Natureview Farm is a yogurt company that has grown from $100,000 in revenues in 1989 to $13 million in 2000. They are considering three options to further grow revenues to $20 million: 1) Expand six 8-oz product SKUs into supermarket regions, 2) Expand four 32-oz SKUs nationally in supermarkets, or 3) Introduce two children's multipacks into natural food stores. Option 1 has the highest revenue potential but also requires a large marketing budget and risks direct competition with national brands. Option 2 provides higher margins than 8-oz cups but increases expenses. Option 3 enhances existing channel relationships, provides high margins, and has lower marketing costs and risk of competitive response.

1. NATUREVIEW FARM
Harvard Business School Case

2. NATUREVIEW FARM
Founded in
Cabot,
Vermont
Jim Wagner
becomes CFO
Revenues
grow from
$100,000 to
$13 million.
Expansion of
product line
1989 1996 1999 2000

3. The Natureview Yogurt
Ultimate Yogurt experience
Smooth
creamy
texture
All natural
ingredients
Family
recipe

4. GROWTH OF NATUREVIEW
Strong emphasis on quality.
Increase product offering
Low cost “Guriella
marketing”.

5. 8 oz 12 Flavors
32
oz
4 flavors
multipack
4 oz cups
tubes
Product line
86%
14 %
Revenue
8 oz 32 oz

6. YOGURT CATEGORY AND CONSUMER
74%
9%
8%
1.2
Dollar share
8 oz multipacks 32 oz Others
26%
22%25%
27%
Dollar share
Northeast Midwest Southeast West

7. THE PROBLEM
Increase revenues to $20,000,000 from $13,000,000 by making strategy
decisions.

8. CHANNEL ANALYSES
Supermarket Channel Natural stores Channel

9. Supermarket Channel
Technologically driven
Multiple Fees
More risk for smaller manufacturer
High level of potential
Manufacturer Distributor Retailer Consumer

10. 0.74
2.7
2.85
0
0.5
1
1.5
2
2.5
3
8 oz cup 32 oz cup 4 oz multipack
Price
Category
Price Vs Category
Retail price
5%
33%
23%
15%
Market sare
Colombo Dannon other Private label Yoplait

11. Natural stores Channel
Manufacturer
Natural foods
wholesaler
Natural foods
distributor
Retailer Consumer
Friendly to small manufacturers
5 steps process
Price are higher

12. 35%
24%
19%
7%
15%
Market sare
Other Nature view Farm Horizon Wave White Wave Brown Cow
0.88
3.19
3.35
0
0.5
1
1.5
2
2.5
3
3.5
4
8 oz cup 32 oz cup 4 oz multipack
Price
Category
Price Vs Category
Retail price

13. Situation Analyse
STRENGTH
High shelf life
Quality , taste and natural
Strong relation with natural store
OPPORTUNITIES
Growth
Increase interest in organic foods
WEAKNESS
Small manufacture
Low funds and revenue
THREATS
Competition
Increasing demand of logistics
Increase in price sensitive customers
SWOT

14. Financial Analyse
Revenues $13,000,000 100%
Cost of goods sold $8,190,000 63%
Gross Prot $4,810,000 37%
Expenses
Administration/Freight $2,210,000 17%
Sales $1,560,000 12%
Marketing $390,000 3%
Research and Development $390,000 3%
Net Income $260,000 2%

15. OPTIONS
1. Expand 6 SKUs of the 8-oz. product line into one or two
selected supermarket channel regions.
2. Expand 4 SKUs of the 32-oz. size nationally.
3. Introduce two SKUs of a children’s multi-pack into the natural
foods channel

16. Option 1 :- Expand 6 SKU of 8 oz product line
• Great upside potential
• Attract higher income less price sensitive
customers
• 20% growth at super marketsBenefits
• Require quarterly trade promotions and
meaningful marketing budget
• $1.2 million advertising cost per region per year
• Direct competition with national yogurt brandsRisks

17. Option 2 :- Expand 4 SKU of 32 oz
• Give higher gross profit margin than 8
oz
• Strong shelf life and lower marketing
advantage
Benefits
• Establish relationships with
supermarket brokers
• Increase SG$A expanse by $160,000Risks

18. Option 3 :- Introduce 2 SKU of children
multipacks
• Give higher gross profit margin than 8
oz
• Strong shelf life and lower marketing
advantage
Benefits
• Establish relationships with
supermarket brokers
• Increase SG$A expanse by $160,000Risks

19. Options Actions Total incremental sales
Option 1 Expand 6 SKUs of the 8-oz. size into eastern and western
supermarket regions
35,000,000
Option 2 Expand 4 SKUs of the 32-oz. size nationally into
supermarket channel
5,500,000
Option 3 Introduce 2 children’s multipacks into natural foods
channel
1,800,000

20. Decisions Parameters Option 1 Option 2 Option 3
Revenue Objective Exceeds Exceeds
Short Term Profits No No Gain
Long Term Profits High High Low
Channel Partners Highly Alienating Alienating Enhancing
Competitive
Response
Very Risky Risky Low
Cost to Induce Trial High Very High Low
Brand Equity Dilution Possible Possible No
Organisational
Capabilities
Low Low High
“Go with Option 3 and expand Multipack into natural foods channel”

21. Credits
• http://www.slideshare.net/abhay9026098519/natureview
• http://www.istockphoto.com/
• Harvard business School Cases

22. DISCLAMER
Created by Aviral kotangle during marketing internship under
guidance of Prof Sameer Mathur.