The document discusses three options for expanding the business of Nature View Farm yogurt company. Option 1 is to launch 6 new 8-oz cup sizes in supermarkets, Option 2 is a national launch of 4 32-oz cup sizes, and Option 3 is launching 2 multipack sizes for children in natural food stores. Option 1 carries the highest potential profits but also the highest risks and costs. Option 3 requires the lowest investment and risk with projected 15% annual growth in the natural food store channel. Therefore, the team chooses Option 3 to launch multipacks in natural food stores as it poses the lowest risk to the company.

1. NATURE VIEW FARM

2. NATUREVIEW FARM

4. The members of Nature view farm:
VP OF MARKETING CHRISTINE WALKER
CHIEF FINANCIAL OFFICER JIM WAGNER
CHIEF EXECUTIVE OFFICER BARRY
LANDER

5. AIM of Case Study:

6. ABOUT NATUREVIEW FARM:
 THE KEY TO THE NATURE VIEW YOGURT FLAVOR AND
TEXTURE WAS THE FAMILY YOGURT RECIPE
DEVELOPED BY THE COMPANY’S FOUNDER.
 THE RECIPE USED NATURAL INGREDIENTS AND A
SPECIAL PROCESS THAT GAVE THE YOGURT ITS UNIQUE
SMOOTH, CREAMY TEXTURE WITHOUT THE ARTIFICIAL
THICKENERS USED BY THE MAJOR U.S. YOGURT
BRANDS—DANNON, YOPLAIT, AND BREYERS

7. Nature view Farm’s Business:
THE COMPANY HAS RAISED ITS REVENUE FROM $100,000 IN 1989
TO $13,000,000 IN 1999.
Initially (1989) Present(2000)
CATEGORIES- 8-oz ,32-oz CATEGORIES- 8-OZ,32-
OZ,MULTIPACKS
FLAVOUR-Vanila,Plain FLAVOUR-12 in 8-oz and 4
flavours in 32-oz

8. Yogurt Share In market;
SUPERMARKET CHANNELSUPERMARKET CHANNEL NATURAL FOOD STORE
97% OF SHARE IN THE MARKET FOR
YOGURT
3% OF SHARE IN THE MARKET FOR
YOGURT
It is increasing at a rate of % per year. It Is increasing at a tremendous rate of
20% per year.
Examples: Dannon,Yoplait etc. Examples: Nature View Farm, Brown cow
etc.

9. Analysis of the Case (1)
 44% AMOUNT OF PEOPLE SUGGESTS THAT THERE IS
NEED FOR WIDER SELECTION IN ORGANIC FOOD.
 67% ARE THOSE PEOPLE FOR WHOM PRICE IS A
BARRIER FOR ORGANIC FOOD.
 58% ARE THOSE PEOPLE WHO WILL BUY IF THE COST IS
LESS.

10. Analysis of the case (2)
46%
25%
29%
ORGANIC FOOD CONSUMERS DISTRIBUTION
s
1st Qtr 2nd Qtr 3rd Qtr
SUPERMA
RKET
NATURAL
FOOD
SUPPLIER
Health food
supply

11. Market Segment
TOTAL OF 40% PERCENT OF US CONSUMED THE PRODUCT
YOGURT. THE SHARE OF THIS IS DISTRIBUTED AS :
WOMEN :70% (MAJOR) MEN: 30% (MINOR)

12. Targeting the segment
THE TARGET SEGMENT IN PREFERENCE ORDER:
I. WOMEN :GENERALLY OPTS FOR 8-OZ OF YOGURT CUP.
II. CHILDREN:MULTIPACKS ( 6 PIECES OF 4-OZ AND 8 PIECES 0F 2-
OZ)
III. 8.1 % OF SALE FOR THE SIZE OF 32-OZ CUP.

13. Supermarket Vs Natural food store
SUPERMARKET STRUCTURE NATURAL FOOD
STORE
SLOTTING FEE
WHOLESALER(7%)
TRADE PROMOTION
DISTRIBUTOR(9%)
ADVERTISEMENT
RETAILER(35%)

14. CASE 1 Analysis
6 SKU’s of 8-oz size to enter into supermarket
channel
o HIGHEST COMPENSATION
o 2% TO 4% GROWTH IN SUPERMARKET
o $1.2 MILLION PER YEAR ADVERTISEMENT COST PER
REGION
o OVERALL $3.2 MILLION EXTRA
1.5% SUPERMARKET SHARE LEADING TO 35 MILLION
UNITS
( EXPECTED SALES)

15. CASE 2 Analysis
4 SKU’s of 32-oz size to launch Nationally
• $1.2 MILLION + $0.4 MILLION ADVERTISEMENT COST
• ENTER INTO THE 64 SUPERMARKET RETAIL CHANNEL
(5.5 MILLIONS UNITS SELLS EXPECTED)

16. CASE 3 Analysis
2 SKU’s of children multipack into
Natural food channel
 $2.5 MILLIONS IN ADVERTISEMENT
 EXPECTED GROWTH IN 5 YEAR IS 15%.
 GROSS PROFITABILITY OF THE LINE WOULD BE 37.6%

17. Analysis of option 1
IT IS EXPECTED THAT THE SHARE WILL RISE BY 2-4% IE BY
35 MILLION UNITS.
TOTAL EXPENDITURE IN ADVERTISEMENT WILL BE $3.2
MILLION .
AFTER DOING CALCULATION FOR 1 YEAR, THE COMPANY
WILL HAVE PROFIT OF $10 MILLION(APPROX.).
SUGGESTING TO ENTER IN SUPERMARKET

18. Risk in selecting option 1
THE TEAM ACKNOWLEDGED THAT THIS OPTION HAD GREAT
UPSIDE POTENTIAL BUT ALSO HIGHER RISKS AND COSTS.
THE 8-OZ. SIZE RECEIVED THE HIGHEST LEVEL OF
COMPETITIVE TRADE PROMOTION AND MARKETING.

19. THE OPTION MUST NOT BE ACCEPTED BECAUSE THE
MULTIPACK IS TARGETED TO VERY SMALL SEGMENT OF
SOCIETY AND ALSO THAT SEGMENT IS VERY FOND OF NATURE
VIEW’S YOGURT. SO WHETHER IT IS AVAILABLE AT NATURAL
FOOD STORE OR AT SUPERMARKET, IT WONT EFFECT THAT
PARTICULAR SEGMENT OF SOCIETY.

20. Analysis of option 3
SUGGESTING TO LAUNCH THE 2 SKU CHILDREN MULTIPACK
INTO THE NATURAL FOOD STORE.
15% GROWTH IN 5 YEAR
$2.5 MILLION IN ADVERTISEMENT EVERY YEAR.
GOOD OPTION

21. Final choice
THE COMPANY HAS TO CHOSE BETWEEN OPTION 1 AND
OPTION 3 AS WE HAVE ALREADY ELIMINATED OPTION 2.
ACCORDING TO ME THE COMPANY MUST GO WITH OPTION
3 BECAUSE IT IS THE CASE WHICH HAS MINIMUM RISK
/THREAD TO THE COMPANY.
THE SALES TEAM WAS CONFIDENT THAT THEY COULD
ACHIEVE DISTRIBUTION FOR THE TWO SKUS.

22. GROSS PROFITABILITY OF THE LINE WOULD BE 37.6%.
THE FIVE-YEAR PROJECTED UNIT GROWTH CAGR OF
YOGURT IN THE NATURAL FOODS CHANNEL WAS
PROJECTED TO BE 15%, ACCORDING TO INDUSTRY
MARKET RESEARCH.

23. Not Choice 1
FARM’S SALES BROKER HAD INDICATED THAT SUPPORTING THIS CUP
SIZE WOULD REQUIRE QUARTERLY TRADE PROMOTIONS AND A
MEANINGFUL MARKETING BUDGET.
THE COMPANY HAS TO INVEST A HUGE AMOUNT IN ADVERTISEMENT
AND SALES TO PROMOTE AND SUSTAIN THE NEW PRODUCT.
IT WILL HAVE TO TAKE A BIG RISK TO ACHIEVE THE TARGET FAILING
IN WILL RESULT A TREMENDOUS LOSS TO COMPANY.

24. FARM’S SALES BROKER HAD INDICATED THAT SUPPORTING THIS CUP
SIZE WOULD REQUIRE QUARTERLY TRADE PROMOTIONS AND A
MEANINGFUL MARKETING BUDGET.
THE COMPANY HAS TO INVEST A HUGE AMOUNT IN ADVERTISEMENT
AND SALES TO PROMOTE AND SUSTAIN THE NEW PRODUCT.
IT WILL HAVE TO TAKE A BIG RISK TO ACHIEVE THE TARGET FAILING
IN WILL RESULT A TREMENDOUS LOSS TO COMPANY.