Natureview yogurt aims to grow revenues to $20 million by 2001's end. It currently earns $13 million annually. Three expansion options are proposed: 1) Expand 6 yogurt SKUs to select supermarket regions, 2) Launch 4 SKU sizes nationwide, or 3) Introduce children's multi-packs to natural food stores. Option 1 offers the highest upside potential and incremental demand but requires significant promotion spending. Option 2 has a stronger advantage through longer shelf life but risks incomplete national distribution. Option 3 leverages Natureview's natural store strength but limits growth. The analysis recommends Option 1 to selectively expand SKUs to supermarkets in the Northeast and West to minimize conflicts and cannibalization while reaching the $20 million goal

1. NATUREVIE
W
Harvad Case Study Analysis by Shubh Patodi
Under the Guidance of Prof.Dameer Mathur

2. OBJECTIVE
They have to make strategic marketing
decisions to grow revenues to $20,000,000
from their current $13,000,000 before the
end of the 2001 fiscal year.

3. CUSTOMERTARGET
■ Yogurt is consumed by 40% of the US population.
■ Among those 70% are women.
■ Organic dairy products are bought by 74% of heavy organic buyers and 29% of
light organic buyers. For natural food buyers, factors to see when buying
yogurt are ingredients and whether it is organic or not. Factors to check when
deciding which yogurt to purchase are package, size, price, flavour, freshness,
ingredients and whether it was organic or not. Shoppers at Natural Food
Stores are older, educated and have higher incomes. 46% of organic food
consumers bought at supermarkets. 25% bought at a small health store. 29%
at natural foods supermarket

5. OBJECTIVE
Natural Foods Customer is Brand
Sensitive,Taste savvy and Less Price
Sensitive so they charged higher
Retail prices.

6. COMPETITIVE ADVANTAGE
HORIZON ORGANIC
It flushes with cash from a recent IPO. It
definitely produces a full range of
organic dairy.
It is also known as a National Brand

7. BROWN COW
Strong regional presence on theWest coast
WEAKNESS: Brown Cow’s yogurt was all natural
but not organic. Horizon’s was organic but it had a
shorter shelf life than Natureview’s product

8. GROWTH STRATEGY
Its growth has involved high Gross Profit margin (
37%)
In 1999, 100% Revenue generated from sales of
refrigerated yogurt to natural foods stores.
High market capture with 8-oz

9. Choices for ChristineWalker,VP
Marketing
■ Option 1: Expand 6 SKUs of the 8-oz. product line into one or
two selected supermarket channel regions as Proposed by
Walter BelliniVP Sales
■ Option 2: Expand 4 SKUs of the 32-oz. size nationally as
Proposed by Jack Gottlieb, vice president of operations
■ Option 3: Introduce 2 SKUs of a Children’s Multi-Pack into
the Natural Foods Channel
■ Proposed by Kelly Riley, the assistant marketing director

10. Option 1
■ analysisOption 1 - Expand 6 SKUs of the 8-oz product line into one or two selected
supermarket channel regions
■ Benefits
■ 1. Great Upside Potential
■ 2. For supermarket adding these products would attract higher-income less price-
sensitive customers
■ 3. Unit volume growth of organic yogurt at supermarkets of 20% per year from 2001 to
2006
■ 4.This option also has the highest incremental demand

11. Risks
■ 1. Supporting 8-oz cup size would require quarterly trade promotions and a
meaningful marketing budget
■ 2. Advertising plan would cost $1.2 million per region per year in addition to the
promotional ads expenses
■ 3. SG&A expenses would increase by $320,000 annually
■ 4.This option creates direct competition with national yogurt brands

13. Option 2 – Expand 4 SKUs of the 32-oz.
size nationally
■ Benefits 1. Potentially give higher average gross profit margin than 8-oz size
■ 2. It also has stronger competitive advantage like longer shelf life and lower marketing
expenses
■ Risks 1. Doubt on claim of new users would readily “enter the brand” via a multi-use
size
■ 2. Doubt on sales team’s ability to achieve full national distribution in 12 months
■ 3. Needs to hire sales personnel and establish relationships with supermarket brokers
■ 4.The 32-oz. expansion option would increase SG&A expense by $160,000

15. Option 3 – Introduce 2 SKUs of a Children’s
Multi-Pack into the Natural Foods Channel
■ Benefits
■ 1. Established leader in this channel
■ 2. Perfect positioning for new multi-pack product
■ 3. Long term the financial potential was very attractive
■ Risks 1. Established leader in this channel
■ 2. Perfect positioning for new multi-pack product
■ 3. Long term the financial potential was very attractive

18. Possible Conclusion
■ If we really hard press to answer the $20 million question, then it’s fairly simple
answer.
■ Go with option 1.We recommend Nature view to expand the multi pack into
supermarket channel in Northeast andWest
■ The benefits would include the follow: High growth (more than 12% from last year)
Minimized channel conflicts :Through this expansion,
■ Nature view can make it’s revenue goal by 2001 No cannibalization or alienation New
target customers : Supermarket will be selling these multi packs relatively cheap
Higher expected annual demand.