Analysis on a Harvard case study

1. CASE STUDY ANALYSIS

2. • Natureview farm
• History
• Goals
• Statistics of natureview
• Strategies
• Solution

3. NATUREVIEW
FARM
• Small yogurt
manufacturer.
• Located in Cabot,
Vermot.

4. 2000
1999
Revenue of
$13 million
1997
Decision to
increase
revenue to
$20 million
by end of
2001
Equity
infusion of
venture
capital
1996
1989
Jim Wager
hired as
CFO
Natureview farm
began
JOURNEY OF NATUREVIEW FARM

5. GOAL
• Grow revenues by over
50% before the end of 2001
REASON
• VC needed to cash out
of its investment
STRATEGY
• Expand to supermarket
channel

6. Twelve refrigerated yogurt
flavors
Four flavors Yogurts packed in tubes for
children. Newly introduced
8-oz cups 32-oz cups 4-oz cups
86% 14%
PACKAGE SEGMENT

7. Natural food retailers
• Whole foods
• Wild oats
• Organic food market

8. DISTRIBUTION CHANNELS
3%
97%
Sales
supermarkets natural food stores

9. 46%
29
25%
SUPERMARKET
NATURAL FOOD
MARKET
SMALL HEALTH FOOD
STORE
ORGANIC FOOD CONSUMER PURCHASE

10. MARKET SHARE IN REGIONS
26% 22% 25% 27%
25
30
33
17
0%
500%
1000%
1500%
2000%
2500%
3000%
3500%
NORTHEAST MIDWEST SOUTHEAST WEST
Chart Title
DOLLAR SHARE NO. OF RETAILERS Column1

11. PRODUCTION COST AND RETAIL PRICE BY CHANNEL
NATURAL FOOD CHANNEL AVERAGE RETAIL PRICE
8-OUNCE CUP $0.88
32-OUNCE CUP $3.19
4-OUNCE CUP MULTIPACK $3.35
SUPERMARKET CHANNEL AVERAGE RETAIL PRICE
8-OUNCE CUP $0.74
32-OUNCE CUP $2.70
4-OUNCE CUP MULTIPACK $2.85
CUPS SIZE MANUFATURING COST
8-OUNCE CUP $0.31
32-OUNCE CUP $0.99
4-OUNCE CUP MULTIPACK $1.15

12. LENGTH OF CHANNEL MARKET

15.  8-OZ represented the largest dollar
and unit share.
 Significant revenue potential.
 First brand to enter the channel would
have first-mover advantage.
Pros
 Advertising would cost $1.2 million per
region per year.
 SG&A would increase by $320000.
 Higher risks and costs.
Cons
TO EXPAND SIX SKUs OF 8-OZ PRODUCT INTO ONE
OR TWO SELECTED SUPERMARKETS
OPTION 1

16.  32-oz generated above-average
gross profit.
 Fewer competitive offering in 32-oz
size.
 Promotional expenses lower.
 Less noticed by competitors.
Pros
 Slotting expenses higher.
 SG&A would increase by $160000.
 Nation wide distribution in 1 year is
difficult.
Cons
EXPAND FOUR SKUs 32-0Z NATIONALLY IN
SUPERMARKETS
OPTION 2

17.  Strong relationship with natural
foods channel.
 Distribution is easy.
 Sales and marketing expenses is
lower.
 Natural foods channel was growing
seven times faster.
Pros
 Revenues of $20 million cannot be
achieved by 2001.
 Channel conflicts may arise.
Cons
INTRODUCE TWO SKUs CHILDREN’S MULTI-PACKS
INTO NATURAL FOOD CHANNEL
OPTION 3

19. Advantages
• Best option to achieve a revenue
of $20 million in a year
• First brand to enter added
advantage
• Supermarket maximize sales
volume.
• 8-oz is most popular sizes

21. Created by Akshaya R, PSG College of
Technology, during a marketing internship
under Prof Sameer Mathur, IIM Lucknow