Class- or Mass Essay

3982 Words May 9th, 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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Pros (in addition to Pros for #2): * Avoid introducing a perceivably lower quality product f. Cons (in addition to Cons for #2): * People may be happy with Gold line and stick with it when price drops 4. Take no action and let excess inventory go to waste g. Pros: * No risk of damaging brand image or margins h. Cons: * Excess inventory will go to waste as sunk cost * Does not make use of available inventory and monetize * Potential action from competitors may put Neptune at a further disadvantage

F. Alternatives Evaluation Matrix Criteria | Importance | Option A – Vary and cut prices 40-50% of existing product | Option B – Introduce new lower-market product line | Option C – Introduce higher premium line | Option D – Status Quo / no action | Fin. Short Term | Medium | + monetize inventory | + monetize inventory | + monetize inventory | - Waste inventory | Fin. Long Term | High | 0 Varies margins and hurts profits to reach more market | + Lower margins but lots of growth potential in mass | + Lower margins but lots of growth potential in mass | - Inventory waste won’t be the only inventory problem | Goods Quality | Medium | 0 no change | 0 no change | 0 no change | 0 no change | Brand Image | High | - Damage image by lowering price | - Brand dilution with lower quality perceived | - Gold line image may fall | 0 no change | Comp. Response | Medium | - Competition will

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