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Optical Distortion, Inc. (ODI) ODI and the U.S. Chicken Market In the Fall of 1974 Daniel Garrison, CEO, and Ronald Olson, Marketing VP, of ODI had raised $200,000 in the venture capital markets, had a technology licensing agreement with New World Plastics and had an idea they wanted to take to market. In this new venture there were many uncertainties, and therefore many assumptions and calculations would need to be made. Dan and Ron (from here on referred to as ODI) thought that there was a market for contact lenses for chickens to improve yields for commercially grown chickens and eggs, and they wanted to roll out their product to the 440 million plus commercially grown chickens across America in the most effective way possible on their limited budget. ODI also feared that large agricultural supply firms would eventually find a way into this shared market. This added to urgency to gain market share with this new product. Geographic segmentation One of the first decisions ODI would have to make is what geographic areas to focus on and in which market segments. When evaluating which market segment to approach first, ODI assumed that a sales person could serve 80 farms at a time. Also, each sales person would cost $40,000/annum. Due to budgetary constraints and concerns of competition coming to market, ODI decided to roll out in California for the first year as California has the largest chicken farms and the highest concentrations of chickens of anywhere in the United States. By the second year, ODI will have approached all the large farms in California (201 farms-1969 number used for conservativeness as will be even more concentrated in 1974) and will expand operations into the second most concentrated region in the country, the South Atlantic. Customer segmentation While medium farms probably present the “friendliest” sales call, to be able to justify approaching medium farms, which average 30,000, as opposed to large farms, which average 150,000 chickens per farm (see: Market Analysis), ODI’s adoption rate would need to be five times greater for the medium farms than the large farms. Assuming this is unlikely, ODI should target the large farm market segment. Additionally, current trends suggest that the distribution of chicken populations is continually transitioning to medium and larger sized farms away from smaller farms. For large farms we assumed 20% of the farms approached by our sales force would trial the product and of those, 60% would become adopters. This works out to 12% (of those approached) fully adopting our product in year 1.
Approximate Word count = 1645
Approximate Pages = 6.6
(250 words per page double spaced)
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