CASE STUDY 1

CLEAN EDGE RAZOR

BY SARAH MOHAMAD NOR

UTM KL

PRESENTATION OUTLINE
Introduction
Issues
Analysis of Marketing Strategy
Razor Market Analysis
Marketing Strategy Analysis
Marketing Solutions

INTRODUCTION
Non-Disposable Razor Market
Consumer
Frequent brand
switching
Replacement cycle shortened since
consumers trying new products &

67%
Involved Non-Disposable Razor Users

Distribution
Channel
Outlets Increase Shelf
Space
for non-disposable razor category.

Shift
of
distribution
channel from Food & Drugs
stores to Mass Merchandisers

Market Trend

Competitor

5% growth per year

Continuous Innovation

In sales of Non-disposable Razors from

2007 to 2010

in non-disposable razor category

Significant growth
Super-Premium
Segment

in

Driven by product innovation

Male-specific personal
care products
became more mainstream

Advertising
and
Promotion
Expenditures
Expansion

of

Intensify competition to
obtain retail space

THE DILEMMA

ISSUES
Primary Issues
Where should the
Clean Edge Razor
be positioned?

Niche
Main Stream

Secondary Issues
Brand name
positioning of
Clean Edge Razor

Separating Clean Edge

from existing Product Line

Associating Paramount to
the brand as part of overall
Corporate Strategy to build
Paramount brand equity

Clean Edge by
Paramount

Paramount Clean
Edge

RAZOR MARKET COMPETITIVE MAPPING

Prince
Cogent
Cogent Plus

Benet & Klein

Vitric Advanced
Vitric Master

Benet & Klein

Vitric

Paramount
Paramount Pro

Su

r-P
e
p

ium
m
re
Radiance
Naiv

Paramount

d
Mo

Paramount Avail

lue
a
V

te
a
r
e
Simpsons
Tempest

RAZOR MARKET ANALYSIS

Market Share by
Brand

Market Share - by Market

Segment
Value; 6%

Super Premium; 46%

Moderate; 48%

Source: Exhibit 5

RAZOR MARKET ANALYSIS

Sales by Segment
Product Segment

Volume (%)

Dollar
(%)

Volume to
Dollar Ratio

Super-premium

25

34

1 : 1.4

Moderate

43

44

1 : 1.0

Value

32

22

1 : 0.7

Source: Table B

Although Moderate Market captures the highest percentage of volume and dollar value,
the super-premium gives the higher return in terms of dollar value per volume
produced.
On the other hand, value market segment gives lower market value per volume
produced.

RAZOR MARKET ANALYSIS

SWOT Analysis
Strength
1. Established brand that consumers already trust and hold
strong and positive association with.

Opportunity
1. Growth in the super premium segment
2. Mainstream market is highly profitable.

2. Paramount can afford $19 million in advertising

3. Increased in mens grooming.

3. Best product in the market (Technologically advanced and

4. Uninvolved razor users (maintenance users) is untapped

tested)

consumer base.

4. Nothing currently in the market like it.

Weakness

Threat

1. Launching the Clean Edge Razor in the wrong segment

1. Positioning in the Mainstream market could lead to

could potentially canabilise the Paramount Pro.

cannibalization of existing Paramount product

2. Does not hold a position in the super premium segment of

2. Super-premium market segment is highly influenced by

the mainstream market which accounts for 37.2%of the

market and technology changes on razor functionality

total non-disposable razor market.

and design.

3. Competitors in the market may released similar products.

4. Naiv, a competitor brand of non-disposable razor has
similar vibrating technology to Clean Edge.

MARKETING STRATEGY ANALYSIS

Profit and Loss Forecast for Clean Edge Under Niche and Mainstream Scenarios (in $ Millions)

MARKETING STRATEGY ANALYSIS

Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning

Profit Projection as Percentage of

Sales
GP Margin (%)
50%
44%
40%
35%
30%
20% 21%
10%

Niche
7%

0%
Year 1

Mainstream
Year 2

Niche positioning offers higher projected profit comparatively to

Mainstream Positioning.

MARKETING STRATEGY ANALYSIS

Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning

Advertising and Promotion Effort ($ Million)

Operating Cost

Niche

Projection
Advertising & Promotions

Year 1
$

15.00

Year 2
$

16.00

Mainstream
Year 1
$

42.00

Year 2
$

39.00

Advertising and Promotion is projected to take up approximately 40% of

the Total Cost. Based on the projection, Mainstream market positioning
strategy requires three times more marketing effort (budget) as
compared to Niche market positioning strategy.

MARKETING STRATEGY ANALYSIS

Key Highlights from Profit and Loss Forecast for Clean Edge in two (2) different Brand Positioning

Cannibalisation Rate ($ Million)

Cannibalisation

Niche

Projection
Total Cannibalisation

Year 1
$

4.54

Year 2
$

10.72

Mainstream
Year 1
$

20.12

Cannibalisation rate for Niche Positioning = 35%

Cannibalisation Rate for Mainstream Positioning = 60%

Year 2
$

41.02

MARKETING SOLUTIONS
Where should the Clean Edge Razor be positioned?
To launch Clean Edge as niche technology product for the first two
years, and subsequently as a mainstream product.
This will benefit Paramount to:
1. Tap higher profit margin
2. Win over shelf space at distribution channel
3. Reduce cannibalisation effect of existing products
4. A soft entry approach to super-premium segment through niche
positioning
Brand name positioning of Clean Edge Razor

As a niche product, Clean Edge should be distinguished from

other brands, as well as Paramount existing line.
Therefore, Clean Edge by Paramount will attract customers
and reduce the cannibalisation impact to the Paramount Avail
and Paramount Pro.