Class or Mass Case Analysis

Essay by smstrick March 2007

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Class- or Mass?: Case QuestionsNeptune Gourmet is facing the problem of an inventory pileup. The company needs a way to sell the excess inventory. At the same time many new ships were purchased and expected to operate, which increases supply. Rita Sanchez proposes a cut in prices of the product by fifty percent. This price cut poses a problem due to the fact the Neptune Seafood is a premium product and usually sells for a higher price than the competition. In order to maintain the premium product image Sanchez proposes starting a mass market brand to decrease inventory. There are many variables but some of the bigger ones include; creating the separate brand at all and whether or not the new brand would be associated or separate from the current Neptune brand. Some executives agree with Sanchez while others take the side of Jim Hargrove in disagreement of the proposal.

The dilemma is whether the company should start a new brand and price it at fifty percent of the Neptune Gold brand in order to increase sales and decrease inventory. The executives have many conflicting opinions about the effects on the image of the Neptune brand if this method of inventory reduction is carried out. The goal of research for Neptune is to determine the effects on the consumer's views if a new brand is implemented.

How well would a new brand perform entering the current market? Is there already a popular brand on the market that has the low cost segment secured? Neptune should look into what their competition would be in an almost new market. This new brand would likely be seen as lower quality due to the price. With the Neptune name associated the quality image would be strengthened for the lower price product. As mentioned in...