2. • Founded in 1989
• Manufacturer and marketer
of refrigerated cup yogurt
• Key differentiators
Natural ingredients
Longer shelf life
Reputation of high quality and great
taste
3. Natural/organic market trends
• Organic foods market predicted
to grow from $6.5 billion to $13.3
billion over 4 years.
• 67% households consider price as
a barrier to purchase organic
products
• 44% of consumers would like a
wider selection of organic
products in supermarkets
4. Yogurt market trends
• Concentrated – 4 competitors control over
50% share
• Supermarkets – 97% of sales (3% growth)
• Natural Food Stores- 3% total sales (20%
growth)
• Factors in purchasing decisions:
– Package type/size, flavour, price , freshness,
ingredients, organic.
5. Natureview
• Challenge : Identify path to grow revenues by
over 50% within 23 months
• Goal :Attain highest possible valutaion in
order to new investors or position itself for
acquisition.
6. 3 Options to achieve
goal
1. Expand 6 SKU’s to the 8-oz
product line into one or
two selected supermarket
channel regions
2. Expand 4 SKU’s of the 32-
oz product line
3. Expand 2 SKU’s of a
children’s multi pack into
the natural foods channel
8. Pros
• 8-oz cups represent
largest dollar and unit
share of market
• Supermarkets fear
losing market share to
natural food
competitors.
• First-mover advantage
• Supermarkets may only
authorize one organic
yogurt manufacturer
Cons
• Highest level of
competitive trade
promotion and
marketing spend
• Possible channel conflict
b/w supermarkets and
natural food stores.
• Promotion and lower
price at supermarkets
may hurt the brand
• Little experience in
dealing with supermarket
chains
12. Pros
• 32-oz cups generate an
above average gross profit
margin (43.6% )
• Fewer competitive
offerings in this size
• Competitive advantage
due to long shelf life of
product
• Lower promotional
expenses than option 1
Cons
• Higher slotting fees for
wider supermarkets
• Such a larger distribution
over 12 months is difficult.
• Possible channel conflict
• Promotion and lower
prices at supermarket may
hurt the brand.
16. Pros
• Strong relationships
with natural foods
channel retailers
• Financially attractive
due to high margins-
37.6%
• Low sales and
marketing expenses
Cons
• Fast growth of natural
foods channel leading to
high demands
• Miss opportunity to
enter supermarkets
before competitors
18. Year 2000 Year 2001
Unit sales 18,00,000
1,800,000 x (1+15%) =
2,070,000
Revenue
1,800,000 x $1.84 =
$3,312,000
2,070,000 x $1.84 =
$3,808,000
Cost
1,800,000 x $1.15 =
$2,070,000
2,070,000 x $1.15 =
$2,380,500
Gross profit $1,242,000 $1,428,300
Expenses
Marketing 2,50,000 2,50,000
Complement
ary case 3,312,000 x 2.5% = 82,800 3,808,000 x 2.5% = 95,220
Net profit $909,200 $1,083,080
Analysis Calculations
19. Recommendations
• Option 1 is financially good
• Only regional wise distribution rather than
national making it to implement easily
• First mover advantage and market
penetration
• High slotting fees, but more visibility of
product
20. Implementation adjustments
• Introduce mix of best flavors that were sold in
Natural Foods channel
• Monitor sales trends and change accordingly
• Develop relationships with supermarket
distributors
• Maintain relationships with natural foods channel
by reducing manufacturer selling cost.
• Work with each chain level to reduce costs and
maintain margins.
