Natureview Farm produces organic yogurt in Vermont and aims to increase its $13 million revenue by 50% to $20 million. It currently sells yogurt in 8 oz and 32 oz sizes through organic food stores and supermarkets. To meet its objective, the company is considering either expanding into supermarket chains or strengthening its current channels. Analysis shows option 2 of expanding its 32 oz cups nationally in supermarkets exceeds the revenue requirement, has lower costs than 8 oz sizes, and faces less competition, making it the most lucrative choice.

1. CASE ANALYSIS

2. ▪ Natureview Farm is an organic yogurt manufacturing
company founded in Cabot, Vermont.
▪ Entered the market with yogurt manufactured by
natural ingredients which had a shelf life of 50 days
offered in 8 oz and 32 oz sizes and in plain and vanilla
flavor in 1989
▪ Since then company had been expanding continuous
with its revenue being $13 Million in 1999 and It also
offered new products such as yogurt in new sizes and
multipacks and also with fruits at the bottom.

3. PRODUCT ANALYSIS

4. YOGURT
▪Made out of natural ingredients which had a longer
shelf life than competitors I.e 50 days to their 30
days.
▪Yogurt was consumed by 40% of the population
which had a very small number of women i.e 7%
▪Yogurt market at the time was expected to grow by
2-4% in the next 5 years.
▪The sales came from various retail environments
such as 46% from super markets, 29% organic food
stores and 25% from small shops.

5. CUSTOMER BASE ANALYSIS

6. ▪40% Population amongst which 7% were women
▪The shoppers of organic food were richer,more
educated and older than the people who
consumed normal food items.
▪They were concentrated in northeast and west
▪58% of population did not consumer organic food
items because of the high price where as 44%
demanded a larger variety of organic products

7. OBJECTIVE IN HAND

8. $13
MILLION
$20
MILLION

9. TO INCREASE CURRENT REVENUE
OF $13 MILLION BY 50% TO $20
MILLION BY THE END OF YEAR
2001

10. NATURVIEW FARM'S AVAILABLE OPTIONS
TO ACHIEVE THE OBJECTIVE
▪TO EXPAND INTO THE SUPERMARKET CHAINS AND
SELLING ORGANICYOGURT THROUGH THESE GIANT
RETAILERS OR
▪TO STREGTHEN CURRENT CHANNELS BY INTENSIVE
MARKETING TO GENERATE HIGHER REVENUES

11. OPTIONS TO ACHIEVE OBJECTIVE

13. TO EXPAND 6 SKU (STOCK KEEPING UNITS)
OF 8 OZ INTO 1-2 SUPERMAKRTS

15. TO EXPAND 4 SKU OF 32 OZ CUPS
NATIONALLY IN SUPERMARKETS

17. INTRODUCE 2 SKU OF CHILDREN
MULTIPACK IN NATURAL FOODS CHANNEL

18. COMPANY SHOULD GO WITH OPTION 2
▪EXCEEDS REVENUE REQUIREMENTS
▪THEY HAVE COMPETITVE ADVANTAGE DUE TO HIGHER
SHELF LIFE THEREFORE SUPERMARKETS WILL PREFER
THEIR BRAND
▪EASY MARKETING

19. PARAMETER OPTION 1 OPTION 2 OPTION 3
REVENUE OBJ. YES YES NO
COMPETITIVE
RESPONSE
HIGH VERY HIGH LOW

20. PROOF

21. OPTION 2
▪ REVENUE AIM = $20 MILLION
▪ DEFICIT IN REVENUE – 20-13 = $7 MILLION
▪ SELLING PRICE = $1.56 PER CUP
▪ ANTICIPATED INCREASE IN SALES = 5,500,000 UNITS
▪ REVENUE GENERATION FROM THIS INCREASE = 5,500,000 X 1.56 =
$8,613,000
▪ REVENUE = 13+8.613 ( MIL FIG)= $ 21,613,000
▪ AFTER PROVIDING FOR THE MARKETING COSTS OF $640,000 AND
OTHER EXPENSES THE REVENUE EXCEEDS THE TARGET

22. OPTION 3
▪ REVENUE AIM = $20 MILLION
▪ DEFICIT IN REVENUE – 20-13 = $7 MILLION
▪ SELLING PRICE = $1.6415 PER CUP
▪ ANTICIPATED INCREASE IN SALES = 1,800,000 UNITS
▪ REVENUE GENERATION FROM THIS INCREASE = 1,800,000 X 1.6415
= $ 2,954,700
▪ REVENUE = 13+2.9547 ( MIL FIG)= $ 15,954,700
▪ REVENUE TARGET IS NOT MET THEREFORE THIS OPTION IS
STRAIGHT AWAY REJECTED

23. OPTION 1
▪ REVENUE AIM = $20 MILLION
▪ DEFICIT IN REVENUE – 20-13 = $7 MILLION
▪ SELLING PRICE = $0.4292 PER CUP
▪ ANTICIPATED INCREASE IN SALES = 35,000,000 UNITS
▪ REVENUE GENERATION FROM THIS INCREASE = 35,000,000 X
0.4292 = $15,022,000
▪ REVENUE = 13+15.022 ( MIL FIG)= $ 28,022,000
▪ ALTHOUGH REVENUE TARGET IS MET BUT THIS OPTION HAS A LOT
OF DRAWBACKS

24. OF OPTION 1

25. ▪MOST POPULAR SIZE AND FACES TOUGH COMPETITION
▪THE COST OF PRODUCTION IS HIGHER FOR THE 8OZ OPTION 1 SIZE
THAN 32OZ OPTION 2 SIZE AS DRASTICALLY MORE NUMBER OF
UNITS HAVE TO BE PRODUCED BECAUSE ANTICIPATED DEMAND IS
MORE
▪6 PACK MAY DEMOTIVATE MANY TO PURCHASE AND EVEN
DEMOTIVATE SUPERMARKETS ARE THEY DONT WANT TO TIE UP
FUNDS IN STOCKS.

26. WHY OPTION 2 SHOULD BE SELECTED
▪ LESS COMPETITION
▪ SUPERMARKETS WILL BE A BOOST FOR SALES THEREFORE FOR
PROFITS
▪ LESS COST OF PRODUCTION
▪ HIGHER PROFIT MARGINS THAN 8OZ SIZE
▪ LOWER MARKETING REQUIREMENTS

27. THEREFORE OPTION 2 IS MOST LUCRATIVE TO
ACHIEVE THE TARGET OF INCREASED REVENUE.

28. SUMMARY
▪ Organic yogurt manufacture from Vermont.
▪ Organic food is next rising market but currently consumed by
educated and rich
▪ Natureview Farm's yogurt is prepared from natural ingredients
therefore has a shelf life of 50 days.
▪ Customer base consists of 40% population concentrated in
northeast and west comprising of 7% women.
▪ Objective of firm to increase revenue by 50% to $20 million
▪ They choose to go for supermarkets and producing 32 oz 4
packs as it is most lucrative

29. DISCLAIMER
▪This analysis is prepared by Shaurya Sareen,
Student at CVS, DU under the supervision of
Prof.Sameer Mathur,Faculty at IIM-L during
Marketing Management Internship