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Natureview
- 2. Agenda • About Natureview Farm • Issues and Challenges • Market Trends • Options • Recommendations
- 3. About Natureview Farm • Founded in 1989 in Cabot, Vermont • Manufacturer and marketer of refrigerated cup organic yogurt • Uses natural ingredients and special process
- 4. About Natureview Farm • Natureview Farm yogurt had following differentiating points: • Made from organic ingredients • Longer shelf life (50 days) • First product to have fruits at the bottom of the Yogurt
- 5. About Natureview Farm • It was highly successful because of following reasons: • It used “Guerrila Marketing” strategy which was effective as well as low-cost • Strong brand equity and relationship with distributors • Strong Distribution channel
- 6. Issues and Challenges • Needs to achive revenue of $20 million from current $13 million i.e. increase revenue by 50% by 2001. • Venture Capital firms need the returns from investment
- 7. GOAL To Increase revenue and position itself as a company suitable for acquisition or investment
- 8. Questions • Should Natureview expand into the supermarket channel to increase its revenue? • What marketing strategy should it use?
- 9. Market Trends 29% 25% 46% Customer prefered channels Supermarket Small health stores Natural foods 97% 3% Yogurt distribution channel Supermarket Natural foods
- 10. 24% 15% 19% 7% 35% Natural Foods channels Natureview Farm BrownCow Horizon Organic Whitewave Others 33% 24% 23% 15% 5% Supermarket channels Dannon Yoplait Others Private Label Columbo
- 12. Option 1 Expand 6 SKUs of the 8-oz. product line into one or two selected supermarket channel regions Pros • 8-oz. cups represent largest market share in unit and dollar terms • only one organic yogurt manufacturer authorized by supermarket • First mover advantage of organic yogurt to move to supermarket Cons • Not much of experience in dealing with supermarket chains • High competition amongst all the product lines of yogurt • Increased advertising cost and SG&A expenses • High risk and cost
- 13. Option 1
- 14. Option 1
- 15. Option 2 Expand 4 SKUs of the 32-oz. size nationally Pros • Fewer offerings by competitors in this size • Generates an above-average gross profit margin (43.6% vs 36% for 8-oz. product line) • Longer shelf life acts as a competitive advantage • Lower promotional expenses Cons • Brand may be hurt by the promotion and lower pricing at supermarket • Higher slotting fees due to national distribution • First 12 months will be problematic for National distribution
- 16. Option 2
- 17. Option 2
- 18. Option 3 Introduce 2 SKUs of a children's multipack into the natural foods channel Pros • Strong relationships with leading natural foods channel retailers • Financially lucrative • High margins • Low sales and marketing expenses Cons • Have to prolong venturing into supermarkets • May not reach the target revenue of $20 million by 2001 • Competitors have already expanded to supermarkets
- 19. Option 3
- 20. Option 3
- 21. Best Option Option 1 because • Higher revenue generated • Lower Slotting Fee (only 2 supermarkets) • Transition to supermarkets • Advantage over competitors by expanding into supermarket
- 22. Recommendations • Instead of just introducing 8-oz. cups, 32-oz, cups should also be introduced in supermarkets. • More shelf coverage • Better gross profit margin • No competition for 32-oz. cups • Combining advantages of both the product lines.
- 23. Disclaimer • Created by Manish Bhatia, SBM NMIMS Mumbai during the Marketing Management internship under Prof. Sameer Mathur, IIM Lucknow Prof. Sameer Mathur, IIM LucknowManish Bhatia, SBM, NMIMS Mumbai
- 24. Thank You Free Template by fppt.com