Week 10- Fresh Patch and Chapter 13

Week 10

Tuesday

 

On Tuesday, we discussed the Shark Tank episode on Fresh Patch. Fresh Patch is real grass that is portable and can be used inside your home or on a balcony or porch. It is an alternative to pee pads which need to be replaced immediately. This last two weeks at which time a new one can be sent to you. The main target market for Fresh Patch is dog owners who do not have a backyard or close park to walk their dogs in. It is also targeted at those who feel bad for not walking their dogs often. It is a feel good product. Those who live in Urban areas and live busy lives are main targets as well. On Tuesday we discussed Fresh Patch's income statement. We concluded that the business is above the break even point, making it profitable. We also said that this product is elastic. This means people would likely still buy it even if the price was to change. It is likely that if someone is already willing to spend $25 every two weeks on this product, making it $30 would not deter them from continuing their subscription. At the end of class we also discussed distribution channels briefly and were assigned to create a distribution chart for Thursday. In my chart I discussed how the supply chain went from producer (grass grower in Ventura) to the seller (Andrew Feld) and then to the buyer. Many of these concepts we discussed, primarily supply chains, were discussed in Chapter 13.

Thursday

  

On Thursday, we continued our discussion of Fresh Patch in class. We discussed the income statement and the type of person that would buy Fresh Patch. We also looked at a lot of data of the populations in major cities that had dogs. We found that there were many major cities in which there were a lot of dogs. These cities, we decided, should be the main focus for Fresh Patch to advertise to. We also talked about the retention rate of Fresh Patch. Andrew stated that it was only 25%. So, if Fresh Patch has 2200 customers, only 550 will be consistent subscribers. However, these 550 could make up up to 95% of the sales revenue of Fresh Patch. This is because they continue to buy the product every two weeks. A subscription keeps a constant flow of money for the business. So, a main focus for Fresh Patch should be to retain more of these customers that have only used it once or twice and then stop. Some ways they could do this would be to offer promotions or discounts of subscriptions in the hopes that more people would subscribe as a result. Fresh Patch wants to turn more of their trial users into subscribers in order to increase their sales revenue. A way to do this could be to target the right group of people. Someone who lives in an Urban setting with a dog and makes more than $75,000 a year is an ideal client for Fresh Patch. They would likely become a subscriber due to the helpfulness of this product to them.

 

Chapter 13 

 

Chapter 13 focuses on supply chains and marketing channels. A supply chain is the connected chain of all of the business entities, both, internal and external to the company, that perform or support the logistics function. The supply chain for Fresh Patch includes the producer of the grass in California, the retail which is Andrew, and the buyer or consumer that receives the product. A major part of Fresh Patch is the technological side. All of the transaction for Fresh Patch occur online. Fresh patches Market Channel is a retailer channel. It goes from producer to retailer to consumer. This is B as shown in the image on the left.

Smart Project

Supply chains and market channels can be applied to our Smart Project as well. Our project, Okay to drive, would be a direct channel. We, the producers, would sell the product right to the consumers. This would be A on the image above. The idea of subscriptions and customer retention doe not really pertain to our product. Our product is really a one time purchase, unless it were to break. It is not something that goes bad every few weeks or something that needs renewing.