Class or Mass?

The Harvard Business Review case “Class- or Mass” presents the dilemma faced by Neptune Gourmet Seafood, the third largest seafood producer in North America. Neptune recently invested in new technology that now allows them to catch fish and freeze them more efficiently. However, this led to increased levels of inventory and Neptune now has to decide how to address this problem. In order to cope with the problem Rita Sanchez, a member on the sales team, suggests that the company reduce prices in order to sell off the excess inventory, perhaps through the introduction of a mass market brand.

On the other hand, Jim Hargrove, the marketing director of Neptune, refuses the proposed price cuts with concerns that this will damage the company’s premium image, and is opposed to launching a new mass market brand in fear that this inexpensive brand could cannibalize Neptune’s premium line while also leading to a price war with competitors. The issue is taken up for discussion at the Neptune's Marketing and Operations Council meeting and while various opinions are expressed, a decision must be made.

After reading about the company’s issue and the various opinions and concerns expressed. I believe the best strategy would be to avoid introducing a new mass market brand and instead consider supplying retailers with private-label products. This is the best strategy because it does not endanger the company’s premium image, it is a long term solution that allows the company to expand its positioning, and it allows Neptune to make some profit off the excess inventory which may otherwise go to waste.

Although introducing a mass market brand may seem like a good way to deal with the excess inventory and expand their business, doing this would bring Neptune Gourmet Seafood more problems than it would benefits. According to the value creation frontier, a company cannot have both a low cost and a differentiation strategy. Companies that attempt to accomplish both of these goals are...