Clean Razor Case:
Splitting Hairs in Product Positioning
Submitted by: WG B2
Gaurav Sancheti - 21M111
Madhur Mishra - 21M115
Shivangi Goel - 21M129
Utkarsh Sharma - 21M137
Introduction
• Paramount Health and Beauty Company are global consumer giants
in health, cleaning, beauty and grooming.
• $13Billion worldwide sales and $7 billion in gross profits.
• Entered non-disposable razor market in 1962 and current
revenue - $170 million , gross profit - $92 million and operating
profit - $26 million.
• Product portfolio : Non disposable razors and refill cartridges.
• Paramount Pro in moderate segment and Paramount Avail in value
segment.
• Proposed product in super premium segment CLEAN EDGE
which gives closet , cleanest and smoothest shave.
Problem Statement
How Paramount Health and Beauty company must position their
Clean Edge non-disposable razor?
Clean Edge Attributes & Benefits
Attributes Benefits
Vibrating Cleaner shave , 25% more hair removal better skin
Technology tone and texture
Ultra thin blade Reduces irritation
Larger heavier Better grip , control and balance
handle
AAA battery Provides vibration for stimulating hair follicles
Five Blade Unique technology for extra precision
Pros & Cons of both positioning
Niche Positioning
Pros Cons
•Positioning clean edge as niche will •Limited consumer base
complement company’s existing product •The company may lose their loyal
portfolio perfectly customer base i.e Pro and Avail
•Consistent profit margins •Presence of already well established
•Risk involved in the form of players
cannibalization will be less •Unit volume sales will be less relatively
•Less marketing expenditure -$15 million when compared to mainstream positioning.
less compared to mainstream
•Higher profit in sales
Pros & Cons of both positioning
Mainstream Positioning
Pros Cons
•Higher unit volume sales •More marketing support will be needed to
•Helps in catering to a larger custo mer reach the target masses.
base •The company would require an extensive
•Paramount Pro, the main product was in advertising campaign and considerable
the mature phase of product life cycle so consumer promotions. Thus the expense
there is a possibility of decline will be huge , costing almost $42 million .
•Lower profit margin
Market Share
Distribution Channel Analysis
Segment of Clean Edge
Out of the major segments : Value , moderate and super premium, CleanEdge should
be considered under the Super Premium Category.
• Using the Table B, super premium category gives the higher return in terms of
dollar value per volume demand. 34% revenue on 25% of Volume.
Reason: This market segment is growing with the latest technology and Clean Edge
would have a strong presence in the market whereby it can expand to various other
segments in future. Since Paramount has no product in this segment this will help in
gaining market reach.
Consumer Behavior :
Active Razor Users : 67% of non-disposable users
• Social/Emotional Shavers
•Aesthetic Shavers
Social/ Emotional shavers are more inclined towards the functionality of a product
and Aesthetic users are concerned about the skin and shaving after-effects , hence
making this a beneficial segment.
Name of Clean Edge
New Name: Clean Edge by Paramount
• This will also separate it from the other products that Paramount currently
produces. Paramount’s main products currently are in moderate and value
markets.
• To establish a niche market and establish it as a unique product , the
Paramount name should be secondary to the new innovation offered by
the Clean Edge.
• This will pull in clients and lessen the cannibalization effect to the existing
best sellers products Paramount Avail and Paramount Pro.
Financial Analysis
Recommendations on basis of
financial analysis
•To reduce Cannibalization effect - As 60% of Clean Edge sales would likely
come from current Pro/Avail customers in a mainstream positioning scenario,
but only 35% in a niche positioning scenario
•Marketing Support: Launching Clean Edge as Mainstream would require a
significantly higher marketing budget
•Paramount has no product in the Niche category
•ROI is higher for the niche positioning compared to that of the mainstream
positioning. The Niche segment would be providing a return of 155% in Year 2
as that of 118% in case of the mainstream segment.
• So we recommend Niche Marketing for Clean Edge.
Marketing Budget for promoting
Clean Edge
• Current Requirement for Niche Marketing: 15 million$ for year 1 & 16
million$ for year 2.
• Current Budget of 2010: $48.3 million which include $20.2 million for
advertisement & $28.1 million for customer and trade promotion.
• Since % share & revenue of paramount avail is decreasing continuously,
marketing and advertising budget involved for it can be shifted to
promotion of Clean Edge.
Thank you!
