Paramounts Launch: Clean Edge Razor
By Consulting Without Borders:
Aditi Memani, Andres Ramirez, Katerina Potesta, and Camilo Romero
Agenda
Situation Analysis
Competitors Consumers Distribution Channels
SWOT Analysis of Paramount Marketing Plan for the Launch of Clean Edge Razor
Positioning and Target Segments Marketing Campaign
Advertising Consumer Promotion Trade Promotion
Financials
Competitor Analysis
2010 Competitors Market's Share
23
21.4
5.7
2.6 21.1 26.2
Paramount Prince Benet & Klein Radiance Simpsons Other
Competitor Analysis
Super-premium Competitor Analysis
13 12.5
12
Price
11.5 11 10.5 10 Cogent Plus Cogent Victric Victric The Naiv Master Advanced Products The Tempest
Consumer Analysis
More brand switching into super premium market to superior products Brand loyal Not price sensitive Aware of new products through advertising Increased blade replacement Generally interested in beauty/grooming products
Nondisposable Razor Consumers Market Share
Maintenance
28%
33%
Social Emotional Aesthetic 39%
Consumer Profiles
Social/Emotional:
Shaving is an essential grooming ritual that makes them feel more attractive and confident These consumers differentiate products based on both messaging and functionality
Aesthetic:
Desire is for smooth skin and shaving is done consistently Differentiation of products is based solely on effectiveness
Maintenance:
Have no interest in product category, are inconsistent, and see shaving as a chore that should be done quickly
Distribution Channel Analysis
% of Sales in Each Distribution Channel
50 45 40
35 30 25 20 15 10 5 0
2007 2008 2009 2010
Food Stores Drug Stores Mass Merchandiser Club Stores
Distribution Channel Analysis
Basic Info about Retail Distribution Channels:
Razors provide higher profit margins Food Stores and Drug Stores are the biggest Retail channels Mass Merchandisers are increasing
Distribution Channel Analysis
Food Stores
Provides: All Products (No Value Pack) Focus on: Niche Mainstream
Drug Stores
Provides: All Products (No Value Pack) Focus on: Niche Mainstream
Mass Merchandisers Provides: All Products (No Value Pack) Focus on: Mainstream Uninvolved Maintained
Club Stores
Provides: Value Pack Only Focus on: Mainstream
SWOT Analysis of Paramount
Strengths
Leader in technological innovation. Established brand with strong brand equity. Significant amount of advertising expenditure at disposal.
Weaknesses
Lacks presence in the super-premium segment of the market.
Opportunities
Increase popularity in mens grooming. Growing superpremium segment.
Threats
Competitors releasing a similar razor into the Super-premium market. Unsuccessful launch could hurt strong brand equity.
Positioning and Target Markets
Positioning:
Super-premium category razor Mens market
Growth due to more media attention and grooming products targeted for men
Marketing strategy will target both a niche and a mainstream market
Target Markets:
Social/Emotional Niche Segment
Largest Segment of Nondisposable Razors Needs of this segment fit the attributes Clean Edge Razor provides
Mainstream
Large Market that is untouched by super premium products
Advertising: Social/Emotional Segment
Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials
Partially cover cost of Ryan Gosling TV Campaign
Print Advertisements
Publications that cover Mens Fashion and Lifestyle
EX: Esquire, Details, and Mens World
Digital Marketing
Digital Mediums of Print Publications Banner Advertising using Google target advertising platform
Focusing on Mens Fashion and Lifestyle
Social Media
Create Clean Edge Razor Social Platform
Including: Facebook, Tumbler, YouTube, and Twitter Accounts #CleanEdge
Give a Free Matte Black Razor with Customized Carrying Case to Top Mens Fashion and Lifestyle Blogging Sites
EX: Dappered.com, TheSatorialist.com Have them post about their experiences with Clean Edge Razor on all Social Media Platforms Feature post about different package options for the product
Repost any social media posts about Clean Edge Razor
Advertising: Mainstream
Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials:
Joakim Noah All Sporting Events
Beginning from the Super Bowl (February)
Ryan Gosling All Other Commercials
Beginning January
Print Publications
News Worthy Print Ads
EX: Forbes, Businessweek, NY Times, WSJ
Sporting Print Ads
EX: ESPN, Sports Illustrated
Digital Marketing
All Digital platforms of Print Publications Banner Advertising using Google target advertising platform Website for Countdown of Lets Shave Noah
Social Media
Efforts focused on promoting social media events Lets Shave Noah Mustache March No Shave November
Consumer Promotion
We are a super premium product therefore our focus will be on Package Differentiation and Product Differentiation Product Differentiation
Offer 4 Different Product Packages:
Original Clean Edge Razor Extra Comfort and Grip Clean Edge razor Original Clean Edge Razor with carrying case, and wall mount Matte Black Clean Edge Razor
Package Differentiation
Offer 3 Different Package sizes for Refill Cartridges
4 Pack 8 Pack 16 Pack
Reasons for our Consumer Promotions
Product Differentiation:
Will allow us to maintain a super premium sub brand image by:
Providing Added Value for Social/Emotional Segments Provide a reasonable priced super premium product for price sensitive mainstream users
Package Differentiation:
Refill Cartridges can be used for all the 4 different product options Allow mainstream users continue use of a super premium product at a reasonable price
Data on Trade Promotion in Different Distribution Channels
Food Store Shoppers
Are high impulse and unplanned utility item purchasers
Drug Store Shoppers
plan their purchases and look for features
Mass Merchandiser Shoppers
Have an average response to promotions and look for overall value with average price
Trade Promotion
Food Stores:
Receive some of Trade Promotion Budget for:
Displays that focus on different Product Options of Clean Edge Razor
Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges
Drug Stores:
Receive some of Trade Promotion Budget for:
Displays that focus on Attributes of Clean Edge Razor as a whole
Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges
Mass Merchandisers:
Receive some of Trade Promotion Budget for:
Displays that focus on the 4 different Product options and the 2 Different Packages for Refill Cartridges
Will carry the 4 different Product options and the 4 - Pack and 8 Pack Refill Cartridges
Club Stores
Will not receive any of the Trade Promotion Budget Will Carry only the 16 Pack Refill Cartridges
Incentives for Distribution Channels
Access to the first of its kind product Sales Forecast for Pro and Avail Razors are said to decrease Higher Gross Unit Contribution Trade Promotions target their specific consumer segments
Food Stores:
Both Social/Emotional Segment and Mainstream
Drug Stores:
Both Social/Emotional Segment and Mainstream
Mass Merchandisers:
Both Social/Emotional Segment and Mainstream
Club Stores:
Mainstream
Financials Agenda
Retail Prices for Different Product Options and Packages Breakdown of Advertising Budget Expected Capture of Market Share Income Statement for Social/Emotional Segment Income Statement for Mainstream Combined Income Statement
Retail Prices: 4 Product Options
$17.99
$15.99 $12.99
$14.99
Expect 30% of Niche Unit Sales from Added Value Product Options Avg. Price Increase for Added Value Options: $3.33 Consumer Promotion Budget Required: $4,896,000
Retail Prices: 3 Package Options
Price for Package
$34.13 $18.38 $10.50
Expectations Mainstream Unit Sales from Value Packs:
8 Pack 20% 16 Pack 5%
4 - Pack
8 - Pack 16 - Pack
Consumer Promotion Budget Required to compensate for decrease in price per cartridge: $2,118,100
Price Per Cartridge $2.63 $2.30 $2.13
4 - Pack
8 - Pack
16 - Pack
Advertising Breakdown: Social/Emotional Segment
Advertising Campaign
TV
Print Digital Social Media
2011 $6,000,000
$3,340,000 $220,500 $46,449.70
2012 $6,000,000
$3,340,000 $220,500 $46,449.70
$2,393,050.30 $2,393,050.30
Consumer Promotion
Costs of Added Value Product Options Manufacturing Costs
$6,000,000
$4,896,000 $1,104,000
$6,000,000
$5,440,001 $559,999
Trade Promotions
Instore Advertising for Clean Edge Features Instore Advertising for Product Options
$4,000,000
$1,240,000 $2,560,000
$4,000,000
$1,240,000 $2,560,000
Total Budget
$16,000,000 $16,000,000
Advertising Breakdown: Mainstream
Advertising Campaign
TV Print
2011 2012 $10,000,000 $11,000,000
$4,287,050.30 $5,297,050.30 $5,056,000 $5,056,000
Digital
Social Media
$620,500
$36,449.70
$610,500
$36,449.70
Consumer Promotion
Costs of Value Pack Options Manufacturing Costs
$5,000,000
$2,118,100 $2,881,900
$8,000,000
$6,824,989 $1,175,011
Trade Promotions
Instore Advertising for Value Packs Instore Advertising for Product Options
$2,000,000
$420,000 $1,580,000
$3,000,000
$630,000 $2,370,000
Total Budget
$17,000,000 $22,000,000
Gross Profit: Social/Emotional Segment
RAZORS GROSS PROFIT 2011 2012 Retail Units - OP 700,000 1,166,667 Sales - OP $9,093,000 $15,155,003.03 Unit Contribution - OP $3.90 $3.90 Gross Contr. - OP $2,730,000 $4,550,000.91 Units - AVP 300,000 500,000 Sales - AVP $4,896,000 $8,160,001.63 Unit Contribution $5.57 $5.57 Gross Contr. - AVP $1,669,500 $2,782,500.56 Total Units 1,000,000 1,666,667 Total Contribution $4,399,500 $7,332,501.47 Paramount Total Units 1,000,000 1,666,667 Total Sales - OP $6,363,000 $10,605,002 Total Sales - AVP $3,168,000 $5,280,001 Total Sales $9,531,000 $15,885,003 Unit Contribution - OP $4.09 $4.09 Unit Contribution - AVP $5.76 $5.76 Total Gross Contr. $4,591,000 $7,651,668.20 REFILL CARTRIDGES GROSS PROFIT 2011 2012 Retail Total Units 4,000,000 12,888,888 Total Sales $42,000,000 $135,333,324 Unit Contribution $3.15 $3.15 Total Gross Contr. $41,999,997 $135,333,321 Paramount Total Units 4,000,000 12,888,888 Total Sales $29,400,000 $94,733,327 Unit Contribution $4.92 $4.92 Total Gross Contr. $19,680,000 $63,413,328.96 TOTAL GROSS PROFIT $24,271,000 $71,064,997.16
Gross Profit: Mainstream
REFILL CARTRIDGES GROSS PROFIT 2011 Retail 4 - Pack Units Sales Unit Contribution Gross Contribution 8 - Pack Units Sales Unit Contribution Gross Contribution 16 - Pack Units Sales Unit Contribution Gross Contribution Total Units Total Contribution Paramount 4 - Pack Sales Unit Contribution 8 - Pack Sales Unit Contribution 16 - Pack Sales Unit Contribution Total Units Total Sales Total Gross Contr. 2012 Retail Total Units Total Sales Unit Contribution Total Gross Contr. Paramount Total Units Total Sales Unit Contribution Total Gross Contr. TOTAL GROSS PROFIT RAZORS GROSS PROFIT 2011 2,300,000 $29,877,000 $3.90 $8,970,000 2,300,000 $20,907,000 $4.09 $9,407,000 $49,909,320 2012 3,833,333 $49,794,995.67 $3.90 $14,949,998.70 3,833,333 $34,844,997 $4.09 $15,678,332 $146,185,814 4,425,000 $46,462,500 $3.15 $13,938,750 14,258,334 $149,712,507 $3.15 $44,913,752
1,180,000 $21,688,400 $5.51 $6,506,520
3,802,222 69,884,848 5.51 20,965,454
295,000 950,556 $10,068,350 $32,442,463 $10.24 $10.24 $3,020,505 $9,732,739 $5,900,000 19,011,112 $23,465,775 $75,611,945.20
$32,523,750 $104,798,754.90 $4.92 $4.92 $15,181,880 $48,919,393.40 $12.34 $12.34 $7,047,845 $22,709,723.84 $14.14 $14.14 5,900,000 19,011,112 $54,753,475 $176,427,872 $40,502,320 $130,507,482
Net Operating Profit
NET OPERATING PROFIT 2011 Gross Profit Operating Expenses Capacity Cost Advertising Budget Cannibalization Costs Operating Profit $74,180,320 $35,145,000 $2,145,000 $33,000,000 $58,867,785 -$18,832,465 2012 $217,250,811 $41,575,000 $3,575,000 $38,000,000 $165,222,887 $10,452,924
