Optical Distortion

Case: Optical Distortion Inc.

History:

In late Fall 1974, Daniel Garrison, CEO of ODI asked the Marketing VP Olson to develop a marketing plan for a new product: contact lenses for chicken

Product was discovered by accident. A farmer had a flock of chicken affected with a cataract problem. This flock was easier to handle and also ate less.

Birds established a hierarchical social organization. A bird with ODI lenses had its vision greatly reduced. Less pecking and also the birds ate less.

Solution to Cannibalism:

Debeaking:

Reduces mortality due to cannibalism from 25% to 9%

Considerable trauma (weight loss, egg reduction)

Lenses:

Positive | Negative |

Significant cannibalization reduction (4.5%) | Farmers resistance to adopt the new technology |

Less Trauma as compared to de-beaking | Only farmers with flock size > 20,000 could absorb cost |

Feed cost reduction | Lenses could not be reused |

SWOT Analysis:

Strengths

* Patent (3 years), Exclusive technology

* Reliable supplier of polymer

* Above advantages

Weakness

* High price

* Lack of personnel, no special machinery

* No way to recycle old lenses

Opportunities

* Potentially big market if farmers are convinced

Threats

* Protests from animal protection groups

* Technology could be copied after 3 years

Pricing:

$0.08 Min Price, $0.28 Optimal Price, $0.38 Max Price

Enter at around the optimal price point and then as the patent is about to expire reduce the price

Strategy:

* Offer complete package to farmers, lens delivery at convenient location, training to insert lens, support and financing

* Lens will reduce chicken mortality, less trauma so more eggs produced and savings in cost of feed.