Natureview case BY volk72 Natureview case wrap -up At the core of the case is the question of whether Natureview should stay loyal to its current channel partners and accept the risk that the company might be limiting its long-term revenue potential. Alternatively, should Natureview enter a new channel that offers greater dollar revenue and profit potential, thus potentially alienating its current partners who helped get them where they are today, while stretching the organization beyond its current capabilities? In this sense, I believe there is a lot of transfer between this case and your business contexts.
Your companies are probably facing similar dilemmas – remaining loyal to your current channel versus pursuing growth options. Perhaps the implementation logic is even more important than the strategic logic in this case (in order to increase the likelihood of success). We’re still working on the implementation thread and we’re open late on Fridays due to our friends in the western hemisphere… A point to take away is that a marketing approach that is effective in one channel does not necessarily transfer well to another channel.
Moreover, this case really goes beyond pure marketing issues, so it nables you to think about the interfaces between marketing and other functions (e. g. , corporate strategy, supply chain management, consumer marketing). Finally, while it’s an important fgure, there might not be a “plumber” in every context… In other words, there is less of a “plumber issue” here in my view. Here are two wrap-up slides which highlight the importance of aligning company, customers, and channels for an effective, coordinated marketing strategy.
Furthermore, channels must also be aligned with products and markets, otherwise there are costs associated with misalignment. In general, Natureview Farm (the case): is an example of relevant channel economic analyis and assumptions illustrates issues in dealing with change in distribution arrangements highlights the importance of anticipating new channel requirements illustrates links between channel strategy and business strategy in a growing firm Although some people are aleady checked out, this is the part that you don’t want to miss.
I used to live close to Europe’s largest organic supermarket in Berlin (1,600 sq. m. of sales area and 18,000 organic products). Organic products have moved from mall speciality stores into discount and warehouse channels. Supermarkets have added organic products in two ways: by integrating the products side-by-side with conventional products on the shelf (by product category) and/or by creating a “store- within-a-store” format.
Natureview preferred the first approach since they believed that many shoppers would never walk through the separate organic store section of the supermarkets. Natureview is a disguised name for Stonyfield Yogurt. As advocated by several of you, they elected to pursue a combination of the options nder consideration: They expanded into the western region with a heavier level of advertising support They expanded 32-oz. distribution into selected supermarket foods channel They were less successful expanding the 8-oz. han the 32-oz. size (the former being a much more competitive size). The multipack launch led to the launch of other multipack products. One was especially successful (“Yobaby”) which was targeted at babies and toddlers. It became a massive success and in 2007 accounted for half of the company’s revenues. Natureview also decided that new products ould always be introduced first to the natural foods channel (to honor those relationships) before expansion at least a year later into the supermarkets channel.
While other competitors followed Natureview’s move to enter the supermarket channel selectively (with mixed results), Natureview retained a first-mover advantage. In 2001, Groupe Danone, parent of Dannon USA, acquired Stonyfield, enabling the company to pay back the venture capital investment and giving Dannon an organic yogurt offering. Dannon had tried earlier to introduce an organic 32 oz. product line but failed and never tried again (in the US).