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Clean Edge Razor - Case Study Presentation

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by

Semaan Obeid

on 6 December 2013

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Transcript of Clean Edge Razor - Case Study Presentation

Strategy Recommendation

Non-Disposable Razor Market
- 22 new products between 2008 - 2009
- 5% growth per year from 2007 - 2010
- Based on technical performance rather than visualization
- Tend to be higher priced, super - premium
- Razor Market is divided into 3 main product categories
- super premium (25% of market share)
- moderate (43 of market share)
- value (32% of market share)
Clean Edge Razor
- Super premium
- 3-Year development
- Technologically superior
- To be launched in 2011
Mainstream Positioning
Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and appeal the whole market with one offer or one strategy. The idea is to broadcast a message that will reach the largest number of people possible.

Positioning Options
Product Positioning Analysis
Niche market strategy

Mainstream market strategy

Consumer Behavior
- More brand switching (mainly to super-premium)
- Shorter inter-purchase intervals
- Shorter average usage period for the blades
- The market is divided into 3 types of consumers with different behaviorial specifications
Retailers
Razors offer high profit margins

Food & drugstores are the biggest retail channels

Retail from Mass Merchandisers are increasing
Competition
Increased marketing spenditures expected to rise 39% between 09-10
Pros
Less competition
Maximum margins
Reaching target markets is more effortless and more direct
Avoid wasting valuable time and resources - focus on small market segment
More Intimate Relationship with Consumers
Loyal customer base
Unique business brand

Cons
Lower sales volume
Difficulty in gaining high profit levels due to smaller market size.
Need of really knowing your customer
In competitive niche markets the competition can be ruthless

Pros
Big sales volume
High profit levels due to bigger market size
No need of really knowing your customer
Wide audience
Less risky
Production cost per unit is low
Achieving economies of scale

Cons
More competition
Smaller margins
Wasting lot of time and resources - focus on whole market
No Intimate Relationship with Consumers
Lack of loyal customer base

Based on Jim Harvey's speech structures
Example
Coca Cola Example
Test Your Skills
PLAY THE GAME!!!
Qatar University
Presented by:
Adbulhadi Al-Marri
Lukasz Slawinski
Amer Al-Rayahi
Semaan Obeid
MAKT 604 - Marketing Management
Clean Edge Razor - by Paramount
Razor Market Segmentation
Consumer Segmentation:
- Demographical Segmentation
- Consumer behavior and preferences

Razor types
- Disposable,
- Non disposable,
- Refill cartridges
- Depilatories
- Laser removal
- Wax
Aesthetic Shavers
- More brand switching (mainly to super premium quality)
- Shorter inter-purchase intervals
- Shorter average usage period for blades (greater recognition for earlier replacement)
Direct Competition
New Entrants
Indirect Competition:
Substitues
Increased competition for retail price
Continuous innovation in the product category
The Direct Competition
PARAMOUNT
Market Leader
2009: 23.4% $ / 23.3% Vol

Operating profit lagging behind competitors
(15% compared to Prince's 20%)

No innovations for the past 5 years


BENET & KLEIN
Market Leader
2009: 30.7% $ / 23.1% Vol
Entered razor market in 1985
PRINCE
Market Leader
2009: 30.7% $ / 23.1% Vol
Leader since 1950's
SIMPSONS
New Competitor
Significantly Increasing Advertising Budget
(2009: $2.4M, 2010: $15.2M)
RADIANCE
New Competitor: Sept 2010 Launch

Fierce competition with Paramount in other product sectors

Aggressive advertising in 2010: $16.1M

Vitric
- Moderate
- Maturity/Decline Stage
Vitric Advanced
- Super premium
- Decline Stage
Vitric Master
- Super premium
- Intro/Growth Stage
Cogent
- Super premium
- Maturity/Declining Stage
Cogent Plus
- Super premium
- Intro/Growth Stage
Tempest
- Super premium
- Intro/Growth Stage
Naiv
- Super premium
- Similar to Clean Edge
- Intro Stage
- Test Market Share: 13%
Avail
- Value
- Smaller Competitors and Private-Label in Segment
- Declining Stage
Pro
- Moderate
- Growth Maturity Stage
- Current Backbone of Paramount's razor-line
Case Overview
- Paramount Overview
- Clean Edge Razor
- Problem on Hand
Product Release Challenges
The first new release in 5 years.
Niche (higher price) or mainstream (lower price).
The overall wellbeing of the company

Product Analysis
The most advance non-disposable razor on the market
Offering the closest, cleanest and smoothest shave possible
More pleasurable and better shaving experience
Potential growth in Social/Emotional shavers

Target Market Analysis
Consumers are purchasing fewer value and more moderate and super-premium razors
Involved consumers are driven by innovation and design
Greater interest in all male specific grooming
Shift in market evolution

Competitive Analysis
3 pricing segments
Competitive position with strong brand and market leader in sale volume
Product differentiation with most innovative design appeals to involved consumers
The market is ready for clean edge

Positioning
Maintenance Shavers
- View of products as the same
- Lack of interest inproduct category
- Shaving routine is inconsistent
- Shaving is a chore they try to finish as quickly as possible
- Motivated by the price
Social/Emotional Shavers
- Search for products that most effectively remove hair
- Shaving is consistently done to remove any unwanted hair
- Shaving is a means to acheiving the smooth skin they desire
Recommendations: Niche Market
Marketing Challenge
Marketing Budget:
- For Niche Positioning: $ 15M
- For Mainstream Positioning:
$ 42M, plus $ 4M for promotions
Timing to enter the super-premium
Strong and growing brand name
Paramount is a leader in non-disposable market.
Paramount Pro and Avail have 23.3% unit share of the non-disposable market.
Naiv will be released a few months before Clean Edge

Introduction into the super-premium market
Cannibalism is expected
The current product lines are in later stage of their PLC

New entries to the non-disposable market
Strong growth in short time
Innovation/Improving Technology
Large Marketing Budgets

Non-disposable market is changing
39% are Involved: Social/Emotional
28% are Involved: Aesthetic
33% are Uninvolved: Maintenance

Niche Positioning
- Paramount's first entry to the growing super-premium market segment
- Supported by Paramount Pro's product manager, Albert Rosenberg, who's worked for Paramount for 20 years
Mainstream Positioning
- Paramount's opportunity to be the leader in the mainstream market
- Supported by Paramount's newly hired corporate marketing director, William Kim
SWOT Analysis
STRENGTH
STRENGTH
• Innovative product which appeals to a growing market
o Provides competitive advantages
• Largest percentage of Volume of Units Sold
o Shows a growing brand loyalty
• Financial growth
o Strong wholesaler relationships
WEAKNESS
• No new product innovation in 5 years
• High operating costs compared to other competitors
• Avail is in the decline stage
• First product to enter the super-premium price point


OPPORTUNITIES
• Non-disposable razor sales had grown 5% annually from 2007 to 2010
o More consumers to purchase products
• Mass merchants and retail stores were introducing non-disposable razors
o Greater number of available channels
• Male specific grooming products are becoming more advertised and accepted
o Creates additional communication opportunities

THREATS
• 22 new SKUs between 2007 and 2009
o Greater competition for shelf space
• Other innovations are scheduled to hit the market before the release of Clean Edge
o May loose the opportunity to penetrate the market
• Radiance has invested $ 16M in advertising alone for their upcoming product release
o Expenses could be greater than profit

OUTLINE
Market Segmentation
Case Overview
Current Dilemma
Case Analysis
Recommendations
Q&A
Niche Positioning
A marketing approach for a good or service with features that appeal to a particular minority market subgroup.

Development
How to develop marketing niche strategy to sustain competitive advantage?

Select a segment of the market that has a special need.
Carry out market research to identify if the market size makes the idea feasible.
Ensure that exclusivity through branding, patents or trademarks can be obtained.
Prepare inventory and delivery channels.
Prepare a promotion plan to reach the particular market.
Implement the plan.
Monitor market continuously to ensure that ‘niche’ characteristics and market continue to be feasible.


Branding
Stand aprat as a completely new product
The name: Clean Edge by Paramount
Fresh, clean look to reach new markets
Attract customers that are loyal to other brands
Reasons for Recommendation
Growing market for ultra-premium razors
Advantage of hitting shelves with completely new feature
Potential consumers move from mainstream to ultra-premium level

Market Attractiveness/Competitive Position Matrix
Financial Analysis
Changes to Marketing Mix
Distribution place / convenience
Social media presence
Specialized website with “teasers”
Coupon promotions
Intriguing campaign
Clean edge to establish name for Paramount in ultra-premium niche market

Challenges to Niche Positioning
Need to upgrade Pro – threat of loosing customers to Naiv and Tempest
Market saturation
Market shift could force adjustment to pricing strategy

Financial Challenges & Other Considerations
Full transcript