Clean Edge Razor Case Study

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Clean Edge Razor

MKTG600, Section 233
10/18/2012

Brief case study analysis of Paramount’s newly designed Clean Edge razor

Table of Contents

INTRODUCTION2
PROBLEM STATEMENTS2
RECOMMENDATIONS & CONCLUSIONS3
RATIONALE & ANALYSIS4
APPENDIX & ATTACHMENTS6
Exhibit A: Select Non-disposable Razor Brand Prices6
Exhibit B: Non-Disposable Razor Unit & Dollar Market Share by Brand: 2007-2010E6
Exhibit C: Financial Forecasts: Alternative Positioning Scenarios for Clean Edge7
Exhibit D: Profit and Loss7
BIBLIOGRAPHY9

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INTRODUCTION

Paramount Health and Beauty Company is set to launch a new non-disposable razor, Clean Edge, utilizing a vibration technology to improve men’s shaving experience. The new product is to be launched in the super-premium segment, which will mark the first time Paramount has played in this segment. Jackson Randall, product manager for Clean Edge, must decide on his product positioning strategy. By gathering information on past and future market trends, competitors, branding, and available marketing budget, this paper will provide recommendations and corresponding rationale to problems that Randall is facing. -------------------------------------------------

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PROBLEM STATEMENTS

This section will briefly present four noteworthy problems of the case, while indicating the root causes and providing the reasons they are significant.

1) One major problem that Paramount faces in marketing their Clean Edge Razor surrounds the method in which the company chooses to position the new product. Should Paramount decide to launch the new razor as a mainstream entry, versus marketing as a more differentiated niche strategy, they will likely cannibalize their existing core products, Pro and Avail. These core products are both marketed as a mainstream position and have continuously proven to be top performers in that category. Choosing the mainstream strategy will likely detract from the brand power of the company’s existing “bread-and-butter” razors. 2) While Paramount faces cuts in excessive marketing expenses, the introduction of Clean Edge into mainstream would reallocate nearly three times as much of the fixed marketing budget away from Pro and Avail. This problem is significant because it would greatly weaken their core product’s marketing power. 3) Another potential problem is the consumer impact if Clean Edge is launched as a mainstream product versus a niche product. The consumers and their perception when Clean Edge comes to the marketplace will make a difference to the overall sales performance of the product. It is the consumer who ultimately determines the success of a product. 4) Paramount is up against fierce competition in their current Moderate and Value markets, and are losing market share without a super-premium product. New entrants were coming to market with super-premium products, technology and greater advertising dollars to gain market share. Radiance Naiv, a close competitor of Paramount, has already acquired 13% market share in test markets. Paramount has to launch a new technology in the super-premium segment to regain market share and continue to exist as a global leader in this category.

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RECOMMENDATIONS & CONCLUSIONS

Expanding on each of the problem statements, this section offers recommendations and expected outcomes to help Randall decide on Clean Edge’s positioning strategy.

1) Randall should launch the Clean Edge Razor as a niche product for a year or two before he considers taking it mainstream, and should center marketing efforts on attracting a new consumer base to minimize cannibalization. As another method to attract more new consumers under niche market strategy, Randall should use the name...
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