...Arguments for launching Clean Edge as a niche product A primary of launching the Clean Edge as a niche product is that the company would incur a lot less cannibalization of its Pro and Avail product lines, which allowed Paramount to capture the unit-volume market-leader position in 2009. Though a cannibalization rate of 35% is expected with the launch of Clean Edge as a niche product, the rate is significantly lower than the 60% expected if Clean Edge was positioned as a mainstream brand. As Rosenberg indicated, a niche positioning strategy would be a better fit to the company’s existing product portfolio. Furthermore, the niche positioning strategy would incur considerably lower marketing expenses than the mainstream positioning strategy. Marketing expenses for the niche positioning strategy is $15 million for the first year and $16 million in the second year. The niche option is much lower compared to the expected marketing expenses for the mainstream option, which would cost $42 million in the first year and $39 million in the second year. A strong quantitative argument could be made for launching Clean Edge as a niche product because it would cost $50 million less in marketing expenses over the course of two years. Moreover, greater advertising expenditures for the mainstream launch may not be justifiable given the fact that the cost of advertising is increasing greater than the rate of retail sales dollars in the super-premium segment. The scenario analysis conducted...
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...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 products as well as for Clean Edge? 2. How is the nondisposable razor market segmented? Examine consumer behavior for nondisposable razors. Non-disposable razor has been experiencing 5% growth per year with refill cartridges growth of 2% per year. The market segments are super-premium (34%), moderate (44%) and value (22%).. The industry experienced a significant growth in super-premium in last decade. Recent studies showed that consumers purchased razors and replacement cartridges more frequently than before. Customers’ behaviors are maintenance shavers (33%), aesthetic shavers (28%) and social/emotional shavers (39%). Customers are moving to highly involved segments. In addition, the rate of new products introductions had accelerated with 22 SKUs introduced between 2008 and 2009. Paramount is a major player in the market. Main competitors are Prince, Benet & Klein and New entrants (Simpsons and Radiance). All of them played in super-premium segments. Paramount’s competitive edge is they are well known brand in the moderate and value segments. In addition, Clean Edge is the most innovative product, a product leader. No products can match it unless Navi which has similar functions offered by Radiance. However, Radiance is a new entrant which might not be able to complete with Paramount. The...
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...Summary – Clean Edge Razor: Splitting Hairs in Product Positioning Paramount Company developed a new non disposable razor called Clean Edge. The product was designed to provide superior performance by adding new technology to stimulate the facial hair, which allowed a more through shave. The question arose on how to market the new product. There was an overwhelming vote by the executives to have this product launched in the super-premium, for pricing reasons; however the question also aroused on which market it should be launched in like some believe it should be mainstream and others felt a niche market would be better. So the questions on hand are what the market positioning should be, brand name and marketing budget for the launch. The Market Choice Paramount conducted studies in 2009 showed there was an increase in razors and replacements more frequently than the year prior. Some felt that the reason for the increase was due to consumers trying new products, and advertisements that focused on benefits of blade replacements. Trends There was an increase in the non-disposable razors and refill cartridges, this increase was seen between 2008 and 2009. Twenty-two new products entered the market, with most of the new products being super-premium with benefit technology. There was an increase in total media advertising and retail also responded to this growth by increasing the shelf space. There was a shift from the food retail stores dominating the selling of...
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...occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge? The non-disposable razor category has seen changes in the recent years. * Advertising expenditures increased significantly for newer and smaller players to grab the market share whereas established players did not increase it significantly. * Male grooming product seemed to be a bright spot in the industry with the advent of male-specific personal care products that outpaced the growth in women’s beauty market * 5% growth per year from 2007 to 2010, attributed to innovations and product introductions. * Diversified as better margin derived from the product brought in retailers in the form of club stores and other stores. Competitive Position: * Global Consumer Product Giant with over $13 billion in worldwide sales and $7 billion in gross profits for 2009 since its entry into the market in 1962 * Respected brand in non-disposable razor market. * 23.3% market share by volume of overall non-disposable razor unit and market leader in moderate non-disposable razor unit both by volume and dollar. * New players with technologically improved products posing a threat to Paramount. Strategic Life Cycle Challenges: Clean Edge Razor – based on superior technology and 5 blade design would give enormous boost in sales provided the product does not cannibalize the existing non-disposable razor segment...
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...Group Case Study Case: Clean Edge Razor Three main parts: Case Discussion Questions 1. What changes are occurring in the nondisposable razor category? Assess Paramount’s competitive position. What are the life cycle challenges for Paramount’s current products as well as for Clean Edge? 2. How is the nondisposable razor market segmented? Examine consumer behavior for nondisposable razors. 3. Marketing problems or key managerial decisions to be made What are the arguments for launching Clean Edge as (a) a niche product and (b) a mainstream product? Which would you recommend, and why? Based on your positioning strategy, what brand name would you advise, and why? Analysis and evaluation of critical issues Recommendations with supports 1 How to analyze a case? 1.2.3 – analysis (50%); 3 – recommendations (40%); writing (10%) 2 How to write a report? Define the problems or main issues Introduction Identify what are the main issues presenting in the case. Mark or list out the most important information that would help you to define the problems or address the case discussion questions. Briefly describe an overview of the case and identify the key issue(s) underlying in the case study. Address the case discuss questions and/or generate possible solutions Once you have a full picture of the issues raised in the case, you can address the issues by mainly using the case information, theories and 3 methods, and...
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...After three years of development, Paramount Health and Beauty Company is preparing to launch a new technologically advanced vibrating razor called Clean Edge. The innovative new design of Clean Edge provides superior performance by stimulating the hair follicles to lift the hair from the skin, allowing for a closer shave. The company has already decided to introduce Clean Edge into the men's market where it has a strong presence. Jackson Randall, the product manager for Clean Edge, struggles with how best to position the product for the launch. One strategy is to release Clean Edge as a "niche" product, targeting the high-end market of fastidious groomers looking for superior skin care products. Another strategy is to release the product into the highly competitive mainstream razor market where the product can be positioned as the most effective razor available. Randall meets internal resistance to the mainstream strategy from the product manager for the company's current, but aging, mainstream razor products and he must consider the effects of cannibalization in his plan. Randall must recommend an optimal strategy and provide supporting economic analysis of his decision--not just for Clean Edge, but for its effect on the entire company. Learning Objective Explore issues associated with strategic product positioning. Review new product development process and understand the importance of evaluating product-company and product-market fit in assessing new product opportunities...
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...General Information Product related information | Geographic segmentation | Country | United Kingdom is a developed country and has the world's sixth-largest economy by nominal GDP. The UK remains a great power with considerable economic, cultural, military, scientific and political influence internationally. Population UK:63,182,000 | The United Kingdom is a major consumer, but only a very minor producer of wine, with English and Welsh wine sales combined accounting for just 1% of the domestic market.Uk owns many chic and exclusive restaurants. London for example, is regarded as one of the world´s best dinning places with restautants as Dinner by Heston Blumenthal, The Ledbury and Galvin at Windows. | Demographic segmentation | | Gender Education Religion | Male, female Grand school, High school, College graduate, University. 59,28 percent is Christian; 25,14 percent no religion; 4,83 percent Muslim | More female are consuming wine comparing to male, that shows the statistics of the UK market. 80 percent of woman and 45 percent of man drinks wine in restaurants. Only higher graduated people can afford themselves to be able to taste this wine, because of the expensiveness of the wine and the exclusive restaurants who will serve the wine. The majority in UK is christian, and second majority has no religion, that means that it will have no impact on the sales of the wine in the restaurants | Psychographic...
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...Kara Duygu The 5th March 2012 000316596 Case study 3 : Ebay’s strategy in China : Alliance or acquisition ? 1. Ebay acquired EachNet in order to expand itself in the Chinese market. The acquisition proved to be a success and the market share increased a lot. In order to capture users, the company formed alliances with the top 3 Chinese internet portals (Sina, Sohu and NetEase). However, eBay EachNet soon faced the obstacle of increasing competition from local market rivals. The company did not escape the fate of seeing its market position encroached by domestic competitors (the most significant was TaoBao). In fact, Chinese consumers preferred to buy from big-named, foreign companies which had a long-established presence in China and tended to hold those that were new in distrust. The key word is the trust because it was particularly important in China, due to the lack of an adequate legal system. The problem was that eBay, as a foreign company in 1995 with less than 10 years of history when it first set foot in the Chinese market in 2002, was fairly new to Chinese consumers. Regarding the trust, the fact that Chinese consumers felt that eBay EachNet had not made much effort in building trust both towards the company itself and between buyers and sellers further exacerbated the problem. When eBay entered China, it did not incorporate an escrow into its online payment system (Paypal) while TaoBao made it an important component of its AliPay system. An...
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...Randall should use the “niche market” positioning concept. As the case points out, both “niche” and “mainstream” strategy will help Paramount to raise its market share in super-premium non disposable razor segment. But the “niche” strategy will enables Clean Edge Razor to contribute profit and at the same time, limit the effect of cannibalizing Paramount’s existing products. Two reasons Randall should use the strategy are presented below: • After quantitative analysis, from Exhibit 7 we see the total estimated profit generated by mainstream strategy in Year 1 & 2 is $64 million, bigger than $46.6 million generated by niche market strategy. However, because Paramount only have the budget totaled $48.3 million on advertising and promotions in 2010, it means if Randall requires $42 million to use mainstream strategy to promote Clean Edge Razor, the expense will account for 87% of the company’s annually marketing budget, which will definitely squeeze the budget of Paramount’s other cash cow products, and thus cause the tremendously potential risks on other product’s competitiveness in Moderate and value market. • Secondly, after deducting the cannibalization effect, the profit come from “Paramount’s new customers” who buy Clean Edge Razor under niche strategy scenario in Year 1& 2 is $30.3 million, bigger than $25.6 million under mainstream strategy scenario. In other words, although the sales volume is evidently large by using mainstream strategy which William Kim suggests, Paramount...
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...million in gross profit, with operating profit of $26 million. Paramount has two disposable razor products, the Paramount Pro, placed in the moderate segment of the product market and the Paramount Avail, a value offering in the market. The two combined make up 23.3% of the company’s share of the industry. Additionally, the shaving market is divided into three categories of “shavers”, each with unique needs from their razor. These are: maintenance shavers, social/emotional and aesthetic shavers. Recently, Paramount developed a new non-disposable razor, Clean Edge. With a new design, the Clean Edge offers scientifically proven, superior performance as it utilizes a vibrating technology to stimulate hair follicles and lift hair from the skin, which allows for a more thorough shave. Paramount is now faced with two options in introducing the Clean Edge razor in the market. With its innovative new features, Clean Edge will be priced in the “super premium” segment of the market. Competitor Overview Paramount’s competition consists of both direct competitors as well as substitute products. Substitute products include disposable razors, electric shavers, depilatory creams, waxing and laser hair removal. While disposable razors provide a “wet” shave alternative, they lack the innovation and technology that are standard for non-disposable razors produced by Paramount and its direct competitors. As a result, disposable razors mainly compete on...
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...RazorClean Edge by Paramount Product Marketing Plan Jennifer Chiang A p r i l , 2 0 1 4 Table of Content 1. Situational Analysis…….……………………………...…………3 2. SWOT Analysis…………………………………………….……..6 3. Strategic Marketing Plan Recommendations……..……..……..7 4. Strategic Communication Plan Recommendations…...………..9 5. Marketing Budget Allocation Recommendations…………….12 2 This product marketing plan proposal has been prepared in accordance with Paramount for deciding the market position and designing marketing strategies for the newest nondisposable razor— Clean Edge, which is scheduled to launch in January 2011. To provide precise marketing and advertising advice, this report begins with a summary elaborating on the components regarding the current situation of Paramount and current U.S. razors market analysis. This report will then assess competitors positioning, cannibalization possibilities, and current target customer behaviors, and concludes with suggested product positioning, branding and communication strategies and budget allocation proposals. 1. Situational Analysis: Company Overview: Paramount, a global consumer products company, including Health, Cleaning, Beauty, and Grooming divisions, had its worldwide sales $13 billion and gross profits $7 billion in 2009. Paramount has been producing nondisposable razors since 1962 and become a leading...
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...Case Brief #1 : Clean Edge Razor October 29, 2013 1. Problem Statement: Paramount Health and Beauty Company having difficulty to choose position their new product (Clean Edge) in the market. 2. Situation Analysis: Company (Paramount Health and Beauty Company) * Paramount is a respected brand in the industry since 1962 * Paramount offered two lines of nondisposable razors and refill cartridges. The Paramount Pro for moderate segment and the Paramount Avail for a value offering * Paramount is ready to launch newest nondisposable razor, Clean Edge * Clean Edge is improved by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin * Paramount would be the first company to provide scientific testing by a third-party lab * Jackson Randall, the product manager for Clean Edge, is considering the position strategy for Clean Edge Collaborators * Food stores is important partner to support the sales. In 2000, food stores sold over half of all razors. * Drug stores, mass merchandisers, club stores and other stores also partners with Paramount. Customers * Male specific grooming products seemed to be a bright spot in the industry * Electric shavers generally appealed to older consumers * Women’s market Competitors * Prince Prince had been a market leader in nondisposable razors since the 1950s and held the number one position in terms of retail dollar sales in 2009. * Benet &...
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...Table of Contents 1.0 Introduction 2 2.0 Case Summary 3 3.0 Case Analysis 5 3.1 SWOT Analysis 5 3.2 Industry Environment Analysis 7 3.3 Product Analysis through the Marketing Mix 11 4.0 Scenario Analysis 13 5.0 Recommendations 15 5.1 Costing and Budget Analysis 15 5.2 Product Positioning 18 5.3 Brand Name Selection 20 5.4 Contingency Plan 21 6.0 Conclusion 23 1.0 Introduction Paramount Health and Beauty Company (Paramount), a leading name in consumer’s Health, Cleaning, Beauty and Grooming, is all set to launch a new non-disposable razor with cutting edge technology aims to improve men’s shaving experience. Developed after a thorough research & development, the design is technologically superior, and provides superior performance by the use of a vibrating technology. Being the market leader in the non-disposable razor market segment, the launch is expected to propel Paramount into extending the market leadership. The issue at hand is the decision regarding this product positioning, either to market it as a niche product targeting highly involved fastidious groomers looking for superior shaving experience or as a main stream positioning focusing on the broad advantage of the closet possible shave. The case study leverage on the economic analysis, where a simple pro forma income statement that took into account the effects of cannibalization were produced, coupled with consideration from various marketing methodology including...
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...MEMO To: Dr. Marlys Mason From: Alyssa Cortez Data: October 5, 2014 Re: Clean Edge Razor-Splitting Hairs in Product Positioning Background Since 1962 Paramount has been regarded worldwide as a respectable and well run company. With major competitors such as: Prince (Cogent and Cogent Plus), Benet (Vitric), The Tempest and The Naiv, it is extremely impressive that they continue to improve within the market. After $13 billion in global sales and over $7 million in profit in 2009 alone, Paramount Health and Beauty Company began working on what they believed to be their golden goose. SWOT Analysis Paramount is a strong brand that has established a positive association and trust with its consumers. The Company also has the funds to afford over $19 million/year in advertising spending. They provide the most technologically advanced product in the market. Currently, in the razor market, there is no other product that compares. Unfortunately, Paramount has their fair share of weaknesses as well. Launching the Clean Edge razor in the wrong segment could potentially decimate the whole company. Another weakness of Paramount is that they don’t hold a position in the super premium segment of the mainstream market, which accounts for 37.2% of the total non-disposable razor market. As far as future growth goes, Paramount has plenty of opportunities. They are already growing and have plenty of room to advance further in this super premium market. Another...
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...Clean Edge Razor In August 2010, Paramount Health and Beauty Company (Paramount) was faced with a difficult dilemma. Paramount was a global consumer products company which focused their products around health, cleaning, beauty, and grooming. Paramount had spent considerable time and investment into a cutting edge non-disposable razor that was touted to provide the “closest, cleanest, and smoothest shave people had encountered.” Their dilemma was into which part of the non-disposable market they should introduce their “superior” razor into. As we evaluate the environment in which Clean Edge will compete, we identified five key issues to analyze. The issues include new entrants into the market, Radiance’s new razor, the economy, distribution channels, and increased marketing costs. After analyzing these issues, the introduction of the new razor and the increased marketing costs would pose the greatest risk to Clean Edge. Both of the issues have a high impact and high immediacy for Paramount. The new razor that is entering the market has similar technologies that will cause a higher impact for Paramount than any of the other issues. The emerging new entrants into the market, the economy, and the changing distribution channels all have a low impact but high immediacy for Paramount. The changing distribution channels are occurring because of changes in the industry and the increased availability of all the products in this submarket. The products are now being offered at more...
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