Clean Edge Essay

Non- useable razors put down average growth of about 5% in retail sales during the period 2007 to 2010 whereas refill pick-me-up and disposable razors recorded growth of approfessional personximately 2% and 3% respectively for the same period. Innovations and in the raw intersection point introductions ar the prime detailors for the growth. Non-disposable razors and refill cartridge grocery store is in the main classified into trio sh atomic number 18s namely value, moderate and ace gift ground on price and quality. preponderatings consumer research identified unmistakable segmentation in terms of produce benefits and consumer behavior. % of non- disposable razor users atomic number 18 segmented as Involved Razor users, social/emotional shavers 28% as Involved Razor users, aesthetic shavers and 33% as set-apart Razor users, maintenance shavers. Studies from 2009 showed that the retail sales of non- disposable razors and refill cartridge came from 25% volume of top -notch-premium, 43% of moderate and 32% of value segments. In the last decade, the industry has experienced significant growth in the super premium segment. result innovation and new technology is leading this area for a number of new entrants.In 2008-09 the rate of new produce innovation leads to 22 new SKUs to be introduced. SWOT Analysis Strengths prevalent Health and Beauty Companys biggest strength is that it is a well- conventional brand with deep pockets and a precise hefty association with consumers. The product- livid exhibit Razor, that they nave released, is also technologically in the current grocery store. Weaknesses best The federation does not have a slice in the 37. 2% of the pie that corresponds to the super premium segment which has immense emf. Also there is a pretend of launching the product in the wrong segment or aligning it wrongly.A wrong move could result in cannibalization of rife Pro, another(prenominal) product in their portfolio. Opportuni ties There is very good growth in the super premium segment especially in mens grooming. The market is also highly profitable so vendors are lay to stock the products. Also, the maintenance users are a market not ventured by any confederacy till date. Hence the opportunities are immense. Threats A good number of competitors are trying to become the leader in this segment which is expected to grow in the future. The competitors could also catch up with the in vogue(p) echnology and release a technologically more advanced product.Availability of alternatives exchangeable disposable and electric razors make a high threat of substitutes. Because of extensive number of products available and constant innovation in the sector it is very easy for the consumers to switch the companies. Hence, consumers have a high bargaining power. ledger entry barriers are low in the industry since no major RD costs are involved and there are no major regulations. The bargaining power of the supplier s is low. Hence, overall the premium segment of nondisposable razors is an attractive industry to enter into.Positioning Strategy The head start dodging that we suggest is quoin Positioning, hind ending the premium segment As of now, the products released by overriding in the non-disposable razer segment, Paramount Pro and Paramount Avail are positioned 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 wise molding. tutelage 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 trusted disadvantages and advantages Advantages Positioning Paramounts Clean Edge as a niche will accentuate the companys product portfolio significantly. From the exhibits it is telescopic th at it will result in high and consistent profit margins for the company and the risk involved will be less.Apart from that, the financial need 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 courses, 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 southward strategy that can be followed is Mainstream Positioning. The advantages and disadvantages of the same are as follows Consumers are becoming more and more sophisticated twenty-four hour period by day and expect more advanced technology. Par amounts bread and cover product, Pro was in the mature phase of the product lifecycle so there is a possibility of decline. Positioning Clean Edge as mainstream product will serve well prevent loyal Paramount customers from being wooed away to more innovative brands.Main stream razor unit volumes are expected to capture over three times the volumes of the niche market in the first course. Clean Edge has the potential for true market domination and would quickly gain ass appeal. Disadvantages Paramount already had product in mainstream locating -Paramount Pro so launching it as mainstream positioning will dilute the brand power and will lead to cannibalization. more than marketing support will be essential to reach the target masses. The company would require an extensive publicize 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 abet year (2010) are calculated use the market surface (retail sales) and corresponding market bundle, both real (2009)and estimated (2010), of Paramount. The cost of Cannibalization is calculated using total sales and percentage of cannibalization given. 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 put down 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 such a way that it emphasizes Clean Edge Razor as a unique and breakthrough product with the physical exercise of latest technology. However, given the tight advertising budget, it should use the well-established name of Paramount rather than build a brand based on the Clean Edge.This should help potential buyers connect with the product quickly and test it. This should envision maximum sales. Recommendations & Conclusion The recommendation is to introduce the Clean Edge into the market 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 gelt 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 sho uld then launch it, maybe after 2 to 3 years, in the mainstream category. As the data shows, 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 inwardness of cannibalizing Paramounts existing products.