Week 10 Reflection

This week began the final push to the end of my last semester of freshman year. It really has gone by quick...

This week's classes were impressive due to the depth of in-class discussion from two Shark Tank clips. These clips focused on the companies "Balm Chicky Balm Balm" and "Fresh Patch." Principally, the companies focused on a "friend end" for a dual-sided chap stick tube and a "boxed patch of grass" for dogs to pee on, respectively. BCBB suffered from their cross-image between a 70's pin-up branding label, and wanting to attract the youth demographic of chap stick buyers. The sharks were definitely not fond of the way the ladies were so open to changing everything their company stood for, in order to please the sharks. Interestingly, a quick glimpse of the company's website shows that they have indeed ditched their semi-risque packaging instead opting for a plain label. Additionally, the company now offers discounts on buying the tubes in bulk of three tubes. This makes sense considering they were selling their units for $9 originally. Now, they are selling the tubes for $7 and allow consumers to buy two tubes for $18 which is undoubtedly a smart decision. When buying chap stick, a consumer is more inclined to buy a few tubes for the family, rather than buying one at a time. This is especially true for their product because it is more of a novelty item that serves as a conversation starter, with its interesting dual-end, sharing design.

The second clip we watched was about a company called "Fresh Patch." Rather than the skimming price strategy that BCBB used, this company used a subscription-based pricing strategy in order to attract consumers. For $25 for a bi-weekly subscription, the company will ship a patch of hydroponically grown grass to your doorstep. This enables an apartment-bound pooch to experience using the bathroom like they naturally do, in the wild. This takes strain off of the dog owner by not making them feel as guilty for not having a backyard and for not having to walk their dogs in inclement weather. By using real grass, the patch absorbs all odors and is also fully disposable. This product is a fascinatingly simple, yet effective concept that has unlimited potential. With already $1 million plus in sales, largely from a west-coast exclusive, online only market, the company's upside is tremendous. Barbara and Mark will bring "Fresh Patch" to the retail sector, as well as fully utilizing Barbara's numerous connections within New York City, due to her being a real estate mogul. This leads me to believe that the company has only reached the tip-of-the-iceberg as far as sales are concerned. By opening up their proposed East Coast distribution center, sales will increase significantly by reaching cities like NYC, Boston, and Philadelphia. The company should subsequently go for a "zone pricing" approach in which a regional flat-rate shipping price is offered. Discrepancies in current West Coast versus East Coast pricing has severely cut into the company's profit margins. With zonal pricing, the company could even experiment with raising subscription pricing in more wealthy areas of cities, such as for subscribers that live on the Upper East Side of Manhattan. These subscribers would be indifferent to a raise in subscription price because $25 is an insignificant sum of money, especially in comparison to the cost of owning a dog in the city and their extravagant rent cost. This pricing method would be better implemented further into the company's lifespan, but it is surely something to think about in order to increase profit significantly.

Have a good week. Til next time...

-Chris