Natureview
HOW DO THE THREE OPTIONS COMPARE FINANCIALLY? YEARLY REVENUE, GROSS MARGIN, REQUIRED INVESTMENT AND PROFIT POTENTIAL.
WHAT ARE THE STRATEGIC ADVANTAGES AND RISKS OF EACH OPTION? CHANNEL MANAGEMENT, CONFLICT ISSUES INVOLVED.
The Problem
Natureviews main problem is that they have to make strategic marketing decisions to grow revenues to $20,000,000 from their current $13,000,000 before the end of the 2001fiscal year.
Channel Analyses Supermarket channel offers more potential for sales and revenue but also is very costly due to technologyand slotting fee requirements and is also risk filled due to many unknown variables. However despite the risk, thischannel provides the most exposure and market base. The Nature foods channel offers less risk, but only servesniche market of organic food purchasing consumers. It is cheaper to invest and is expected to grow by 20% annually
Organizational Objectives
Grow revenues to $20,000,000 from their current $13,000,000 before the end of the 2001 fiscal year
Alternatives/Options
Option 1: Expand into the supermarket channel with 6 SKUs of 8oz yogurt in two regions
Option 2: Expand into the supermarket channel with 4 SKUs of 32oz yogurt in all regions
Option 3: Introduce 2 SKU of children multi pack into natural foods channel
Recommendation - Option 3 due to:
Low risk factors
Low cost
Take advantage of current relationships and growth of nature foods channel
Implementation Plan
Approval - 1stWeek
Meet with R&D, brokers, sales, retailers - 2nd week – 3 rd week
Product test and approval - 4 th week
Product and promotion launch - 2 nd month
First status report - 6th month
Final yearend report 12 th month
Strength
Long product shelf life
Reputation of high quality, taste and naturalingredients
Strong relationship with nature store retailers
Opportunities
Organic food market expected to grow to $13.3billion in 2003
Nature store channel sales up 20%
12.5% growth in 4oz multipack
Increase in
WHAT ARE THE STRATEGIC ADVANTAGES AND RISKS OF EACH OPTION? CHANNEL MANAGEMENT, CONFLICT ISSUES INVOLVED.
The Problem
Natureviews main problem is that they have to make strategic marketing decisions to grow revenues to $20,000,000 from their current $13,000,000 before the end of the 2001fiscal year.
Channel Analyses Supermarket channel offers more potential for sales and revenue but also is very costly due to technologyand slotting fee requirements and is also risk filled due to many unknown variables. However despite the risk, thischannel provides the most exposure and market base. The Nature foods channel offers less risk, but only servesniche market of organic food purchasing consumers. It is cheaper to invest and is expected to grow by 20% annually
Organizational Objectives
Grow revenues to $20,000,000 from their current $13,000,000 before the end of the 2001 fiscal year
Alternatives/Options
Option 1: Expand into the supermarket channel with 6 SKUs of 8oz yogurt in two regions
Option 2: Expand into the supermarket channel with 4 SKUs of 32oz yogurt in all regions
Option 3: Introduce 2 SKU of children multi pack into natural foods channel
Recommendation - Option 3 due to:
Low risk factors
Low cost
Take advantage of current relationships and growth of nature foods channel
Implementation Plan
Approval - 1stWeek
Meet with R&D, brokers, sales, retailers - 2nd week – 3 rd week
Product test and approval - 4 th week
Product and promotion launch - 2 nd month
First status report - 6th month
Final yearend report 12 th month
Strength
Long product shelf life
Reputation of high quality, taste and naturalingredients
Strong relationship with nature store retailers
Opportunities
Organic food market expected to grow to $13.3billion in 2003
Nature store channel sales up 20%
12.5% growth in 4oz multipack
Increase in