Note: Don’t change a technical words, Supermarket channel
Natureview is in the cross roads of deciding on strategic business plan for attaining incremental revenue over 50% to $20M (reported $13 million in 1999) within the close of the financial year with a confusion as to which project to promote. The alternatives are to expand into the existing channel for product “yogurt” by incrementally adding regions or introduce new products in the nature foods segment thereby fortifying its position. I recommend, the company should strategies to enter chosen supermarkets ensuring channel tapping by expanding the existing products in new geographical markets. Focusing on customer base and brand recognition will aid incremental revenue and 8oz market which a 3 % has expected growing rate represents the largest market player of the yogurt market and presents huge revenue potential.
Initially a 20 retail chain based channel expansion is envisaged with 11 in north east and 9 in western regions. The 8 Oz Curd product offers optimal market reaping potential with an expected sales of $25.9M per annum. This would be the first competitive move over the organic curd manufacturers by inserting this product into the market at an early stage. This would benefit the company as it has been observed that the early starter always has a heads up on the market. This option is expected to be a winner by volume sold with a 35 million units (Exhibit 6) sold marking a projected revenue of $25.9M (Exhibit 3). This along with Natureview current revenue of $ 13 M, will aggregate to a $38.9M, surpassing the $20M objective. Hence this qualifies to be one of the most fruitful of the strategies owing to the demand for the product that is existing in the market and the revenue earning potential of the said product respectively. On the flip side the risks associated with this option would include investment into marketing, advertising and shelving costs.
Along with the above detailed marketing efforts enhancing the yogurt product mix with by introducing various flavors and using latest processing technology, natural ingredients the company could increase the shelf life of the product. This could be further amplified by a friendly package line optimizing packaging visibility combined with packaging aesthetics can make the product more appealing
Nature view needs to leverage the Northeast and the West geography based chains. The in store placement needs to be neat and with bright colors near the rack/shelf nearby to aligned competitors and at customer eye level accompanied by digital messaging portals.
The consumer of natural foods have lower price sensitivity and hence could incrementally buy with lowered prices. The company can offer a 50% off coupon during introductory week and price the products at least 10 – 15% lower than competitors for increased market share and lowering competition. Social media discounts could also be offered.
In store demonstrations are helpful and a 25% off could help a good start. Advertisements placed in women’s health and lifestyle magazines with recipes on social media could aid market development. Influential blogger write ups and Instagram marketing could render solid support and health websites would be aiding the back links, adverts and reviews The best time for online promotion would be just before breakfast time (7am-8am) and lunch time (11:30am-12:30pm)
The incremental operating and marketing expenses owing to expansion of new channels would be require considerable financial outlay which may lay a strain on the company .