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CASE STUDY: Clean Edge Razor: New Product Positioning On August 9, 2010, 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. Clean Edge’s improved design provided superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave1. Jackson Randall, product manager for Clean Edge, sat in the darkened observation room considering the positioning strategy for this new product. He had led the new product development process and was now grappling with how to position the product for the upcoming launch. 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 within that segment, with the broad appeal of being the most effective razor available on the market. Others felt a more differentiated niche strategy, targeting the most intensely involved super-premium consumers, would be optimal. Paramount had decided to launch this technologically advanced introduction into the women’s market following soon after. As Stuart Quimby, director of Paramount’s U.S. Grooming Division, left the observation room, he asked Randall to provide a recommendation to the executive steering committee by the end of the week for product positioning, brand name, and marketing budget allocations for the launch. The U.S. Razor Market Background The U.S. Razor market could be broken up into several categories, including nondisposable razors, refill cartridges, disposable razors, shaving cream, and depilatories. Clean Edge competed in the non-disposable razor and refill cartridge categories. Nondisposable razors experienced approximately 5% growth per year from 2007 to 2010, with refill cartridges capturing slightly less growth of approximately 2% per year over the same time period. Most of the growth in this market can be attributed to innovations and new product introductions. Market Segments and Consumer Behavior Currently, industry experts divided the non-disposable razor and refill cartridge market into three segments based on price and quality: value, moderate, and super-premium. In the last decade, the industry had experienced significant growth in the super-premium segment. Numerous product innovations in the super-premium segment (e.g., 5-blade technology, glide strips, lather bar, low resistance blade coating, etc.) fueled the growth.
Paramount would be the first company to provide scientific testing by a third-party lab to back these claims.
Paramount studies from 2009 showed that consumers purchased razors and replacement cartridges more frequently than they had in any year previously. Executives felt the replacement cycle had been shortened due to consumers trying out new products as well as advertising and sponsored articles that touted the benefits of frequent blade replacement. In addition to the traditional price/quality segments that industry experts tracked, Paramount’s consumer research indicated distinct segmentation in terms of product benefits and consumer behavior. Research showed these segments held true for both men and women. Exhibit 1 summarizes Paramount’s findings on these groups. The intensity of...