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Niche Positioning Strategy for Clean Edge Razor

The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

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Sudhir Pawar
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18 views2 pages

Niche Positioning Strategy for Clean Edge Razor

The document discusses positioning strategies for the Clean Edge Razor brand. It analyzes the pros and cons of a niche versus mainstream positioning strategy. A niche strategy focuses on creating a strong differentiated brand, requires lower marketing investment, and has higher profit margins but lower market share. A mainstream strategy aims for a larger market share but requires higher marketing spending and risks higher cannibalization of existing brands. Based on the profitability analysis provided, a niche positioning strategy is recommended as it results in over $31 million in total profits over two years, higher than the mainstream strategy.

Uploaded by

Sudhir Pawar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Clean Edge Razor

Assignment Group: 7

What should be the positioning strategy for Clean Edge


Razor?
Ans.
Niche Mainstream
 Create a one strong differentiated  Capturing a bigger market share
brand  High cannibalization as 60% market
 Low cannibalization only 35% share comes from Paramount razors
 Low marketing investment than  Higher marketing investing
mainstream positioning of only $12 requirements of $42 million
million  Lower profit margin
 Higher profit margin due to high
pricing

Why Niche positioning?


 Profitability analysis of both niche and mainstream market demonstrates more
profits in niche markets
 Low cannibalization in niche market (35%) and less resistance from management
team
 Less advertising and promotional expenses and no need to increase the overall
budget
 Low threats and uncertainty in niche market
 Even after considering profits and deducting cannibalization amount, we are getting
31.365 million $ profit in niche positioning(calculations are shown below).
Niche Mainstream
year 1 year 2 year 1 year 2
Razor unit volume(million) 1 1.5 3.3 4
Razor unit price($) 9.09 7.83
Razor sales (million $) 9.09 13.635 25.839 31.32

Cartridge unit vol(million) 4 10 9.9 21.9


Cartridge unit price($) 7.35 6.22
Cartridge sales(million $) 29.4 73.5 61.578 136.218

Total sales(million $ ) 38.49 87.135 87.417 167.538

Razor production unit cost($) 5 4.74


Razor production cost(million $) 5 7.5 15.642 18.96
Cartridge unit producton cost($) 2.43 2.24
Cartridge production cost(million $) 9.72 24.3 22.176 49.056
capacity cost(million $) 0.61 0.87 1.71 2.45
Advertising cost(million $) 7 7 19 17
Consumer promotion cost(milliom $) 6 6 17 14
trade promotions(million $) 2 3 6 8
Total cost ($ million ) 30.33 48.67 81.528 109.466
operating profit ($ million) 8.16 38.465 5.889 58.072

Niche Mainstream
Year 1 Year 2 Year 1 Year 2
Net operating profit ( $ million) 8.16 38.465 5.889 58.072
Cannibalized Razor vol(million) 0.35 0.525 1.98 2.4
Razor contribution margin ($) 1.76
Cartridge vol. after Cannibalization 1.4 3.5 5.94 13.14
Cartridge contribution margin($) 2.8
total Cannibalization ($ million) 4.536 10.724 20.1168 41.016
profit after cannibalization( $
3.624 27.741 -14.2278 17.056
million)
Total profit after 2 years (million) 31.365 2.8282

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