Natureview Farms

MGTC14: SALES AND DISTRIBUTION MANAGEMENT

Case #2: Natureview Farms

Date: Thursday, Feb 3, 2010

For: Tarun Dewan

Problem Definition:

Natureview Farm is experiencing great pressure to earn the highest possible valuation in order to find a venture capital firm to fund its strategic investments or to put itself for acquisition. The need for the company is to raise their revenues from $13 million to $20 million within 2 years. Currently, Natureview is the leading brand in natural foods stores holding 24% of the markets share. From the beginning, Natureview has only used the natural foods channel to distribute its product, however now that the company is facing pressure to grow revenues by over 50%, the challenge is whether to expand in to the supermarket channel or not in order to meet organizational objectives. The reason why expanding into the supermarket channel is a big concern for Natureview is because it may lead the natural foods channel to seize distribution of Natureview’s yogurt because of the lower prices offered by supermarkets. It may even force both channels in to a price concession.

Alternatives:

Option#1: Expand 6 SKUs of the 8-oz. product line into Northeast and West supermarket channel regions. The 6 SKUs chosen will be the best selling SKUs of the 8 0z. line.

| Advantages/Revenue | Disadvantages/Costs |

Strategy | - 8 oz. cups represented the largest dollar & unit share of the refrigerated yogurt market, providing significant revenue potential- natural food competitors who previously entered the supermarket channel were able to grow revenues by 200% within two years- Supermarket channel will provide increased exposure of the brand resulting in a greater spatial convenience | - Increased competition due to larger substitute choices in supermarket- highest level of competitive trade promotion and marketing spending- Supermarket retailers would likely authorize only one organic yogurt brand- Increase multi-channel conflict...