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Neptune Gourmet Seafood Company Background Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 1872 words Published: 1st Jan 2015

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Neptune Gourmet Seafood is the third largest company in North America, it has been initiated 40 years ago. And it is growing rapidly. However, this growth in market demand is still insufficient as compared to the amount of catch the company are able to haul and process daily. As such, excess inventories have been piling up in the warehouses, and turnovers are slower than they ever were.

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To try to combat this issue, some strategies regarding the pricing of their premium products have been introduced for discussion. Talking about the growth possibilities and the problems that these strategies might encapsulate. Also offering a fresh perspective on the issue of launching a mass-market brand amongst existing premium brands. And give some alternative recommendations to solve the problem of oversupply.


Neptune Gourmet Seafood is a $820 million company with its core business lying in providing high quality seafood and seafood-based products to its customers. Neptune is using a freezer trawler with new technologies that allow the vessel to catch and freeze fish in an environmentally sustainable way as these technologies super freeze fish to -70F while the usual is between -10F and -23F, and that retains the original flavor, texture and color of the fish, Neptune also generated approximately 30% of its revenues by selling frozen and processed fish products to United States grocery chains. Neptune had got a premium image among its customers, it had earned a reputation for producing the best seafood with high quality for the past forty years. In the $20 billion fishing industry, Neptune has managed to position itself as one of the top provider of premium seafood products. The company has been one of the best innovators in the art of fishing, with high investments made on developing technologies and technical know-how on maintaining the quality of its catches. Neptune also is gaining attention in its focus on environmentally sustainable fishing, in line with its tagline ‘The Best Seafood on the Water Planet’. However, the company have been facing some inventory problems due to oversupply, and have been seeking ways to remedy it without jeopardising the company’s premium image.


Analyzing the business competition environment that Neptune operates in, through the porter’s five forces model

Porter’s Five Forces Model of Competition


To identify Neptune target market, the market mix should be analyzed using four Ps model.


While Neptune is one of the biggest companies in the market, it faces several challenges and problems in retain its position in the market due to the new technologies that Neptune adopted and ships that have been added to the fleet, Neptune became able to produce a large number of products comparing with the other companies where as the goods inventory shows that the supply of sixty days is twice the normal level and three times what it had been a year ago, and these products more than the targeted segments of Neptune which causing the excess inventory.Some parties believed that this inventory problem would only be temporary, as they relate this sudden influx in supply to the increase in the number of ships that would allow for a more efficient catching and processing of seafood.

However, some parties have identified that the problem are not just the highly efficient fishing vessels, but truly lies on the newest amendment to the fishing law, which reduces commercial fishing near the coastal areas. As Neptune now have limited access to the waterways near the coasts, they are reduced to fish further out at sea. And due to the sheer abundance of fishes in this area, it ultimately leads to bigger catches that has ultimately put a strain on their inventory capacity.

However, Neptune would have to push to sell off these excess inventories before they turn bad, and not being able to do this could lead to big losses.

There are suggestions to reduce supply by stopping the usage of a few of Neptune’s fishing vessels. However, having idle profit-making assets is not a very good business idea as the vessels are already sunk costs anyways. Neptune could probably sell off some of these assets but to do that would mean having to get losses from the sale of those vessels.

Therefore, there is another suggestion to try to combat this problem of oversupply. Neptune suggests cutting prices of end products drastically to try to entice more buyers. However, there are several concerns surrounding the viability of this price cut.


There are several suggested options by the team of Neptune to solve the excees of the inventory that the company facing, cutting prices is suggested by some but cutting the prices may solve problems in short term, while the overcapacity may stay long with Neptune. There also an issue highlighted in the case which is cutting price may effect negatively to the consumers image that Neptune achieved 40 years ago. After cutting the price consumers would conceive that these Neptune products sold at a lower price could be rotten and it could destroy their brand equity.

Another effects of cutting price which may affects the future sales because restaurants and household consumers may buy and stock Neptune products in the period of cutting the prices, so the company will get lower sales in the future and it will consider it as an expense. As well as cutting the prices may lead competitors to reduce their prices too trying to compete with Neptune and after while the price would reach the equilibrium point.

So many problems may occur due to cutting the prices the Neptune team has another suggestion which is introducing a new low-price seafood brand to the existing upmarket brand. Introducing this new roduct may lead to the cannibalization of the old premium products. Neptune has successfully positioned its Neptune Gold brand on the high end of the seafood market. Neptune are therefore scared that selling off the same seafood for a lower price under another brand would backfire as consumers could discover that both these offerings’ quality are at par with each other. Hence, consumers would naturally move towards purchasing the new brand instead of the premium one.

Neptune also should consider the reaction of the United States Association of Seafood Processors and Distributors. This new brand by Neptune could be risky and possible to negatively affect their ASPD Gold Seal of approval that have strengthened their reputation for quality all these years retracted. This could further endanger the sales of their existing brands..


Due to the problems and situation discussed above the idea of improving mass-market is suggested to distribute the excees inventory. It is an excellent idea to give opportunities of growth to Neptune. This strategy to expand their market as opposed to only threatening their currunt offerings, it is also good for the company to come up with something different to this new low-price brand to minimize the negative impact . producing low-price brand to add value to the current market segmentation by supporting the the premium one offered before.

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It is very important for Neptune to figure out what the consumer really wants from their seafood purchases other than price. Neptune could definitely create an edge over other competitors who are competing in the same price range by promoting the product with a focus on its quality. As a major supplier for seafood products, Neptune has definitely built a name for itself for its quality catches, and they should make sure that this message extends to the new brand as well. Therefore, Neptune could catch the attention of consumers looking for the best quality produce at a much more affordable price range. However, opening a new segment in the market by offering low-priced products will target the consumers who want products at a cheap price and differentiate them with consumers that on the normal market of Neptune. They achieve a competitive advantage over other competitors. In fact, Neptune would probably attract a lot of sales with this new mass-market brand, even with the stiff competition with other low-priced suppliers, as customers would assume that they could get the same value proposition delivered by Neptune with their Gold line, but at a cheaper price.

This suggestion will reduce cannibalization by differentiate targeted segments, Neptune should retain its revenue from the premium offerings to restaurants and eatiers.


While Neptune’s customers are loyal to the company to go back and repurchase its products and their demands are still continuously climbing, Neptune is still using its expertise and technologies to satisfy its customers and keep competitive in the premium seafood market.However, because of its new investment in new shipping vessels, top-quality supplies have also been climbing. However, this increase is not matched by a proportional increase in demand. As such, inventories turnovers have become slower and Neptune runs the risk of having these inventories turning bad in storage.

Neptune team has come up with the strategy of slashing their offerings by half, and that is followed by the strategy to open a new mass-market brand. However, both suggestions have certain underlying problems connected to its implementation. But going through a new market segment is highly viewd as an opportunity instead of a threat for long run.

As a conclusion, Neptune needs to lunch mass-market brand to solve the excees of the inventory as well as being the best in growth prospect to revive its position in the seafood market.


Some recommendations to Neptune to sustain its position as market leader and increase its market share through introducing a mass-market brand and implementing some strategies.

To expand its offering giographically and open new market outside United States and importing seafood products. This strategy will lead the demand to rise up quickly to follow the rising of supply, so Neptune will solve the oversupply once the margin of demand increases.

Neptune sould introduce promotions of its products to definite increases in environmental awareness, to encourage its customers to repurchase and then will get more profit

As of currently, about two-thirds of Neptune’s total revenue comes from sales made to restaurants, cruise ships and eateries. growing its consumer franchise is recommended as well. Neptune thus should try to collaborate with local supermarkets and grocers nationwide in order to let customers have access to these premium products easier.

These recommendations to solve the problem of the excees of the inventory, also to help Neptune to be the leader of the market internationally and the biggest supplier of seafood products.

Hisham Turban

Marketing Management


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