CASE STUDY 1

CLEAN EDGE RAZOR

BY SARAH MOHAMAD NOR
UTM KL

PRESENTATION OUTLINE  Introduction  Issues  Analysis of Marketing Strategy  Razor Market Analysis  Marketing Strategy Analysis  Marketing Solutions .

INTRODUCTION Non-Disposable Razor Market Consumer Frequent brand switching Replacement cycle shortened since consumers trying new products & 67% Involved Non-Disposable Razor Users Distribution Channel Outlets Increase Shelf Space for non-disposable razor category. Shift of distribution channel from Food & Drugs stores to Mass Merchandisers Market Trend Competitor 5% growth per year Continuous Innovation In sales of Non-disposable Razors from 2007 to 2010 in non-disposable razor category Significant growth Super-Premium Segment in Driven by product innovation Male-specific personal care products became more mainstream Advertising and Promotion Expenditures Expansion of Intensify competition to obtain retail space .

THE DILEMMA… .

ISSUES Primary Issues Where should the Clean Edge Razor be positioned? Niche Main Stream Secondary Issues Brand name positioning of Clean Edge Razor Separating Clean Edge from existing Product Line Associating Paramount to the brand as part of overall Corporate Strategy to build Paramount brand equity Clean Edge by Paramount Paramount Clean Edge .

RAZOR MARKET – COMPETITIVE MAPPING Prince Cogent Cogent Plus Benet & Klein Vitric Advanced Vitric Master Benet & Klein Vitric Paramount Paramount Pro Su r-P e p ium m re Radiance Naiv Paramount d Mo Paramount Avail lue a V te a r e Simpsons Tempest .

RAZOR MARKET ANALYSIS Market Share – by Brand Market Share .by Market Segment Value. 6% Super Premium. 46% Moderate. 48% Source: Exhibit 5 .

4 Moderate 43 44 1 : 1. the super-premium gives the higher return in terms of dollar value per volume produced.RAZOR MARKET ANALYSIS Sales by Segment Product Segment Volume (%) Dollar (%) Volume to Dollar Ratio Super-premium 25 34 1 : 1.7 Source: Table B Although Moderate Market captures the highest percentage of volume and dollar value. On the other hand. value market segment gives lower market value per volume produced.0 Value 32 22 1 : 0. .

Launching the Clean Edge Razor in the wrong segment 1. 3. 4. Positioning in the Mainstream market could lead to could potentially canabilise the Paramount Pro. Does not hold a position in the super premium segment of 2. Established brand that consumers already trust and hold strong and positive association with. Naiv. a competitor brand of non-disposable razor has similar vibrating technology to Clean Edge. Best product in the market (Technologically advanced and 4. Competitors in the market may released similar products. and design. Mainstream market is highly profitable. cannibalization of existing Paramount product 2. Opportunity 1. Growth in the super premium segment 2. Paramount can afford $19 million in advertising 3. 2. . Nothing currently in the market like it.2%of the market and technology changes on razor functionality total non-disposable razor market. Increased in men’s grooming. Weakness Threat 1. 3. 4.RAZOR MARKET ANALYSIS SWOT Analysis Strength 1. Super-premium market segment is highly influenced by the mainstream market which accounts for 37. Uninvolved razor users (maintenance users) is untapped tested) consumer base.

MARKETING STRATEGY ANALYSIS Profit and Loss Forecast for Clean Edge Under Niche and Mainstream Scenarios (in $ Millions) .

.MARKETING STRATEGY ANALYSIS Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning Profit Projection as Percentage of Sales GP Margin (%) 50% 44% 40% 35% 30% 20% 21% 10% Niche 7% 0% Year 1 Mainstream Year 2 Niche positioning offers higher projected profit comparatively to Mainstream Positioning.

00 Year 2 $ 16.00 Mainstream Year 1 $ 42.00 Advertising and Promotion is projected to take up approximately 40% of the Total Cost. . Based on the projection. Mainstream market positioning strategy requires three times more marketing effort (budget) as compared to Niche market positioning strategy.00 Year 2 $ 39.MARKETING STRATEGY ANALYSIS Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning Advertising and Promotion Effort ($’ Million) Operating Cost Niche Projection Advertising & Promotions Year 1 $ 15.

72 Mainstream Year 1 $ 20.54 Year 2 $ 10.02 .12 Cannibalisation rate for Niche Positioning = 35% Cannibalisation Rate for Mainstream Positioning = 60% Year 2 $ 41.MARKETING STRATEGY ANALYSIS Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning Cannibalisation Rate ($’ Million) Cannibalisation Niche Projection Total Cannibalisation Year 1 $ 4.

Clean Edge should be distinguished from other brands. and subsequently as a mainstream product. Tap higher profit margin 2. This will benefit Paramount to: 1. “Clean Edge by Paramount” will attract customers and reduce the cannibalisation impact to the Paramount Avail and Paramount Pro. Therefore.MARKETING SOLUTIONS Where should the Clean Edge Razor be positioned? To launch Clean Edge as niche technology product for the first two years. as well as Paramount existing line. A soft entry approach to super-premium segment through niche positioning Brand name positioning of Clean Edge Razor As a niche product. Win over shelf space at distribution channel 3. . Reduce cannibalisation effect of existing products 4.