Clean Edge Razor Essay
Clean Edge Razor
Haifeng Chen
1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life cycle challenges for Paramount’s current product as well as for Clean Edge?
The rate of new-product introductions for non-disposable razors and refill cartridges had accelerated in recent years, with an unprecedented flurry of 22 new stock-keeping units being introduced between 2008 and 2009. Most of these new SKUs were line extensions targeted at the super-premium segment and promoted benefits from advances in technology. Because of the new product introductions and in order to simulate demand, total media advertising expenditures in this category had been rising faster than retail market sales, and this trend was expected to continue. And the …show more content…
The strategy will dilute the brand power for the Pro so as to lead to the unwanted cannibalization. Otherwise, launching Clean Edge would complement the existing product portfolio so that expand the product line.
If launching it as mainstream product, the reasons are that the consumers are becoming more sophisticated and expect more advanced technology. Positioning Clean Edge as a mainstream product will help prevent loyal Paramount customers from being wooed away to more innovative brands.
My recommendation is based on the initial financial forecasts for both options and the ROI. The Exhibit 7 indicates that the total cost of launching niche first year is 1*5+4*2.43+15+0.61=30.33m, the revenue is 9.09*1+7.35*4=38.49m. The ROI would be 38.49-30.33/30.33*100%=27%.
The total cost of launching mainstream is 3.3*4.74+9.9*2.24+42+1.71=81.528m, the revenue is 3.3*7.83+9.9*6.22=87.417m. The ROI would be
Haifeng Chen
1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life cycle challenges for Paramount’s current product as well as for Clean Edge?
The rate of new-product introductions for non-disposable razors and refill cartridges had accelerated in recent years, with an unprecedented flurry of 22 new stock-keeping units being introduced between 2008 and 2009. Most of these new SKUs were line extensions targeted at the super-premium segment and promoted benefits from advances in technology. Because of the new product introductions and in order to simulate demand, total media advertising expenditures in this category had been rising faster than retail market sales, and this trend was expected to continue. And the …show more content…
The strategy will dilute the brand power for the Pro so as to lead to the unwanted cannibalization. Otherwise, launching Clean Edge would complement the existing product portfolio so that expand the product line.
If launching it as mainstream product, the reasons are that the consumers are becoming more sophisticated and expect more advanced technology. Positioning Clean Edge as a mainstream product will help prevent loyal Paramount customers from being wooed away to more innovative brands.
My recommendation is based on the initial financial forecasts for both options and the ROI. The Exhibit 7 indicates that the total cost of launching niche first year is 1*5+4*2.43+15+0.61=30.33m, the revenue is 9.09*1+7.35*4=38.49m. The ROI would be 38.49-30.33/30.33*100%=27%.
The total cost of launching mainstream is 3.3*4.74+9.9*2.24+42+1.71=81.528m, the revenue is 3.3*7.83+9.9*6.22=87.417m. The ROI would be