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Manufacturer Manufacturer
Wholesaler
Wholesaler
Distributors
Retailer
Retailer
Customer Customer
Brokerage fee
Natural Food Channel
MSP $0.48 DPP $0.52 RPP $0.57 RSP $0.88
4 % sales
• Larger in size as compared to NF channel
• Growth rate is 3 % NF NF Retail
Natureview NF W
• Number of intermediaries are lesser as against NF. 36 % Gross Seller 7 %
Distributor Store
9% 35 %
Margins Margins
Margins Margins
Prof. Prem Prakash Dewani
22
Market Typology
The Yogurt Market Natural
Foods
Channel
Channel Market Share
3%
32-oz. cups
8% Other
Children’s 9%
multipacks
9%
Option 2
(Supermarket: 32-OZ) • Longer Shelf Life • More Expensive, Less Visible for consumers
• Higher Gross Margins • Upset NF Partners
• Less Market Investments • Large Investment: How to pay for?
• Less competition (8 OZ)
Option 3
(Natural Foods, • Supports current fast growing
Children's Multipack) channel • Miss window of opportunity (Supermarket)
1.5% share of supermarket yogurt sales = 35 m units * $0.74 supermarket retail price /
[97% supermarket share * $1.8 billion
2.0% market share of 6-8 oz. supermarket yogurt sales = 35 m units * $0.74 supermarket retail price / [97% supermarket share *
$1.8 billion * 74% share for 6-8 oz.
Option 3
Option 2
Option 1 Not meeting the
Growing gross profits
Growing sales does immediate
but not net income
not necessarily requirement of
Although meeting
corresponds to revenue but growing
revenue
growing profitably bottom line
requirements but ???
profitability
• Assumption: we assumed ‘static’ multi year economic analysis in order to simplify the analysis
Our forecast assume no competitive response function and that Natureview will continue to be able to price its products in the
natural food channel at current level
Natureview will not introduce product to additional chains (and thus not incur incremental slotting fees) over the projected
five years
• While less so than with the 8-oz. size, entering this channel with the
32-oz. size will still be noticed by the current channel competitors, all
of whom have deep pockets and could significantly outspend
Natureview.
• Option 2
• Key risks are
1. Alienating the company’s current channel partners
2. Attracting the attention of the deep pocket supermarket brand
competitors and
3. The lack of organizational experience and /or abilities to successfully
service and market to this channel
4. 32 oz size is merchandized n the bottom well of the refrigerated
yoghurt case, significantly affecting brand visibility
Company
Product and Value
Proposition
Channel
Go to Market Synchronization
Strategies
Customers
Target Market