Week 10

This week, we focused on a Shark Tank product called Fresh Patch. We applied this product to a multitude of new and review terms including income statements, pricing objectives, discounts, and distribution channels 

Fresh Patch
Andrew Feld created this rectangular patch of real grass, that is produced in Ventura, California.  He wanted his dog to be able to have a place to use the bathroom in his condo.  By having this patch of grass on the patio of condo, he would not have to walk his dog outside every time it needed to use the bathroom.

Type of Product

Because this product is so unique, it would be considered a specialty product.  Those who seek buying Fresh Patch will mot likely not seek out or accept a substitute for this product.


Target Market

By analyzing cities across the country and the price of the product we were able to assume the target market. Fresh Patch is intended for higher income pet owners who live in cities.  These people are most likely busy and do not have much time to devote to their pet, but feel guilty for this.  These urban dwellers have an emotional attachment to their pets.

Competition

Competition for this product would be pee pads and synthetic grasses of sorts.  The advantage that Fresh Patch has over these products is that it is real grass, and can be used more than once.  Not only this, but it also decomposes the elements naturally and without smell for at least about two weeks.  Pee pads begin to smell very quickly and are not as easy on the eyes as Fresh Patch is.  Dogs and other pets who are already trained to go to the bathroom on grass outside would better understand and would more easily go on the grass patches.

Pricing Objective

Because Fresh Patch is a specialty product and there are no direct substitutes for it, I would suggest a Profit Pricing Objective. The goal of this type of pricing objective is to maximize the gross margin and net profit, while the Sales Pricing Objective tries to maximize revenue and the Status Quo Pricing Objective prices to compete.  In our case, the produce would be inelastic, as it is price insensitive.  Because the subscription users are mostly of higher income, they would most likely not stop buying the product if the price went up, to say $30.


Income Statement

When analyzing Andrew Feld's income statement, we found that Subscribers make up a significant amount of his net income, and account to a large majority of his money.  Although, only 25% of his customers are subscription users. So how can we increase this percentage?? By using a seasonal discount, they could lower the price during the off season(in this case, it would be during the summer, when owners are more likely to take their pets outside because of the warm weather, especially in the north east where winter weather is more prevalent).  They could also create a discount for a longer subscription period, or make it so that the longer subscription they purchase, the cheaper the price of it would be.

"Accelerate Growth"

Mark Cuban wanted to accelerate Fresh patch's growth.  By this, he means getting past the intro stage of the Product Life Cycle, and into the growth stage.  This entails getting past the innovators and the early adapters on the Diffusion of Innovation Chart.  Getting beyond this chasm is extremely important in maximizing both sales and profits.


Elements of Value Pyramid

This product can be seen as "feel good" product.  For a pet owner to buy it, they need to feel guilty for not giving their animal the attention that they deserve.  The owner will buy this to make themselves feel as if they are treating their pet.  This hits the EMOTION sector of the Elements of Value Pyramid.