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Natureview Farm
Case Analysis
Agenda
• About Natureview Farm
• Issues and Challenges
• Market Trends
• Options
• Recommendations
About Natureview Farm
• Founded in 1989 in Cabot, Vermont
• Manufacturer and marketer of refrigerated cup
organic yogurt
• Uses natural ingredients and special process
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
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
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
GOAL
To Increase revenue and position itself as a
company suitable for acquisition or investment
Questions
• Should Natureview expand into the supermarket
channel to increase its revenue?
• What marketing strategy should it use?
Market Trends
29%
25%
46%
Customer prefered channels
Supermarket
Small health stores
Natural foods
97%
3%
Yogurt distribution channel
Supermarket
Natural foods
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
OPTIONS AVAILABLE
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
Option 1
Option 1
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
Option 2
Option 2
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
Option 3
Option 3
Best Option
Option 1 because
• Higher revenue generated
• Lower Slotting Fee (only 2 supermarkets)
• Transition to supermarkets
• Advantage over competitors by expanding into
supermarket
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.
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
Thank You
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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
  • 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
  • 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
  • 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