ï»¿Clean Edge Razor case
What changes are occurring in the non-disposable razor category? Assess Paramountâ€™s competitive position. What are the strategic life-cycle challenges for Paramountâ€™s current products as well as Clean Edge?Â
Changes in the non-disposable razor category in the recent years:
It has become harder for newer and smaller players to grab the market share because of increased advertising expenses. However, for bigger and established players it has not increased significantly.Â
1. With the advent of male-specific personal care products, male grooming products seems to be a growing in the industry; growth in this segment has outpaced that of womenâ€™s personal ...view middle of the document...
To launch the razor as a â€œnicheâ€ revolutionary technology product, or
c. To create a new strategy to market the razor as a revolutionary technology
How is the non-disposable razor market segmented? Examine consumer behavior for non-disposable razors.
The non-disposable razor market is segmented into three, based on price and quality:
1. Value segment,
2. Moderate segment, and
3. Super-premium segment
Based on estimates from 2010, non-disposable razors constitute close to 11.23 percentage of the U.S razor market â€“ which is nearly worth about $2 billion.
On looking closely at the consumer behavior for non-disposable razors, I can see that that consumers now are focusing a lot more on the premium segment. This indicates that the modern customer is more tuned to the changing times and are becoming more and more sophisticated. They expect new technologies to fasten and smoothen the shaving process.
I think Paramount should capitalize on this and look to invest in the premium products segment. However, it should be kept in mind that, this strategy could create an opportunity for cannibalism on â€œpro-products,â€ whose sales are already on shaky grounds.
What are the arguments for launching Clean Edge as (a) a niche product and (b) a mainstream brand? Which would you recommend? What are the strategic implications of your recommendation?
The niche strategy:
Prevents cannibalization of sales from existing products
Prevents decline of overall market share.Â
Helps earn a profit of $19 million, through new customers in years one and twoÂ
The mainstream strategy
Capacity to earn higher profits after years one and two
After years one and two, profit could be as high as $39 million
To promote this...