Expansion Strategy, Case Study Example

Per your request, the senior management team is developing a new strategy that will meet Natureview’s aggressive growth plan that will achieve 50% growth by the end of 2001, which requires due to the fiscal demands that are present within our corporation. The company must also solve a marketing dilemma pertaining to this growth strategy, which will center on a key issue. Does Natureview focus their efforts and resources into introducing the brand to an entirely different market segment and demographic, or is it better to focus the company’s efforts to expend within their existing target market with new product offerings? After extensive consultation from the managers, we offer the following recommendations. Please note that there is no consensus, as the management team has divergent and creative ways to achieve the goals. Upon reflection and review, I do feel the net resulting recommendation is the right and direct course for the company.

Natureview achieves success on the quality of its product. Given that it is organic, it is naturally healthier than the mass producing brands such as Dannon and Breyers, using all natural ingredients, with no hormones or artificial products. This has made the company a popular choice among distribution channels such as Whole Foods and Wild Oats where quality is given precedent over pricing. It also is a fit for a consumer trend that prioritizes quality and health, projecting to achieve a significant trend in growth and popularity in the coming years. The options presenting are ambitious and not without risk. Two options focus on broader expansion into mass appeal supermarkets where the company is currently not present. One option is to use the popular 8-ounce product line into regional supermarket chains given its position as the largest dollar and unit share. The other is to utilize the large 32-ounce packaging due to its advantages with profit margin. Both of these options would represent a new market for the company, require extensive marketing investment and has both significant potential for risk and reward. Both opportunities have some senior management support. A third option provides from marketing, where the company augments their presence in the natural foods category by adding children’s multi-pack products to the line of offerings. This approach would utilize the existing distribution chain, avoiding the expense of additional marketing costs and the potential for damaging the connections we have with the existing distribution. It is a valid concern that the broker will attest that the existing distribution could suffer damage if our partners start seeing the product sold cheaper at the local mass merchandise supermarkets. It could also damage the brand, known for quality without necessarily relying on price point.

The company founds on quality, freshness, and longevity. Given the options that are present, it is my recommendation that the third option is the best solution, and the least risky to pursue. The marketing mix should consist of utilizing existing channels and brand recognition, while price and promotion would require minimal costs as the company would not be introducing itself to a new customer base. Natureview would instead simply introduce a new product line to consumers that already have some familiarity with the product. I congratulate the entire senior management team for coming up with diverse and creative options, but to sustain the company and respect the resources that are available this is the best solution present to achieve our goals.