CLEAN EDGE RAZOR:SPLITTING HAIRS IN PRODUCT POSITIONING

GROUP 14

THE GENERAL FRAMEWORK OF OUR BUSINESS CASE DETERMINING PROBLEMS: 1.WE HAVE 2 SCENARIOS:MAINSTREAM POSITIONING & NICHE POSITIONING 2.CHOOSE THE MOST RELEVANT BRAND NAME 3.PREDICT BUDGET ALLOCATION & PRIVATE MARKET SHARE

ELIMINATION OF THE 2ND SCENARIO

LETS COMPARE FINANCIAL FORECASTS OF 2 SCENARIOS BASED ON EXHIBIT 7
MAINSTREAM
YEAR 1 SUGGESTE 123 D PRICE MANUFAC TURED PRICE PRODUCT COST GROSS PROFIT OVERALL GROSS PROFIT 84 YEAR 2 242 164

NICHE
YEAR 1 53 37 YEAR 2 130 79

35 7 44

64 61 98

13 9 69

25 38 101

COMPARE THE SUGGESTED PRICE (IN MAINSTREAM POSITIONING) WITH COMPETITORS

RAZOR SUPER-PREMIUM COGENT PLUS $12.50 $10.00 STANDARD REFILL CARTRIDGES

COGENT CLEAN EDGE

NAIV

$11.19 $11.19
$11.80

$8.89 $8.89
$9.15

SDS

IN YEAR 1 OVERALL GROSS PROFIT FOR NICHE POSTIONING IS MUCH MORE THAN MAINSTREAM POSITIONING (69>44) IN YEAR 2 THERE IS A LITTLE DIFFERENCE AMONG INDICATORS THE CONS OF MAINSTREAM POSITIONING 1. THE CANNIBALIZATION OF EXISTING PRODUCTS IS VERY HIGH(60%) 2. THE COST FOR MARKET PROMOTION IS VERY HIGH($ 42 MLN) 3. THERE IS NOT CONCRET TARGET SEGMENT, SO IT IS VERY HARD TO MEET , ANALYSE, DETERMINE THEIR PREFERENCES,AND TO FIND OUT THE MOST RELEVANT BRAND NAME)

RESULT: WE PREFERED NICHE POSITIONING

LETS BEGIN TO CONSTRUCT STRATEGY FOR NICHE POSITIONING TARGETING THE MOST APPROPRIATE SEGMENTS
SOCIALEMOTIONAL SHAVERS AESTHETIC SHAVERS
28%

33%

39%

MAINTENAN CE SHAVERS

WE CHOSE 2 SEGMENTS: SOCIAL-EMOTIONAL &AESTHETIC SHAVERSOUR TARGETED SEGMENT IS 67%

OUR COMPETITORS AND PREDICTED PRIVATE SHARE IN THE MARKET
Market leader since 1950s, 224 mln $ revenue, 45 mln $ operating profit

PRINCE

23 % of market share

OTHER

B&K

Brend: Vitric, 23,2 % of market share

PARAMOUNT

Brend: Tempest 5,7 % of market share

SIMPSONS

RADIANCE

Brend: Naiv, 2,6 % of market share

PRIVATE SHARES FOR YEAR1 & YEAR2 (WITH $(%))

30%

20% PARAMOUNT PRINCE B&K RADIANCE SIMPSONS OTHER

10%

0% CURRENT YEAR YEAR1 YEAR2

BREND CONSTRUCTION
BREND POSITIONING

CHARACTERS OF CLEAN EDGE:VIBRATING,ULTRATHIN, 5 BLADE RAZOR

SOUGHT VALUE:A LARGER ,HEAVIER HANDLE FOR A BETTER BALANCE ,GRIP & CONTROL VIBRATION FOR STIMULATE HAIR FOLLICLES, 25% INCREASE IN HAIR REMOVAL

TRUST&COMMON VALUE:MAKES MEN&WOMAN CLEARER & MORE ATTRACTIVE

THE FOLLOWINGS HAVE TO BE TAKEN INTO ACCOUNT IN CHOOSING BREND NAME

THE BREND HAS TO CREATE THE FIRST OPINIONS ABOUT THE QUALITY & UTILITY OF THE PRODUCT IN CONSUMERS
THE NAME OF THE BREND HAS TO BE PRONOUNCED & MEMORIZED EASILY

THE BREND NAME HAS TO BE DIFFERENTIATED

THE BREND NAME HAS TO BE TRANSLATED INTO FOREIGN LANGUAGES EASILY

THE BREND HAS TO BE REGISTRED & HAS TO BE BASED ON LAW

WE HAVE 3 ALTERNATIVES OF THE BREND NAME

ADVERTISING & PROMOTION

YEAR 1:
THE AMOUNT OF MONEY PLANNED TO SPEND($) IN MILLIONS

$15
$33,3 FOR THE NEW PRODUCT FOR PRO&AVAIL

SOME BASIC HIGHLIGHTS ABOUT A&PROMOTIONS

IF THERE WILL BE 35% CANNIBALIZATION IN SALES , WE HAVE TO TAKE INTO ACCOUNT THIS IN A&P , SO

$48,3 MLN*35% / 100%=$ 17 MLN

IT MEANS THAT WE CAN ALLOCATE THIS AMOUNT OF MONEY FOR THE NEW PRODUCT & IN Y1 AND Y2 WE NEED $15 MLN,$16 MLN FOR A&P PROPORTIONALLY===== $2 MLN & $1 MLN SURPLUS

A&P EXPENDITURES FOR PARAMOUNT ULTRA THIN 5

IN MILLIONS
MEDIA 7.5
3.75 CONSUMER PROMOTIONS TRADE PROMOTIONS

3.75

IT CAN BE MUCH MORE BENEFICIAL TO SPEND HALF OF THE MONEY ON MEDIA, AND SUBSTRACT THE REST HALF-HALF FOR CONSUMER PROMOTION AND TRADE PROMOTION