MARKETING MANAGEMENT

CASE ANALYSIS
Clean Edge Razor: Splitting Hairs in Product Positioning

By Group AO-2

Meghana Chore 14S721

Raunak Rao 14S732
Avinash Singh 14S752
Hitesh Takhtani 14S716
Jagannath Akela 14905

Introduction

Q1) a) What changes are occurring in the non-disposable razor

category in the United States?
b) Asses Paramounts Competitive position.
United States: Non-Disposable Razor Market
A few major categories exist in the U.S. Razor market namely nondisposable razor, disposable razor, refill cartridges, shaving cream and
depilatories.
As per the product Clean Edge, the companys categories of interest are
the non-disposable razor and refill cartridges. During the period of 2007
2010, market saw a growth of average 5% per year in the non-disposable
razor category while the latter had a 2% growth per year.
Segmentation was done on the basis of Demography, Consumer
behaviour and preference and also Gender.
Based on the price and quality, the industry experts segmented the nondisposable razor market into 3 markets Super-premium, Moderate and
Value. Owing to a variety of products being introduced at a rapid pace and
new innovations taking place in this segment, super premium witnessed a
substantial growth of 25% by volume and 34% by sales.
The changing Consumer Behaviour:
2009 witnessed a peculiarly high value of reduced replacement cycle of
the blades. The possible reasons for the same were listed as consumption
of a wide variety of products due to their availability, and a major focus on
the advertising and articles. They adequately promoted the benefits of
frequent replacement of blade.

The cosmetic benefits of razor for men industry was also being promoted
more as the stigma associated with it was reducing in this era. As a result,
the male segment outpaced the growth of womens in beauty markets.
More brand switching existed in the super-premium segment.
Also it was found that,

39%(Social/Emotional shavers) of the non-disposable razor users in

the U.S. attributed the product as a part of their daily hygiene,
grooming which made them more confident and attractive. These
users looked for differentiation among the products.

28% (Aesthetic shavers) used for the benefits of close shave,

smoother skin, and consistent hair removal.

33%(Maintenance shavers) of the non-users lacked interest in this

category of product as their shaving routine was inconsistent. They
viewed it as a daily task rather than hygiene or a beautifying
product.

Distribution:
The retailers were also increasing the shelf space for this industry given
the higher margins that they were enjoying. Food & Drugstores are the
biggest channels.
Competition and Substitutes:
Substitutes: Disposable razors and Electric Razors.
Disposable razors:

Provided Wet Shave Close shave

Economical, hence catered to the users who liked to change blade

with each shave.

Lacked technological edge

Electric Razors:

Easy to manoeuvre

Reduced Skin irritation

Close shave like disposable ones.

Targeted older consumers.

Competition: Prince, Benet & Klein, Radiance and New Entrants

Prince:

Product Category- Personal Care

Market leader in non-disposable razors since 1950s

Held top position in Sales by value in 2009

Supper-premium products Cogent and Cogent Plus

Benet & Klein:

Product Category Beauty & Health

POD Advanced lubrication strip, non-slip handle and superior anticorrosive technology.

Moderate segment- Vitric. Direct competition to Paramounts Pro

Supper-premium product- Vitric Master and Vitric Advanced

Radiance:

Pipeline product Naiv

Pulsing technology similar to Clean Edges vibrating technology.

Launch due on September 2010 while Clean Edge set to launch on

January 2011.

Test market share 13%

Paramounts CompetitivePositioning:
Currently paramount has two products Pro and Avail. Pro marks a close
competition in terms of volume share with B&Ks product Vitric.
Paramounts new product Clean Edge is seen as a trend setting product
with vibration (provided by basic AAA battery), ultra-thin, stimulating hair
follicles design.
It gave better grip, balance, control and reduced skin irritation, even skin
tone and improved skin texture.
Edge over Vitric provided 25% increased hair removal.
Clean Edge is proposed to position in two possible ways.
1. One as a niche product in the super premium highly involved
consumers. This will favour the current product portfolio of the
company.

The total marketing expenditure would approximate to

$15 million. The competition is also less in this market. However,

the volume of this category users is fairly less. This will also fail to
cash in on the opportunity of extending innovation in the Pro and
Avail segment which has on the verge of maturity.
2. Another strategy is to position as a mainstream product. This will act
as a replacement to the less innovative but high volume sale
providing Pro. This will help to retain the loyal customers. Also,
mainstream product volumes are expected to be 3 times higher
than that of the niche product. The expenditure however, is as high
as $42 million due to the need of extensive promotions. This could
hamper

the

brand

power

and

lead

to

cannibalization.

The

competition is also high in this market.

2.How is the non disposable razor market segmented?

Examine consumer behavior for non disposable razors.

The consumer segmentation of the non-disposable razor is mainly

behavioral. The three main segmentation are based on price and quality
which

are

listed

as

Segment

Volume

Dollar

Super Premium

25%

34%

Moderate

43%

44%

Value

32%

22%

follows:

This segmentation is also a mix of psychographic and aligns to

demographics, but reflects that people and families have different product
and service needs throughout their life. Drilling down further, on the basis
of consumer research done by Paramount, following categories were
revealed about their razor blade users:

Social/Emotional Shavers

Aesthetic Shavers

Maintenance Shavers

This type of segmentation is also called psychographics, and is measured

using information captured on the activities, interests and opinions of your
target customers.
Consumer behavior

More brand switching

Shorter inter purchase intervals

Shorter average usage periods

Consumers have shown a mix reaction and have been quick at switching
mainly due to super-premium category. In past few years, male specific
personal care products outpaced the growth in womens counterpart as
this the former is no more a taboo now. . Apart from these media has kept
attention on mens grooming issues and preening, there for this segment
has shown vast opportunity in terms of growth.
3. What are the arguments for launching Clean Edge as a) A
Niche Product and b) A Mainstream brand?
The following are the arguments for launching clean edge as A)niche
Product b)Mainstream product
As a Niche product :
Positioning of the Product Clean edge pro will complement the company's
existing product portfolio scenario ,it is mentioned in the case that the
product would result in high profit margin and risk involved would be less.
Niche positioning will require 15$ million as total marketing expenditure
as compared to 42$ million in mainstream positioning.
Paramount has limited a consumer base and the existing products Pro
and Avail have not introduced any innovations in the last 5 years, also Pro
is in its mature phase, and there is a high possibility of decline in its sales.
Hence launching Clean Edge in this stream would affect /cut down their
customer base which is there with Pro and Avail
As mentioned in the case that 35% of Clean Edge sales would come from
current Pro/Avail customers in a niche positioning scenario
As a Mainstream product
1)Paramount had already a product called Paramount pro in mainstream
positioning so launching Clean edge will dilute the brand power and lead
to cannibalization.
2) In order to reach the target masses the company would require huge
marketing

support,

extensive

advertising

campaign,

consumer

promotions. Hence expenses related to these activities will be huge. For

instance to reach full sales potential ,$42 million marketing budget would
be need for year one.
3)Positioning as a mainstream product would Siphon off consumers from
Paramount pro which was positioned in the moderate segment of the
product.
4) As people are becoming tech savvy ,advanced so projecting edge as
mainstream will help prevent loyal paramount customers from being
wooed away to more innovative brands. And Clean edge has the potential
for the true market domination and needs to be positioned as such.
5)As mentioned in the case that 65% of Clean Edge sales would come
from current Pro/Avail customers in a mainstream positioning scenario.