1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge?
The non-disposable razor category has seen changes in the recent years.
* Advertising expenditures increased significantly for newer and smaller players to grab the market share whereas established players did not increase it significantly.
* Male grooming product seemed to be a bright spot in the industry with the advent of male-specific personal care products that outpaced the growth in women’s beauty market
* 5% growth per year from 2007 to 2010, attributed to innovations and product introductions.
* Diversified as better margin derived from the product brought in retailers in the form of club stores and ...view middle of the document...
With this objective in mind, company had to choose between three alternative strategies which are:
Launching “Clean Edge” as a “mainstream” technology product to be a market leader
a) Increase in profits and market share.
Consumers are becoming more sophisticated and looking for new technologies. In other words, they are willing to invest more money and buy products that satisfy the necessity of a smooth shaving experience. In other hand, observing the Exhibit 1, there is a category of consumers called “Maintenance users” that made up 33% of consumers; they were not interested in buying products with superior technology. These consumers cannot be ignored.
Based on that, the strategic life cycle challenges for Paramount’s would be:
First, providing a product with good cost x benefit but with a short life cycle for the 33% called “Maintenance users” keeping these users buying their products and interested in their brands.
Second, launch the Clean Edge product with a longer life cycle. Also, making this product profitable creating a fidelity from the consumer when they buy cartridges for refill.
Launch as niche Product
A niche product positioning would focus on highly involved, fastidious groomers that want a superior shaving experience. This positioning will result in a 35% cannibalisation of current Paramount Pro/Avail sales.
* The niche positioning will have a higher margin as compared to the mainstream positioning by $1 per unit (see table 1).
* It will help Paramount increase their market presence and possibly even market share in the Social/Aesthetic segments. As the male-specific grooming products industry is set to grow, this affirms their position as market leaders in the industry.