Clean Edge Razor Case Study Analysis

 

Case Study

 –

Clean Edge Razor Section C

 –

Group 11

PGP 2011-13 Page 3

On Trade

- The retail margins associated with the razors is considerably higher and thereforewith a large number of new entrants the distributors are responding to the growth byincreasing their shelf space for the product category. Distribution is also reaching out from foodand drug stores (42%) to mass merchandisers (21%) and club stores (5%).

On Media Expenditure

- As per 2009 data the total media expenditure (excluding trade andconsumer promotion) is $103.6 m while this number is expected to reach $137.7 m in 2010, arise of 33% in a year.Looking at some of the prime

competitor’s

figures we get- Revenues for PRINCE are $224 m,operating profit $ 45 m, media expense $27.8 m in 2009 and expected $ 29.2 in 2010. For Benetand Klein the media expense is $35.2 m in 2009 and expected $36.8 m in 2010. For Paramountthe revenue for 2009 is $170 m, operating profit is $26 m and total media advertisementexpense is $ 44.3 m. Thus the immense competition has lead to over promotion and mediaexpenditure by the companies which is difficult to maintain given the operating profit margins.

POSITIONING:

Clean Edge’s improved desig

n provided superior performance. Within the super-premiumsegment, Clean Edge could be positioned either as Niche product focusing on high involvement,fastidious groomers looking for a superior shaving experience, or a mainstream productfocusing on the broad advantage of offering the closest possible shave. Each positioning has itsown pros and cons.

Niche positioning

:

Pros

:Positioning Clean Edge as niche will comp

lement company’s existing product portfolio perfectly.

From the exhibits, it’s visible that it will result in high and consistent profit margins for the

company and the risk involved will be less. Apart from that Niche positioning will require $15million in total marketing expenditures in the first year as opposed to $42 million in mainstream

Cons

:First of all it has a limited consumer base and secondly

the company’s current products Pro and

Avail had not introduced any innovations in the last five years. Pro is in the mature phase and

there’s a high probability of its sales declining soon. Therefore by launching in this segment

Paramount will lose their loyal customer base which is there with Pro and Avail.

Clean Edge Razor Case Analysis Essay

909 WordsOct 21st, 20114 Pages

Clean Edge Razor Case Analysis
Luiz Dantas
Marketing Management
Professor MaryJo Radosevich

Background/Situation
A group of executives from Paramount Health and Beauty Company (Paramount) sat in a research room intently observing a dozen men shaving on the other side of a two-way mirror. The subjects were testing out Paramount’s newest nondisposable razor, Clean Edge, and discussing the experience. The verdict was extremely encouraging. The majority of men felt it was the closest, cleanest, and smoothest shave they had encountered. All executives at Paramount agreed Clean Edge should be priced in the super-premium segment of the market. However, some executives believed Clean Edge should be launched as a mainstream entry…show more content…

Examine consumer behavior for nondisposable razors.
According to the article the razor market are segmented in three segments based on price and quality: value, moderate, and super-premium segment.
Examining the consumer behavior for nondisposable razors, we can observe that consumers are focusing on the premium segment. Also, they are becoming more sophisticated and expecting new technologies to smooth the shaving process. Focusing on that, Paramount should invest in the premium products category. Even though that would create cannibalism for the “pro-products” which is already loosing market.

3. What are the arguments for launching Clean Edge as (a) niche product, and (b) a mainstream brand? Which would you recommend? What are the strategic implications of your recommendations?
According to Randall’s analysis, to launch “Clean Edge” as a mainstream product would require significantly more market support. Mainstream razor unit volumes were expected to capture over three times niche volumes in the first year, and reaching the masses would require an extensive advertising campaign as we can observe on Exhibit 7. In other hand, launching as a “niche” positioning, would be a lot cheaper. Also, the company could use the market penetrance of the brand to help consumers buy the product.
I would recommend launch “Clean Edge” as a “niche” positioning. This would help paramount to become a revolutionary leader in non-disposable segment, focusing on highly

Show More

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *