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Natureview Farms Group F

Group F- Marketing Strategy
by

Phoebe Toal

on 5 November 2015

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Transcript of Natureview Farms Group F

Natureview Farms- Group F
Introduction
Background

Founded in 1989
Yogurt Manufacturer
Revenue increase from under $100,000 to $13,000,000 in 10 years
Originally 2 products in two flavours
Now 2 Sizes, in 8 flavours
Natural ingredients

Analysis
Strategic Alternatives

“We owe it to our customers, our suppliers, and our distribution partners to make the right strategic

choices regarding this revenue growth objective.” Barry Landers, CEO, Natureview Farm


Marketing Mix
The Organization and Implementation of the Four P's
Channel Analysis
Option 1
The Challenge
Where yogurt is sold
Promotion
Place
The Problem
Natureview Farm need to increase revenues by 50% within 22 months from the Present Revenues in 1999 $13,000,000 to $20,000,000.
The Market
The market for organic food in 1999 worth $6.5 billion
Predicted to grow to $13.3 billion in 2003 an increase of 100% across four years
Yogurt Sales in 1999 $1.8 billion – Sales volume of 2.3 billion units
Predicted volume growth in supermarkets of organic yogurt of 20% year on year from 2001 to 2006 compared to 2%-4% for overall yogurt

Pros
Wider distribution - 46% of organic shoppers bought organic at supermarkets
Supermarkets would attract higher income, less price-sensitive customers
Predictions of volume growth of organic yogurt in supermarkets of 20% (up to 2006)

Cons
Higher Risks and Costs
8 oz size is highly competitive market - needs trade promotion and marketing spend
Ad costs $1.2m plus the above spend
Product Profile of Natureview Yogurt
Secret Recipe (flavour & texture)
Natural ingredients
Special process in production
No use of artificial sweeteners
50 day shelf like (compared to norm of 30 days)

The Yogurt Market
SWOT Analysis
Strengths
Market Leader
high quality product with natural ingredients
Long Shelf Life

Weaknesses
No alternative financing
Small portion of overall yogurt market
They have a high dependence on brokers


PEST Analysis
Political - No major impact
Economic - Possible Inflation issues
Social - Normalisation of Organic
Technological - Developments in Production techniques



Porter's Five Forces
Competitors
Supermarket Channel Competitors
Dannon
Breyers
Columbo
Yoplait
Private Label

Natural Foods Channel
Horizon Organic
Brown Cow
White Wave
Natureview Products
6-8 oz cups
The most popular and make up 74% of supermarket sales
This segment was growing 3% per year but is highly competitive
Bought as a healthy snack / lunch alternative by women
Variety of flavours

Multipacks
9% of sales but growing more than 12.5% year on year
Targeted at children and mothers
8 x 2 oz tubes

32 oz cups
8% of sales and growing at 2% year on year
Bought by heavy yogurt consumers
Plain and Vanilla most popular and often added to

Opportunities
Strong relationships with natural foods retailers, this can be further exploited.
High quality product, with a higher average shelf life
Supermarket channels

Threats
Horizon with their cash
First Mover advantage
No Supermarket expertise


Product
Case Lessons
Know your numbers!!!! £$€
Don't burn (channel) bridges!!
Know your target market
Strategy is still key
Natural ingredients
Nutritious product
Improves digestion
“heavy” users of yogurt, long-lasting
High quality design Bright and colorful



Natural food shoppers organic more important than the price.
lower price sensitivity among natural foods customers.
58% of households expressed that they would buy more organic product if it were less expensive.
49 cents cheaper in the supermarket
Discounts on Social Media






In store demonstrations can really help customers see the uses of the product
A first week in store 25% off can encourage customers to try the product
A Big, Colourful and Simple display needs to attract attention
Time your promotion to your target market
Adverts in women’s health and fashion magazine would be ideal
A Facebook page with recipes of the week

Write ups from influential fitness bloggers
LinkedIn works with a highly educated target market
Health websites would be great to target for back links, adverts and reviews

Promotion online just before breakfast time (7am-8am) and lunch time (11:30am-12:30pm)
Try new innovations, ex. dieticians in stores and online virtual shopping space


Price
Very little competition in the 32 oz
Resistance? multiple-brand strategy
Good strong relationships with Natural Food Stores
Brokers jobs to win new customers
Strategy still lay with management
Make sure they stock in supermarkets that are not close to Natural Food Stores
Concentrate first on the regions in the Northeast and the West

Old school promotion still works
Thank you!
Any questions?
Option 2

•The company will be using an existing channel where it has strong relations therefore less risky than other options


•The sales team are confident that they will achieve distribution.


•Gross profit levels are at 37.6%


•Sales and marketing expenses are lower.


•Potential to yield a strong profit contribution


•Natural food channel growing 7 times more faster than the supermarket channel


•The company would not incur any additional sales and general expenses this was within capacity of current resources.


Drawbacks

•Multi packs do not have as good visibility in supermarkets as 8 ounce being placed on the next -lowest shelves



Option 3
Pros

•The company will be using an existing channel where it has strong relations therefore less risky than other options


•The sales team are confident that they will achieve distribution.


•Gross profit levels are at 37.6%


•Sales and marketing expenses are lower.


•Potential to yield a strong profit contribution


•Natural food channel growing 7 times more faster than the supermarket channel


•The company would not incur any additional sales and general expenses this was within capacity of current resources.


Drawbacks

•Multi packs do not have as good visibility in supermarkets as 8 ounce being placed on the next -lowest shelves
Channel Strategy Considerations
Internal Analysis -
Resources
Control
The Consumer
Cost
Customer satisfaction
Competitors responses
Reputation
Relationships
Competitive Advantage
ROI
So which of the strategic options as outlined in the case will achieve this objective of increasing income to $20,000,000 whilst maintaining the brand’s premium status, keeping the existing channel partners happy and not cannibalize existing lines?
The Threat of New Entrants
The Threat of Substitute Products
Bargaining Power of Customers
Bargaining Power of Suppliers
Intensity of Competitive Rivalry
Option 1 seemed like the most attractive option but it was loss making. situation had it have gone with this option.
Option 2 was not the most obvious option but numbers wise the best!
New distribution
Must make sure your audience can still find you
Tailor your product and promotion to them
Think of solving their problems through your product
Maintain good relationships with the partners that brought you success
Work with them to find the best option available to both of you
Don't leave them out of your growth
Manage all channels effectively
Management is still in charge of strategy
Don't hire salespeople without giving them a road map
Know where you will get the sales
Don't bet on if you can get the sales
In store promotions still work
You can’t taste a yogurt by liking it on Facebook
Don't let all your promotion be digital, especially with a food product.
Consumers of Yogurt
40% of the U.S. population consumed yogurt in 1999
Women making up 70% of yoghurt purchases.
Customers at natural food stores.
Higher incomes
More educated
Live in Northeast and west coast.
Full transcript