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Natureview Farm Harvard Case Analysis
- 6. • Yogurt is consumed by 40% of US population. (70% of these are women) • Supermarkets sold 97% of all yogurt consumed. • 6 and 8 oz. cups most popular and comprise of 74% of total sales. • Natureview farm had strong reputation for high quality and great taste. • Shelf life - 50 days as compared to 30 days of other big brands. • Natureview produced natural yogurt(organic).
- 7. Revenues 8-oz. 32-oz. 8-oz. – 12 flavors 32-oz. – 4 flavors Also started children’s 4-oz. cups and yogurt packaged in tubes.
- 8. Manufacturer Distributor Retailer Customer Manufacturer Natural Foods Wholesaler Natural Foods Distributor Retailer Customer
- 9. Product Manufacturing Cost Gross Profit Selling Price 8-oz. $0.31 36% $0.4216 32-oz. $0.99 43.6% $1.4216 Children’s Multi- pack $1.15 37.6% $1.5824
- 14. • 8-oz. cups had significant revenue potential. • Other brands were very successful in their expansion. • Growth of organic yogurt sales at supermarkets were expected to rise at 20% per year.
- 15. • Quarterly trade promotions needed. • High slotting cost. • Adequate staff not available for marketing. • Very high competition from well established brands in supermarkets. • Will affect relations with Natural Foods Channel
- 16. • Natureview selling price = $0.4216 • Incremental annual sales = 35 million • Increased Revenue = $0.4216 * 35 million = 14.756 million Revenue growth target achieved.
- 18. • 32-oz. cups generated above average gross profit for Natureview (43.6%) • Natureview had special advantage because of longer shelf life. • Less competition as compared to 8-oz. cups • Lower marketing expenses
- 19. • Difficult to achieve nationwide distribution in just 12 months. • Expansion in 64 supermarkets required lot of slotting fees. • Launching 32-oz. cups in supermarkets can get unnoticed. • A competitor in organic yogurt Brain Vista was coming up
- 20. • Natureview selling price = $1.4216 • Incremental annual sales = 5.5 million • Increased Revenue = $1.4216 * 5.5 million = 7.818 million Revenue growth target achieved.
- 22. • Already had strong relationships with Natural Foods Channel • Necessary skill-set available. • Better profit and no additional SG&A cost • Perfect positioning to launch children’s multi-pack. • Natural Foods Channel growing at 7 times as compared to supermarkets.
- 23. • Objective of revenue generation may not be achieved • One day to become big it has to make business in supermarkets • Demands of local dealers may increase with sales.
- 24. Revenue growth target not achieved. • Natureview selling price = $1.5824 • Incremental annual sales = 1.8 million • Increased Revenue = $1.5824 * 1.8 million =2.8483 million
- 26. •Targeted Revenue Generation •Effect on existing relationships •Additional marketing costs
- 28. • Revenue generation objective is fulfilled. • Additional cost although high but lower than 1st option can be easily recovered in future. • Small market share of 32-oz. cups will not affect existing Natural Foods stores much. • Longer shelf life will always give an edge over other brands.
- 29. • Natureview Farm - organic yogurt manufacturer • Needed revenue growth from $13 million to $20 million. • Expand in Supermarkets or elaborate existing Natural Foods Channel • 3 Options suggested • Finally, expanding 32-oz. cups in Supermarkets most suitable option.
- 30. Created by RAGHAV MAHESHWARI, NIT Jaipur, during a marketing internship by Prof. SAMEER MATHUR, IIM Lucknow.