1. By: Alex Zaldastani, Ariana Gallegos, & Elena Lie
Dr. John’s Products
By: Alex Zaldastani, Ariana Gallegos, & Elena Lie
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all participated in the analysis of the case and the creation of this document.

2. Qualitative Analysis Customer Value Proposition
Problem: no affordable high quality electric toothbrush
Solution: SpinBrush
Low-cost, high quality toothbrush that mimics the attractive aspects of manual toothbrushes (this solves the 2 fundamental reasons to why people won’t purchase electric toothbrushes: price and preferring the traditional way)
Cheap – about 10% of the cost
Better for your health
Still uses traditional brushing techniques
Try before you buy
Durable, low replacement rate of three months
AA batteries are an easy-to-get energy source
Created a new market: cheap electric toothbrushes
Osher has patents for his low-cost electric toothbrush design
Concern: people won’t want to change from manually brushing their teeth
Concern: people may not like the feeling and not want an electric toothbrush
Concern: If marketing is not done correctly people may still assume it is expensive
Concern: Other big brands Oral B, Reach, Crest etc. could make competitive product
Concern: the machine can be damaged by water
Go-To-Market Plan
Distribution channels: FDM channel (food/grocery store, drugstore, mass merchandise store) and through retail giants (e.g. Wal-Mart, Target)
Adveritsement
“Try me” feature designed with the packaging allows the brand to stand out from all the other electric toothbrush products
Tested the market NACDS trade show-it was well received
First Mover Advantage over cheap electric toothbrush
Concern: If marketing is not done properly they will fail to build brand name and awareness
Concern: Advertising needs to compete against other brands
Concern: Brand needs to be established enough incase big names like Crest, Oral B copy their product
Concern: Marketing needs to stress affordability and health benefits or people may not buy it
Technology & Operations Management
Many very overqualified executives
Outsourced as much of the logistics process as possible
Created product design, manufacturing plan,, and package design themselves
Novel head with fixed bristles and moving bristles
Unique package design
Partnered with previous loyal Chinese manufacturing partner
Modern, high international standards for quality and cleanliness
John Osher: serial entrepreneur very successful
Knowledgeable, great leadership
Joe O’Connor
Responsible for almost $1 billion in annual sales.
Sophisticated computer systems to track information
Concern: Overqualified executives could realize they are overqualified and quit or that they are costing too much money
Concern: Another company creates more advanced technology and sells competing product
Profit Formula
$1,5 million worth of funding and contributed capital from founder and managers
Sell 6,000 units per day (assuming $3 wholesale cost)
Yearly Growth
Approx. Units/day
Units/year
Revenue/year
20%
6.6K
2.41M
7.23M
50%
7.5K
2.74M
8.22M
80%
8.4K
3.07M
9.21M

3. Quantitative Analysis
Assuming that the lead brand $60 toothbrush lasts forever but needs head replacements thrice a year and the batteries last all three months, this calculates economic value over one and five years
Assuming 50% growth (about 2.74M units/year), this calculates potential yearly gross profit with wholesale cost and gross margin as variables
Units/year
Wholesale
Revenue/year
Gross Margin %
COGS/year
Gross Profit/year
2.74M
$1.50
$4.11M
20%
$3.29M
$822K
50%
$2.06M
$2.25
$6.17M
$4.94M
$1.23M
$3.09M
$3.00
$8.22M
$6.58M
$1.64M
SpinBrush
Leading Toothbrush
Cost/item
$5.00
$60.00
Purchases/year 4
Once ever
Energy Cost/year $0
$1.00
Replacement Head Cost
N/A
$6.00
Heads/Year 3
One Year Cost
$20.00
$79.00
Five Year Cost
$100.00
$155.00
COGS/year and Gross Profit/year might not add to Revenue/year due to rounding
Using x as years to calculate yearly cost:
SpinBrush(x) = ($20) * x
LeadingToothBrush(x) = $60 + ($19) * x
It would take 60 years to make buying a leading toothbrush to become for cost effective using our assumptions.

4. Recommendations Barrier to entry is really low
Bigger companies like Gillette or Optiva can work around the patents and copy them. Therefore, we suggest increasing marketing efforts aggressively within the next 6-12 months, before bigger companies come up with cheaper electronic toothbrush designs.
Increase marketing efforts to increase perceived value
Typical toothbrush brand sold 1 per week, whereas SpinBrush was selling 7 per day, without advertising. There is a demand for this product. Increase advertising would increase the volume sold.
Trade promotion (10%) to get better shelf spaces in FDM and large retailers, advertisement, direct marketing, sales incentives, social communications
Increase mass marketing to increase the brand equity by increasing the brand name, image, perceived quality
This could be done through television advertisements, social media, celebrity endorsements
Establish partnerships with dentists to recommend this toothbrush to their patients
Increase customer retention rate
We recommend perfecting the design of the electronic toothbrush (if possible, make the machine resistant to water)
Establish a customer service hotline
“Steal” market share from manual toothbrush users rather than electronic toothbrush users because their barrier to switch from the leading electronic toothbrush is much higher due to the replacement heads being a similar price to the SpinBrush
Increase marketing efforts for manual toothbrush users to transition them into using electronic toothbrush (which shouldn’t be hard consider that SpinBrush includes the attractive aspects of traditional teeth-brushing)
We recommend to not sell the company, and instead aggressively race against shelf
Given this information, this is what should be prioritized:
Increase funding for marketing efforts: work on getting investors to aggressively increase marketing efforts and increase brand awareness.
Increase mass production to decrease cost of goods sold, and increase the volume sold, which can be achieved through mass marketing.