BBUS470C_Report_Neptunepart2

.pdf

School

Bellevue College *

*We aren’t endorsed by this school

Course

470

Subject

Marketing

Date

Apr 3, 2024

Type

pdf

Pages

6

Uploaded by ElderFang341 on coursehero.com

1 1. Evolution Criteria: Here are some pivotal evaluation criteria, along with an explanation of their importance: 1. Market Share: Market share is a crucial indicator of a company's competitive position within the industry. For Neptune, understanding the potential impact of each option on market share is essential, especially if the company is introducing a new brand or product line. It reflects the ability to attract and retain customers in both the premium and potential mid-tier market segments. 2. Contribution Margin: Contribution margin assesses the profitability of individual items and is critical for understanding the financial implications of each strategic option. For Neptune, a high contribution margin indicates that the new strategy can cover its variable costs and contribute to fixed costs and profits, which is crucial given the current inventory surplus. 3. Brand Equity Impact: Brand equity is particularly vital for Neptune due to its established reputation in the premium segment. It's important to evaluate how each option might enhance or threaten the perceived value of the Neptune brand in the eyes of consumers. 4. Customer Acquisition Costs: Importance: This criterion assesses the cost effectiveness of attracting new customers through different strategies. For Neptune, introducing a new brand or product line might incur significant marketing and promotional costs, and it's crucial to ensure that these costs are justified by the long- term value of the newly acquired customers. 5. Operational Flexibility: Operational flexibility involves the company's ability to
2 adapt its operations to changes in the market or supply chain. Given the dynamic nature of the seafood industry and Neptune's current inventory issues, the chosen strategy should not overly constrain the company's ability to respond to future challenges or opportunities. 6. Sustainability and Compliance: In the seafood industry, sustainability and regulatory compliance are increasingly important. Neptune's strategy should align with sustainability standards and regulations to avoid potential penalties and to meet the growing consumer demand for responsibly sourced products. 7. Risk of Cannibalization: For Neptune, introducing a new brand or product line could potentially cannibalize the existing premium product sales. Evaluating this risk is crucial to ensure that the new strategy leads to net growth rather than merely shifting sales from one product to another within the same company. 8. Time to Market: This criterion assesses how quickly Neptune can implement the strategy and see tangible results. Given the urgency of the inventory surplus issue, a strategy that allows Neptune to act swiftly and effectively may be preferable. 2. Alternatives/Options: Option 1: Introduce a Low-Priced Seafood Brand Pros: 1. Market Expansion: Can tap into a new customer segment, increasing sales and market share. 2. Inventory Management: Helps quickly reduce excess inventory without immediate
3 price slashing of the premium brand. 3. Revenue Stream Diversification: Introduces a new revenue stream, potentially stabilizing income during market fluctuations. Cons: 1. Brand Dilution Risk: If not managed carefully, could dilute the premium image of Neptune's existing brand. 2. Operational Complexity: Requires new marketing strategies, packaging, and possibly changes in distribution channels. 3. Market Positioning Challenges: Navigating the premium and low-priced segments simultaneously can be challenging and might confuse customers if not clearly differentiated. Option 2: Supply Retailers with Private-Label Products Pros: 1. Risk Distribution: Spreads the risk by allowing retailers to take on branding and marketing. 2. Inventory Reduction: Provides an immediate outlet for excess inventory. 3. Low Marketing Costs: Neptune can avoid the costs associated with creating and promoting a new brand. Cons: 1. Low Control over Branding: Neptune has little control over how the product is marketed and priced, which could indirectly affect its premium brand. 2. Lower Profit Margins: Private-label products typically yield lower margins than
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help