5. Situation
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VC needs to cash
out of its
investment
Achieving 50%
revenue before
the end of 2001
Should
NatureView
farm expand into
super market?
14. Option1(to expand 6 sku’s of the 8-oz product line into one or two
selected supermarket channel)
pros cons
• 8-oz has highest incremental
demand.
• Potential to increase revenue.
• High risk(marketing)
• Advertising cost $1.2 mn per
region per year.
• Need to pay one time slotting
fee.
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15. Option2(Expand 4 sku’s of the 32-oz product line nationally )
Pros Cons
*Higher profit margin than 8-oz
*lower promotional expanses
*Doubt on sales team’s ability to
achieve full national distribution in one
year.
*The 32-oz expansion option would
increase SG&A expanse by $160,000
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16. Option3(Introduce 2 skus of a children multipack into the
natural food channel)
Pros Cons
• The financial potential was very
attractive .
• The natural food channel was
growing almost 7 times faster than
the supermarket.
• There were many conflict which
manager could not determine.
• Can not achieve the target objective
of Nature view farm.
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17. Comparison of options for year 2001
Option1 Option2 Option3
Unit sales 42,000,000 5,500,000 27,247,200
Revenue 44,080,000 27,850,000 21,397,600
Net profit 27,247,200 19,934,500 17,130,637
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19. Option1(The Best)
• Long term advantages are high if properly implemented
• Exposure to more range of customers.
• It exceeds the revenue objective.
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20. Conclusion
• Reach beyond the target objective $20 million before the
end of 2001
• More customer buys products from supermarket (46%)
• “Guerilla marketing “ 8-oz -86% Revenue
• 40%yogurt consumed by U.S. population (70% women)
• Long term revenue generate around 200%.
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