Natureview Farm is a yogurt manufacturer seeking to increase revenues from $13 million to $20 million. They have three options: 1) Expand product lines into supermarkets, requiring $1.2 million in marketing costs; 2) Launch larger 32oz sizes nationally, requiring hiring sales staff; or 3) Introduce children's multipacks in natural food stores using existing relationships. The recommendation is to go with the third option of introducing multipacks in natural food stores, as it has less financial risk but can still help meet the revenue target, without disrupting current partnerships.
2. ● About Natureview Farm
● Problem Statement
● Market Trends
● Options
● Recommendation
AGENDA
3. ABOUT NATUREVIEW FARM
● Founded in 1989 in Cabot, Vermont
● Manufacturer and Marketer of
refrigerated cup yogurt
● Uses natural ingredients and special
process
4. ● Uses natural ingredients
● Longer shelf life (50 days)
● Reputation of high quality
and great taste
DIFFERENTIATORS
5. SUCCESS FACTORS
● Strong brand
● Effective, low-cost “Guerrilla Marketing”
● National distribution in natural foods
channels
● Strong relationships with distributors
6. ● VC firm needs to cash out its
investment, and thus Natureview
management have to find another
investor or position itself for
acquisition, and increasing
revenues is critical in order to
attain the highest possible
valuation.
● They have to make strategic
marketing decisions to grow
revenues to $20mn from their
current $13mn before the end of
the 2001.
PROBLEM STATEMENT
12. 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 #1
13. ● Great Upside Potential
● For supermarket adding these products would attract
higher-income less price-sensitive customers
● Unit volume growth of organic yogurt at supermarkets
of 20% per year from 2001 to 2006
● This option also has the highest incremental demand
PROS
14. ● Supporting 8-oz cup size would require quarterly trade
promotions and a meaningful marketing budget
● Advertising plan would cost $1.2 million per region per
year in addition to the promotional ads expenses
● SG&A expenses would increase by $320,000 annually
● This option creates direct competition with national
yogurt brands
CONS
15.
16. Expand 4 SKUs of the 32-
oz. size nationally as
proposed by Jack
Gottlieb, VP operations
OPTION #2
17. ● 32-oz. cup generates an above-average gross profit
margin (43.6% vs 36% for 8-oz. product line)
● Fewer competitive offerings in this size
● Competitive advantage due to longer shelf life
● Lower promotional expenses
PROS
18. CONS
● Doubt on claim of new users would readily “enter the brand”
via a multi-use size
● Doubt on sales team’s ability to achieve full national
distribution in 12 months
● Needs to hire sales personnel and establish relationships
with supermarket brokers
● Higher slotting fees due to national distribution
19.
20. Introduce 2 SKUs of a
Children’s Multi-Pack into
the Natural Foods
Channel as proposed by
Kelly Riley, the assistant
marketing director
OPTION #3
21. ● Strong relationships with leading natural foods channel
retailers
● Financially lucrative
● Perfect positioning for new multi-pack product
● Low sales and marketing expenses
PROS
22. ● Have to prolong venturing into supermarkets
● May not reach the target revenue of $20 million by 2001
● Competitors have already expanded to supermarkets
CONS
25. GO WITH OPTION #3
● Less financial risk and the
target is achieved
● Does not threatens our
existing partners
“ I’m proud of the strong brand we’ve
built and what it represents in our
marketplace, and I’m even more
proud of the unconventional route
we’ve taken to get here. We owe it to
our customers, our suppliers, and our
distribution partners to make the
right strategic choices regarding the
revenue growth objective before us.”
-Barry Landers, CEO
26. These slides were created by Sarthak Anand, IET Lucknow as a part
of Marketing internship under the guidance of Prof. Sameer Mathur,
IIM Lucknow.
