Natureview Farm Case Write Up

Topics: Marketing, Organic food, Whole foods Pages: 10 (1686 words) Published: October 3, 2013
1) How has Natureview succeeded in the natural foods channel? What are the two primary types of growth strategies under consideration by Natureview? Product attributes: Natureview, in the following referred to as NV, benefits from the strong attributes the customer connects with the product. Through the special process and ingredients the products can achieve shelf life of 50 days, which is significantly higher than the average 30day shelf life in the industry. In order compete with NV on this dimension competitors have to build multiple production plants in order to reduce shipping time. The offering of 12 different flavors covers a variety of customer taste and can therefore be considered as a substitute to the non-natural yogurts without limitations. Under the growing demand for natural and organic food and the increasing awareness for healthy nutrition1 sales of the pure organic product portfolio could be further increased.

Brand: Through the exclusive distribution in Natural Food Stores, in the following referred to as NS, management could achieve a strong premium brand positioning within the market2. In the customers perception NV products have a great taste and are considered a high quality product. Therefore NV is able to charge a price premium.

Promotion: Guerilla marketing leverages an advantageous relationship of advertising expenses and effect, whereby the advertiser is able to achieve a high degree of customer attention with a relatively small budget.3 NV could benefit from this type of marketing, which works well in the NS channel.4

Channel: The overall demand for natural and organic food is rising and margins earned on yogurt products are comparably high to other dairy products. This generates a pull effect for the product from the Natural Food store channel and gives NV high negotiation power over the considerably small Natural Food stores.

Growth strategies:
The management of NV mainly considers two growth strategies, namely growing either through a new product variation in the existing NS channel or by introducing the existing product line into the supermarket channel, in the following referred to as S.

1

Trends in Prevalence, Awareness, Treatment, and Control of Hypertension in the United States; Ihab Hajjar, Theodore A. Kotchen; JAMA 2003 Case page 9
3
Guerrilla Marketing: The Nature of the Concept and Propositions for Further Research; Katharina Hutter and Stefan Hoffmann, Asian Journal of Marketing 2011
4
Case page 2
2

New product variation: Consumers with high nutrition awareness do not only track which kind of food they consume (e.g. “healthy” or “unhealthy”) but also the quantity of food they ingest. Smaller packaging sizes allow tracking the intake easily.5

Smaller packaging sizes also allow for the classification as a “snack” rather than a “meal” and therefore respond to different consumer needs.6 A reduced packet size of 4-oz., which can be eaten out of tube without a spoon, could be regarded as a component of a small lunch break and thus, a favorable perversion through the adult customer.7

New channel: Currently NV distributes only through the NS channel which is generating 3% of all yogurt sold.8 The rest is sold via the S channel, which is in terms of market size the more attractive channel. S are considering to introduce natural yogurts into their product portfolio in order to target higher income and less price-sensitive customers and benefit from the high unit volume growth of 20%.9 Accordingly, NV for its part is considering an introduction of their products into the supermarket channel.

2) How do the three options compare financially in terms of yearly revenue, gross margin,

Millions

required investment, and profit potential?
$50
$45
$40
$35
$30
$25
$20
$15
$10
$5
$-

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Option 1 Revenue

Option 3 Revenue

Option 1 Gross margin

5...
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