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

2. 2 Ganesh Iyer Adoption Factors for a Radically New Technology l Relative advantage: Is there tangible incremental benefits versus existing option? »Cost savings over debeaking l 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? l Observability of benefits: Is the benefit easily observable and understood? »How much time the contact lens takes to show result? »Program oral flea. l Risk: »Financial risk, social risk.

3. 3 Ganesh Iyer ODI: Pricing Options New 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. 4 Ganesh Iyer Skimming vs. Penetration l Is the firm liquid?...can a startup afford to go after large market share? l Are there enough high valuation consumers? l Status item l Likelihood of competitive entry l Consumer Waiting

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