Marketing - Positioning Your Brand

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Clean Edge Razor
Splitting Hairs in Product Positioning

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Index
1. Synopsis ……………………………………………………………………………………………….. 3 2. Situation Analysis…………………………………………………………………………………. 3

3. Alternative Evaluation………………………………………………………………………….. 4

4. Position Strategy, with explanation……………………………………………………… 5

5. Marketing mix………………………………………………………………………………………. 6

6. Expected Outcomes……………………………………………………………………………… 8

7. Appendices…………………………………………………………………………………………… 9 - 22

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Synopsis: Based on the financial analysis as shown in the Exhibits 1-9 and taking into account the effects of cannibalization on Paramount Pro and Avail, I recommend Paramount to adopt the niche positioning strategy. This strategy would (as per the financial analysis) result in high and consistent profit margins for the company and the risk involved would be lesser than that involved in case of the mainstream positioning strategy. With the launch of Paramount Clean Edge in the super-premium segment, Paramount will introduce a completely new and innovative technology in the US razor market at an initially higher price. Looking at the level of competency in the market, it can be understood that Paramount will eventually face strong competition down the line as this new technology will be cloned by its competitors too and thus, this factor will not stay as the Paramount Clean Edge’s core competency for too long. Thus, after one or two years when this new feature becomes relatively common and there is increased competition in the market, Paramount can then accordingly set the pricing and placement of its product in order to match the new market trends.

Situation Analysis: Paramount Health & Beauty Company (Paramount) has come up with their latest and so far the most innovative and effective shaving razor, the Clean Edge. The test results declared, guarantee great satisfaction for consumers. The senior executives have already decided that Clean Edge would be priced in the super-premium segment and its launch would occur in January 2011. Now with this decision finalized, the next challenge that the product manager at Paramount, Jackson Randall faces is to determine the best course of action for Clean Edge i.e. in terms of positioning the brand either as niche or a mainstream product.

Market Analysis: The US razor market can be categorized into several categories such as non-disposable razors, refill cartridges, disposable razors, shaving cream and depilatories. Paramount’s latest product, Clean Edge would be competing in the non-disposable razors and refill cartridges category. Ever since 2007, the retail sales of the non-disposable razors have experienced an annual growth rate of 5%, while the retail sales of refill cartridges have had a growth of 2% annually. Also the non-disposable razor and refill cartridge market is further divided into three segments based on the price and quality of the product, namely value, moderate and super-premium. The super-premium segment has over the last decade witnessed a significant growth. Meaning that more consumers are buying these products which are at a comparatively higher price and provide better quality experience to the consumers. However, the maximum market share is still owned by the moderate segment having 43% of the retail sales volume and 44% of the dollar retail sales, followed by the value segment having 32% and the super-premium segment which possesses 25% of the market’s retail sales volume.

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Consumer Analysis: Paramount studies show that post 2009 the consumers have purchased the non-disposable razors and the refill cartridges more frequently than they have had in any other year. This increased consumer buying and the consumer’s desire for trying out new products has eventually lead to a shortened replacement cycle. These consumers have been basically divided into three different labels by Paramount, namely Maintenance Shaver – ones who shave but are completely disinterested in the...
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