3. Natural Market Trends
Organic foods market predicted to grow from
$6.5 billion to 13.3 billion over 4 years
67% households consider price as a barrier to
purchase organic products
44% of consumers would like a wider selection
of organic products in super markets
4. Yogurt Market Trends
Concentrated - 4 competitors control over
50% share
Supermarkets - 97% of sales (3% growth)
Natural Food Stores - 3% total sales (20% growth)
Factors - Package type/size, flavour, price, freshness, ingredients
9. Advantages
8-oz cups represent largest dollar and unit share of market
Supermarkets fear losing share to natural food competitors
First mover adventage
Supermarkets may only authorise one only organic yogurt
manufacturer
10. Disadvantages
Highest level of competitive trade promotion and marketing spend
Possible channel conflict b/w supermarkets and natural food stores
Promotion and lower price as supermarkets may hurt the brand
Little experience in dealing with supermarket chains
14. Advantages
32-oz cups generate an above average gross profit margin(43.6%)
Fewer competitive offerings in this size
Competitive advantage due to long shelf life of product
Lower promotional expenses than option 1
15. Disadvantages
Higher slotting fees for wider supermarkets
Such a larger distribution over 12 months is difficult
Possible channel conflict
Promotion and lower prices at supermarket may hurt the brand
19. Advantages
Strong relationships with natural foods channel retailers
Financially attractive due to high margins 37.6%
Low sales and marketing expenses
20. Disadvantages
Fast growth of natural foods channel leading to high demands
Miss opportunity to enter supermarkets before competitors
22. Year 2000 Year 2001
Unit Sales 18,00,000
1,800,000 x 115%
= 2,070,000
Revenue
1,800,000 x $1.84
= $3,312,000
2,070,000 x $1.84
= $3,808,000
Cost
1,800,000 x $1.15
= $2,070,000
2,070,000 x $1.15
= $2,380,500
Gross Profit $1,242,000 $1,428,300
Expenses
Advertisement 2,50,000 2,50,000
Complimentary Case
3,312,000 x 2.5%
= 82,800
3,808,000 x 2,5%
= 95,220
Net Profit $909,200 $1,083,080
23. Recommendations
Option 1 is financially good
Only regional wise distribution rather than national making it to implement easily
First mover advantage and marketing tenetration
High slotting fees, but more visibility of product