Presented by

Kush Kumar (MP15021)

Ranabir Mullick (MP15034)
Shakil Hassain (MP15040)
Sudipta Chatterjee (MP14045)
Suman Mandal (MP15046)

PGDM(2015-18), XLRI JAMSHEDPUR

AGENDA
Case Summary
Main Issue
Problem Statement
Analysis
Product Positioning
Recommendation
CASE SUMMARY
- Paramount Health and Beauty Company, known as Paramount,
is a global consumer products giant with four corporate divisions
including Health, Cleaning, Beauty and Grooming.

- Paramount entered the razor market in 1962 and became a

market leader by 1992 with 23.3% market share followed by
Prince with 23.1% share.
- Paramount Product: Pro to moderate segment & Avail to value
segment; By 2009 – Sales : $13 billion and $7 billion Gross
profits.
- Non disposable razor market
• 5% growth rate from 2007-2010
• Contributing $170 million in revenue, $92 million in gross
profit and $26 million of operating profit.

• Segment: Super-Premium -25%, Moderate-43%, Value-32%

• Consumer Group: Social/Emotional shaver-39%, Aesthetic
shaver-28%, Maintenance Shavers-33%
NON DISPOSABLE RAZORS AND REFILL SALES (2009)

Sales Value Sales Volume

VALUE, SUPER-
SUPER- 22% PREMIUM,
PREMIUM, VALUE,
25% 32%
34%

MODERATE
MODERATE
, 34%
, 44%
4P’S

Product
Volume : Market Leader Promotion
Value: Operating profit Consumer Promotion
lagging behind competitors
Trade Promotion
NO innovation in last 5
years

Place
Food Stores
Price
Drug Stores
Paramount Pro : $9.50
Mass Merchandisers
Paramount Avail: $5.75
Club Stores
Other
BEHAVIOR SEGMENTATION OF NON DISPOSABLE RAZOR CONSUMERS

Social/Emotional Shavers Aesthetic Shavers Maintenance Shavers

(39%) (28%) (33%)

Differentiate among product. Search for product View product as the same.
Search for product based on that most effectively Lack of interest in product
both functionality and remove hair. category.
messaging.

Shaving as an essential part Shaving is consistently Shaving routine is

of a daily grooming ritual. done to remove unwanted inconsistent.
hair.
Shaving makes them feel Shaving is a chore they try
more attractive and Shaving is a means to to finish as quickly as
confident. smooth skin they desire. possible.
MARKET SHARE 2010
Brand :
Cogent : : super premium
Prince
[26.2%] Cogent Plus : Super premium
Paramount Brand :
Avail: Value
Pro: Moderate
Other B&K
[23%] [21.1%]
Paramount Brand :
[21.4%] Vitric : Moderate
Vitric advanced :
super premium
Vitric master : Super
Radiance premium
Simpsons
[2.6%]
[5.7%]
New competitor New competitor Aggressive
Increasing advertising advertising of $16.1M
budget Brand : Naiv: Super
Brand : Tempest: Super premium, Similar to clean
premium shave
PARAMOUNT PRODUCT OFFERINGS

Market Leader 2009: BCG Matrix: Paramount Portfolio

 Volume: 23.3%
 $ (2nd): 23.4%

No innovations or new products

in last 5 years
Avail:
 Value Segment Clean
 Smaller competition and Edge
private labels in segment
 declining stage
Pro:
 Moderate Segment
 Growth/Maturity Stage Avail
 Backbone product Pro
Clean Edge:
 Super Premium
 Advance in Technology
 to be launched
NON DISPOSABLE RAZOR MARKET: POSITIONING MAP
MAIN ISSUE

Market Entry for the Clean-Edge

Positioning strategy for the Clean-Edge

Brand Name for new product

Market budget for promoting Clean-Edge

CHALLENGES FOR PARAMOUNT
Target Markets:
 Initially Males between 22-55 years
 Emotional/Social and aesthetic Shavers
 Latter on woman

Positioning :
 Mainstream Product(lower range)
 Niche Product (higher range)

Brand Name:
 Mainstream: PARAMOUNT CLEAN EDGE
 Niche: CLEAN EDGE by Paramount

Market Budget:
 Niche $14 Million
 Mainstream $36 million
CURRENT MARKET SEGMENTATION

Market
segments

Super-
Moderate Value
Premium

Mainstream Niche
PROBLEM STATEMENT
ANALYSIS Timing to enter
Super premium

Introduction to
Competitive
super premium
Analysis
market

New entries to
Target Market the non
Analysis disposable
market

Non disposable
Product Analysis market is
changing
SWOT ANALYSIS-NICHE MARKET

STRENGTH WEAKNESS

 Highly technologically advanced  Volume sales are low

product  Not enough space for new entrants
 Create a new market segment  High operating and advertisement
 Brand loyalty cost
 Low cannibalizing impact
SWOT Analysis
(Niche Market)
OPPORTUNITIES THREATS

 Non disposable razor sales grew by  Cannibalizing of existing product.

5% between 2007-10
 67% of target consumer in form of
involved shavers
 High acceptance for super premium
segment
 First mover advantage
 Launch of Naive by Radiance.
 Test market response is positive for
Naive
 Aggressive media advertising
planned by Radiance
SWOT ANALYSIS-MAINSTREAM

STRENGTH WEAKNESS

 Increase product diversity  No technological innovation in

 Market leader with largest past 5 years
volume in non disposable market  Congestion of products in
 Innovative product mainstream segment
with great mass appeal

SWOT Analysis
OPPORTUNITIES
(Mainstream)
THREATS
 Non disposable razor sales grew  22 new stock keeping units
by 5% between 2007-10 introduced between 2008-09
 67% of target consumer in form of  Cannibalizing impact is high
involved shavers
 Pro in matured stage of product
cycle
4C’S

Cost:
Customer : Affordability , Satisfaction and
Positioning our product to get the Value
maximum profitability we must Price offered , benefit and
know the target market valued added

Communication: Convenience:
Engaging customer through Offering product through
meaningful communication builds multiple outlets , reducing
barriers customer might face
Customer should know “what is while purchasing product
in for me”
Customer service
STRATEGIC BRAND DECISIONS
“Paramount Clean Edge”
Pros:
o Build on brand equity
o Consistency with overall corporate
strategy on building Paramount Brand
o Paramount is a recognized
established brand
Cons:
o Consumers could view older product
lines as inferior or not as advanced
o Could cause higher cannibalization
from loyal consumers wanting to
upgrade
o Because of consumer loyalty,
customers loyal to other brands might
not switch because of Paramount
Brand
“Clean Edge by Paramount”
Pros:
o Stand apart from current products
o Emphasis on “Clean Edge” name to
attract and associate with “New”
and “Innovative Technology”
and
o Focusing on the “Shaving
Experience”
o Could attract loyal consumers of
competition due to being seen as its
own brand
Cons:
o Consumers not recognize or be
favourable to new “brand”
o Might not be able to capitalize on
current brand loyalty
 MAINSTREAM POSITIONING: PARAMOUNT CLEAN EDGE
Paramount Clean Edge Marketing Plan:

Positioning: MAINSTREAM SUPER PREMIUM SEGMENT

-Paramount Clean Edge’s improved design provided superior performance by utilizing a vibrating
technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave.
Why using mainstream with Paramount by Clean Edge?
-Executive’s views on the name “Paramount by Clean Edge” are in line with our Mainstream Marketing
Plan (giving the Paramount brand top billing, Consistent with the overall corporate strategy,
concentrated on building Paramount brand equity.

Product:
-Tech specs: vibrating, ultra-thin five blades (less irritation) design, AAA battery, housed in the handle of
the razor vibrations that stimulated hair follicles. Larger heavy handle allowed for better balanced, grip
and control while shaving. 25% increasing hair removal and benefits in skin condition.

Price:
Razor Price: $11.19
Cartridge Price: $8.89

Place:
Large Distribution Channels: Food Stores (42%), Mass Merchandisers (21%), Club Stores (5%)- *Club
Stores share is rising especially in mainstream
Promotion:
Advertising ($19 Million Budget) TV, Magazine, Newspapers, Social Media, Online
Consumer Promotions ($17 Million) Coupons, Events, Store Displays, Bonus Packs
Trade Promotions: ($6 Million) PoP, Trade Shows, Co-Op Ads
MAINSTREAM POSITION: PARAMOUNT CLEAN EDGE BUDGET ALLOCATION

Changes in allocation Not allocation

NICHE POSITIONING: CLEAN EDGE BY PARAMOUNT
Clean Edge by Paramount Marketing Plan:

Positioning: NICHE SUPER PREMIUM SEGMENT

Clean Edge´s improved design provided superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the
hair from the skin, allowing for a more thorough shave.

Why use Niche with Clean Edge by Paramount?

To create a stand along brand inspired by “innovation” and “technology” and to create a brand focused on the total “Shaving
Experience”

Product:
Tech specs: vibrating, ultra-thin five blades (less irritation) design, AAA battery, housed in the handle of the razor vibrations that
stimulated hair follicles. Larger heavy handle allowed for better balanced, grip and control while shaving. 25% increasing hair removal
and benefits in skin condition.
Enhance Brand Recognition through Packaging:
Color: appeals to men as color of innovation, elegant design, and sophistication
Drastically different to that of existing products Pro and Avail

Price:
Razor Price: $12.99
Cartridge Price: $10.50
This is the main driver to define our customer segment as super-premium, want to position and align ourselves with the highest price
competitor int he market and price just above due to its innovation and breakthrough.

Place:
Clean Edge by Paramount should be alleviated in places that meet exception of Super-Premium Customer Experience and Service as
Drug Stores (45%) and Mass Merchandisers (55%)

Promotion:
Advertising: TV, Magazine, Newspapers, Social Media, Online, Event sponsorship
Consumer Promotions: Cent-off coupons, Bonus Packs
Trade Promotions: In-store displays,Trade allowances, Sales training
In order to gain premium costumer some promotions have to be considered such as Cents-off Coupons and Bonus Pack in a way to trial
the costumer attention and experience our superior technology advanced quality.
For catching the costumer attention, Clean Edge´s trade promotion should be through PoP material displayed in the places of
NICHE POSITION: CLEAN EDGE BY PARAMOUNT BUDGET ALLOCATION

Changes in
Not allocation
BUDGET ALLOCATION: REASONING
COST AND EFFECTS OF CANNIBALIZATION
CONCLUSION
As a result of analysing our strategic marketing plan both for Clean Edge by Paramount
and Paramount Clean Edge and according to the Pro Forma Profit/Loss Forecast, we
established that Niche market is the most appropriate and profitable position for several
reasons:

1. Clean Edge could make more profit if positioned into Niche Market: the Total Profit after two
years including cannibalization results in a profit of $31.37 million compared to profit form
launching in the Mainstream market is only $2.82 million.
2. Targeting the largest and most appealing segments present in the market : the Social-Emotional
and Aesthetic shavers that are the 67% of total razor users.
3. Competing in the mainstream market could incur in price pressure against competition.
4. Launching our product in the Niche Market we predict a cannibalization effect of 35% compared
to that of launching in the Mainstream Market where we would compete with our current “bread-
and-better” product, the Paramount Pro, which would result in a prediction of 60%
cannibalization.
5. Further, as a positive result of that strategy the Pro’s lifecycle will be extended with launching our
new product in a different segment.

In conclusion it can be said that in order to maximize Clean Edge profit, we can compete
for the first two years in the Niche market in order to capture our breakthrough
innovation, then as customer awareness and loyalty increase, and further innovation
occurs, we can transition the product into the mainstream segment. Thus giving us the
ability to maximize profit on shared costs and our experience curve.
RECOMMENDATIONS

TARGETING THE MOST

Niche market is the way to go!! APPROPRIATE SEGMENTS
 Profit and Loss analysis of both niche and
mainstream market shows clear profit in niche
market.
 Impact of cannibalizing is less in niche market.
 Loyal customer base and hence less advertising &
promotional expense.
 Low threat in niche market
CHOSE 2 SEGMENTS : SOCIAL-EMOTIONAL AND
Changes to marketing Mix AESTHETIC SHAVERS (TOTAL SEGMENT 67%)
Advertise to College students
Facebook and other social networking sites Ads
Distribution Place / convenience