Scribd Logo
Upload

Welcome to Scribd!

  • 2K views

    Clean Edge Razor

    Uploaded by

    Roma Rahaim Graham
    The document discusses a new razor product called Clean Edge being developed by Paramount Health and Beauty Company. It considers how to best position Clean Edge in the market against competitors. The options are introducing it as a niche super-premium product or a mainstream product. Market research found the mainstream approach could cannibalize 60% of Paramount's existing sales. As a niche product this cannibalization would be reduced to 35%. Analysis of sales data showed the niche approach would have higher profits each year even with fewer unit sales. The recommendation is for Paramount to introduce Clean Edge as a niche super-premium product to capitalize on its innovative design and avoid significantly eroding their existing product lines.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd

    Clean Edge Razor

    Uploaded by

    Roma Rahaim Graham
    2K views3 pages
    The document discusses a new razor product called Clean Edge being developed by Paramount Health and Beauty Company. It considers how to best position Clean Edge in the market against competitors. The options are introducing it as a niche super-premium product or a mainstream product. Market research found the mainstream approach could cannibalize 60% of Paramount's existing sales. As a niche product this cannibalization would be reduced to 35%. Analysis of sales data showed the niche approach would have higher profits each year even with fewer unit sales. The recommendation is for Paramount to introduce Clean Edge as a niche super-premium product to capitalize on its innovative design and avoid significantly eroding their existing product lines.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses a new razor product called Clean Edge being developed by Paramount Health and Beauty Company. It considers how to best position Clean Edge in the market against competitors. The options are introducing it as a niche super-premium product or a mainstream product. Market research found the mainstream approach could cannibalize 60% of Paramount's existing sales. As a niche product this cannibalization would be reduced to 35%. Analysis of sales data showed the niche approach would have higher profits each year even with fewer unit sales. The recommendation is for Paramount to introduce Clean Edge as a niche super-premium product to capitalize on its innovative design and avoid significantly eroding their existing product lines.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views3 pages

    Clean Edge Razor

    Uploaded by

    Roma Rahaim Graham
    The document discusses a new razor product called Clean Edge being developed by Paramount Health and Beauty Company. It considers how to best position Clean Edge in the market against competitors. The options are introducing it as a niche super-premium product or a mainstream product. Market research found the mainstream approach could cannibalize 60% of Paramount's existing sales. As a niche product this cannibalization would be reduced to 35%. Analysis of sales data showed the niche approach would have higher profits each year even with fewer unit sales. The recommendation is for Paramount to introduce Clean Edge as a niche super-premium product to capitalize on its innovative design and avoid significantly eroding their existing product lines.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    Clean Edge Razor: New Product Positioning Paramount Health and Beauty Company (Paramount) is a multiproduct company specializing

    in shaving products and accessories. The company has developed a new shaving product dubbed Clean Edge is seen as the next generation of wet shaving products. Existing shaving products sold by paramount occupy the value and moderate product market segment. Introducing the new Clean Edge product into the market requires decisions on market placement, pricing, advertising and branding. Several potential problems with the product introduction are evident. The first problem to address is how this product should be positioned relative to the other offerings of Paramount. Another question is how this product will fare against similar competitive products from rival companies. Information from Table A in the case study indicates the non disposable razor market growing at roughly 5% per year with refill cartridge growth rate at 2% per year. The refill market is much larger than the razor market in terms of total sales. Table B in the same document on page 2 indicates that the Super-Premium and Moderate market volume and dollar sales are about 75% of the total market. The choice for Paramount is which market segment to position the new Clean Edge razor and replacement cartridge sales into for maximum profitability. Competitors have developed products that have some but not all of the features of the new Clean Edge razor so this becomes a factor on market introduction. Will this product displace competitors brands or just replace Paramount existing sales from its other lines? Positioning the product as a super premium product with premium pricing seems to insulate the company from market cannibalism. Market research done by Paramount indicates that if the Clean Edge is introduced into a mainstream scenario, 60% of new sales would come from Paramount existing product lines. Introduction as a niche product the market cannibalism

    would be reduced to about 35%. Both scenarios have the potential to erode strong market brands currently established by Paramount. The market Pro Forma on Clean Edge developed using information gathered from the Clean Edge case and Exhibit 7 of the case show a clear decision for production positioning. Overall product pricing is competitive with other competing products as shown in Exhibit 6. Analysis of the information in this Exhibit indicates that unit sales and cartridge total dollar sales are both larger in the Mainstream market. This is not too surprising since both the razor and cartridge sales are much larger for this market than the niche market. The analysis also indicates that total cost for production is higher in the Mainstream market. This causes the operating profits as a % of sales to be less in mainstream than in the Niche market. Even with these larger costs the mainstream market seems hold its own until cannibalization of product is factored into the equation. Sixty percent product cannibalization causes the mainstream market to be unprofitable in both year one and two. The recommendation is to introduce the Clean Edge into the marketplace as a niche product capitalizing on the innovative design and customers willingness to switch to this razor even at a premium price. This positioning does not cannibalize existing niche market nearly as bad only taking about thirty five percent of the existing product line. With appropriate advertising and promotion the new product should take away market share from competitors. Exhibit 8 directly supports this recommendation and shows that even though unit sales are less than mainstream sales, the operating profit and the operating profits as % of sales is higher. In both year one and year two, this niche market is profitable and growing. It is here that Paramount should focus its efforts on product introduction and positioning for the Clean Edge Razor.

    Bibliography

    Harvard Business Publishing Clean Edge Razor: Splitting Hairs in Product Positioning John A. Quelch; Heather Beckham

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy