Class--or Mass? (HBR Case Study)

Jim Hargrove, the marketing director of $820 million Neptune Gourmet Seafood, is having a bad week. Neptune is the most upmarket player in the $20 billion industry, and the company is doing everything it can to preserve its premium image among customers. But Neptune's recent investment in state-of-the-art freezer trawlers, along with new fishing regulations, is resulting in catches that are bigger than ever. Though demand is at an all-time high, the company is saddled with excess inventory--and there's no relief in sight. Neptune's sales head, Rita Sanchez, has come up with two strategies that Hargrove feels would destroy the company's premium image: cut prices or launch a new mass-market brand. Not many executives in the company are in favor of cutting prices, but it's clear that Sanchez is gaining ground in her bid to launch a low-priced brand. Reputation worries aside, Hargrove fears that an inexpensive brand would cannibalize the company's premium line and antagonize the powerful association of seafood processors. How can he get others to see the danger, too? Commenting on this fictional case study in R0504A and R0504Z are Dan Schulman, the CEO of Virgin Mobile USA, a wireless voice and data services provider; Dipak C. Jain, a professor of marketing and the dean of the Kellogg School of Management at Northwestern University; Oscar de la Renta, chairman, and Alexander L. Bolen, CEO, of Oscar de la Renta Ltd., the New York-based luxury goods manufacturer; and Thomas T. Nagle, the chairman of the Strategic Pricing Group, a Massachusetts-based management consultancy that specializes in pricing.

• Marketing strategy
• Risk management
• Brand management
• Inventory management