Natureview Farm Case Summary Group 03 Page 1

CASE: NATUREVIEW FARM

Submitted By:
Group 03:
2013PGPM014 BASAMGARI MOUNICA

2013PGPM016 ANAND CHAURASIA

2013PGPM023 HIMANI KOTHARI

2013PGPM039 RACHIT DEVENDRA PRADHAN



Natureview Farm Case Summary Group 03 Page 2

Objective: Natureviews revenue needs to be increased from 13 Million to 20million (over 50% by 2001)
Constraints Identified:
1) Entry to supermarket channel was not easy taking into consideration the demands of resources
in terms of advertising ,S,G&A expenses, technology and staffing
2) Slotting expenses for each SKU and associated trade promotions
3) Presence of Big Competitors: Dannon,Yoplait & Breyer who can afford .
4) Possibility of spoiling the established relations with current natural food channel leader to
dropping the brand and replacing it with competitors Lines
5) Horizon Organic, Natureviews greatest organic dairy competitor was planning to enter into
supermarket distribution hence a threat of losing the benefit of 1
st
organic brand entering the
supermarket benefits.
Options available with Natureview:
1) Option 1: Expand into the supermarket channel with 6 SKUs of 8oz yogurt in two regions
2) Option 2: Expand into the supermarket channel with 4 SKUs of 32oz yogurt nationally.
3) Option 3: Introduce 2 SKU of children multi pack into natural foods channel
Option Advantages Disadvantages
Expand into the supermarket
channel with 6 SKUs of 8oz
yogurt in two regions
-Sales Potential of 35 million
Units(1.5% Supermarket Share)
-High Purchaebility in North-
eastern and Western Regions
-High Potential for Increased
Revenue
-High advertising cost -
$1.2millionper region per year
-$20000 towards sales staff &
$1,20,000 towards additional
marketing staff
-High level of competition
Expand nationally into the
supermarket channel with 4
SKUs of 32oz yogurt
-Higher Profit Margin 43.6 % as
compared to 36% for 8 oz
-Low Trade promotion &
marketing expense
- Expected 1
st
year sales of
5.5million units
-Difficult to achieve national
distribution
-Increased sales staff needed
that would increase S,G&A
expense
-High Risk
Introduce 2 SKU of children
multi pack into natural foods
channel
-Lowest Risk
- Already Positioned for this
option
- Leveraging existing relationship
with natural food channel
- Multi packet Market expected
to grow at 12.5%
- R&D cost to be incurred
- Low expected revenue

Cost Benefit Analysis of Each Option is Done on : PGP2_SDM_Natureview_Group03.xlsx
Natureview Farm Case Summary Group 03 Page 3

Recommendation for Natureview:
Option 3 presents least risk but also least reward .The top line with option 3 is 19.03 Million which is
below the target of 20 Million with the profit margin of 18.80%(This would originally be less as the R&D
cost were not given in the case for multipacks).Option 1 Achieves the top Line of 38.9 Million Much
Above than 27.85 Million as compared to Option 2 with better Net Profit Margin of 17.67%.This option
is most realistic one as 8-0z is the largest dollar and unit share of yogurt market (74%) thus has larger
consumption. It also gives Natureview a first mover advantage in entering the super market channel as
first organic yogurt brand from natural food Channel. Case also strengthens the argument that other
brands from natural food channel like Silk soymilk and Amys Organic Food increased revenues by 200%
within two years of entering the supermarkets. Hence we Recommend Natureview to go ahead with
Option 1 of expanding into the supermarket channel with 6 SKUs of 8oz yogurt in two regions.
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