NATUREVIEW FARM
PRESENTE
D BY
GROUP 9
Q1,How has Natureview succeeded
in the natural foods channel?
Unique smooth, creamy texture & flavor owing to family recipe.
Absence of artificial sweeteners & use of non rGBH treated milk gave a Natureview
advantage over other Major brands.
Such process & ingredients led to Natureview products having 50 days shelf life against
30 days industry standard.
Captured Organic & natural segment which was under served by traditional retail
channels.
By servicing a specialized customer, carved out a niche for itself.
Use of a broker against traditional distribution channel enabled Natureview in capturing
25% of the natural food market. The same system also helped in increase ales for its 8
ounce and 32 ounce products.
Their brokers had direct relationship with the retailers. Hence Natureview didnt deal with
retailers directly but through brokers.
Q2,PRIMARY GROWTH
STRATEGY
INTRODUCE NEW SKUS OF
CHILDRENS MULTI PACK INTO
THE NATURAL FOODS CHANNEL
Growth : Average of 20% per
year
Connect : Leverage
relationship with existing
channel retailers
Profit Contribution :
Financial potential was most
attractive
Positioning : Sales team was
confident to achieve required
distribution
Resources : no additional
skill sets was required to
implement the strategy
ENTER SUPERMARKETS WITH EITHER
SKUs OF EITHER 8-OZ OR 32-OZ
Growth : Average of 3% per year
Entrance : skeptical about
acceptance of brand via multi-use
size
Risk : High risk
Expensive Proposition: required
slotting fee ,trade promotions and
meaningful marketing budget
Dedicated Sales Force :
sophisticated resources to enter
supermarkets and establish
relationships
3
Q3,Financials
Revenues
Current
Option 1
Change in Revenue
Cost of Goods Sold
Increase in COGS
Gross Profits
Expenses:
Adminstrative/Freight
Sales
Marketing
R&D
Slotting fees(20 supermarket chains and 6
SKU's)
Trade Promotions
Total Expenses
Investment Required
Net Income
13,000,000
Option 2
Option 3
38,900,000
27,850,000
19,030,000
25,900,000
14,850,000
6,030,000
8,190,000
19,040,000
13,635,000
10,260,000
10,850,000
5,445,000
2,070,000
4,810,000
19,860,000
14,215,000
8,770,000
2,210,000
2,330,000
1,560,000
1,760,000
390,000
640,000
390,000
1,200,000
490,000
(Assumption of R&D
expense=100,000)
1,560,000
870,000
390,000
2,210,000
1,720,000
2,790,000
390,000
2,210,000
2,560,000
870,000
1,024,000
4,550,000
9,340,000
8,774,000
4,900,000
4,790,000
4,224,000
350,000
260,000
10,520,000
5,441,000
3,870,000
Option 1: Expand 6 SKUS (8 Oz) in supermarkets
Advantages:
Good Shelf Presence
No large slotting
expense
8 oz- Significant
revenue potential
Natureview uniquely
positioned to
capitalize on growing
natural food market
Significant first mover
advantage
High growth
projections of organic
yogurt at
supermarkets
Risks:
High cost of trade promotion
High marketing expenditure
Huge advertising budget
Increase in sales, general and
administrative expenses
Do not have necessary
resources to move to
supermarket channels
Channel Management &
Conflict Issues:
Natureviews brokers can take
advantage of relationship with
supermarkets in Northeast and
West
Loss of trust by natural and
organic stores
Option 2: Expand 4 SKUS (32 Oz) nationally
Advantages:
Above average gross
profit margin
Fewer competitive
offerings
Strong competitive
advantage due to
longer shelf life
Lesser promotional
expense
Lesser marketing
expense
32oz category will
generally not be
considered as a threat
by the competitors as
is the case with the 8
oz category
Risks:
High slotting expense
Inhibitions of new users to
readily enter the brand
Increase in sales, general and
administrative expenses
Channel Management &
Conflict Issues:
Concerns about sales teams
ability to achieve national
distribution in just 12 months
Option 3: Introduce 2 SKUS of children multi-pack into
natural food channel
Advantages:
Strong relationship
with leading natural
foods channel
Will not disrupt other
relationships
All natural ingredients
provide perfect
positioning to launch
children multi-pack
Attractive financial
prospects
High growth rate of
natural food channel
No increase in sales,
general and
administrative
Risks:
R&D and operations need to
develop the new product
Natural food channel making
similar demands as
supermarket channel once it
grows
Channel Management &
Conflict Issues:
Confidence of sales team to
achieve distribution of the two
SKUs
Action Plan | Implementation Process
Recommendation : Option 1 Expand into supermarket space with 8oz SKU
A Trend is shown towards favorable financial position
When compared with national, regional targting is easy to implement
Increased visibility of products due to higher slotting fees
Relinquishing first movers advantage of moving into the supermarket channel has huge
opportunity cost
Implementation Adjustments
Brand: Do not loose brand positioning and equity- premium tag of product
Channel Partner: Provide beneficial schemes to natural food retailers to help them
better compete with supermarkets.
Marketing mix: 4Ps - 8oz SKU, $0.78, Located in-store with competitor brands, In-store
promotions
Sales: Implementing latest technology advancements to track sales trends and
developments in the market
THANK YOU!!
