Excerpted from HBR Case Studies: Class — or Mass?, by Idalene F. Kesner & Rockney Walters. Reprinted with permission from Harvard Business Press. All Rights Reserved.
Should Neptune launch a mass market brand?
Here's the case of an organization reassessing its strategic priorities when faced with working capital pressures due to capacity being higher than demand, and this has led to a reassessment of its growth strategy . Neptune is under serious threat of facing a stall point because of a situation of price premium captivity . We therefore believe Neptune should launch a mass market brand, for unlocking new growth opportunities beyond its current franchise, and not just for tactically tiding over the temporary crisis. Following are strategic growth opportunities that can be unlocked with a mass market brand. It is however imperative that Neptune opts for a differentiated business model for the mass segment to mitigate any cannibalization threats from its current core business.
Growing the seafood category
Ironically, the vision of the company's founder was to "sell some of the fish so low so that more people would eat sea food" . As the company grew bigger, it set a narrower category definition for itself as "the best seafood in the water planet" . Neptune can grow the seafood category and get a disproportionate share of it by inducing a shift from mass affordable meat products through a better value proposition like a "healthier food at the same price" . This is also likely to find common cause with ASPD because it gives its members an opportunity to grow and emerge stronger with an aggressive pricing strategy. Upgrading from unbranded seafoods
While it is not explicitly mentioned in the case, but there could be an opportunity to trade up consumers from unbranded seafoods. Neptune's turnover of $820 million represents only a 4% share of the $20 billion seafood business. Given that Neptune...