Case Brief #1 : Clean Edge Razor Analysis

Table of Content

Problem Statement: Paramount Health and Beauty Company is facing the challenge of deciding how to position their new product (Clean Edge) in the market.

2. Situation Analysis: Company (Paramount Health and Beauty Company) Paramount has been a renowned brand in the industry since 1962. They offer two lines of nondisposable razors and refill cartridges – the Paramount Pro for the moderate segment and the Paramount Avail for a value offering. Currently, Paramount is preparing to launch their newest nondisposable razor, Clean Edge. Clean Edge incorporates vibrating technology to stimulate hair follicles and lift the hair from the skin, making it an improved product. Notably, Paramount would be the first company to provide scientific testing conducted by a third-party lab. Jackson Randall, the product manager for Clean Edge, is now contemplating the positioning strategy for the product.

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Collaborators: Food stores play a crucial role as important partners in supporting sales. In fact, in 2000, food stores accounted for over half of all razor sales.

Drug stores, mass merchandisers, club stores, and other stores also partner with Paramount. Male specific grooming products are a bright spot in the industry, with electric shavers generally appealing to older consumers. In the women’s market, Prince has been a market leader in nondisposable razors since the 1950s and held the number one position in terms of retail dollar sales in 2009. Benet & Klein (B&K) entered the nondisposable razor market in 1985 with the Vitric brand and unveiled a new product line of nondisposable razors and refill cartridges (Vitric Master) in 2009.

New entrants such as Radiance Health Inc and Simpsons have recently made advancements in the shaving industry. On August 1, 2009, Simpsons introduced a new nondisposable razor that is part of its deodorant brand, Tempest. Similarly, Radiance has plans to expand its deodorant brand name, Naiv, by launching nondisposable razors. According to executives at Paramount, the Naiv razor is expected to be available nationwide in September 2010. In today’s market, consumers are increasingly seeking innovative and creative solutions, indicating a growing sophistication in their preferences.

Customers nowadays are willing to invest more money in products that meet their needs, as the old business saying goes: a satisfied customer brings ten more. One alternative to consider is creating and marketing a niche product, which is designed for a specific, specialized, yet highly lucrative market.

Niche strategy targeting the most intensely involved super-premium consumers who look for superior skin care products. Option Two: A Mainstream Brand. A mainstream brand require a higher marketing budget in order to reach larger target. Conclusion: This option which uses a mainstream brand assumes that Paramount will achieve higher revenue rather than using a niche strategy. On the other hand, Paramount is still considering using this strategy due to its high cost, given that the strategy requires more marketing support and a $42 million marketing budget for one year.

Paramount should pursue this strategy, unless the cost of the marketing budget cannot be covered by sales revenue of Clean Edge.

Recommendation: After reviewing the information on past and estimated future company, products, competitors, and branding, I recommend the following strategy: Paramount should take a mainstream brand approach. They should maintain a lower price than competitive products. Paramount could use more marketing support to leverage sales revenue, such as public relations (third party media coverage) or sales promotions (sweepstakes, sampling, etc). For branding strategy, it is better to name the product “Paramount Clean Edge”.

There is a greater emphasis on the name “Paramount”. The “Paramount” brand is memorable and familiar to customers, so if they see “Paramount Clean Edge”, it will create a more positive image and attract consumers to buy compared to using “Clean Edge by Paramount”. In summary, mainstream positioning strategy is seen as a profitable strategy for launching Clean Edge. Please refer to the implementation plan for the total cost and revenue projections for the first and second year using both strategies.

Mainstream strategy will work for Paramount, as long as the company can afford the costs of marketing, advertising, and promotions. The implementation plan includes a table that outlines the forecasted sales and total revenue for year one and year two for both niche and mainstream strategies. The goal of the company is to maximize profits, considering that mainstream strategy is expensive and requires more marketing support. The table shows that the costs associated with advertising and promotion using mainstream strategy are higher than that of niche strategy. However, the total revenue from year one and two proves that mainstream strategy is profitable for Paramount.

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