Marketing Management

Case Analysis

Clean Edge Razor: Splitting Hairs in Product Positioning

Group AE1:
Abhinav Singh (14S601)
Anima Tapadiya (14S607)
Dushan Garg (14S616)
Niharika G (14S628)
Raviteja Palanki (14S636)
Prem Sharath (14804)

Q.1. What changes are occurring in the non disposable razor category? Assess
Paramounts competitive position.
Changes occurring in the non-disposable razor category:
Consumers are increasingly becoming aware of technology and are demanding
for technologically advanced and innovative razors. The market is growing at
the rate of 5% approximately from 2007-10. Every player in this market is
planning to increase the advertising media expenditure which translates to say
that the market is being tapped to its full potential. Also, distribution outlets
are responding to the increasing demand by increasing the shelf space. To
cater to this increasing demand, 22 new stock keeping units were introduced
between 2008 and 2009.
Initially, the distribution of non-disposable razors was limited to traditional
food and drug stores. But over the years from 2007 to 2010, the distribution
started to shift towards mass merchandisers and club stores.
Paramounts Competitive position:
Paramount presence is in the moderate and value segments. Paramounts
products Pro and Avail were currently not able to cater to the demand for
technologically advanced and innovative products.
Paramount also faced competition from substitute products like disposable
razors, electric razors, depilatory creams, waxing and hair removal.
Paramount proved to be a market leader with a 23.3% of market share in retail
unit.But, Paramount has no product in the premium market where it can earn
a high margin. Competitors like Prince, Benet & Klein, etc., are taking
advantage of presence in this market

Q.2. How is the nondisposable razor market segmented? Examine consumer

behavior for nondisposable razors.
The non-disposable razor market is segmented into three sections namely
value, moderate, and super-premium on the basis of price and quality. A 2009
study depicts that the retail sales of non-disposable razors came from 25%

volume of super-premium, 43% of moderate, and 32% of value segments. The

sale part contributes 34% of super-premium, 44% of moderate, and 22% of
value segments to the retail sales of non-disposable razors.
Paramounts consumer research identified distinct segmentation in terms of
product benefits and consumer behaviour. 39% of non-disposable razor users
are segmented as Involved Razor users, Social/Emotional Shavers; 28% as
Involved Razor users, Aesthetic Shavers, and 33% as Uninvolved Razor users,
Maintenance Shavers. Social/Emotional Shavers differentiate among products
and search for products based on both functionality and messaging. They
perceive shaving as an important part of a daily grooming practice which
makes them feel more attractive and confident. Aesthetic Shavers search for
products that most effectively remove hair and they consistently shave in
order to remove unwanted hair. They perceive shaving as a means to smooth
skin they want. Maintenance Shavers are indifferent towards the different
products and their shaving routine is inconsistent. They perceive shaving as
just another chore which they try to finish as soon as possible.

Q.3. What are the arguments for launching Clean Edge as a) A Niche
Product and b) A Mainstream brand?
Following are the arguments which explain the pros and cons of launching
Clean Edge as a niche and a mainstream product:
Niche positioning
Pros
Positioning Clean Edge as niche will complement companys existing product
portfolio perfectly.
From the exhibits, its visible that it will result in high and consistent profit
margins for the company and the risk involved will be less. Apart from that
Niche positioning will require $15million in total marketing expenditures in the
first year as opposed to $42 million in mainstream.

Cons
First of all it has a limited consumer base and secondly the companys current
products Pro and Avail had not introduced any innovations in the last five
years. Pro is in the mature phase and theres a high probability of its sales
declining soon. Therefore by launching in this segment, Paramount will lose
their loyal customer base which is there with Pro and Avail.
Mainstream positioning:
Pros
Consumers are becoming more and more sophisticated day by day and expect
more advanced technology. Paramounts bread and butter 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 help 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 year. Clean Edge has the
potential for true market domination and would quickly gain mass appeal.
Cons
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 needed 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.