Natureview Brief Essay

765 Words4 Pages
Sylvia Isaza Option 1 had three main advantages. Eight-ounce cups were the most profitable based on size. There was a growing trend in natural and organic foods in supermarkets and Natureview wanted to capitalize on this growing trend. They also had a significant first-mover advantage if they were to expand into the supermarket channel before one of their major natural foods competitors did. There were also risks involved with this decision. Creating a comprehensive advertising plan would cost Natureview $1.2 million per region per year. These were in addition to the trade promotion expenditures the company would need to make. “Natureview's sales, general, and administrative expenses (SG&A) would increase by $320,000 annually; $200,000 would be incremental SG&A for additions to sales staff required to manage the supermarket brokers in the two regions, and $120,000 would go towards additional marketing staff.” Option 2 had three main advantages as well. 32-oz cups currently generated a higher than average gross profit margin for Natureview, despite comprising a smaller unit and dollar share of the yorgurt market. Natureview has less competition in this size category and had a strong competitive advantage because their product lasted much longer compared to their competing brands. “The company used milk from cows untreated with rGBH, an artificial growth hormone that increased milk production. Because of the special process and ingredients, Natureview Farm's yogurt's average shelf life (the length of time the yogurt stayed fresh) was 50 days. Most of the large competitors' products had a 30-day shelf life, requiring them to build multiple production plants to reduce shipping time to their distributors.” Promotional expenses would be lower, since the 32-oz size was promoted only twice a year. An expansion as well would result in significantly lower marketing

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