Marketing: Inventory Problems Solutions

Topics: Inventory, Toyota, Toyota Production System Pages: 4 (948 words) Published: September 16, 2010
A – Class or Mass Summary (100 word)

Neptune is the North America’s third-largest seafood producer in a high-end business. The company is an upmarket player.
Main distribution channels:
• grocery chains and retailers;
• the best restaurants on its region;
• wholesalers;
• its own fish market.
They are facing a big inventory problem.
• new technologies;
• new lows;
• growing demand.
Proposed solutions
• slash prices launching a new mass-market brand;
• slight discounts;
• sell old ships and launch new product;
• new markets.
Issues of Sanchez’proposal
• destroy premium image, erode brand equity;
• price war;
• cannibalization;
• distribution;
• markets.

B – A similar situation

In the everyday struggle with the lifecycles of the market, companies face inventory problems. It is important for them to have adequate inventory levels to accommodate the needs of customers. However, in some cases, as it happened to Neptune , having too much inventory can become a weakness. Idle inventory can be costly and therefore could be a potential threat to company ‘s success. Hence, several companies such as Dell computers, McDonalds, and Toyota have been very successful using an important approach: the Just In Time Management.

Company’s situation: Toyota Motor Corporation and the JIT
Japanese corporations cannot afford large amounts of land to warehouse finished products and parts. This was thought to be a disadvantage because it forced the production lot size below the economic lot size. The undesirable result was poor return on investment for a factory. In the same Situation was Toyota Motor Corporation that had to find a strategic solution.

Inventory problem solution
Usually excess inventory is marked down and sold for a reduced price. The chief engineer at Toyota, Taiichi Ohno,, examined accounting assumptions and realized that another method was possible. The factory...
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