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

SWOT analysis:

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Group-3

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

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

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

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Group-3

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

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

ODI

savings

mortality

.216

.108

.108 (Exhibit-2)

feed

7.04

6.837

.203

labor

.034

.033

.001

egg laying

.099

---

.099

.411
Cost of lens

-.08

Total savings per bird

.331

5. Determine the variable costs per pair of lens

manufacturing cost
.032
injection 12000/15 million
.0008
box Cost
.00168
Plastic box
.10
filling cost
.14
order processing
.18
total
.42
Divide by no. of lenses i.e. 250
______
Total variable cost
.03448
6. Determine the fixed costs
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Group-3

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

payment to new world

office and warehouse
headquarters expense
(Assuming 20 million pair)
salesmen
technical representatives
advertising and promotional
trade shows
total fixed costs

$25,000
196,000 ( Exhibit-1)
184,000
280,000 ( Exhibit-3)
70,000
100,000
100,000
$ 955,000

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
$.24
$.08
variable costs
.03448
.03448
fixed costs
.04775
.04775
profits for ODI (per pair)
$.1577
$(-.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

11. Exhibit-2

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Group-3

12. Exhibit-3

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

Group-3

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