Class or Mass Mini Case Analysis’.
‘Neptune Gourmet Seafood’ is worth $820 million, is the third-largest North American seafood producer and is believed to be the most up market player in the $20 Billion seafood industry. Neptune has done everything in terms of their quality and technology for improved, efficient & sustainable production. Therefore, living up to their tagline, ‘The Best Seafood on the Water Planet’. In spite of having the best quality produce and substantial market share, the company is facing inventory problems. The company has purchased six new Freezer Trawlers, thereby increasing their original level of production in threefold, from what it had been a year ago. The company’s sales executive Rita Sanchez suggests that the company must reduce their prices by 40% to 50% and sell the lower priced goods as a new brand, thereby reducing the excess levels of inventory. Neptune’s marketing director Jim Hargrove was unhappy with the idea of slashing their prices since, there were chances for the company to lose their existing customers and it cannot afford to have a fall in their revenue levels, as sunk costs have gone up and there is an increase in competition. Instead, Jim suggests that there be a 10% discount given on the finished goods as the discount rate sounds more realistic and there would be no misrepresentation to the existing consumers about the sudden fall in Neptune’s finished goods. Neptune’s COO Bernard Germain wonders whether Neptune should target a new geographical market viz. South and Central America. On further analysis and study of the case, the three most realistic options that Neptune should implement are enumerated as follows. Firstly, the company can reduce their prices by 40% to 50%; secondly, Neptune can launch a low priced seafood brand through private labeling; and finally, the company should target new geographical markets. With regards to the first option, the company should reduce their prices by 40% to 50% on...
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