Neptune Gourmet Seafood

Neptune Gourmet Seafood, North America’s third-largest seafood producer is facing the problem of excess inventory. For the past 4 decades the company has placed itself as a premium brand with the Gold Seal of US Association of Seafood Processors and Distributors (ASPD). The company’s margin level has reduced considerably due to the increased costs and competition. The firm recently underwent major expansion by purchasing six new freezer trawlers. The new trawlers along with the change in the fishing laws have increased the stocks in the warehouses. Even though when the demand for the firm’s products has reached to its all time high the inventory level is still increasing. And now Stanley Renser, the CEO of the company needs to take a decision in regard to managing the stock levels that are higher than the normal level.

In order to control the excess supply of stock, three strategies could be considered, the first strategy is to introduce a low price brand, the second is to launch the product in new geographical areas and the third strategy would be to sell excess stock to a wholesaler in some other market at a low price.

Considering the first strategy, Neptune is blessed with a good distribution network; it can focus on creating a new brand, “Neptune Silver” in the existing market. It would also not take too much time to establish itself as it has complete knowledge of the market. . The main objective of releasing such a brand would be to effectively sell the excess inventory. It can differentiate the new product based on reduced shelf- life and lower cost. If “Neptune”, wishes to sell new product in the name of “Neptune Silver”, there is a risk that the company might not get the ASPD gold seal of approval for the new product (because of shelf life ), and this loses the reputation of the company. As the people would get the product “Neptune Silver” at a much lower price, the people may prefer “Neptune Silver” to “Neptune Gold”. In the...