1. What changes are occurring in the non-disposable razor category?
The non-disposable razor category has experienced tremendous growth in recent years, boasting a steady 5% growth per year from 2007 to 2010. This growth can be attributed to introduction of new innovative products; 22 between 2008 and 2009. There is increased competition for shelf space, which was forcing distribution to shift outside traditional food and drug stores. In 2000, food stores sold over half of all razors, but by 2009 they represented only 42% of sales.
As a result of the rising product introduction, the non-disposable razor category also experienced rising advertising expenditures. Between 2009 and 2010, advertising expenditures increased by 39%; faster than overall sales which only saw a 5% increase. Due to the heavy emphasis on advertisement, consumers in this category have become well informed making it easier for consumers, shavers to switch across brand in order to evaluate new products. There is an increasing shift towards super premium products especially among “involved” shavers.
There has also been a shift in men’s grooming routine’s which now went beyond “shaving and after shave” to other products like body spray, fragranced shower gel, and skin care line. Male-specific personal care products have outpaced the growth in the women’s beauty market as these products have become more mainstream. This trend is due to more media attention on grooming issues and also a reduction in stigma associated with men’s preening.
Assess Paramount’s competitive position.
Paramount entered the non-disposable razor market in 1962 to become one of the leaders in the industry. This is evident from the fact that paramount has maintained the unit-volume market-leader position for 2 years straight boasting a 23.3% share in 2009 and 22.2% in 2010. However, Paramount’s operating profits are lagging behind that of one it’s closest competitors Prince which has maintained the unit –sales market leader position since 2009 with a 2009 operating profit of $45 million compared to paramount’s $26 million. This may due in part to the fact that Paramount currently has no products in the super-premium category. In addition, paramount has not had any product innovations for the past 5 years. This is concerning especially since their products are either in the mature or declining phase of their products life cycle. What are the strategic life cycle challenges for paramount’s current products as well as for Clean Edge? Paramount’s current products are either in the mature or declining phase of their product life cycle; paramount is faced with the challenge of stimulating sales at this phase. Replacement cycles have been reduced this coupled with the heavy advertisement in this market category means that there is an increased chance for consumers to switch to other products. In addition, introducing a product especially if it is in the same product category as the existing products can have a big effect as a result of cannibalization. On the other hand, Clean Edge poses the challenge of positioning; the product will need to be positioned in such a way as to minimize the effect of cannibalization and maximize market share. Furthermore, since Clean Edge is in it is early stages it is going to face competition from existing products with similar capabilities.
2. How is the nondisposable razor market segmented? Discuss consumer behavior for non-disposable razors? The market is segmented into value, moderate, and super-premium on the basis of price and quality. In addition to the traditional price/quality segments there is also a distinct segmentation in terms of product benefits and consumer behavior. The non-disposable razor market is segmented into 3 categories: Involved users (social/emotional shavers) who differentiate among products in terms of functionality and messaging; this type of shavers accounted for...