Clean Edge Razor Case

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Problem Statement:
Paramount has become a market leader in global consumer products; but knows that innovation is vital to continue success. Paramount has used technology to create an innovative razor, but wants to make sure that it is positioned effectively.

Situation Analysis:
* Customers: Male consumer products have been trending upward in the last decade. The customer segments are broken up into three areas; social/emotional, involved razor users, and uninvolved or maintenance users. Social/emotional are responsible for 39% of Nondisposable razors, Involved is for 28%, and maintenance users account for 33%. In 2009 consumers razors and replacement cartridges at a higher rate than ever before. * Competitors: Competition includes direct competition as well as substitutes for Nondisposable razors. In 2010 the three major players were Paramount, Prince, and Benet & Klein (B&K). Prince mainly focuses on super-premium products. B&K entered the Nondisposable market in 1985. There are also new entrants which account for the rest of the market. In 2010 Paramount is expected to have a 21.4% dollar market share. * Company: Paramount is a large consumer products company with $7 billion in gross profit in 2009. The current Nondisposable razor line has products in both the market and value customer segments. The Clean Edge Razor is the first Nondisposable razor produced by Paramount that has a technological innovation. Paramount is relying on the Clean Edge Razor to increase sales and earn more market share in the Nondisposable razor category. * Context: In 2011 the effects of a recession are becoming less drastic than in years before. Customers have more disposable income and companies have more money to spend on investments such as media/advertising and R&D. * Collaborators (retailers): In 2009 food stores represented 42% of all razors and cartridges. Other distributors include drug stores, mass merchandisers, club stores, and other distributors. As SKU’s increase, shelf space is increased to accommodate for all of the different products. Distributors are willing to increase shelf space because the margin on razors is high compared to other consumer products.

Alternatives:
Position the Clean Edge Razor as a niche product for highly involved groomers looking for a superior shaving experience. Pros
* Less cannibalization. Social shavers right now aren’t interested in the Pro or Avail razor. * Paramount is concerned with the overall profitability of all the razor lines. By positioning the Clean Edge Razor as a niche product, the brand equity of Pro and Avail won’t be as affected as if the Clean Edge Razor was positioned as mainstream. The current customer segment for emotional shavers is 39%. With over 1/3 of the customer segment involved with emotional razor purchases there is a decent sized market that could use the benefits of the Clean Edge Razor. * The net operating profit based on financial analysis is higher than the mainstream positioning strategy. There are advantages of positioning the as a niche product.

Advantages
* One advantage is that customers will be more involved, so they will take the time to research the product. After the consumer investigates the Clean Edge Razor, he will be able to tell that there is a clear advantage and the Clean Edge Razor is the best option. * Another possible advantage could be that Paramount could increase the size of the social/emotional market.

Cons
* Clean Edge Razor is losing out on potential sales because the market is much smaller. * Another con is the negative brand awareness. Even if Paramount created the greatest razor of all time, the brand wouldn’t become stronger because only people who know about razors would know that Paramount is making technological innovations. Through a niche market Paramount would need to rely on their other razors to remain relevant to the mass market. This could prove to...
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