Natureview Farm Case Analysis
Company Background
Natureview Farm, Inc. established in 1989 as a small yogurt manufacturer. In last 10 years, the company’s revenue grows from less $10 million to $13 million. However, Natureview Farm wants to increase their revenue from $ 13 million to $20 million by the end of 2001. In order to make this happen, Natureveiw Farm needs to find ways to increase its sales by expanding their focused group segmentations and target market, or extending the product line.
Distribution Channels and Problem Identification
There are two channels used in Natureview Farm to sell and distribute their products. One is called Supermarket Channel and the other is called Natural Foods Channel. Here comes the problem in Natureview Foods’s: which channel is better for the company? Should they enter the Supermarket channel or stay with Natural Foods channel?
Alternatives: Three alternatives for Natureview Farm to choose to grow its sales Alternative 1: Expand 6 SKU of 8-oz into 1 or 2 supermarket channel regions
Natureview Farm wants to expand its target market and include shoppers in supermarket in this alternative. It has a first move advantage comparing other yogurt industry so that it gives more chances to Natureview to get their target consumers. It also gives high revenue potential which are 35 million units. However, it costs a lot to enter
the supermarket channel, and it will make Natureview Farm compete with Danmon and Yoplait directly. This also gives negative impact on Natural Foods stores. Therefore, it is obvious to see that in the short run, it gives benefits to the company to increase its sales. However, in the long term, by expanding its target market in supermarkets, it will make the sales of product for Natural Foods stores decreased because the products in natural stores are more expensive.
Alternative 2: Expand 4 SKUs of the 32-oz. size nationally
In this alternative, Natureview farms want to expand their 32-oz size yogurt nationally into sixty-four supermarkets.