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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