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NATUREVIEW FARM
SUBMITTED BY-
AYUSH SRIVASTAVA
Btech III Year
MNNIT Allahabad
AGENDA
OVERVIEW
• Company
• Natural/Organic Market Trends
• Yogurt Market Trends
• Challenge
Option 1
Option 2
Option 3
Financials
Rccommendations
COMPANY
• Founded in 1989.
• Manufacturer and marketer of refrigerated
cup yogurt
• Differentiators:
Natural Ingredients
Longer shelf life
Reputation for high quality and great taste
• Key success factors:
Strong brand
Effective low cost “guerrilla marketing”
National distribution in natural food channel.
Strong relationships with distributors.
NATURAL/ORGANIC MARKET TRENDS
• Organic food market predicted to grow from $6.5 billion
to $13.3 billion over 4 years.
• Generally organic products consumers tend to be more educated,
be older and live in the Northeast and West.
• 67% of households consider price as a barrier to purchase of
organic products.
• 44% of the customers would like a wider selection of
organic products in supermarkets.
• Supermarkets are moving towards attracting
new customers by offering more organic products.
YOGURT MARKET TRENDS
• Concentrated- 4 competitors control over 50% share.
• Supermarkets= 97% of total sales(3% annual growth).
• Natural Food Stores= 3% total sales(20% annual growth)
• Factors in purchasing decisions:
Package type/size, flavour, price, freshness, ingredients,
Organic
CHALLENGE :
Identify path to grow
revenues by over 50%
within 23 months.
GOAL :
Attain against possible valuation in
order to secure new investors or position
Itself for acquisition.
OPTION 1
Expand 6 SKU’s of the
8-oz product line into
one or two selected
supermarket channel regions
PROS:
• 8-oz cups represent largest dollar and unit
share of market.
• Supermarkets fear losing market
share to natural food competitors.
• First-Mover advantage.
• Supermarkets may only authorize 1
organic yogurt manufacturer.
CONS:
• Highest level of competitive trade promotion
and marketing spend.
• Possible channel conflict between
supermarkets and natural food stores.
• Promotion and lower price at supermarkets
may hurt the brand.
• Little experience in dealing with supermarket
chains.
OPTION 2
Expand 4 SKU’s of the 32-oz
product line nationality.
PROS :
• Natureview already has strong
relationships with leading natural foods
cahnnel retailers
• More time to prepare the company for
moving into supermarkets.
• Financially attractive.
• High margins- 37.6%.
• Low sales and marketing expenses.
CONS :
• Fast growth of natural food channel
will lead to demands equal to those
of supermarkets.
• Miss opportunity to enter
supermarkets before competitors.
OPTION 3
Expand 2 SKU’s of a children’s
Multi-pack into the natural
foods channel.
PROS :
• Financially attractive
• High Margins- 37.6%
• Low sales and marketing expenses
CONS :
• Fast growth of natural food channel
will lead to demands equal to those
of supermarkets.
• Miss opportunity to enter
supermarkets before competitors.
Financial Of Option 1:
• SALE PRICE
• RETAIL MARGIN
• PRICE TO RETAIL
• DISTRIBUTOR MARGIN
• PRICE TO DISTRIBUTOR
• MFC COST
$0.78
$0.21
$0.57
$0.09
$0.48
$0.31
GROSS PROFIT NV $0.07
GROSS PROFIT MARGIN 35.95%
Financial Of Option 2:
• SALE PRICE
• RETAIL MARGIN
• PRICE TO RETAIL
• DISTRIBUTOR MARGIN
• PRICE TO DISTRIBUTOR
• MFC COST
$2.83
$0.76
$2.07
$0.31
$1.76
$0.99
GROSS PROFIT NV $0.77
GROSS PROFIT MARGIN 43.6%
RECOMMENDATION
OPTION 1:
• Financials
• Only a regional distribution instead of
national which should make it easier to implement.
• Competitors are going to move into the supermarket
space and we may miss a huge opportunity by not taking
the risk.
• Higher slotting fees, but more visibility of the product.
NET MARKETING CONTRIBUTION =
(Sales Revenue * % gross profit) – marketing expenses
2001 2002 2003 2004 2005 2006 Average
OPTION 1 $3599.65 $4817.58 $6279.09 $8032.91 $10137.49 $12662.99 $7588.28
OPTION 2 $3699.08 $4301.04 $5027.80 $5863.57 $6824.70 $7930.01 $5602.70
OPTION 3 $997.07 $1308.84 $1698.55 $2185.68 $2794.61 $3555.76 $2090.08
Ayush Srivastava NatureView Farm Case Study

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Ayush Srivastava NatureView Farm Case Study

  • 1. NATUREVIEW FARM SUBMITTED BY- AYUSH SRIVASTAVA Btech III Year MNNIT Allahabad
  • 2. AGENDA OVERVIEW • Company • Natural/Organic Market Trends • Yogurt Market Trends • Challenge Option 1 Option 2 Option 3 Financials Rccommendations
  • 3. COMPANY • Founded in 1989. • Manufacturer and marketer of refrigerated cup yogurt • Differentiators: Natural Ingredients Longer shelf life Reputation for high quality and great taste • Key success factors: Strong brand Effective low cost “guerrilla marketing” National distribution in natural food channel. Strong relationships with distributors.
  • 4. NATURAL/ORGANIC MARKET TRENDS • Organic food market predicted to grow from $6.5 billion to $13.3 billion over 4 years. • Generally organic products consumers tend to be more educated, be older and live in the Northeast and West. • 67% of households consider price as a barrier to purchase of organic products. • 44% of the customers would like a wider selection of organic products in supermarkets. • Supermarkets are moving towards attracting new customers by offering more organic products.
  • 5. YOGURT MARKET TRENDS • Concentrated- 4 competitors control over 50% share. • Supermarkets= 97% of total sales(3% annual growth). • Natural Food Stores= 3% total sales(20% annual growth) • Factors in purchasing decisions: Package type/size, flavour, price, freshness, ingredients, Organic
  • 6. CHALLENGE : Identify path to grow revenues by over 50% within 23 months. GOAL : Attain against possible valuation in order to secure new investors or position Itself for acquisition.
  • 7. OPTION 1 Expand 6 SKU’s of the 8-oz product line into one or two selected supermarket channel regions
  • 8. PROS: • 8-oz cups represent largest dollar and unit share of market. • Supermarkets fear losing market share to natural food competitors. • First-Mover advantage. • Supermarkets may only authorize 1 organic yogurt manufacturer. CONS: • Highest level of competitive trade promotion and marketing spend. • Possible channel conflict between supermarkets and natural food stores. • Promotion and lower price at supermarkets may hurt the brand. • Little experience in dealing with supermarket chains.
  • 9. OPTION 2 Expand 4 SKU’s of the 32-oz product line nationality.
  • 10. PROS : • Natureview already has strong relationships with leading natural foods cahnnel retailers • More time to prepare the company for moving into supermarkets. • Financially attractive. • High margins- 37.6%. • Low sales and marketing expenses. CONS : • Fast growth of natural food channel will lead to demands equal to those of supermarkets. • Miss opportunity to enter supermarkets before competitors.
  • 11. OPTION 3 Expand 2 SKU’s of a children’s Multi-pack into the natural foods channel.
  • 12. PROS : • Financially attractive • High Margins- 37.6% • Low sales and marketing expenses CONS : • Fast growth of natural food channel will lead to demands equal to those of supermarkets. • Miss opportunity to enter supermarkets before competitors.
  • 13. Financial Of Option 1: • SALE PRICE • RETAIL MARGIN • PRICE TO RETAIL • DISTRIBUTOR MARGIN • PRICE TO DISTRIBUTOR • MFC COST $0.78 $0.21 $0.57 $0.09 $0.48 $0.31 GROSS PROFIT NV $0.07 GROSS PROFIT MARGIN 35.95%
  • 14. Financial Of Option 2: • SALE PRICE • RETAIL MARGIN • PRICE TO RETAIL • DISTRIBUTOR MARGIN • PRICE TO DISTRIBUTOR • MFC COST $2.83 $0.76 $2.07 $0.31 $1.76 $0.99 GROSS PROFIT NV $0.77 GROSS PROFIT MARGIN 43.6%
  • 15. RECOMMENDATION OPTION 1: • Financials • Only a regional distribution instead of national which should make it easier to implement. • Competitors are going to move into the supermarket space and we may miss a huge opportunity by not taking the risk. • Higher slotting fees, but more visibility of the product.
  • 16. NET MARKETING CONTRIBUTION = (Sales Revenue * % gross profit) – marketing expenses 2001 2002 2003 2004 2005 2006 Average OPTION 1 $3599.65 $4817.58 $6279.09 $8032.91 $10137.49 $12662.99 $7588.28 OPTION 2 $3699.08 $4301.04 $5027.80 $5863.57 $6824.70 $7930.01 $5602.70 OPTION 3 $997.07 $1308.84 $1698.55 $2185.68 $2794.61 $3555.76 $2090.08