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CLEANSPLITTING

EDGE RAZOR
HAIRS IN PRODUCT POSITIONING

CASE SOLUTION
BY GROUP C2
Anubandh 14F112
Leela Mohit Chivukula 14F129
Moumita Dutta 14F132
Sai Alekya Edara 14F147
Sanjit Kumar Moharana 14F148
PARAMOUNT HEALTH AND BEAUTY COMPANY

 Global consumer products giant (Health, Cleaning,Beauty and Grooming)


 $13 billion worldwide sales and $7 billion in gross profits.
 Entered non-disposable razor market in 1962 and current revenue- $170
million, gross profit-$92 million and operating profit-$26 million
 Products(non-disposable razors and refill cartridges)
 Paramount pro in moderate segment and paramount avail in value segment.
 Proposed product in super premium segment “Clean Edge” which gives
closest, cleanest and smoothest shave.
Clean Edge: Attributes and Benefits
COMPETITORS

Brand Categories MARKET SHARE ($)

Super-Premium Moderate Value

Cogent Plus, PARAMOUNT


0%
Prince Cogent 23% 23% PRINCE
BENET AND KLEIN
1%
Companies

Vitric Advanced, SIMPSON


Benet and Klein Vitric Master Vitric 22%
31% OTHERS
RADIANCE

Simpsons Tempest

Radiance Naiv
Analyzing completion
Market Share

NDR Brands Volume(%) $(%) Unit Price($) Product Features Product Benefits
Cogent Plus 1 1.3 12.5
Cogent 22.1 29.4 11.19 Super premium products
Vitric 17.8 20 8.89 Advance lubrication strip,
vitric Advanced 0.7 1.1 11.2 non slip handle, superior
Vitric Master 0.7 0.9 10.85 anti-corrosive technology
Paramount Pro 16.9 18.5 9.5 No significant
Paramount Avail 6.4 4.9 5.75 technological innovation.
Tempest 0.9 1.1 10.99 Advanced pivoting head. Smoother shave
Pulsing feature(vibrating
Naiv(Expected) 2 2.6 11.8 technology).
Clean Edge 11.19
MARKET SEGMENTS EXISTING BEHAVIORAL SEGMETS

value • 32% volume Social/emotional • 39% non disposable


• 22% dollar shavers razor users

• 43% volume • 28% non disposable


moderate Aesthetic shavers
• 44% dollar razor users

• 25% volume Maintenance


• 33% non disposable
Super premium shavers-un involved razor users
• 34% dollar
SYMPTOMS

• Segment positioning of clean edge razor:


 Niche segment
 Main stream

• Brand name positioning


 How to associate paramount to clean edge
NICHE POSITIONING

Pros: Cons:
Positioning Clean Edge as niche will limited consumer base
complement company’s existing product
portfolio perfectly. the company may lose their loyal customer
base which is there with Pro and Avail, who
consistent profit margins were used to non-technological products.
risk involved in the form of cannibalization
will be less.
Less marketing expenditures-$15 million
compared to main stream.
MAIN STREAM POSITIONING

Pros: Cons:
Pro ,the main product was in the There is the possibility of diluting the
mature phase of the product lifecycle brand power leading to cannibalization.
so there is a possibility of decline.
More marketing support will be needed to
Technological advancement can resist reach the target masses.
the new innovative markets and
The company would require an extensive
competitors
advertising campaign considerable
consumer promotions and thus the
expenses will be huge, costing almost $42
million
Profit & Loss Statement
Niche Mainstream
Year 1 Year 2 Year 1 Year 2
Unit sales – Razors (millions of units) 1 1.5 3.3 4
Dollar sales - Razors ($ in millions) 12.99 19.485 36.927 44.76
Unit sales – Cartridges (millions of units) 4 10 9.9 21.9
Dollar sales – cartridges ($ in millions) 42 105 88.011 194.691
Total dollar sales 54.99 124.485 124.938 239.451
Production costs - Razors ($ in millions) 5 7.5 15.642 18.96
Production costs – Cartridges ($ in millions) 9.72 24.3 22.176 49.056
Capacity costs 0.61 0.87 1.71 2.45
Advertising and Promotion ($ in millions) 15 16 42 39
Total costs 30.33 48.67 81.528 109.466
Operating Profit ($ in millions) 24.66 75.815 43.41 129.985
Profits as % of sales 44.84 60.90 34.75 54.28
Cost of cannibalization ($ in millions) 19.2465 43.56975 74.9628 143.6706
Profit after cannibalization ($ in millions) 5.4135 32.24525 -31.5528 -13.6856
LAUNCH DECISION

Launching in niche market :

• Lower cannibalization costs


• Lower advertising costs
• Although lesser profits compared to mainstream without
considering expenses, after the above expenses niche will result
in better net results

Launching in super-premium segment and social/emotional shavers


segment
BRAND NAME OF THE PRODUCT

The clean edge will be positioned in the name of


“CLEAN EDGE BY PARAMOUNT”

Reasons:
 Focusing product rather than company
 Differentiating from other brands and also Pro and Avail models helps in
reduction of cannibalization