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    CB Natureview

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    Dusky Mahapatra
    Natureview Farm produces refrigerated cup yogurt and is considering options to grow revenues from $13 million to $20 million by the end of 2001. Option 1 is to expand 6 SKUs of their 8oz yogurt cups into one or two supermarket regions. This allows them to target the largest portion of the yogurt market and appeal to supermarkets wanting to attract natural food shoppers. However, it presents the highest competitive and promotional costs. Option 2 is a national expansion of 4 SKUs in 32oz sizes, which have good margins but higher distribution fees. Option 3 focuses on the growing natural food channel by expanding children's multipacks, but misses the supermarket opportunity. The recommendation is Option 1 due to the potential for exceeding revenue goals,

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    CB Natureview

    Uploaded by

    Dusky Mahapatra
    172 views14 pages
    Natureview Farm produces refrigerated cup yogurt and is considering options to grow revenues from $13 million to $20 million by the end of 2001. Option 1 is to expand 6 SKUs of their 8oz yogurt cups into one or two supermarket regions. This allows them to target the largest portion of the yogurt market and appeal to supermarkets wanting to attract natural food shoppers. However, it presents the highest competitive and promotional costs. Option 2 is a national expansion of 4 SKUs in 32oz sizes, which have good margins but higher distribution fees. Option 3 focuses on the growing natural food channel by expanding children's multipacks, but misses the supermarket opportunity. The recommendation is Option 1 due to the potential for exceeding revenue goals,

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    Natureview Farm produces refrigerated cup yogurt and is considering options to grow revenues from $13 million to $20 million by the end of 2001. Option 1 is to expand 6 SKUs of their 8oz yogurt cups into one or two supermarket regions. This allows them to target the largest portion of the yogurt market and appeal to supermarkets wanting to attract natural food shoppers. However, it presents the highest competitive and promotional costs. Option 2 is a national expansion of 4 SKUs in 32oz sizes, which have good margins but higher distribution fees. Option 3 focuses on the growing natural food channel by expanding children's multipacks, but misses the supermarket opportunity. The recommendation is Option 1 due to the potential for exceeding revenue goals,

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    172 views14 pages

    CB Natureview

    Uploaded by

    Dusky Mahapatra
    Natureview Farm produces refrigerated cup yogurt and is considering options to grow revenues from $13 million to $20 million by the end of 2001. Option 1 is to expand 6 SKUs of their 8oz yogurt cups into one or two supermarket regions. This allows them to target the largest portion of the yogurt market and appeal to supermarkets wanting to attract natural food shoppers. However, it presents the highest competitive and promotional costs. Option 2 is a national expansion of 4 SKUs in 32oz sizes, which have good margins but higher distribution fees. Option 3 focuses on the growing natural food channel by expanding children's multipacks, but misses the supermarket opportunity. The recommendation is Option 1 due to the potential for exceeding revenue goals,

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    At a glance
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    The key takeaways are that Natureview Farm is a yogurt manufacturer known for its natural ingredients and long shelf life. It is looking to expand its revenues and market share.

    The objective of Natureview Farm is to grow its revenues to $20 million by the end of 2001 fiscal year from the current $13 million.

    One of the main challenges Natureview Farm is facing is expanding into the supermarket channel.

    NATUREVIEW

    FARM
    CASE ANALYSIS
    INTRODUCTION

    Founded in 1989
    Manufacturer and Marketer of Refrigerated Cup Yogurt

    Differentiators:
    All Natural Ingredients
    Longer Shelf Life (50 days)
    Reputation for high quality and great taste

    Key Success Factor:


    Strong Brand
    Guerrilla Marketing
    Strong Relationship and Distributors
    OBJECTIVE

    To make strategic marketing


    decisions to grow revenues to
    $20,000,000 from $13,000,000
    (current) before the end of the 2001
    fiscal year
    CHALLENGE

    Expand into supermarket


    channel
    NATURAL/ORGANIC MARKET
    TRENDS

    Organic Food market is predicted to grow from $6.5 Billion to $13.3 Billion
    over 4 years.
    Generally Organic Food customers tend to be more educated, earn
    higher incomes, be older and live in the Northeast and West.
    67% of households consider price as a barrier to purchase organic food
    products.
    44% of customers would like a wider selection of organic products in
    supermarket.
    Supermarkets are moving toward attracting new customers by offering
    more organic products.
    YOGURT MARKET TRENDS

    Top 4 Competitors control over 50% market share


    Supermarkets 97% of total sales (3% annual growth)
    Natural food stores 3% of total sales (20% annual
    growth)
    Factors in purchasing decision:
    Package type/size, flavor, price, freshness, ingredients,
    organic
    CHOICES FOR CHRISTINE WALKER,
    VP MARKETING

    OPTION-1 : Expand 6 SKUs of the 8oz product


    line into one or two selected supermarket
    channel regions.
    OPTION-2 : Expand 4 SKUs of the 32oz
    product line nationally
    OPTION-3 : Expand 2 SKUs of the childrens
    multi pack into the natural food channel
    OPTION-1: Expand 6 SKUs of the 8oz
    product line into one or two selected
    supermarket channel regions.
    PROS CONS
    8oz cups represent largest Highest level of
    dollar and unit share of competitive trade
    market. promotion and marketing
    spend.
    Supermarkets fear losing
    market share to natural Possible channel conflict
    food competitors. between supermarkets
    and natural food stores.
    Other natural food brands
    have successfully Little experience in dealing
    expanded to with supermarket chains.
    supermarkets.
    OPTION-2 : Expand 4 SKUs of the 32oz product line
    nationally

    PROS CONS
    32oz cups generate an Higher slotting fees due to
    above average gross profit national distribution.
    margin.
    National distribution will be
    Fewer competitive offering challenging within 12
    in this size. months.
    Lower promotional Possible channel conflict
    expense than Option 1. between supermarkets
    and natural food stores.
    OPTION-3: Expand 2 SKUs of the childrens multi
    pack into the natural food channel

    PROS CONS
    Natureview has strong
    relationship with leading
    Fast growth of natural food
    natural food channel
    channel will lead to
    retailers
    demands equal to those of
    Financially attractive supermarkets.
    More time to prepare the Miss opportunity to enter
    company for moving into supermarket channel
    supermarket channel before competitors.
    DECISION MATRIX
    RECOMMENDATION FOR
    OPTION-1

    Reach beyond the target objective of 20Mn Revenue by end


    of 2001
    Less Channel Conflict
    Exposure to more range of customers in supermarket
    No Cannibalization
    Accelerating growth rate
    Risk but in long term will generate revenues of 200% (as
    compared to its competitors)
    Higher slotting fees but more visibility of the product
    RECOMMENDED ACTION PLAN

    MARKETING MIX : 8-oz, $0.78, located in-store with other major


    yogurt manufacturers, in-store promotion
    SALES : Utilize more sophisticated technology to monitor sales
    trend
    BRAND : Will remain premium through joint promotions with other
    premium products such as Organic fresh fruits
    CHANNEL PARTNER ARRANGEMENTS :
    1. Lower MSRP for natural food retailers to better compete with super
    markets
    2. Work with retailer, distributor and wholesaler to reduce cost and
    maintain margin (like case breaking, shelf stocking, etc)
    THANK YOU

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