Natureview Farm Case Study Essay
Natureview Farm Case
Team 9 (Raf, Sarah, Lynn, Jake, Emily)
Objective
• Natureview Farm wants to increase their revenue by to $20 million by end of 2001, but they are not wanting do not want to drastically change the company’s vision with this the new sale’s strategy.
Recommendation
• Our team is choosing recommends option one #1 for Natureview Farm to proceed with. This option will expand distribution into supermarkets with the 6 SKUs of the 8-oz. product line.
Strengths
• By choosing this option, the anticipated retail sales is 35,000,000 units, which is the highest of the three options being considered. By selling these 6 product lines at $0.74 per unit, Natureview Farm would exceed the target objective of $20 million by $590,000.
• A …show more content…
These two brands experienced increased revenues over 200% within two years of their expansion, which is promising for Natureview Farm.
• 74% of all category supermarket yogurt sales prefer 6-8 oz. yogurt cups, which is the top factor in decision on yogurt purchases.
• 46% of organic food consumers bought organic products at a supermarket.
• The high volumes of supermarkets in the eastern and western regions outnumber the natural foods channel stores. The increase in marketing efforts will allow Natureview Farm to achieve a 1.5% share of supermarket yogurt sales after 1 year with incremental annual sales thereafter.
• Horizon Organic, Natureview Farm’s main competitor in the organic food channel, now has a significant amount of cash from their recent recent IPO. Which This poses a threat to Natureview Farm’s market share in the organic food channel.
• A longer shelf life compared to competitors will enable distributors to maintain pricing suggestions to consumers.
Drawbacks
• Sunk costs require a one-time $60,000 slotting fee for the 6 SKUs.
• The total estimated continuing costs in choosing the option will be $2.72 million per year is based on two primary …show more content…
• Pulling these product lines from the traditional channels will allow these channels to replace their products with Natureview Farm’s competitors.
Implementation
• Penetrating the supermarket channel, such as Target, gives Natureview Farm a convenience advantage to customers. These individuals would otherwise make multiple location stop to purchase necessities, such as toothpaste and yogurt.
• We believe that option #1one will be the most viable choice for Natureview Farm because of the potential long- term generation of revenue, as well as being the first mover in premature market.
• Furthermore, Natureview Farm has great brand loyalty and brand equity, allowing them to transition to a new channel that is more accessible for to consumers.
• Natureview Farm can leverage their quality ingredients and longer shelf life when shifting to the supermarket channel. This will maintain consumer’s perception of brand quality .
Exhibit 6
Action Estimated Incremental Retail Units Sales
Option 1 Expand 6 SKUs of 8 oz. to the eastern and western supermarket regions
Team 9 (Raf, Sarah, Lynn, Jake, Emily)
Objective
• Natureview Farm wants to increase their revenue by to $20 million by end of 2001, but they are not wanting do not want to drastically change the company’s vision with this the new sale’s strategy.
Recommendation
• Our team is choosing recommends option one #1 for Natureview Farm to proceed with. This option will expand distribution into supermarkets with the 6 SKUs of the 8-oz. product line.
Strengths
• By choosing this option, the anticipated retail sales is 35,000,000 units, which is the highest of the three options being considered. By selling these 6 product lines at $0.74 per unit, Natureview Farm would exceed the target objective of $20 million by $590,000.
• A …show more content…
These two brands experienced increased revenues over 200% within two years of their expansion, which is promising for Natureview Farm.
• 74% of all category supermarket yogurt sales prefer 6-8 oz. yogurt cups, which is the top factor in decision on yogurt purchases.
• 46% of organic food consumers bought organic products at a supermarket.
• The high volumes of supermarkets in the eastern and western regions outnumber the natural foods channel stores. The increase in marketing efforts will allow Natureview Farm to achieve a 1.5% share of supermarket yogurt sales after 1 year with incremental annual sales thereafter.
• Horizon Organic, Natureview Farm’s main competitor in the organic food channel, now has a significant amount of cash from their recent recent IPO. Which This poses a threat to Natureview Farm’s market share in the organic food channel.
• A longer shelf life compared to competitors will enable distributors to maintain pricing suggestions to consumers.
Drawbacks
• Sunk costs require a one-time $60,000 slotting fee for the 6 SKUs.
• The total estimated continuing costs in choosing the option will be $2.72 million per year is based on two primary …show more content…
• Pulling these product lines from the traditional channels will allow these channels to replace their products with Natureview Farm’s competitors.
Implementation
• Penetrating the supermarket channel, such as Target, gives Natureview Farm a convenience advantage to customers. These individuals would otherwise make multiple location stop to purchase necessities, such as toothpaste and yogurt.
• We believe that option #1one will be the most viable choice for Natureview Farm because of the potential long- term generation of revenue, as well as being the first mover in premature market.
• Furthermore, Natureview Farm has great brand loyalty and brand equity, allowing them to transition to a new channel that is more accessible for to consumers.
• Natureview Farm can leverage their quality ingredients and longer shelf life when shifting to the supermarket channel. This will maintain consumer’s perception of brand quality .
Exhibit 6
Action Estimated Incremental Retail Units Sales
Option 1 Expand 6 SKUs of 8 oz. to the eastern and western supermarket regions