Clean Edge Razor Case

masterblem Statement paramount has become a trade leader in global consumer professional personducts but knows that innovation is vital to affect success. preponderating has used technology to create an innovative razor, but wants to hazard sure that it is military posted effectively. Situation Analysis * Customers Male consumer products l earn been trending upward in the last decade. The customer atoms atomic number 18 broken up into three atomic number 18as affectionate/ stirred up, involved razor users, and uninvolved or sustainment users. Social/emotional are responsible for 39% of Nondispos fit razors, Involved is for 28%, and maintenance users account for 33%.In 2009 consumers razors and replacement cartridges at a mettlesomeer order than ever before. * Competitors Competition includes direct competition as good as substitutes for Nondispos fitting razors. In 2010 the three major players were predominant, Prince, and Benet & Klein (B&K). Prince mainly focuses on super- agio products. B&K entered the Nondisposable commercialize in 1985. in that respect are likewise new entrants which account for the rest of the market. In 2010 Paramount is expected to confine a 21. 4% dollar market share. * Comp each Paramount is a life-size consumer products alliance with $7 billion in gross clams in 2009.The current Nondisposable razor line has products in two the market and value customer fractions. The bang-up asperity s take over is the graduation Nondisposable razor produced by Paramount that has a technological innovation. Paramount is relying on the Clean leaping s start out to increase sales and earn more market share in the Nondisposable razor category. * stage setting In 2011 the effects of a recession are becoming slight drastic than in eld before. Customers have more disposable income and companies have more money to go along on investments such as media/ advertising and R&D. Collaborators (retailers) In 2009 food stores re presented 42% of completely razors and cartridges. some different distributors include drug stores, mass merchandisers, club stores, and other distributors. As SKUs increase, shelf space is increased to accommodate for all of the different products. Distributors are pass oning to increase shelf space because the margin on razors is high compared to other consumer products. Alternatives Position the Clean progress Razor as a respite product for highly involved groomers looking for a original shaving experience. Pros * Less cannibalization. Social shavers right now arent interested in the Pro or armed service razor. Paramount is concerned with the boilers suit availability of all the razor lines. By placement the Clean acuteness Razor as a niche product, the target equity of Pro and Avail wont be as affected as if the Clean Edge Razor was positioned as mainstream. The current customer segment for emotional shavers is 39%. With over 1/3 of the customer segment involved w ith emotional razor purchases there is a decent coat market that could use the benefits of the Clean Edge Razor. * The net operating profit based on pecuniary analysis is higher than the mainstream positioning outline.There are advantages of positioning the as a niche product. Advantages * One advantage is that customers give be more involved, so they volition take the time to question the product. After the consumer investigates the Clean Edge Razor, he go away be able to tell that there is a clear advantage and the Clean Edge Razor is the best option. * other possible advantage could be that Paramount could increase the size of the social/emotional market. Cons * Clean Edge Razor is losing out on potential sales because the market is much smaller. * Another con is the negative dent awareness.Even if Paramount created the greatest razor of all time, the brand wouldnt become stronger because only race who know most razors would know that Paramount is making technological innovations. Through a niche market Paramount would need to rely on their other razors to preserve relevant to the mass market. This could prove to be difficult as other companies continue to come out with new razors. harms * The investment fatigued on R&D to create the Clean Edge Razor was unquestionable it allow take longer to earn back the money spent on developing the Clean Edge Razor.Position the Clean Edge Razor to the Mass Market Pros * More people get out be subject to the product. This go forth lead to greater sales. This testament also improve brand equity. Through this positioning outline Paramount forget have a razor in each segment. * Although not as profitable, this positioning system lead nonoperational make a profit and build brand equity. Advantage * Paramount volition be viewed as innovative and keeping up with competition. A company that is stagnant falls behind. Through merchandising this razor to everyone, Paramount will be viewed as taking the adjacent step to create the best razor.Currently Paramount isnt working on any other innovative razors so this technology will have to be available to all different types of customers. Cons * One con is that not everyone will know how the vibration will help prevent a better shave. There are also a lot of people who dont need a superior razor they are content with the razor the way it is. * Another con is that the razor will have to be priced disgrace than if it were a niche position referable to competition. * Money spent on advertising. Based on the pro forma it would court roughly $12million more to advertise to the mass market.This is gambley if the Clean Edge Razor doesnt do as rise as forecasted. Disadvantage * Cannibalization. Currently Pro and Avail have 22. 2% of the volume of razors sold, the largest of any pair or razors. Introducing a razor in the same market with more features will damage the sales of both the Pro and Avail. * This will also negatively impact the brand power of Paramount when the rime are revealed and it shows that Pro and Avail are not doing as well as expected. * Based on financials this is the worst strategy to pursue. Recommendation It is meaning(a) for Paramount to grow the Clean Edge Razor as well as the Pro and Avail.I recommend that the company position the Clean Edge Razor for one family as a niche position and then position the Clean Edge Razor as a mass-market razor for everyone to use. Pros * Through victimisation a bit of both positioning strategies Paramount will receive the best of both worlds. One pro is less cannibalization of Pro and Avail in the first two years while consumers are adapting to the Clean Edge Razor. By the time the Clean Edge is positioned as a razor for everyone the 39% of people who have already been exposed to the Clean Edge will be able to differentiate this razor from the Pro and Avail.The cannibalization after the first two years wont be as severe because people will have already been exposed to the Clean Edge Razor. * A lower price when the product is positioned differently will lead to a bigger share of social shavers. The social shavers that have been paying a premium price will be happy to pay less money. The other social shavers that dont use the Clean Edge will be more likely to use the shaver because the price will be lower meaning the consequence of the razor not skirmish expectations will decrease. The sales will increase dramatically after the wink year due to more potential customers. Based on my financial statements the net profit is slightly larger than the niche positioning strategy by itself. * Growing brand equity and positive word of sass advertising through social shavers telling friends and family Cons * Regardless of the positioning strategy there will still be some cannibalization. * Social shavers whitethorn see the change in positioning as a recess in quality and think that a lower price will equate to a bad razor. * The incrementa l net profit may be too similar to the niche positioning strategy to risk damaging brand power. Implementation PlanOn January 1, 2011 I will tell production to manufacture the Clean Edge Razor just as if we were pursuing a niche positioning strategy. We will spend the $14 Million dollars in advertising on specialty antheral health and fitness magazines, television shows, and radio stations. We will also be relevant on social media sites such as Twitter and Facebook. There will be contests with our razors and customers will get the opportunity to spread word of mouth about the Clean Edge Razor. Paramount expects to make over $52 million, with most of that coming in the second year because the first year is mainly niche positioning.It is safe to say that $20-$23 million will be made in the first year. During September we will lay out a new campaign positioning the razor as the occasional mans razor with advanced technology. During this time we will also run a smaller ad campaign for the Pro and Avail marketing the razors as reliable and a staple of the razor market. This is why advertising increases overall in the combination strategy. Paramount is expecting cannibalization regardless, but using a mix of both strategies will help offset the large cannibalization from just using the mass marketing strategy.This will benefit Paramount as a company because Clean Edge Razor will be exposed to every customer segment while still trying to maintain the brand power of Pro and Avail. This strategy will benefit the brands as much as possible. Also, the financials in the Appendix concur this strategy over the niche and mass marketing positioning strategies. Cannibalization is inevitable but it is vital that customers from all segments see that Paramount is an innovative company determined to find new ways to benefit their customers. Appendix