HBR case study

5. NATURE VIEW FARM’s product line

9. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets
Introduce 2 SKUs
of multipacks in
natural food stores

14. Distribution
channels
Average retail price (in $ US)
8-oz cup 32-oz cup 4-oz cup multipack
Supermarkets 0.74 2.70 2.85
Natural Foods Store 0.88 3.19 3.35
Natureview’s manufacturing costs (in $ US)
8-oz cup 32-oz cup 4-oz cup multipack
0.31 0.99 1.15

16. 8-oz cups +3%
Children’s multipacks +12.5%
32-oz cups +2%
Supermarket +46%
Small health foods store +25%
Natural foods store +29%

17. 8-oz cups +3%
Children’s multipacks +12.5%
32-oz cups +2%
Supermarket +46%
Small health foods store +25%
Natural foods store +29%

20. 1. Natureview Farm is NOT
PRESENT in Supermarkets.
2. Natural Foods Store earns
HIGHER REVENUE than
Supermarkets.
3. 8-oz cups: MAX SUCCESS
chance.
4. MORE consumers at
Supermarkets

22. Revenue $13,000,000
Cost of Goods Sold $8,190,000
Gross Profit $4,810,000
Expenses
-SG&A $3,770,000
-R&D $390,000
-Marketing $390,000
Net Income $260,000
1. Revenue for 2001 =
Current revenue (1999) +
Increments
2. Continuation of sales in
Natural Foods Stores as
in 1999.

23. Option
Action
Anticipated
incremental
retail unit
sales
Additional
advertising &
marketing
expenses ($ per
region per year)
Additional
SG&A
expenses ($
per year)
Net
expenses
($)
Net Cost of
Goods Sold ($)
1
Expand 6 SKUs of 8-oz size
into eastern and western
supermarket regions
35,000,000 1,200,000 320,000 6,070,000 19,040,000
2
Expand 4 SKUs of 32-oz size
nationally into supermarket
channel
5,500,000 120,000 160,000 4,830,000 13,635,000
3
Introduce 2 children’s
multipacks into natural
foods channel
1,800,000 250,000 Nil 4,800,000 10,260,000

24. Option Action
Anticipated
Revenue ($)
Gross Profit ($) Net Income ($)
1
Expand 6 SKUs of 8-oz size into
eastern and western
supermarket regions
38,900,000 19,680,000 13,610,000
2
Expand 4 SKUs of 32-oz size
nationally into supermarket
channel
27,850,000 14,215,000 9,385,000
3
Introduce 2 children’s
multipacks into natural foods
channel
19,030,000 8,770,000 3,970,000

25. Option
Action
Anticipated
Revenue ($)
Gross Profit ($)
Net Income
($)
1
Expand 6 SKUs of 8-oz size
into eastern and western
supermarket regions
38,900,000 19,680,000 13,610,000
2
Expand 4 SKUs of 32-oz size
nationally into supermarket
channel
27,850,000 14,215,000 9,385,000
3
Introduce 2 children’s
multipacks into natural foods
channel
19,030,000 8,770,000 3,970,000

26. Option
Action
Anticipated
Revenue ($)
Gross Profit ($)
Net Income
($)
1
Expand 6 SKUs of 8-oz size
into eastern and western
supermarket regions
38,900,000 19,680,000 13,610,000
2
Expand 4 SKUs of 32-oz size
nationally into supermarket
channel
27,850,000 14,215,000 9,385,000
3
Introduce 2 children’s
multipacks into natural foods
channel
19,030,000 8,770,000 3,970,000

27. Option
Action
Anticipated
Revenue ($)
Gross Profit ($)
Net Income
($)
1
Expand 6 SKUs of 8-oz size
into eastern and western
supermarket regions
38,900,000 19,680,000 13,610,000
2
Expand 4 SKUs of 32-oz size
nationally into supermarket
channel
27,850,000 14,215,000 9,385,000
3
Introduce 2 children’s
multipacks into natural foods
channel
19,030,000 8,770,000 3,970,000

28. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets
Introduce 2 SKUs
of multipacks in
natural food stores

29. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets

30. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets

31. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets

32. Expand 6 SKUs of
8-oz product line in
supermarkets
Expand 4 SKUs of
32-oz product line
in supermarkets
Introduce 2 SKUs
of multipacks in
natural food stores

37. Created by Anshul Dewangan, IIT Madras, during a Marketing
Internship under Prof Sameer Mathur, IIM Lucknow