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Increase Revenue by $7M in 2 years by expanding 6 SKUs of the 8-oz. product line into one or two selected supermarket channel regions.

Natureview Farm Yogurt

Challenge:

Increase revenue from $13M to $20M in 2 years without any additional financing.

Three Key Strategies:

Option 2

Option 3

Option 1

Expand four SKUs of the 32-oz. size nationally

Expand six SKUs of the 8-oz. product line into select regions in the supermarket channel

Introduce two SKUs of a children’s multi-pack into the natural foods channel

Option 2

Expand four SKUs of the 32-oz. size nationally

Pro

Con

  • Lower marketing expenses than Option 1

  • Lower slotting fees due to well shelf position
  • Shelf placement, low visibility for a new product

  • Size of product

Recommendation

Option 3

Option 1

Option 1: Expand six SKUs of the 8-oz. product line into one or two selected supermarket channel regions.

Introduce two SKUs of a children’s multi-pack into the natural foods channel

Expand six SKUs of the 8-oz. product line into one or two selected supermarket channel regions

Pro

Con

Reason 3: Realistic strategy to achieve revenue goals

Con

Reason 2:

Worst Case Scenario of Option 1

Reason 1: Best Case Scenario of Options 2 & 3

  • 8-oz. cups have a 74% dollar share of refrigerated yogurts

  • Industry experts forecast 20% growth of organic yogurt in supermarkets over the next five years

  • First mover advantage
  • Maintain competitive advantage in the natural foods channel

  • Lowest costs

  • Preserve relationship with natural foods retailers
  • Highest risk because of competition

  • Up to $1.2M in comprehensive advertising per region per year.

  • Slotting fees cost between $60k and $120k
  • R&D and Operations costs to develop the multipack product

  • Loyalty to natural food channels not a high priority

  • Opportunity cost of the first mover advantage in the supermarket channel

Natureview can still make its required sales and be successful, even if all the cons bear out

Options 2 and 3 are less likely to generate the sales volume to recoup the loss of the venture capital funds, even in the best case scenario

A market share of just 1.5% in the first year will meet revenue requirements

Based on Jim Harvey's speech structures

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