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Clean Edge

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by

Andreas Foell

on 3 November 2012

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Transcript of Clean Edge

Operating since 1962 in the nondisposable razors and refill cartridges market. Paramount Corporate Divisions Unit-volume market-leader position in 2009, with a 23.3% retail unit share. No significant technology innovations in the last five years. Paramount's Products Pro
- Moderate AVAIL
- Value offering Clean Edge
- Super-premium Competition Nondisposable Razor Unit and Dollar Market Share by Brand / 2010E Market Growth & Trends Nondisposable Razors

5% increase Refill Cartridges

2% increase Market Growth from 2007-10: Market Trends Consumer Trends Increase in consumer sophistication
Increase in spending for need satisfaction
Decrease in average replacement cycle
Increase attention to male grooming products Increase in product innovations and razor technology
Increase in advertising expenditures to promote new technology
Increase in available shelf space because of high retail margins
Increase in nondisposable SKUs, specifically in super premium segment Market Segmentation Price & Quality Value

32 % Market Volume Moderate

43 % Market Volume Super-Premium

25 % Market Volume Benefits Maintenance Shavers
(less involved)
33 % Market Volume Social/Emotional Shavers
(experience)
39 % Market Volume Aesthetic Shavers
(cosmetic result)
28 % Market Volume Clean Edge Razor:
Splitting Hairs in Product Positioning Janice Kretschmer, Julia Postatny, Wiebke Militz, Daniel Hurrle, Hannah Walker, Andi Föll Clean Edge Positioning Problem How should Paramount position Clean Edge in the Super-Premium segment ? Cannibalization (% cannibalization from Pro/Avail) x (Unit-Sales) x (Contribution per unit) Formula to calculate cannibalization: Niche = 35%
Mainstream = 64% Razor = 1.76
Cartridge = 2.80 Positioning Strategy Contingency Plan Market Entry 2013 Future Pro +
- Product Modification (relaunch of Pro) AVAIL - Divestment Clean Edge Arguments for strategy Avoids initial loss and increases profit
Avoids cannibalization
Requires lower launch expenditures
Positions Clean Edge product as superior product
Follows market trends (male grooming)
Aligns with market growth towards super-premium segment Clean Edge by Paramount Changing Positioning of Clean Edge to mainstream Lower the price of Clean Edge to appeal to Mainstream consumers
Increase spending in marketing with an emphasis on consumer promotions
Allow for cannibalization of Pro razor as it enters the declining stage of the product life cycle Launching Pro + Modifying the product allows Paramount to keep up with innovations from competitors
Relaunch as Pro declines with minimal marketing spending
This keeps a lower value option for consumers who were unwilling to switch to Clean Edge when it was positioned as a mainstream product Divesting in Avail: As Avail's product life cycle declines divesting in the product will assist in reestablishing the Paramount brand as a superior razor brand Marketing Budget Clean Edge Launch Profit & Loss Forecast "The Blue Mustache Strategy"
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