A case study about Marketing

1. IIT EMBA MARKETING COURSE 2020
A MARKETING CASE STUDY
CLASS OR
MASS?
TEAM
YELLOW
TEAM Members (in order of roll nos.):
MS20W001, Ajit Simili Jagannath
MS20W005, Balaji Kothandan
MS20W021, Naren V S
MS20W026, Pranesh Suresh
MS20W028, Prathapraj Sekar
MS20W042, Vasudevan V. Mukundan

2. CRITICAL FACTS (1/2)
 Revenue: 820 m $. 3rd largest seafood producer in NA.
 Serves “extremely demanding” customers.
 For 4 decades aimed for, and successfully achieved and
maintained, a very upmarket position.
 Products rated foremost in quality for the tenth year in a
row by gourmet magazine Connoisseur’s Choice.
 The only company that has ASPD Gold Seal of Approval on
every product.
 Practices product quality leadership pricing (premiums of 25
-30% over rivals).
 Has 2 sophisticated plants in Florida and Virginia.
 Invested $9 million in six sophisticated freezer
trawlers to stay ahead of rivals.
30%
33%
33%
4%
Revenue Distribution
Retailers Restaurants
Wholesale Company Owned
Stanley
Renser
Jim
Hargrove
Rita
Sanchez
Nelson
Stowe
Pat
Gilman
Bernard
Germain
U.S. Association of Seafood Processors and Distributors
ACTORS

3. CRITICAL FACTS (2/2)
In Past 3 months, FG inventory has reached a
level of 60 days (2x normal, 3x previous year’s).
ASPD has discretion on issuing the GOLD
SEAL.
Sanchez believes in launching a new
discounted mass-market brand.
For Hargrove deep discounts or new
mass-market brand are unthinkable.
Key management people are divided on the next
actions.
Generally accepted by all, inventory’s up due to
news ships, technology, richer fishing grounds.
Other companies are facing over capacity.
May cut prices, if triggered by Neptune,
leading to a price war.
PROBLEM STATEMENT - WHAT IS THE PROBLEM / CHALLENGE FACED
Should Neptune launch a mass-market brand?
How to deal with the high FG inventory?
INSIDE NEPTUNE OUTSIDE

4. DEEP ANALYSIS OF NEPTUNE

5. OUR FINAL DECISION
DONATE EXCESS INVENTORY
• Support Series of Charity event/Fund raising events by
donating.
• Create a comprehensive PR campaign to accompany these
donating efforts
• Have a good Tax auditor to ensure donations are tax
deductible
PENETRATE NEW GEOGRPAHIES
• Open South American / Caribbean offices
• Hire local consultants to set up business in South America
• Create a new division in Virginia office to support this new
region.
LAUNCH NEW MASS MARKET
• Carefully position new market without affecting original Ne
ptune’s GOLD seal brand
• Product development to distinguish the new brand properly
• Non-grant of ASPD seal to signal the buyers that the brand
is lower in quality than GOLD SEAL.

6. NOTES

7. Suggestions & Justifications
Launching a new mass market brand
Consider Launching A New Brand
MASS MARKET
•Already have the basic product, distribution channels & can achieve a new positioning through
packaging, advertising & pricing.
•There are food companies which have achieved such multiple segment play (e.g. Kellogg).
•Seafood is currently a high-end business, but with more people turning to healthier eating there could
be much potential to exploit in the bigger economy segment.
Ensure Wide & Clear Differentiation between the two Brands
CLEAR PODS
•Necessary to justify premium pricing.
•Lack of wide and clear Points Of Difference (POD) might cause cannibalization and even customer
defection.
Explore Potential New Geographies
NEW MARKET
•Explore potential in South / Central America with a low priced offerings.
•These are regions with long shorelines and hence a potential market for seafood.
•Open South American / Caribbean offices.
•Hire local consultants to set up business in South America.
•Create a new division in Virginia office to support this new region.

8. Suggestions & Justifications
Launch New Mass Market brand Over Stretched Time
TIME PERIOD
•Since this will be Neptune’s first entry into economy segment there should be sufficient time for review
and course correction.
Dealing with the high FG inventory level situation
Consider Temporarily Renting Out Older Ships
RENTING OUT
•Will reduce inventory.
•Will ensure at least some rent revenue inflow.
Consider Operating some Ships @ Lower Quality Settings
LOWER CONFIG.
•Sell the lower quality catch to low cost retailers, auction at fish markets, export etc. without using
Neptune’s name.
•This will keep the ships busy and also bring some revenue without impacting Neptune’s premium
image.
Consider sponsoring seafood festivals/menus
SEAFOOD FESTIVALS
•Choose exclusive locations/events e.g. hotels, industry, entertainment or political events.
•This will reduce some inventory and also generate publicity.

9. Suggestions & Justifications
For purchases much above normal levels
Discounts/Rewards
•Restrict to high end buyers (e.g. hotels, supermarkets, cruise ships).
•This will incentivize them to push Neptune sales which will help reduce inventory while maintaining
exclusivity.
Some inventory to Food Charity Organizations
Donate
•Ensure that the donated stock is not premium grade (e.g. lower grade or close to expiry).
•This can reduce some inventory and might even get some tax deduction, without impacting the
premium image.
•Create a comprehensive PR campaign to accompany these donating efforts.
As a last option consider destroying some inventory.
Destroy
•To maintain premium position, excess inventory cannot be released into market.
•Some luxury goods companies practice this.
Do not give deep discounts just to reduce inventory.
No deep discounts
•A large price cut might be perceived poorly by customers, and could damage Neptune’s premium
image and brand equity.
•Neptune’s margins are already under pressure due to rising costs and growing competition.
•Competitors might react with a price war which will benefit no company.

10. Suggestions & Justifications
General
Management should strictly check every decision/action for
impact on Neptune’s premium image.
Premium Image
•Neptune’s premium/upmarket image/position is a very critical asset.
•It takes huge efforts to achieve a premium position but is easy to lose, and very expensive to regain.
Do not lose the cooperation of industry groups such as ASPD.
COOPERATION
•Try a combination of persuading and accommodating them (more donations?).
•They are powerful and influential.
•In old world businesses (like fishing), with tough regulatory and environmental issues, their lobbying
power is critical to deal with governments etc.