...Natureview Farm success, growth strategy and financial analysis of the three options under consideration Natureview Farm yogurt originated in 1989 and was based on the family recipe that used only natural ingredients, and no artificial flavors or thickeners. That was one of the main points of differentiation from bigger competitors such as Dannon, Yoplait, and Breyers, and gave the Natureview farm yogurt the privilege of a niche producer. Moreover, Natureview Farm’s yogurt’s average shelf life was 50 days, 20 days longer than that of competitors. That way special production process and ingredients helped Natureview Farm to save on efficient supply chain that competitors needed to reduce shipping time to their distributors. Strong reputation for high quality and great taste, as well as high perception of natural ingredients helped the company to grow quickly to national distribution. The Natureview brand occupied the organic & natural segment that was not served adequately through the normal retailing chains at that time. Natureview Farm was considering two growth strategies: through Supermarket Channel and through Natural Foods Channel. Supermarket Channel usually dominated by large manufactures such as Dannon and Yoplait. The product takes just four steps before it gets to final consumer. In this channel an 8oz cup sells for $0.74. However, in order to sell its yogurt in the supermarket channel, Natureview farm has to pay a “slotting fee” for each flavor of...
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...Natureview Farm- Case Analysis By 2001, Natureview Farm has to grow revenue by 50%. The marketing team at Nature View farm was tasked to make this formidable decision, which led them to consider three options. The glaring reality among these options is the consideration of entering the supermarket channel. However, the dilemma they face is the risk of ruining their relationships with the natural foods retailers and loyal natural foods customers because of the presumed betrayal of expanding into the supermarket channel. Natureview Farm accredits the natural foods retailers and customers to the tremendous success of what the company is today. Natural foods consumers value natural ingredients, high quality and taste. The unique way that Natureview creates its yogurt makes it extremely successful within the natural foods channels in a number of ways. It is simply made as organic and natural, using cows untreated with growth hormones, which leads to a higher shelf life than most of its competitors by 67%. Natureview is considered a major brand in the supermarket channel that attracted retailers like Whole Foods and Wild Oats. Yogurt also dominates the dairy portfolio in stores since it yielded the highest margins over the other dairy products overall. The organics foods market is expected to double in 2013, so as consumers become more interested in organic food, the natural foods retailers will reap in great benefits. Essentially 74% of organics products are bought by truly...
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...11/16/2009 MRK526MT CASE ANALYSIS-NATUREVIEW FARM SUBMITTED TO DONNA GEARY | BY MAHMOUD ISSA TABLE OF CONTENT EXECUTIVE SUMMERY THE PROBLEM CHANNEL ANALYSES SITUATION ANALYSES FINANCIAL ANALYSES ORGANIZATIONAL OBJECTIVES ALTERNATIVES/ OPTIONS RECOMMENDATION IMPLEMENTATION PLAN BIBLIOGRAPGHY PAGE 3 4,5 6,7 7,8 9 9 10-16 17 18 19 2 Executive Summery The Problem Natureviews main problem is that 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. Channel Analyses Supermarket channel offers more potential for sales and revenue but also is very costly due to technology and slotting fee requirements and is also risk filled due to many unknown variables. However despite the risk, this channel provides the most exposure and market base. The Nature foods channel offers less risk, but only serves niche market of organic food purchasing consumers. It is cheaper to invest and is expected to grow by 20% annually Strength Long product shelf life Reputation of high quality, taste and natural ingredients Strong relationship with nature store retailers Opportunities Organic food market expected to grow to $13.3 billion in 2003 Nature store channel sales up 20% 12.5% growth in 4oz multipack Increase in consumer interest in organic foods Threats Competition(both in regular yogurt and organic yogurt) Increasing nature store channel demands on logistics or technology...
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...Natureview Farm Founded in 1989, Natureview Farm is the leading manufacturer of refrigerated cup yogurt in the natural foods channel with 24% market share. In the last 10 years, Natureview was able to grow its revenues from less than $100,000 to $13 million in 1999 by selling only 8 Oz and 32 Oz cups. In 1997 an equity infusion from a venture capital firm was needed in order to fund strategic investments. The deal was arranged and completed by Natureview’s CFO, Mr. Wagner. However the VC firm now needed to cash out of its investment, which forces Natureview to find another investor or position itself for acquisition. In order to achieve this though strategic and important goal the company needs to increase its revenues by more than 50%, from $ 13 Mio. to $ 20 Mio., by the end of 2001. For this reason, members of the management team have decided that the best way to achieve the revenue goal is either to expand into the supermarket channel or to increase their product line in the current channel of natural foods stores. Three options are being considered, two of which involve the supermarket channel and one remaining solely in the natural foods channel. Uncertainties exist with all options and many questions arose, such as how will natural foods stores and Naturview long-time partners react when placing the brand into supermarkets? Would natural foods stores replace Naturviews’ products with competitors’ lines? What potential conflicts could arise? Etc. There are many more important...
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...Case: Natureview Farm It is recommended that Natureview should accept Option 1 and breaks into supermarket channel. First, by doing so, the company will be able to get higher revenue and meet the requirement more easily. Second, it will help Natureview to target new customers. Third, launch Option 3 can help Natureview to increase its brand value. Because Option 1 will expand six SKUs of 8-oz, it will bring the largest dollar and unit share of the refrigerated yogurt, which provide a great potential revenue in the future among three options. [Exhibit 1] Since most of yogurt is sold in supermarket, it would be the best place to promote the sales for Natureview. According to the previous companies’ experience, entering supermarket to sale yogurt can bring over 200% of revenue within two year. Therefore, with first mover advantage and our products premium quality, Natureview have strong success possibility following in the footsteps of successful companies. Choosing Option 1 can provide a great chance for Natureview to earn more new customers and build trust with them in a long-term. Because Natureview will expand its market area into a new market channel and meet more various customers in the future. [Exhibit 2] Since 46% of people prefer to purchase dairy products in supermarket and 97% of people will purchase yogurt in supermarket, expanding the market into supermarket will help Natureview have more chance to earn customers than before. If Natureview release multiple...
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...“Marketing…is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.” - Peter F. Drucker, People and Performance, 1977 Required Textbook • Managing Marketing in the 21st Century: Developing and Implementing the Market Strategy, 3rd ed., by Noel Capon (www.axcesscapon.com, 2012). Available through www.axcesscapon.com (as a PDF file or in paperback), as well as Amazon.com or BN.com in either paperback or electronic format and in paperback through the University Bookstore. Required Cases • Harvard Business School Cases: listed in course outline. Cases are available for purchase online through Harvard Business School Press (Coursepack Link for purchasing cases listed below with list of cases). Introduction and Overview In their never-ending search for the ultimate secret to business success, many businesses continue to overlook the most fundamental premise of all business. While their search for the ultimate “secret to success” has provided some interesting and useful concepts and theories, the ultimate secret to business success is not as secret or complex as some would have us believe. Success in business comes from creating satisfied customers. This is, or should be, the essence of all marketing activities. Yet each day, we personally encounter—or the press brings news of—CEOs...
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