Reflection: Week 10

Tuesday: 

New Shark Tank Episode Introduced: Fresh Patch

Introduction: What is it? 

Chloe, Andrew's dog, shows how Fresh Patch is meant to be used.

Tuesday we watched a new episode of ABC's Shark Tank, which introduced a product named "Fresh Patch". Fresh Patch is a square of fresh, real grass your pet can use to go to the bathroom if they are unable to be let outside. Andrew Feld, creator of Fresh Patch, invented this product so that his dog could go to the bathroom on the porch of his condo, where there was no lawn space. Furthermore, Andrew knew that his dog, Chloe, would be willing to use the Fresh Patch because she did not have to be trained how to go to the bathroom on natural grass.

Analysis: 

After viewing the video, we conducted a thorough analysis of the product. Here are some of the most important inferences we were able to make:

Target Market: We believe that the target consumer for Fresh Patch is an urban dweller than owns and feels an emotional connection to their pet and earns a high income, but leads a busy lifestyle and is unable to give their pet the attention it deserves. We were able to conclude this because of things like the price of the product and identifying what parts of the country has living space without a lawn.

Andrew owns a patent for this patch of grass.

Product and Pricing Strategy: We concluded that Fresh Patch is a specialty product. It is designed to fill the emotional guilt pet owners feel when they are unable or unwilling to take their dog for a walk to use the bathroom. For those same reasons, Fresh Patch is positioned by emotion. As Barbara from Shark Tank worded it, this is a "feel good" product for pet owners. Consumers will not buy the product because of its function. Rather, consumers will buy the product because it makes them feel like they are giving their pet a better life.

Because Fresh Patch is a specialty product, it will most likely be price inelastic. There is nothing like it on the market than can silence the guilt pet owners feel. Therefore, we concluded that Fresh Patch should pursue a profit-oriented sales objective, meaning it will charge a higher price and make a significant margin per customer. To achieve this objective, Fresh Patch will need to implement a price skimming strategy.

Shark Mark Cuban wanted to team up with Andrew and Barbara. He believed he could accelerate the growth of Fresh Patch: What does this mean? 

In making a joint offer with Barbara, Mark Cuban said that he would take over the back office stuff such as the accounting and website maintenance for Fresh Patch so that the product could grow quicker. Mark is referring to the product cycle and adoption curve, concepts we learned before spring break. In order for Fresh Patch to really catch on, it needs to pass the chasm of the adoption curve and move into the early majority.  

At the time of the Shark Tank episode, Fresh Patch had only been adopted by the "innovators" who are our pet lovers!

Thursday: 

Continuation of Fresh Patch: 

In class Thursday, we looked at Fresh Patch's income statement again. This time, however, we broke the income statement into trial users and subscribers. We learned from the video on Tuesday that only 25% of Fresh Patch's customers are subscribers. Initially, this number seems very low. However, when you analyze the revenue generated by subscribers versus trial users, you will find that subscribers make up a significant amount of Fresh Patch's income.

While the numbers we calculated to reach this conclusion make several assumptions about the company and what define a trail user, it is still effective in making the point that Fresh Patch should concentrate its efforts in getting their customers to be subscribers. This conclusion relates to a marketing concept known as Buyer Contribution. Buyer contribution is the answer to the question of how much of a particular user group contributes to your company's sales and income.

How can Fresh Patch improve its marketing strategy? 

It is obvious that Fresh Patch has only skimmed the surface when it comes to profits in their industry, which begs the question: how can they be more profitable? To start, Fresh Patch can focus its efforts in marketing to an gaining subscribers. They should conduct an analysis of why trial users chose not to use the patch again. Some of it could be within Fresh Patch's control such as price or product inefficiency. Some if it, however, might be that the customer's dog just wouldn't use it. Once Fresh Patch finds out why their trial users don't come back, they can begin to discuss ways they can keep those users.

Additionally, Fresh Patch should conduct a geographic analysis of their customers. One reason it might be beneficial to do this is because they might not need to waste resources building an east coast distribution center if a majority of their sales are to the west coast. Conducting a geographic analysis will also help Fresh Patch know where to heavily market their product.

Currently, Fresh Patch owns a very small portion of their market share. Improving their marketing strategy and conducting market research will help them take over them market!

Example of dog accessories

In class, we looked at basic geographic data that was generated by the Simmons Database. Here are some of the conclusions we were able to reach:
1. 55 million people in America own 1 dog
2. 3 million people who make over $100,000 per year own a dog.
3. 3 million people who work more than 51 hours per week own a dog.
4. 5 million people give their dog three treats per day, on average.
5. 14 million people bought apparel or fashion accessories for their dog in the last year.
6. There exist 2,200,000 people who work more than 40 hours per week, make more than $75,000 annually, and live in a condo or apartment.

What does this tell us? Fresh Patch's market size is HUGE! And, most importantly, our assumptions about Fresh Patch's target market were correct.