• 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).

Revenues

8-oz. 32-oz.

8-oz. – 12 flavors32-oz. – 4 flavors

Also started children’s 4-oz. cups and yogurt

packaged in tubes.

Manufacturer

Distributor

Retailer

Customer

Manufacturer

Natural Foods Wholesaler

Natural Foods Distributor

Retailer

Customer

Product Manufacturing Cost

Gross Profit

SellingPrice

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

• 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.

• 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

• Natureview selling price = $0.4216• Incremental annual sales = 35 million• Increased Revenue = $0.4216 * 35 million

= 14.756 million

Revenue growth target achieved.

• 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

• 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

• 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.

• 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.

• 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.

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

•Targeted Revenue Generation•Effect on existing relationships•Additional marketing costs

• 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.

• 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.

Created by RAGHAV MAHESHWARI, NIT Jaipur, during a marketing internship by Prof. SAMEER MATHUR, IIM Lucknow.