Clean Edge, Non Disposable razor case study analysis
- 1. CASE STUDY ANALYSIS – CLEAN EDGE, NON DISPOSABLE RAZOR Q1. (i)What changes occurring in non-disposable Razor category? (ii)Access paramount’s competitive position? (iii)What are the strategic lifecycle challenges for paramount’s current products as well as for clean edge? Ans: (i) Significant growth in industry of super premium segment because of innovation (5 blade technology, leather bar, low resistance blade coating). It experienced nearly 5% growth per year from 2007 – 2010. Introduction of new product rate for non- disposable razor increased. There was more competition for retail shelf space. Therefore distribution started to shift outside the traditional food and drug stores (ii) Paramount has established itself as a global consumer products giant with over $13 billion in worldwide sales & $7 billion in gross profits for 2009 since its entry into market in 1962. Sales of Non-disposable razor in US - $170 million in revenue, Gross Profit - $ 92 million and operating profit of $ 26 million in 2009. 3 main large players have dominated, Prince, Benel and Klein. New entrant Radiance, Simpson. - Prince had 2 products – Super premium segment. - Paramount had 2 products – Moderate segment. (iii) It is seen that the market share for paramount Avail has been declining, while market share for Paramount Pro experience a steady increase.
- 2. Paramount has developed a new product for the super-premium category. -clean edge which is based on superior technology & 5 blade designs. Paramount could milk the profits from pro to fund clean edge. The increasing introduction of new products with superior technology & benefits, by competitors, tends to shorten the product life cycle. Q2. How is the Non-Disposable Razor market segmented? Examine Consumer behaviour for Non-Disposable Razors? Ans: Segmented by gender (male/female), price & quality (value, moderate & super-premium) & consumer behaviour (Maintenance shavers, social/emotional shavers, and aesthetic shavers). “Maintenance” shaver constitute 33% of market and can be regarded as low involvement consumers. These consumers are price sensitive & easily switch brands. “Social/emotional” user make up 39%of the market. These users are actively differentiate between available products & make purchase decisions based on the overall experience .They shave regularly & therefore, replace cartridges sooner & buy razors more often. The remaining 28%of the market is made up of “Aesthetic” users that actively search for products to fulfil cosmetic motives. Both social/emotional & Aesthetic users can be considered as high involvement consumers, who place higher value on product features and brand .They may act as innovators or early adopters of new product. Q.3) what are the arguments for launching clean Edge as a Niche Product and a mainstream Brand? Ans: Arguments for launching Clean Edge as niche product. Owing to technical features which goes hand in hand with current advancements in technology.
- 3. Men and women who are willing to pay despite of the premium price. Super category. Good brand image. Should not leave the niche market to others competitors like naïve. Marketing budget is three times less than that of Mainstream. Arguments for launching Cleaning Edge as mainstream product Being Clean Edge as technical innovation would reap great profits. Category leadership Difficult for competitors to give at that price. Defend Paramount Pro’s market share. Q4) based on your positioning strategy, what brand name & marketing budget allocations would you recommend? Ans: In order to target the niche market, I would like to recommend Clean Edge by paramount as the brand name. This brand name will differentiate clean edge from the other products of paramount, highlights the new super- premium position, and emphasize on the technology innovation. It will therefore, stand out from the current products of paramount, which are less advanced technologically, and hence attract the high involvement segment.