Clean Edge Razor Splitting Hairs in Product Positioning
MBA8145-Marketing Management Alpharetta, Summer-2011 GSU
Individual Case Analysis
Situation at Paramount
Paramount had established itself as a global consumer products giant with over $13 billion in worldwide sales and $7 billion in gross profits for 2009 since it’s entry in the market in 1962. In 2009, Paramount had established itself as unit-volume market leader in 2009 based on non disposable razor product sales. The Non disposable razor category market is entering a new phase with technology products and new entrants posing a threat to capture Paramount’s Market Share. From the target market positioning perspective the ...view middle of the document...
The rate of increase in total media advertising expenditures in this category is greater than the rate of increase in retail market sales as shown in Appendix A. Main reason for this is numerous product innovations in Super-Premium segment and advances in technology. Paramount had developed a new product in this category called “Clean Edge” based on superior technology and 5 blade designs. This new product would give Paramount much needed boost to position itself as a leader in Super-premium segment and technology giant for non disposable category. If Paramount decides to position and market “Clean Edge” in mainstream positioning, then it will have to cannibalize existing
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Paramount Pro and Paramount Avail products. This could potentially reduce loss of revenue and eliminate these products from Paramount offering resulting in losses due to “Clean Edge”. Paramount is currently not sure as to where to place this product, “niche” or “mainstream” positioning.
Price: Based on the data given in this case and price set by Randall and his team for Clean Edge in either niche or mainstream positioning, I do not see any challenge for Paramount. The reason is that they are positioning this product in Super-premium segment and suggested retail unit price is $12.99 for Razor and $10.50 for cartridge in niche positioning, $11.19 for Razor and $8.89 for cartridge in mainstream positioning. This price is lower than current price in the same segment across Paramount’s competitor and even lesser when compared to Cogent Plus.
Place: I don’t see any issues with Coverage, Assortment, Inventory, Transport or Locations in US market. However, distribution started to shift outside traditional food and Drug Stores. In 2000, food and drug stores sold over 50% of all razors, but by 2009 it was only 42%. So, how should Paramount leverage this shift and gain advantages to increase its sales via retail channels?
Promotion: Paramount as a corporation had decided to curb excessive marketing expenses in all product categories. With the introduction of “Clean Edge” as a new product, Randall and his team has to convince executive leadership to allocate necessary dollars needed to establish a marketing campaign that will position “Clean Edge” as a revolutionary Super premium and technologically advance Razor into the market. The marketing campaign for “Clean Edge” has to be carefully planned in such a way that the message reaches the target market with great success and also satisfy the executive team.
Branding: Paramount executives have different opinions when it comes to branding this revolutionary “Clean Edge” product. However, Randall and Paramount has a challenge to name come up with a name that provides the necessary boost for “Clean Edge” branding, and not cannibalize Paramount Pro and Avail products.
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Paramount studies showed that consumers purchased razors and replacement cartridges more frequently than...