Essay on Class- or Mass

3965 Words May 17th, 2012 16 Pages
Class – or Mass?

A. Executive Summary: Neptune Gourmet Seafood is currently struggling with what appears to be a temporary problem of excess inventory. A combination of new coastline regulations and an investment in new fishing vessel technology and freezer trawlers has increased their average catch size while demand in the current segment has not grown as quickly. The Neptune management team is faced with a decision of how to clear out its excess inventory that is not moving fast enough under its Neptune Gold branding. My recommendation is to launch a mass-market product under a different product line in order to monetize excess inventory and position Neptune to capture more of the North American seafood market share. Going forward
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E. Alternatives
Two potential solutions were proposed at the Marketing and Operations Council meeting. Rita Sanchez, the sales lead, suggests a reduction in the price of current products by 40-50% or introducing a new lower-market brand reaching value consumers in order to quickly sell the excess inventory. Jim Hargrove, the Marketing Directory, strongly disagreed with either scenario arguing they would permanently tarnish the brand’s premium quality image. A fourth alternative could be to introduce a new premium line while dropping the price of the Gold line to maintain brand image.

1. Cut prices as supply and demand fluctuates (cut prices on existing products 40-50%) a. Pros: * Steep price cut will stimulate significant increase in sales and move inventory * Allow Neptune products to reach budget and value consumers b. Cons: * Damage to brand image and quality perception of existing products * Decreasing margins on existing products * Initiate a pricing war between Neptune and its competitors 2. Introduce new brand to cater to lower-end mass market segment c. Pros: * New brand will cater to large mass market customer segment (market share gains) * Will take care of the excess inventory if properly executed d. Cons: * Cannibalize sales of existing Gold line products and damage to premium brand image * Decreases Neptune’s overall profit margins * May lose ASPD

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