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Student
The first option is to introduce six SKUs of the 8-oz. product line into the Northeast and West supermarket channels. An advantage of implementing this option is increase revenue potential. According to the Natureview Farm case study, this particular product line represents the largest dollar and unit share of the refrigerated yogurt market. In addition, natural food competitors that have entered into the supermarket channels have increased revenues by over 200% within two years. Another advantage is the increased exposure of the brand. Currently, the company has selective coverage of its products by only marketing to natural foods retailers. By expanding into the supermarkets, mass coverage of the product will create greater spatial convenience. A disadvantage of this option is the intense level of competition both in marketing and spending, and in the distribution channels. Other natural foods competitors will likely enter into the supermarket channels, leaving only room for one organic yogurt brand. Additionally, this option will create a multichannel conflict. According to Kotler and Keller (2009), “It’s likely to be especially intense when the members of one channel get a lower price or work with a lower margin” (p 242). In this scenario, the natural foods retailer could lose organic yogurt sales to a supermarket across the street due to the lower prices charged.
They carved out a niche in serving a very specialized customer. The organic & natural segment that was not served adequately through the normal retailing chains. There are a few dominant players in the normal grocery chains whose revenues dwarf’s natureviews. The total Sales volume for refrigerated yogurt was $1.8 billion so Natureview only had 0.7% of the market. In the 10 years since beginning business Natureview had a 62.5% CAGR versus an average growth rate of around 3% in the yogurt market as a whole and 20% growth in the natural food stores. Also a reputation for high quality and...
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