Clean Edge Essay

Non-disposable razors recorded fair(a) growth of about 5% in retail sales during the period 2007 to 2010 whereas refill cartridge and disposable razors recorded growth of approximately 2% and 3% respectively for the same period. Innovations and new harvest-home introductions argon the prime factors for the growth. Non-disposable razors and refill cartridge market is broadly classified into three parts namely value, moderate and tops(predicate) gift based on price and quality. dominants consumer research identified distinct partition in terms of product benefits and consumer behavior. % of non- disposable razor users are segmented as Involved razor users, social/emotional s viewrs 28% as Involved Razor users, aesthetic shavers and 33% as isolated Razor users, maintenance shavers. Studies from 2009 showed that the retail sales of non- disposable razors and refill cartridge came from 25% volume of superintendent-premium, 43% of moderate and 32% of value segments. In the last de cade, the industry has experienced significant growth in the super premium segment. Product innovation and new technology is leading this welkin for a shape of new entrants.In 2008-09 the rate of new product innovation leads to 22 new SKUs to be introduced. uprise Analysis Strengths preponderating wellness and Beauty Comp whatevers biggest strength is that it is a well- established mark off with deep pockets and a very good association with consumers. The product- well-defined Edge Razor, that they nave released, is also technologically in the current market. Weaknesses best The company does not have a slice in the 37. 2% of the pie that corresponds to the super premium segment which has immense potential drop. Also on that point is a risk of launching the product in the wrong segment or place it wrongly.A wrong move could result in cannibalization of predominant Pro, an other(a) product in their portfolio. Opportunities There is very good growth in the super premium segme nt especially in mens grooming. The market is also spicyly bankable so vendors are ready to stock the products. Also, the maintenance users are a market not ventured by any company till date. Hence the opportunities are immense. Threats A good number of competitors are trying to befit the leader in this segment which is expected to grow in the future. The competitors could also catch up with the up-to-the-minute echnology and release a technologically more advanced product.Availability of alternatives like disposable and electric razors instal a high threat of substitutes. Because of large number of products available and constant innovation in the sector it is very easy for the consumers to switching the companies. Hence, consumers have a high bargaining reason. Entry barriers are pocket-size in the industry since no major RD follows are involved and at that place are no major regulations. The bargaining power of the suppliers is low. Hence, overall the premium segment of nondisposable razors is an cunning industry to enter into.locating Strategy The first outline that we suggest is Niche Positioning, object glassing the premium segment As of now, the products released by Paramount in the non-disposable razer segment, Paramount Pro and Paramount Avail are positi one(a)d in the moderate segment and as a value -offering respectively. After three courses of development, Paramount Health and Beauty Company has come up with a new technologically advanced vibrating razor called Clean Edge.Keeping in mind the superior technology used and the fact that Paramount has not launched a product targeting the premium egment, Paramount could adopt Niche Positioning while launching Clean Edge. However, there are certain disadvantages and advantages Advantages Positioning Paramounts Clean Edge as a recess will accentuate the companys product portfolio significantly. From the exhibits it is visible that it will result in high and consistent profit margins for the company and the risk involved will be less.Apart from that, the financial unavoidableness of launching the product in the premium segment is only 15 million dollars as against 42 million dollars for the mainstream targeting. Disadvantages As the trends suggests, understanding the fact that the premium segment has not been targeted significantly, almost all of Paramounts competitors have launched products for this segment. Also, for the past 5 years, the companys current products Pro and Avail have not introduced any new innovations as a result of which its customers are moving on to other competitors.The product pro is in the mature face and might need phasing out eventually. The flake scheme that can be followed is Mainstream Positioning. The advantages and disadvantages of the same are as follows Consumers are becoming more and more in advance(p) day by day and expect more advanced technology. Paramounts bread and cover product, Pro was in the mature phase of the product lif ecycle so there is a possibility of decline. Positioning Clean Edge as mainstream product will help prevent loyal Paramount customers from universe wooed away to more innovative brands.Main stream razor unit volumes are expected to grab over three times the volumes of the niche market in the first year. Clean Edge has the potential for true market domination and would chop-chop gain ass appeal. Disadvantages Paramount already had product in mainstream positioning -Paramount Pro so launching it as mainstream positioning will dilute the brand power and will lead to cannibalization. More marketing support will be mandatory to reach the target masses. The company would require an extensive advertising campaign, considerable consumer promotions would be needed and thus the expenses associated with them will be huge.To reach full sales potential with this positioning, $42 million marketing budget would be needed for year one. Total sales of Paramount for Avail and Pro for first year ( 2009) and second year (2010) are calculated using the market size (retail sales) and corresponding market sell, both real (2009)and estimated (2010), of Paramount. The cost of Cannibalization is calculated using total sales and percentage of cannibalization blow overn. Analyzing the result, it is evident that launching the product is a profitable venture however, the cost of cannibalization may change equations.The cost of cannibalization is lower for the niche market as compared to mainstream market. Although, cannibalization djustments give us losses for the first year in the case of both mainstream and niche, the profit obtained in the second year for mainstream is larger than niche market. Branding Strategy The branding should be done in much(prenominal) a way that it emphasizes Clean Edge Razor as a unique and breakthrough product with the usage of latest technology. However, given the tight advertising budget, it should use the well-established name of Paramount rather than haoma a brand based on the Clean Edge.This should help potential buyers connect with the product quickly and test it. This should ensure maximum sales. Recommendations & Conclusion The recommendation is to introduce the Clean Edge into the marketplace as a niche product since data shows that consumers in the premium segment are willing to switch between the companies. Using advertising and promotion of the new product we can gain market share from competitors. Exhibit 8directly suppo rts this recommendation and snows that even though unit sales are less than main stream sales, the operating profit and the operating profits as % of sales is higher.In both year one and year two, this niche arket is profitable and growing. It is here that Paramount should focus its efforts on product introduction and positioning for the Clean Edge Razor. Once it has launched itself in the niche segment, Randall should then launch it, maybe after 2 to 3 years, in the mainstream category. As the data s hows, both niche and mainstream strategy will help Paramount to raise its market share in super- premium non disposable razor segment. But the niche strategy will enables Clean Edge Razor to contribute profit and at the same time, limit the military issue of cannibalizing Paramounts existing products.