Natureview Farm, an organic yogurt manufacturer from Cabot, Vermot found itself in a difficult situation because the venture capital that funds its strategic investments needed to cash of its investment in the company, and in order to attract another investor or position itself for acquisition, the company wanted to increase their revenues by 50% by the end of the next year (2001). In order to achieve this increase in revenue, the small natural yogurts company would need to grow their sales from $13 million to $20 million by the end of next year.
Natureview yogurt was founded in 1989, and its key value was flavor and texture developed from a family recipe created by the company’s founder. It was made of milk from cows untreated with artificial …show more content…
The first option was to expand six of its most seller SKUs of 8oz into one or two selected supermarket channel regions. This proposal was made because the 8oz cup represent the largest share in the refrigerated yogurt market. Volume growth of organic yogurt in supermarkets is predicted to grow about 20% in the next five years, which could represent a profitable decision for the company. Other natural foods brands have expanded successfully to the supermarket channel increasing revenues over 200% in the first two years and rumors have been made that Natureview largest competitor were thinking of expanding to this channel and the brand that first expands will have competitive advantage. As the financial part, advertising will cost 1.2 million per year and an additional cost of sales, general and administrative (SG&A) of $320,000 for the marketing staff and additional staff to manage the supermarket brokers. This is a risk for the company because it represents high costs to the company and additional from these supermarkets require brands to participate in regular promotions and pay a slotting fee which are irregular practices in the natural stores. Expanding into supermarkets also a risk because of channel conflict relationships with brokers and retailers of the Natural Food Stores compromising the share it currently …show more content…
This is an option where Natureview will have advantage because of their good relationship with the leading natural foods retailers. Additionally, its brand was also positioned in this market do entering with a new product. Natural foods channel is having a quick growth and its an opportunity to continue to grow without putting the company at risk. This market for children is growing and parents are seeking for different options so this would represent a revenue potential. The marketing and sales expenses for this option were lower and Natureview believed that introducing this multipack for children would bring the strongest profit contribution. Natural food stores where growing seven times faster than the supermarket and the company will not incur in extra costs creating the
Natureview yogurt was founded in 1989, and its key value was flavor and texture developed from a family recipe created by the company’s founder. It was made of milk from cows untreated with artificial …show more content…
The first option was to expand six of its most seller SKUs of 8oz into one or two selected supermarket channel regions. This proposal was made because the 8oz cup represent the largest share in the refrigerated yogurt market. Volume growth of organic yogurt in supermarkets is predicted to grow about 20% in the next five years, which could represent a profitable decision for the company. Other natural foods brands have expanded successfully to the supermarket channel increasing revenues over 200% in the first two years and rumors have been made that Natureview largest competitor were thinking of expanding to this channel and the brand that first expands will have competitive advantage. As the financial part, advertising will cost 1.2 million per year and an additional cost of sales, general and administrative (SG&A) of $320,000 for the marketing staff and additional staff to manage the supermarket brokers. This is a risk for the company because it represents high costs to the company and additional from these supermarkets require brands to participate in regular promotions and pay a slotting fee which are irregular practices in the natural stores. Expanding into supermarkets also a risk because of channel conflict relationships with brokers and retailers of the Natural Food Stores compromising the share it currently …show more content…
This is an option where Natureview will have advantage because of their good relationship with the leading natural foods retailers. Additionally, its brand was also positioned in this market do entering with a new product. Natural foods channel is having a quick growth and its an opportunity to continue to grow without putting the company at risk. This market for children is growing and parents are seeking for different options so this would represent a revenue potential. The marketing and sales expenses for this option were lower and Natureview believed that introducing this multipack for children would bring the strongest profit contribution. Natural food stores where growing seven times faster than the supermarket and the company will not incur in extra costs creating the