Clean

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Clean Edge Razor

KELOMPOK 7 MM KELAS 27C
DIAN ATIKA, RAFIKA, RERY INDRA KUSUMA

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Case Summary
Main Issue
Problem Statement
Analysis
Recommendation

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Case Summary

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- Paramount Health and Beauty Company, known as Paramount,

is a global consumer products giant with four corporate divisions

including Health, Cleaning, Beauty and Grooming.
- Paramount entered the non-disposable razor market in 1962
and quickly became a market leader.
- Paramount offers two products, the Paramount Pro in the
moderate segment of the product market and the Paramount
Avail, which was considered the value offering market.
- With these two products the company enjoys 23.3% (2009) of
the retail share.

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2009, the company realized $13 billion in worldwide sales

and $7 billion in gross profits, with the non-disposable razors
and refill cartridges in the U.S. contributing $170 million in
revenue, gross profit of $92 million, and operating profit of $26
million.
- The company has developed their newest non-disposable
razor, Clean Edge, which is currently undergoing review by
market testers.

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NON DISPOSABLE RAZORS AND REFILL CARTRIDGE RETAIL SALES

BY SEGMENT FOR US MARKET (2009)

SALES
VALUE 22%

SUPERPREMIUM
34%

MODERATE
44%

VOLUME
VALUE 32%

SUPER-PREMIUM
25%

MODERATE 43%

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PARAMOUNT COMPETITORS AND MARKET SHARE (2010 E)

PRINCE

23 % of market share

Market leader since 1950s, U$ 224 M

revenue, U$45 M operating profit, 26,2%
market share, brand: Cogent

OTHER

B&K

Brand: Vitric,
21,1 % of market share

PARAMOUNT

21,4 % of market share

Brand: Tempest
5,7 % of market share

SIMPSONS

RADIANCE

Brand: Naiv,
2,6% of market share

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Main Issue

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1. How Should Edge-Razor Enter The Market

2. Positioning strategy for the Clean-Edge

3. Brand Name for new product

4. Market budget for promoting Clean-Edge

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Problem Statement

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MARKET SEGMENT
Market
Segments

SuperPremium

Mainstream

Moderate

Niche

Value

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POSITIONING STRATEGY

ALBERT ROSENBERG

WILLIAM KIM

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BRAND NAME CONSIDERATIONS

Paramount Clean-Edge
Clean-Edge Paramount

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MARKETING BUDGET ALLOCATION

NICHE

$ 15 Million

MAINSTREAM

$ 42 Million

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Analysis

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CLEAN EDGE DESIGN AND TESTING

VIBRATING,ULTRA- THIN, 5 BLADE RAZOR

A LARGER ,HEAVIER HANDLE FOR A BETTER BALANCE

,GRIP & CONTROL VIBRATION FOR STIMULATE HAIR
FOLLICLES, 25% INCREASE IN HAIR REMOVAL

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COMPARE THE SUGGESTED PRICE (IN MAINSTREAM

POSITIONING) WITH COMPETITORS
Super Premium

Razor

Standard Refill
Cartridges

Cogent Plus

$12.50

$10

Cogent

$11.19

$8.89

Clean-Edge

$11.19

$8.89

Naiv

$11.80

$9.45

Vitric Advanced

$11.20

$8.99

Vitric Master

$10.85

$8.65

Tempest

$10.99

$8.75

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Profit and Loss Forecasts for Clean Edge Under Niche and
Mainstream Scenarios
Niche

Mainstream

Year 1
unit

price

Year 2
dollar

unit

price

Year 1
dollar

unit

price

Year 2
dollar

unit

price

dollar

Razors sales

9.09

9.09

1.5

9.09 13.64

3.3

7.83 25.84

7.83 31.32

Cartridge sales

7.35 29.40

10

7.35 73.50

9.9

6.22 61.58

21.9

6.22 136.22

Total Sales (1)

38.49

87.14

Razors Production cost

5.00

1.5

Cartridge Production cost

2.43

9.72

10

Capacity Cost

87.42

167.54

7.50

3.3

4.74 15.64

4.74 18.96

2.43 24.30

9.9

2.24 22.18

21.9

2.24 49.06

0.61

0.87

1.71

2.45

Advertising & Promotion

15.00

16.00

42.00

39.00

Total Cost (2)

30.33

48.67

81.53

109.47

8.16

38.47

5.89

58.07

21.20

44.14

6.74

34.66

Profit (1-2)
Profit % from sales

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SEGMENT MARKET COMPARATIONS

NICHE
Create a One Strong Brand
Avoid Cannibalization
Lower Marketing
Investment than
Mainstream
Higher Gross Profit than
Mainstream

MAINSTREAM
Replace Paramount Pro
(Cannibalization)
Higher Marketing
Investment
Lower Gross Profit

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BEHAVIOR SEGMENTATION OF NON DISPOSABLE RAZOR

CONSUMERS
Social/Emotional Shavers
(39%)

Aesthetic Shavers (28%)

Maintenance Shavers (33%)

Differentiate among
product. Search for product
based on both functionality
and messaging.

Search for product that

most effectively remove
hair.

View product as the same.

Lack of interest in product
category.

Shaving as an essential part

of a daily grooming ritual.

Shaving is consistently done

to remove unwanted hair.

Shaving routine is
inconsistent.

Shaving makes them feel

more attractive and
confident.

Shaving is a means to
smooth skin they desire.

Shaving is a chore they try

to finish as quickly as
possible.

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Recommendation

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WE PREFERED NICHE POSITIONING

TARGETING THE MOST APPROPRIATE SEGMENTS

33%

39%

28%

SOCIALEMOTIONAL
SHAVERS
AESTHETIC
SHAVERS

MAINTENANCE
SHAVERS

CHOSE 2 SEGMENTS : SOCIAL-EMOTIONAL AND AESTHETIC SHAVERS

(TOTAL SEGMENT 67%)

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