As per the context of the case study, we have come up with three possible actions that can be taken in order to meet the excess inventory problem are geographical expansion and increasing the market size by covering the untapped market in South and Central parts of America or making an internal agreement with a small manufacturing company that imports raw fishes and produces fish allied products such as fish oil, fish sauce, etc. Else we can launch a ‘Limited Edition Product’ by increasing the quantity per package at the existing price and providing exciting offers.
The underlying cause of excess inventory in Neptune Gourmet Seafood is due to limited target market size. Neptune has to identify areas that are isolated from its product and enter new geographic markets. The current supply to restaurants within 250 miles of Fort Lauderdale may be increased to 500 miles and cover more markets in Central and Southern America by setting up agencies and exporting the products. As Neptune already has shipping equipment, the transportation and extra transaction costs incurred is nominal. Geographical expansion will need high initial capital investment such as advertising and obtaining the Federal State permissions and licenses is an uphill task. Although it takes a longer
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Therefore the best alternative to reduce the excess inventory is to launch a ‘Limited Edition Campaign’ in which the excess inventory can be cleared in a short span of time as compared to the other alternatives. The cost incurred in expansion or acquisition is relatively higher than the cost incurred in launching this campaign, by doing this the customer base would increase naturally for Neptune’s seafood products. The demand can be met by the available excess inventory without reducing the price or eroding the brand image of the