Natureview Farm is a small manufacturer of yogurt, which was established in 1989. It has a wide range of products, but still maintained itself within the natural foods market. Through the years, Natureview managed to build an excellent reputation due to their high quality and natural organic ingredients. After few months, the venture capital firm withdrew their investment and cashed out by not having enough capital to finance marketing expenses. Involuntarily, Natureview came up with a plan to increase in revenues up to $20 million by 2001 (Fleming, 2007, p.2). Even though their current business model was up-and-coming, the company now had to make a decision between staying in their current market (i.e. natural organic foods channel) or to enter the aggressive supermarket market channel.
Natureview had developed a good relationship with the natural food retailers, yet supermarkets sold an estimated 97% of overall yogurts in 1999. Approximately 46% of organic yogurt was purchased from the supermarkets. Keeping this is mind, venturing within this new supermarket channel would be a huge benefit for Natureview to increase its sales within less amount of time. However, a switch between channels have created a high expenditure that an increase in sales might ended up in huge rewards.
We consider that the most viable solution to Natureview’s problem is to implement the Option 1: To expand 6 SKUs of 8oz. product line into two selected supermarket channel regions. Since it provides the high level of potential, rather than the two available options. Also, this option is likely to reach its target of the overall $20 million goal and the possibility of penetrating a new market. For instance, regular organic company like Natureview can reach out to this market to attract new customers. In addition, this new marketing strategy also returns a net income of $7,278,500 annually, which in comparison with the other two options proved to be the highest...