
    6. What's a realistic goal for ODI by 1978?

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