CASE ANALYSIS OF
CLEAN EDGE RAZOR
Case Analysis of Clean Edge Razor
Paramount Health and Beauty Company developed the Clean Edge Razor, a technologically advanced non disposable razor. The company now has to study and segment the market environment and find a suitable target to successfully position and launch their product.
General Market Profile
Products available in U.S. Razor market are non-disposable razors, refill cartridge, disposable razors, shaving cream, and depilatories. Non-disposable razors recorded average growth of about 5% in retail sales during the period 2007 to 2010 whereas refill cartridge and disposable razors recorded growth of approximately 2% and 3% respectively for the same period. Innovations and new product introductions are the prime factors for the growth. Non-disposable razors and refill cartridge market is broadly classified into three segments namely value, moderate and super premium based on price and quality. Paramount’s consumer research identified distinct segmentation in terms of product benefits and consumer behavior. 39% of non-disposable razor users are segmented as Involved Razor users, social/emotional shavers; 28% as Involved Razor users, aesthetic shavers and 33% as Uninvolved Razor users, maintenance shavers. Studies from 2009 showed that the retail sales of non-disposable razors and refill cartridge came from 25% volume of super-premium, 43% of moderate and 32% of value segments.
In the last decade, the industry has experienced significant growth in the super premium segment. Product innovation and new technology is leading this sector for a number of new entrants. In 2008-09 the rate of new product innovation leads to 22 new SKUs to be introduced. SWOT Analysis
Paramount Health and Beauty Company’s biggest strength is that it is a well-established brand with deep pockets and a very good association with consumers. The product- Clean Edge Razor, that they have released, is also the best technologically in the current market. Weaknesses
The company does not have a slice in the 37.2% of the pie that corresponds to the super premium segment which has immense potential. Also there is a risk of launching the product in the wrong segment or positioning it wrongly. A wrong move could result in cannibalization of Paramount Pro, another product in their portfolio.
There is very good growth in the super premium segment especially in men’s grooming. The market is also highly profitable so vendors are ready to stock the products. Also, the maintenance users are a market not ventured by any company till date. Hence the opportunities are immense.
A good number of competitors are trying to become the leader in this segment which is expected to grow in the future. The competitors could also catch up with the latest technology and release a technologically more advanced product. Also, a wrong execution would result in damage of the firm’s repute. The substitutes are also a major competition.
PORTER’S FIVE FORCE FRAMEWORK
Large number of
Large no. of
Easy to enter the
market no major costs
disposable and electric
There is large number of players already present in the premium segment hence there is high level of rivalry in the industry. Availability of alternatives like disposable and electric razors make a high threat of substitutes. Because of large number of products available and constant innovation in the sector it is very easy for the consumers to switch the companies. Hence, consumers have a high bargaining power. Entry...
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