nature view farm case study
Post on 20-Mar-2017
63 Views
Preview:
TRANSCRIPT
NATUREVIEW FARM CASE STUDY
BY-RISHI BANSAL3rd Year Undergraduate, IIT KANPUR
TIMELINE
● Founded and Marketed in Cabot, Vermont● First enter market 8-oz and 32-oz with plain and vanilla flavour.● Natural ingredients
● Revenue from 100,000 to 13 million● Fruit on the bottom yogurt.
● Expand to 12 yogurt flavours and multipack yogurts (for children).
1989
2000
1999
Christine Walker Vice President, Marketing
Barry Landers Chief Executing Officer
Walter Bellini Vice President, Sales
Jack Gottlieb Vice President, Operations
Kelly RIley Assistant Marketing Director
WHO ARE THE PLAYERS??
To Increase Revenue by 50% within 22 months from present revenues in 1999 of $13 Million to $20 Million in
2001
ISSUES
● VC needed to cash out of its investment● The path to grow the revenues by 50% in 2
years● Should expand in Supermarket channel?
PRODUCT SHARE
● 8-oz with 12 Flavours
● 32-oz with 4 Flavours
4P’s
●
● Natural Yogurt● 8-oz size with 12
flavours.● 32-oz size with 4
flavours.
● Affordable acc. to its channel
PR
OD
UC
T
PR
ICE
● Natural Food Channel
● Wholesale● National Retailer
● Natural flavour, high quality, good taste.
● Low cost guerilla marketing.
PR
OM
OT
ION
PL
AC
E
● Strong Brand● Low Cost● Natural Ingredients● Unique, Creamy and Smooth texture
of yogurt● Longer Shelf life
STRENGTH
● No alternative Financing● Lack of potential in taking higher risks
and costs● Low spending in research and
developement● Doubt in sales team
WEAKNESS
● Strong relationship with leading natural food retailers
● Potential growth in SUpermarket Chain
● High sales recently
OPPORTUNITY
● Increased Competition● No supermarket Expertise
THREATS
YOGURT MARKET SHARE BY PACKAGING SEGMENT
YOGURT MARKET SHARE BY REGION
LENGTH OF CHANNELS TO MARKET
Manufacturar Distributor Retailer Customer
SUPERMARKET FOOD CHANNEL
ManufacturarNatural Food Wholesaler
Natural Food Distributor
Retailer Customer
NATURAL FOOD CHANNEL
YOGURT MARKET SHARE BY BRAND
SUPERMARKET CHANNEL NATURAL FOOD CHANNEL
OPTIONS
● Expand in 2 Super Market Regions (NE and WEST)
● Introduce 6 SKU’s of 8-oz products
● Expand in Super Market Nationally
● Introduce 4 SKU’s of 32-oz products
● Stay in Natural Food Chains
● Introduce 2 SKU’s of Children Multipack
Expand 6 SKU’s of 8-oz product in North-East and
West SuperMarkets
● 8-oz represented highest incremental demand and unit share
● High potential to Increase Revenue
● First Mover as Organic Yogurt Brand to enter Supermarket chain
● High risks and High costs (Marketing)
● Ad plans cost $1.2 million per region per year.
● SG&A cost increase by $320,000 annualy
Channel Selling Price Margin Cost Price
Retailer $0.74 27% $0.54
Distributer $0.54 15% $0.46
Nature View $0.46 33% $0.31
SUPERMARKET Channel MARKET ANALYSIS
2000 2001
Unit Sales 35,000,000 35,000,000*(1+20%)= 42,000,000
Revenue Growth 35,000,000*$0.74= $25.9 million 42,000,000*$0.74= $31.08 million
Projected Revenue $13 million +$25.9 million= $38.9million
$13 million +$31.08 million= $44.08 million
Cost 35,000,000*$0.31= $10.85 million 42,000,000*$0.31= $13.02 million
Gross Profit $28.05 million $31.06 million
PROJECTION INCOME STATEMENT
REVENUE GENERATED
Advertisement $1.2 million*2(regions)= $2.4 million
$2.4 million
SG&A $320,000 $640,000
Slotting Fees 6* $10,000* 20 retails= $1.2 million
Broker’s Fees(4% Revenue)
$16.1 million* 0.04= $644,000 $19.32 million* 0.04= $772,800
NET PROFIT $23.486 million $27.247 million
2000 2001
EXPENSES BY COMPANY
Expand 4 SKU’s of 32-oz product Nationally in Super
Markets
● 32-oz generate higher profit margin than 8-oz size
● Lower promotional expenses● Fewer Competitors
● Difficult to achieve National distribution
● Increased SG&A expenses● Core consumers limited● Hard marketing Strategy
Channel Selling Price Margin Cost Price
Retailer $2.70 27% $1.97
Distributer $1.97 15% $1.67
Nature View $1.67 41% $0.99
SUPERMARKET Channel MARKET ANALYSIS
2000 2001
Unit Sales 5,500,000 5,500,000
Revenue Growth 5,500,000*$2.70= $14.85 million $14.85 million
Projected Revenue$13 million +$14.85 million= $27.85
million$13 million +$14.85 million= $27.85
million
Cost 5,500,000*$0.99= $5.445 million 5,500,000*$0.99= $5.445 million
Gross Profit $9.405 million $22.405 million
PROJECTION INCOME STATEMENT
REVENUE GENERATED
Marketing $120,000*4(regions)= $480,000 $480,000
SG&A $160,000 $160,000
Slotting Fees 4* $10,000* 64 retails= $2.56 million
0
Broker’s Fees(4% Revenue)
$367,400 $367,400
NET PROFIT $18.8376 million $21.3976 million
EXPENSES BY COMPANY
2000 2001
Introduce 2 SKU’s of Children Multipack in Natural Food Chains
● Perfect Position due to all Natural ingredients
● Confidence of Sales team in distribution of 2 SKU’s
● Lower SG&A expenses● Attractive Financial Potential
● Can not achieve the Target Objective.
● Ignores Opportunities in growing Supermarkets
● Potential conflicts and uncertain factors
Channel Selling Price Margin Cost Price
Retailer $3.35 35% $2.18
Distributer $2.18 9% $1.98
Natural Food Wholesaler
$1.98 7% $1.84
Nature View $1.84 38% $1.15
NATURE FOOD Channel MARKET ANALYSIS
2000 2001
Unit Sales 1,800,000 1,800,000*(1+15%)= 2,070,000
Revenue Growth 1,800,000*$3.35= $6.03 million2.070,000*$3.35 million= $6.9345
million
Projected Revenue$13 million +$6.03 million= $19.03
million$13 million +$6.9345 million=
$19.9345 million
Cost 1,800,000*$1.15= $2.07 million 2,070,000*$1.15= $2.3805 million
Gross Profit $16.96 million $17.54 million
PROJECTION INCOME STATEMENT
REVENUE GENERATED
Marketing $250,000 $250,000
SG&A and Slotting Fees
0 0
Complementary Cases
$6.03 million*2.5%=150,750 $6.9345 million*2.5%= 173,363
NET PROFIT $16.55925 million $17.130637 million
2000 2001
EXPENSES BY COMPANY
WHICH OPTION TO CHOOSE?
OPTION 1 2 3
Gross Margin 33% 48% 38%
Unit Sales 42,000,000 5,500,000 2,070,000
Projected Revenue $44.08 million $27.85 million $19.9345 million
Cost $13.02 million $5.445 million $ 2.380 million
Gross Profit $31.060 million $22.405 million $17.554 million
EXPENSES
SG&A $640,000 $160,000 0
Marketing $2.4 million $480,000 $250,000
Broker’s Fee(4% Revenue) $772,800 $367,400 0
Complementary Cases 0 0 $173,363
Net Profit $27.2472 million $21.3976 million $17.130637 million
COMPARISON
My Suggestion
OPTION ’1’
● Highest Risk as well as Highest Reward● Only Regional distribution instead of National● Competitors will move to Supermarkets and farm might lose
an opportunity● If Implemented properly, The most beneficial option for the
Farm.
OPTION 1
Rishi Bansal3rd Year UndergraduateIIT Kanpur
Sameer MathurProf. MarketingIIM Lucknow
This Presentation was created by Rishi Bansal, IIT Kanpur during a Marketing Internship by Prof. Sameer Mathur, IIM Lucknow
DISCLAIMER
top related