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ODI: Key Learning Comprehensive Pricing Approach

ODI: Key Learning Comprehensive Pricing Approach. Price Ceiling (Demand Factors, Consumer Reservation Prices). Competition Risk Preemption Market Penetration. Final Pricing Decision. Price Range. Corporate objectives Liquidity Skimming.

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ODI: Key Learning Comprehensive Pricing Approach

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  1. ODI: Key LearningComprehensive Pricing Approach Price Ceiling (Demand Factors, Consumer Reservation Prices) • Competition • Risk • Preemption • Market Penetration Final Pricing Decision Price Range • Corporate objectives • Liquidity • Skimming Price Floor (Cost Factors, Direct Variable Costs)

  2. Adoption Factors for a Radically New Technology • Relative advantage: Is there tangible incremental benefits versus existing option? • Cost savings over debeaking • Complexity: How difficult the new technology is to understand and operate/ • Is ODI lens a really out of the box idea especially for small farmers? • Observability of benefits: Is the benefit easily observable and understood? • How much time the contact lens takes to show result? • Program oral flea. • Risk: • Financial risk, social risk.

  3. ODI: Pricing OptionsNew Product Pricing Strategies Market Skimming Pricing Setting a high price for new products to maximize revenue from the target segment Market Penetration Pricing Setting a low price to attract a large number of buyers before any competitor enters

  4. Skimming vs. Penetration • Is the firm liquid?...can a startup afford to go after large market share? • Are there enough high valuation consumers? • Status item • Likelihood of competitive entry • Consumer Waiting

  5. ODIPostscript • While the market potential was 440 mn chicken in 1974, chicken farmers were not easily persuaded to adopt the innovation in the 1970s. • Two problems arose with the first introduction in the 1970s • Eye irritation • Unacceptably low retention rates. Lenses tended to pop out. • After a decade the problems were solved and re-launched in 1988 by Animalens Inc. • Animalens discovered that the red color is enough (no need for vision distortion) • Current market size is est. $38 mn.

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