1. NATUREVIEW
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.
CUSTOMER TARGET: 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
Supermarket Channel
Columbo
Dannon
Other
Private Label
Yoplait
(1999)
5%
33%
23%
15%
24%
Natural Foods Channel
Other
Nature view Farm
Horizon Wave
White Wave
Brown Cow
(1999)
35%
24%
19%
7%
15%
OBJECTIVE: Natural Foods Customer is Brand Sensitive, Taste savvy and Less Price Sensitive so they
charged higher Retail prices.
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
BROWN COW:
Strong regional presence on the West 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
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

2. Choices for Christine Walker, 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 Bellini VP 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
Option 1 analysis
Option 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
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
Income forecast
Year 2000
Year 2001
Year 2002
Year 2003
Revenue
Costs of Good Sold
Gross Profit
Admin / Freight
Sales
Marketing
R&D
One-Time Slotting
Fee
Brokers' Fee @ 4%
Total Expense
Net Income
Profit Margin
$
$
$
$
$
$
$
29,070,950
(19,040,000)
10,030,950
(2,210,000)
(1,880,000)
(3,660,000)
(390,000)
$
(1,200,000)
$
(642,838)
$
(9,982,838)
$
48,112
0.17%
$
$
$
$
$
$
$
32,285,140
(21,210,000)
11,075,140
(2,210,000)
(1,880,000)
(3,660,000)
(390,000)
$
$
$
$
$
$
$
36,142,168
(23,814,000)
12,328,168
(2,210,000)
(1,880,000)
(3,660,000)
(390,000)
$
(771,406) $
(925,687)
$
(8,911,406) $
(9,065,687)
$
2,163,734 $
3,262,481
6.70%
9.03%
$
$
$
$
$
$
$
40,770,602
(26,938,800)
13,831,802
(2,210,000)
(1,880,000)
(3,660,000)
(390,000)
-
$
(1,110,824)
$
(9,250,824)
$
4,580,978
11.24%

3. 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
Forecast
Year 2000
Revenue
Costs of Good
Sold
Gross Profit
Admin / Freight
Sales
Marketing
R&D
Year 2001
$
22,214,425
$
24,057,310 $
26,268,772
$
28,922,526
$
(13,635,000)
$
(14,724,000) $
(16,030,800)
$
(17,598,960)
$
8,579,425
$
$
10,237,972
$
11,323,566
$
(2,210,000)
$
(2,210,000) $
(2,210,000)
$
(2,210,000)
$
(1,720,000)
$
(1,720,000) $
(1,720,000)
$
(1,720,000)
$
(1,894,000)
$
(1,894,000) $
(1,894,000)
$
(1,894,000)
(390,000) $
(390,000) $
(390,000) $
(390,000)
-
-
(442,292) $
(530,751) $
$
One-Time Slotting
Fee
$
Brokers' Fee @ 4%
Total Expense
Net Income
Profit Margin
$
9,333,310
(2,560,000)
$
(368,577) $
(9,142,577)
$
-2.54%
$
Year 2002
(6,656,292) $
(563,152) $
11.13%
2,677,018
$
Year 2003
(636,901)
(6,744,751)
$
(6,850,901)
3,493,221
$
4,472,665
13.30%
15.46%

4. 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
Forecast
Year 2000
Revenue
Costs of Good
Sold
Gross Profit
Admin / Freight
Sales
Marketing
R&D
Year 2001
Year 2002
Year 2003
$
16,317,073 $
16,383,414 $
16,451,083 $
16,520,104
$
(10,260,000) $
(10,007,640) $
(10,043,993) $
(10,081,073)
$
6,057,073 $
6,375,774 $
6,407,090 $
6,439,032
$
(2,210,000) $
(2,210,000) $
(2,210,000) $
(2,210,000)
$
(1,560,000) $
(1,560,000) $
(1,560,000) $
(1,560,000)
$
(640,000) $
(640,000) $
(640,000) $
(640,000)
$
(390,000) $
(390,000) $
(390,000) $
(390,000)
-
-
One-Time
Slotting Fee
$
Brokers' Fee @
4%
$
(132,683) $
(135,337) $
(138,043) $
(140,804)
$
(5,015,610) $
(4,935,337) $
(4,938,043) $
(4,940,804)
$
1,041,463 $
1,440,438 $
1,469,046 $
1,498,227
Total Expense
Net Income
Profit Margin
6.38%
(82,927)
8.79%
8.93%
-
9.07%

5. SUMMARY
2000
OPTION 1
Revenue
Gross
Profit
Net
Income
Profit
Margin
Profit
Growth
OPTION 2
Revenue
Gross
Profit
Net
Income
Profit
Margin
Profit
Growth
OPTION 3
Revenue
Gross
Profit
Net
Income
Profit
Margin
Profit
Growth
2001
2002
2003
2004
$ 29,070,950.00 $ 32,285,140.00
$ 36,142,168.00 $ 40,770,601.60 $ 46,324,721.92
$ 10,030,950.00 $ 11,075,140.00
$ 12,328,168.00 $ 13,831,801.60 $ 15,636,161.92
$
$ 3,262,481.28 $ 4,580,977.54 $ 6,163,173.04
48,112.00 $ 2,163,734.40
0%
7%
9%
11%
13%
0%
4397%
51%
40%
35%
$ 22,214,425.00 $ 24,057,310.00
$ 26,268,772.00 $ 28,922,526.40 $ 32,107,031.68
$ 8,579,425.00 $ 9,333,310.00
$
(563,152.00)
$ 2,677,017.60
$ 10,237,972.00 $ 11,323,566.40 $ 12,626,279.68
-3%
11%
13%
15%
18%
0%
575%
30%
28%
26%
$ 3,493,222.12 $ 4,472,667.34 $ 5,648,001.41
$ 16,317,072.85 $ 16,814,633.78
$ 17,386,828.84 $ 18,044,853.17 $ 18,801,581.15
$ 6,057,072.85 $ 6,575,333.78
$ 6,840,133.84 $ 7,144,653.92 $ 7,494,852.01
$ 1,041,463.11 $ 1,622,748.43
$ 1,864,660.69 $ 2,142,859.79 $ 2,462,788.76
6%
10%
11%
12%
13%
0%
56%
15%
15%
15%

6. Decision Matrix
Decision Parameter
Option 1
Option 2
Option 3
Revenue Objective
Short Term Profits
Long Term Profits
Channel Partners
Competitive Response
Cost to Induce Trial
Brand Equity Dilution
Organizational capabilities
Exceeds
No
High
Highly Alienating
Very Risky
High
Possible
Low
Exceeds
No
High
Alienating
Risky
Very High
Possible
Low
Falls Short
Gain
Low
Enhancing
Low
Low
No
High
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
and West
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.