Clean Edge Razor: Splitting Hairs in Product Positioning

Clean advance razor splitting Hairs in Product Positioning Name Yuanxu He (Jason) Semester Fall, 2012 Course Number MBA 812A Date of paper family line 25th, 2012 Executive Summary The Clean Edge which is Paramounts brisk-fangledest nondisposable shave has powerful entrance in the market since 2010. It was improved design and used the invigorated skills to make the razors properties conk out better than before. Lots of men like it and consider it was the closest, cleanest and smoothest. The article analytic thinking the Paramounts situation, competition, carrefour positioning, market strategy through the U. S. azor market, market segments and consumer behavior and the trends of nondisposable razors and refill cartridges. After the company overview, the analysis of competition, design and testing and compargon the marketing budget, Randall think that the Clean Edge has the significant mainstream potential and provide become the new standard in mens shaving.1. Non-disposabl e razor category has changed a lap these years. The article pointed that nondisposable razors experienced approximately 5% growth per year from 2007 to 2010. Numerous innovations and intersection point in the super-premium segment has grown a lot.The expenses of advertising increased a lot because of the need to promote new benefits from advances in razor technologies. Changes in retail channel distri justion have also been noted in the category. Male-specific grooming products seemed to be a bright spot in the industry from 2007 to 2010 and the segment saw frequently more growth because shaving became more than just shaving it started to include body spray, fragranced shower mousse and skincare lines pro heartrated. Channel distribution for the razor category has become increasingly important through the possess 4. It has been quite demand for male-grooming products.Competitive Position Paramount has been a global consumer products giant with over $13 one million million mi llion in worldwide sales and $7 billion in gross profits for 2009 since it entered the nondisposable razor market in 1962. Paramount established itself as unit-volume market-leader in 2009 based on nondisposable razor sales. The nondisposable razor category market is entering a new phase with technology products and new competitors entering the market, its a threat to Paramount. Strategic Life Cycle Challenges Consumers are becoming more experienced and always looking for new technologies.Namely, they want to spend more money and buy products which are satisfy the necessity of a smooth shaving experience. In other words, through the Exhibit 1, thither is a category of consumers called fear users that made up 33% of consumers they were not interested in purchase products with superior technology. These consumers cannot be ignored. So, to the challenges, it should provide a product with good cost x benefit but with a short life cycle for the 33% called Maintenance users keeping thes e users buying their products and interested in their brands. And then, launch the Clean Edge product with a longer life cycle. Meanwhile, making this product gainful creating a high quality from the consumer when they buy cartridges for refill.2. The nondisposable razor market is segmented to three move base on price and quality which are value, moderate and super-premium. From 2009, consumers purchased razors and replacement cartridges more frequently and they were limpid to Maintenance Shavers, Social/Emotional and Aesthetic. The Maintenance Shavers who almost not interested in the product category. The Social/Emotional shavers were motivated by the overall shaving experience and Aesthetic shavers were interested in cosmetic results.3. street corner Mainstream Pros Cons Pros Cons Increase profits and market share Increased marketing budget be to launch the new product and provide incentives to Maintenance users Increase profits Potentially could result in elimination of Para mount Pro Existing products can be retained and used to target Maintenance users Increase market share Paramount will not be focusing Maintenanceusers with new product line Branding strategy can be arefully planned and deployed for maximum success serve well prevent loyal Paramount customers form being wooed away to more innovative brands Opportunity to use quick products and gain increased sales Through the pros and cons, I will recommend the Clean Edge for a niche strategy. Because Rosenberg said that they will siphon off consumers if he considered a mainstream positioning strategy. A niche strategy will make more sense.4. Niche Mainstream Planned capacity Razor (Year 1) 1. 0 3. 3 (Year 2) 1. 5 4. 0 Razor Production per unit cost $ 5. 00 $ 4. 74 Razor manufacturer price $ 9. 09 $ 7. 83 Razor Suggested price $ 12. 99 $ 11. 19 Revenue (Year 1) 9. 09 25. 84 (Year 2) 13. 64 31. 32 Production Costs (Year 1) 5 15. 64 (Year 2) 7. 5 18. 96 Planned capacity Cartridge (Year 1) 4. 0 9. 9 (Year 2) 10. 0 21. 9 Average Production unit cost $ 2. 43 $ 2. 24 manufacturer price $ 7. 35 $ 6. 22 Suggested price $ 10. 50 $ 8. 89 Revenue (Year 1) 29. 4 61. 58 (Year 2) 73. 5 136. 22 Production Costs (Year 1) 9. 72 22. 18 (Year 2) 24. 3 49. 06 Capacity costs (Year 1) $ 0. 61 $ 1. 71 (Year 2) $ 0. 87 $ 2. 45 Advertising (Year 1) $ 7 $ 19 (Year 2) $ 7 $ 17 Consumer (Year 1) $ 6 $ 17 (Year 2) $ 6 $ 14 Trade promotions (Year 1) $ 2 $ 6 Year 2) $ 3 $ 8 Subtotal of Other Costs (Year 1) 15. 61 43. 71 (Year 2) 16. 87 41. 45 Total Costs (Year 1) 30. 33 81. 53 (Year 2) 48. 67 109. 47 cashbox the chat above which compares the revenues and costs, its easily to find out the Niche is the better one. About the marketing budget, through the comparing, the advertising and promotion of Clean Edge Razor is $15m and $ 16m, and we can reduce the budget for existing products of advertising.Because the consumers become more sophisticated and the research shows that these will be the mature phra se of the product life cycle in the future. I consider that if it launch the product to the Niche market, it will bring a huge profit to Paramount. So, I want to make the brand name called The Clean Edge Razor by Paramount.ConclusionBy the time, consumers really purchased razors and replacement cartridges more frequently than they than in any year previously. Its no doubt that the Clean Edge has huge potential in the super-premium segment.It should keep developing by the Niche strategy and this will bring the biggest benefits and profit to the company and beat the other competitors.Work Cited S. E. Smith, One Tool, Many Uses private Edge Razor, (Aug 02, 2012), http//www. networx. com/article/one-tool-many-uses-single-edge-razorJeremy Pingul, Paramount Health & Beauty The Clean Edge Razor, (2012, January), http//prezi. com/pjd6evuzfndc/paramount-health-beauty-the-clean-edge-razor/