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Market segmentation of non-disposable

razor:

The non-disposable razor and refill are

segmented in terms of price and quality, and

they are categorized as value, moderate, and
super premium. The super-premium is
positioned in mainstream and niche market
segment. The market is segmented in terms of
consumer segmentation and it is based on
demographics, behavior, and consumer

preference. Technical segmentation

performance shows that super premium
category is highly priced and has a market
share of 25%, moderate's market share is 43%,
whereas, value has 32% of the market share.

Consumer Behavior of non-disposable

razor:

It is observed that the consumers' behavior is

segmented in terms of three categories; which
include social/emotional shavers, aesthetic
shavers (both involve razor users), and
maintenance Shavers (involved razor users).
The consumers are willing to differentiate and
search for the products that are unique and
effective in their function. The social shavers
o, who search for better functioning and
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Q.2. How is the nondisposable razor market segmented?
Examine consumer behavior for nondisposable razors.

The non-disposable razor market is segmented into three

sections namely value, moderate, and super-premium on the
basis of price and quality. A 2009 study depicts that the retail
sales of non-disposable razors came from 25% volume of super
premium, 43% of moderate, and 32% of value segments. The
sale part contributes 34% of super-premium, 44% of moderate,
and 22% of value segments to the retail sales of non-disposable
razors.

Paramount's consumer research identified distinct

segmentation in terms of product benefits and consumer
behaviour. 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. Social/Emotional
Shavers differentiate among products and search for products
based on both functional ity and messaging. They perceive
shaving as an important part of a daily grooming practice which
makes them feel more attractive and confident. Aesthetic
Shavers search for products that most effectively remove hair
and they consistently shave in order to remove unwanted hair.
They perceive shaving as a means to smooth skin they want.
Maintenance Shavers are indifferent towards the different
products and their shaving routine is incon sistent. They
perceive shaving as just another chore which they try to finish
as soon as possible.

Q.3. What are the arguments for launching Clean Edge

as - a) A Niche Product and b) A Mainstream brand?

Following are the arguments which explain the pros and cons of
launching Clean Edge as a niche and a mainstream product:

Niche positioning
Pros

Positioning Clean Edge as niche will complement company's

existing product portfolio perfectly.
From the exhibits, it's visible that it will result in high and
consistent profit margins for the company and the
risk involved will be less. Apart from that Niche positioning will
require $15million in total marketing expenditures in the first
year as opposed to $42 million in mainstream.

Cons
First of all it has a limited consumer base and secondly the
company's current products Pro and Avail had not introduced
any innovations in the last five years. Pro is in the mature
phase and there's a high probability of its sales declining soon.
Therefore by launching in this segment, Paramount will lose
their loyal customer base which is there with Pro and Avail.

Mainstream positioning:

Pros

Consumers are becoming more and more sophisticated day by

day and expect more advanced technology. Paramount's bread
and butter product, Pro was in the mature phase of the product
lifecycle so there is a possibility of decline. Positioning Clean
Edge as mainstream product will help prevent loyal Paramount
customers from being wooed away to more innovative brands.
Main stream razor unit volumes are expected to capture over
three times the volumes of the niche market in the first year.
Clean Edge has the potential for true market domination and
would quickly gain mass appeal.
Cons

Paramount already had product in mainstream positioning

-Paramount Pro so launching it as mainstream positioning will
dilute the brand power and will lead to cannibalization. More
marketing support will be needed to reach the target masses.
The company would require an extensive advertising campaign,
considerable consumer promotions would be needed and thus
the expenses associated with them will be huge. To reach full
sales potential with this positioning, $42 million marketing
budget would be needed for year one.
Strength weaknesSS

Paramount is a historical global Cannibalization may Occur

consumer product company
Paramount Pro had strong market share .Marketing budget of Clean Edge has
in the business Limitations
Paramount was the unit volume market
leader in 2009
Clear Edge Razor caried new
breakthrough technology.

Opportunities Threats

Nondisposable razors sales had The accelerate rate of new-product

experienced approximately 5% grovwth introductions for nondisposable razors

annually from 2007 to 2010. and refill cartridges in these years.

In the last decade, the industry had The new launched Navi made from

experienced significant growth in the Radiance had similar new technology

Super-premium segment. with Clean Edge.

The growth ofsuper-premium segment There are many substitute products

was caused by the product innovations. available.

The purchase and replacement cycle of The nondisposable razor market is

razors and replacement were shortening high competition.

In the last five years, there was no

significant technology innovations

Introduced by Paramount.

Male-specific grooming products

became the mainstream in the market.

4-Positioning Analysis (Prosand Cons):
4.1-Niche Market
According to Ptil forecasting, more profits will be gained for Paramount after cannibalization

(28.55 million dollars more than mainstream positioning scenario after two years).

More consistency with the marketing message of promoting product's high technology and
innovation. It requires less marketing expenditures (15 million dollars) compare with

mainstream positioning (42 mllion dollars) as well as advertising and promotions

expenditures (31 million dollars in niche vs. 81 mllion dollars in mainstream for 2 years).

Cannibalizatilon will be low with Pro/Avall (356) comparing with mainstream strategy (60%).
Clean Edge will be the first product in Paramount to target the niche market which is not
saturated and has potential to grow in the future; by this way the company will have

products in each market segments. As per Paramount's senior executive's preferences, Clean

Edge will be placed in the super premium segment and the niche market is suitable to better
fit its pricing strategy.

The disadvantage is that the volume sales in the niche market are relatively less than the
mainstream market.

4.2-Mainstream Market
Pro Paramount's main product is in the maturity phase and has the possibility to decline in

the future. For this reason, clean edge with its innovation technology can be a good

replacement to maintain Paramount's current and loyal customers. The volume sales are

higher in the mainstream market than in the niche market and Paramount's competitors are

fewer in the mainstream market (only Paramount Pro and Vitric exist).

The disadvantage of mainstream strategy are: cannibalization rate is higher (60%) than in the

niche market (35%). Marketing allocations are very high but the total profits after two years

will be only 2.82 million dollars but in the niche market the profit will be 31.37 million

dollars.
SWOT ANALYSIS
Strengths Weaknes

Paramount is a global consumer Clear edge has certain limitations in

products giant with 13 billion in marketing budget
worldwide sales and 7 billion in The new launch of clear edge can
gross profits. result in decrease in the sales of
One of the products of paramount existing Paramount products which
Paramount pro occupied second can create instability in Paramount's
place in existing non disposable market
market
It has strong background and
consumer base who can prefer and
support their new launch
The new product clear edge has the
revolutionary new technology which
can appeal to a rapidly growing8
market.

Opportunities Threats

Male-Specific grooming products High competition in non-disposable

and non-disposable razor markets razor market.
are witnessing a rapid growth New launched product from
Non-disposable razor market has Radiance called Navi having similar
seen growth of 5 % annually from technology to that of Clear Edge and
2007 to 2010 getting launched sooner than Clear
Super premium market is seeing Edge.
growth because of new Availability of other substitute
technologles which is also same in products can be considered as big
the case of Clear Edge threat
Paramount didn't have any new
products involving new technology
in last five years and this will be a
great chance for them to start with
Clear Edge
Consumers are trying new products
in the market.

PROBLEM ANALYSIS
NICHE V/s MAINSTREAM
Niche Market Mainstream Market

Pros Niche positioning requirerelatively Launching Clean Edge in this

less marketing expenditure ($15
million) compared to mainstream
positioning ($42 mlllon).
Less advertisement
promotions expenditures
million) compared to mainstream
($81 million).
Niche strategy can lower the
cannibalization rate with Pro/Avail
(35%) compare with applying
mainstream positioning (60%).
market is that Pro, the backbone
of the company is in its mature
phase of the product lifecycle and
has possibility of decline soon.
and
Therefore, to maintain Its loyal
($31 customers company can launch
this product.
Being the mainstream market of
course the volume is relatively
higher If Clean Edge Is launched in
this market.

Positioning Clean edge in the niche

market can give an edge to
Paramount as this market is less
saturated and has a high growth
potential.

Rosenberg, the Pro's product

manager has also categorized the
product in the super-premium
segment, therefore targeting niche
market will make more sense.

Cons Due to niche market, there will be Higher cannibalization rate

less customers which implies there compared to niche market.

will be less sales in terms of
Large investment is required in
volume.
marketing of the product in this
segment.