Created for a Marketing Internship

1. HBR Case Study

2. Background
• Founded and Manufactured in Cabot, Vermont in 1989
• First Entered Market with 8-oz and 32-oz with plain vanilla
flavour
• Uses Natural ingredient with shelf life of not more than 50 days
• In 1999 , Company’s revenue is growing from 100000 $ to 13
Million $
• Introduced Yogurt with fruit at the bottom.
• In 2000, it expanded to 12 yogurt flavours and multipack yogurt
for children

3. Facts about this
industry
• Yogurt consumed by 40% of Population
• Among these , 7% are women
• Organic foods market was expected to grow by 20-40% and the
yogurt market by 2-4% in the next 5 years
• Different criterias for the regular shoppers and the people
preferring organic foods in the selection of yogurt.
• 46% of organic food buyers bought food at a supermarket
• 29% at natural foods store.
• 25 % at a small health store.

4. Promotion Mix
PRODUCT
Natural yogurt (organic):
8 –oz. size with 12 flavors
32-oz. size with 4 flavors
PRICE
Affordable according to
it’s target market
PLACE
Natural food channel
Wholesale club
National retailer channel
Convenience and drug store
PROMOTION
It’s natural flavor with high quality and
great taste growth in the national
distribution and natural food channel
Low-cost guerilla marketing

5. Swot Analysis
Strengths
Strong brand
Low cost
No artificial
thickeners used
Unique, smooth
and creamy
texture of yogurt
Usage of natural
ingredients
Longer shelf life
Opportunity
Strong
relationships with
leading natural
foods retailers
Threats
Accumulation of
cash by Horizon
from IPO
Being dropped out
of traditional
channel
Weaknesses
No alternative
financing available
Lacks potential of
taking higher risks
and costs
Doubt on sales
team’s ability

6. Issues faced
- VC needed to cash out of its investment
-Need to find a path to grow revenues by
over 50% before the end of 2001 ($20
million)
-Should Natureview Farm expand into
supermarket channel?

7. Option 1
• Expand in North East and West Supermarket
Region
• Bring in the 6 SKUs of the 8-oz size

8. Pros
• 8 - Oz has the highest
Incremental Demand
• High Potential to
increase Revenue
• First Mover Advantage
of Organic Yogurt
Brand to enter the
supermarket
• High Risk and High cost
• Requires Quarterly
Trade promotions which
is an expensive affair
• Advertising would cost
$1.2 Million Per Year
• Need to pay one time
slotting fee
Cons

9. Option 2
• Expand in the supermarket Internationally
• Bring in the 4 SKUS of the 32-oz Size

10. Pros
• Generate higher profit
margins than 8-oz
• Strong competitive
advantage with longer
shelf life
• Lower promotional
expenses
• Doubt on sales team’s
ability to achieve full
national distribution in
12 months
• Need to hire sales
promotional people to
establish relationships
• Expensive
Cons

11. Option 3
• Stay in the Natural Foods Channel
• Introduce 2 children’s Multipack

12. Pros
• The sales team is
confident that they could
achieve distribution for 2
SKUs
• Attractive Financial
Potential
• Yields the strongest
profits
• Strong Growth potential of
industry
• Many Potential
conflicts and uncertain
factors
• Cannot achieve the
target of nature view
farms
Cons

13. Data Available

14. Data Available

15. Data Available

16. Data Available

17. Data Available

18. Data Available

19. Solution
• Taking all the options and data available under
consideration , Option 3 seems to be the best choice
• Options 1 and 2 has the risk of loosing through
middlemen i.e. retailers , distributors relations but
option 3 doesn't
• For options 1 and 2 , the seller’s capability for
expansion is questionable
• Number of risks is too little for option 3 so it is the best
option for increasing revenue.

20. Recap
• Background
• Facts about the Industry
• Promotion Mix
• Swot Analysis
• Issues faced and solutions
• Options and their pros and cons
• Data to support the Options
• Solution

21. Disclaimer
Created by Shivani Bagaria , St Xavier’s
College Kolkata , during a marketing internship
by Prof Sameer Mathur, IIM Lucknow