Optical distortions, Inc. case

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Optical Distortion, Inc. case

Daniel Garrison, the president and CEO of Optical Distortion, is thinking about to bring the new and only product, a contact lens for chickens, to the markets. Working with Ronald Olson, the marketing vice president, Garrison is currently developing a marketing plan for ODI’s new product. ODI is planning to introduce these contact lenses to at least one region at the beginning, hoping to reach national distribution in a couple of years. There are three different sizes of the chicken farms that the company faces when they finally introduce the lens, namely small farms (10,000 or fewer birds), medium farms (10,000-50,000 birds), and large farms (over 50,000 birds).

Compared to the debeaking operation, ODI
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Thus, the total cost of a pair ODI lenses is $0.08223. Due to the underestimation of the produce cost for ODI, the expected value for the farmer using the ODI lenses would be overestimated. Once the ODI set up the price more than $0.2940, the expected saving for the farmer who uses the ODI contact lenses would be negative, which means it is less likely to bring the chicken lenses to the poultry industry. In another words, the expected value of the lenses for the farmer could be definitely lower than $0.2140 per hen according to the fluctuation on lenses price.
Table 3

Depending on the evaluation, we would say that it is easy for the company to sell the lenses to the farmers for the following reasons. One is the feeding efficiency. The ODI lenses will be able to permit the farmers to reduce the depth of feed in troughs by at least 3/8’’, which means the farmers can save the considerable annual feeding cost, especially for the large flocks. If the farm breeds 50,000 birds, the 3/8’’ feeding saving would be worth $3,828. In addition, the ODI lenses would help to avoid the debeaking operation, in which chicken were subjected to considerable trauma resulting in the temporary weight loss and unproductivity. Furthermore, the significantly reduced cannibalism is going to reduce the flock mortality resulting in the ODI lenses attractive to the farmers. In the other hand, the price strategy is going to
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