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Submitted By shibhati
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OVERVIEW
Paramount Health and Beauty Company, a leading multiproduct company specializing in shaving products and accessories, is planning to launch a new non disposable razor “Clean Edge”. The company feels that this would be a revolutionary product Paramount needs to establish themselves as an innovative leader in the market. While the existing products by paramount come under the value and moderate product market segment, the company is planning to launch “Clean Edge” in the super premium segment.
The problem that they face right now is the decision on how to position “Clean Edge” (niche market or mainstream market) keeping in mind the position of existing products offered by Paramount, Branding and the marketing budget required to introduce the new product in the market.
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Calculation for deciding the positioning of CLEAN EDGE RAZOR | | | NICHE | MAINSTREAM | | | YEAR 1 | YEAR 2 | YEAR 1 | YEAR 2 | Calculation for Contribution of Razor | | | | | | Volume of Razor | Units | 1000000 | 1500000 | 3300000 | 4000000 | Sale price for the company | $ per unit | 9.09 | 9.09 | 7.83 | 7.83 | Production Cost | per unit | 5.00 | 5.00 | 4.74 | 4.74 | Total Sales of Razor | $ | 9,090,000.00 | 13,635,000.00 | 25,839,000.00 | 31,320,000.00 | Total Variable Cost | $ | 5,000,000.00 | 7,500,000.00 | 15,642,000.00 | 18,960,000.00 | Total Contribution (Razor) | $ | 4,090,000.00 | 6,135,000.00 | 10,197,000.00 | 12,360,000.00 | (Sales less variable cost) | | | | | | | | | | | | Calculation for Contribution of Cartiridge | | | | | | Volume of Cartridge | Units | 4000000 | 10000000 | 9900000 | 21900000 | Sale price for the company | $ per unit | 7.35 | 7.35 | 6.22 | 6.22 | Production Cost | per unit

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