Class or Mass Essay

1900 Words May 22nd, 2015 8 Pages
Jason Hwang
MGMT 430 A

Class – or Mass?

Executive Summary

Neptune Gourmet Seafood is an $840 million corporation that provides premium seafood in North America. They are the 3rd largest seafood producer in the market, and have been around for 40 years, continuously providing the highest quality of product. Despite their success, they are having issues with what appears to be a temporary problem of excess inventory. Due to new coastal laws, investments in new freezer trawlers and fishing technology, Neptune’s trawlers have been able to move further out to sea to fish and maintain the quality the company has been known for. By going further out to sea, they have been bringing back larger than normal catches due to richer fishing grounds,
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Depending on the actions of Neptune, there will definitely be a reaction from their competitors to include the U.S. Association of Seafood Processors and Distributors (ASPD). If Neptune were to lower prices by 40-50%, it would most certainly cause other competitors to lower their prices as well and potentially could cause a price war that none of the businesses could afford in the long run. Neptune especially would not be able to afford this due to their increasing cost structure. In the customer’s mind, a price drop of 40-50% would likely cause negative perceptions of the brand, and may cause consumers to believe that they were being overcharged in the past.

Solution/Alternatives

It is reasonable to assume that their competitors will likewise lower their prices to maintain their share of the market. This will have the effect of increasing demand for seafood products. But it will have the negative impact of lowering profit margins for all in the market. It may also create a more hostile market environment for Neptune, a long-term adverse effect. In the case of Neptune’s product, demand seems inelastic, and lowering prices would only devalue Neptune in the long run. Additionally, although it will offer a short-term solution, it will not address the core issue.

If Neptune were to provide retailers with a private brand, this could potentially interrupt the current market. Most of the stores that Neptune supplies fish products to are high end that would either already
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