Clean Edge Essay Example for Free

exonerated Edge EssayNon-disposable shaves enter average ontogeny of about 5% in sell sales during the period 2007 to 2010 whereas refill cartridge and disposable razors recorded growth of approximately 2% and 3% respectively for the same period. Innovations and new harvest-tide introductions be the apex positionors for the growth. Non-disposable razors and refill cartridge market place place is broadly classified into 3 elements concernly measure out, mode direct and super aid based on price and quality. dominants consumer research identified distinct segmentation in terms of product benefits and consumer behavior. % of non- disposable razor users are segmented as Involved Razor users, social/emotional s clearrs 28% as Involved Razor users, aesthetic shavers and 33% as Uninvolved Razor users, maintenance shavers. Studies from 2009 showed that the retail sales of non- disposable razors and refill cartridge came from 25% volume of super- grant, 43% of moderate an d 32% of value segments. In the last decade, the industry has experienced signifi fecal mattert growth in the super premium segment. ware innovation and new technology is leading this sector for a amount of new entrants.In 2008-09 the rate of new product innovation leads to 22 new SKUs to be introduced. SWOT Analysis Strengths rife health and Beauty Companys biggest strength is that it is a well- established brand with deep pockets and a very good familiarity with consumers. The product- Clean Edge Razor, that they nave released, is in addition technologically in the current market. Weaknesses best The company does not have a slice in the 37. 2% of the pie that corresponds to the super premium segment which has immense possible. Also on that point is a risk of entryway the product in the wrong segment or positioning it wrongly.A wrong move could result in cannibalization of Paramount Pro, another product in their portfolio. Opport unities There is very good growth in the su per premium segment especially in mens grooming. The market is as well as highly profitable so vendors are ready to stock the products. Also, the maintenance users are a market not ventured by any company till date. Hence the opportunities are immense. Threats A good number of competitors are trying to become the leader in this segment which is expected to grow in the future. The competitors could also catch up with the latest echnology and release a technologically more advanced product.Availability of alternatives want disposable and electric razors make a high threat of substitutes. Because of large number of products available and never-ending innovation in the sector it is very easy for the consumers to switch the companies. Hence, consumers have a high negotiate power. Entry barriers are low in the industry since no major RD be are involved and in that location are no major regulations. The bargaining power of the suppliers is low. Hence, overall the premium segment of nondisposable razors is an attractive industry to enter into.Positioning Strategy The prototypal system that we hint is Niche Positioning, targeting the premium segment As of now, the products released by Paramount in the non-disposable razer segment, Paramount Pro and Paramount Avail are positioned in the moderate segment and as a value -offering respectively. After three years of development, Paramount Health and Beauty Company has come up with a new technologically advanced vibrating razor called Clean Edge.Keeping in mind the superior technology used and the fact that Paramount has not engrossed a product targeting the premium egment, Paramount could adopt Niche Positioning tour establish Clean Edge. However, there are certain disadvantages and advantages Advantages Positioning Paramounts Clean Edge as a ceding back go out accentuate the companys product portfolio significantly. From the exhibits it is visible that it will result in high and ordered profit margins for th e company and the risk involved will be less.Apart from that, the financial requirement of launching the product in the premium segment is only 15 one million million million dollars as against 42 million dollars for the mainstream targeting. Disadvantages As the trends suggests, understanding the fact that the premium segment has not been targeted significantly, almost all of Paramounts competitors have launched products for this segment. Also, for the away 5 years, the companys current products Pro and Avail have not introduced any new innovations as a result of which its customers are moving on to other competitors.The product pro is in the mature position and might need phasing out eventually. The second strategy that can be followed is Mainstream Positioning. The advantages and disadvantages of the same are as follows 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 p hase of the product lifecycle so there is a possibility of decline. Positioning Clean Edge as mainstream product will help foreclose 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 initial year. Clean Edge has the potential for true market domination and would quickly gain ass appeal. Disadvantages 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 trade support will be call for 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. Total sales of Paramount for Avail and Pro for first year (2009) and second year (2010) are calculated using the market size (retail sales) and corresponding market share, some(prenominal) real (2009)and estimated (2010), of Paramount. The cost of Cannibalization is calculated using total sales and percentage of cannibalization given. Analyzing the result, it is evident that launching the product is a profitable venture however, the cost of cannibalization may change equations.The cost of cannibalization is lower for the niche market as compared to mainstream market. Although, cannibalization djustments give us losses for the first year in the case of both mainstream and niche, the profit obtained in the second year for mainstream is larger than niche market. Branding Strategy The branding should be done in such a way that it emphasizes Clean Edge Razor as a unique and breakthrough product with the usage of latest technology. However, given the tight advertising budget, it should use the well-established name of Paramo unt rather than build a brand based on the Clean Edge.This should help potential buyers connect with the product quickly and test it. This should ensure maximum sales. Recommendations Conclusion The recommendation is to introduce the Clean Edge into the marketplace as a niche product since data shows that consumers in the premium segment are willing to switch between the companies. Using advertising and promotion of the new product we can gain market share from competitors. Exhibit 8directly suppo rts this recommendation and snows that even though unit sales are less than main stream sales, the operating profit and the operating profits as % of sales is higher.In both year one and year two, this niche arket is profitable and growing. It is here that Paramount should focus its efforts on product introduction and positioning for the Clean Edge Razor. Once it has launched itself in the niche segment, Randall should then launch it, maybe after 2 to 3 years, in the mainstream category. As the data shows, both niche and mainstream strategy will help Paramount to raise its market share in super- premium non disposable razor segment. But the niche strategy will enables Clean Edge Razor to contribute profit and at the same time, limit the effect of cannibalizing Paramounts existing products.