INDEX
TOPIC PAGE NUMBER
Case Summary 3
Problem in hand 3
Market segmentation 3
Differences and Parity 4
Perceptual map 5
Financial forecast 6
Inference and conclusion 6, 7
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CASE SUMMARY:
Paramount is a global consumer product giant with 13$ billion sales worldwide
and 7$ billion in gross profit for 2009. It deals in Health, Cleaning, Beauty and
Grooming products and it entered the non-disposable razor market in 1962 and
became a respected brand in the industry. It offers two types of non-disposable
razors and refills cartridges positioned in the moderate and value segment
category respectively.
It is launching a clean edge razor with an improved design and superior
performance ability. Mr. Randall has the responsibility of making a suitable
marketing strategy for the new product positioning.
PROBLEM IN HAND:
The problem being faced by Mr. Randall is to choose between one of the two
options for positioning:
o Position Clean Edge in the niche market (where there is good demand for
the product by the target segment)
o Position Clean Edge in the mainstream market (where there is already a
stronghold of Paramount Pro)
MARKET SEGMENTATION:
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POINTS OF DIFFERENCE AND PARITY:
Paramount Paramount Prince Benet & New Entrants
Klein
Products Clean edge Paramount Cogent & Cogent Vitric, Vitric Tempest razor &
offered Pro & Avail Plus advanced & Radiance Naiv
Vitric Master razor
Value Vibrating, ultra- Non- Non-disposable razors Advanced Tempest:
proposition thin, five-blade disposable Lubrication Advanced
design, razors strip, non-slip pivoting head
stimulated the handle, Naiv: Pulsating
hair follicle, superior anti- feature
heavy handle, corrosive
reduced technology
irritation
Offering Moderate / Pro: Super-premium Vitric: Tempest & Naiv:
Value (TBD) Moderate Moderate Super premium
Avail: Value Advanced &
Master: Super
premium
Other NA 1) Health 1) Oral care products 1) Beauty Personal care
products 2) Cleaning 2) Skincare products 2) Heath
offered 3) Beauty 3) Shaving products products
4) Grooming 4)Deodorants/antipers
pirants
Identifying potential point of difference and point of parity:
Points of difference:
1. Desirable to customers:
The market demand of the similar kind of products offered by Prince and
B&K is high, hence it can be concluded that the desirability for a clean
edge will be high.
2. Deliverable by the company:
Paramount has already built a strong brand image in the market and
among the customers through its non-disposable razor. Hence the
company can fulfill the deliverability aspect.
3. Differentiating from customers:
Paramount’s clean edge razor comes with some unique features like
vibrating technology to stimulate hair follicles, lifting hair from the skin
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thereby allowing a more thorough shave, which makes the product stand
out from the competition.
Points of parity:
1. Category point of parity:
The clean edge razor is a suitable product as the men’s grooming
market is growing and customers are becoming attuned to better skin-
care products.
2. Competitive points of parity:
The product is technologically more advanced as it has vibrating
technology to stimulate hair follicles, lifting hair from the skin thereby
allowing a more thorough shave, giving it a competitive advantage.
PERCEPTUAL MAP:
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Financial Forecasts: Alternative Positioning Scenarios for Clean Edge
Mainstream
Niche Positioning Positioning
Planned capacity Razor
unit volume (millions of
units) Year 1 1.0 3.3
Year 2 1.5 4.0
Planned capacity
Cartridge* unit volume
(millions of units) Year 1 4.0 9.9
Year 2 10.0 21.9
Advertising ($ in $ $
Millions) Year 1 7 19
$ $
Year 2 7 17
Consumer promotions ($ $ $
in Millions) Year 1 6 17
$ $
Year 2 6 14
Trade promotions ($ in $ $
Millions) Year 1 2 6
$ $
Year 2 3 8
INFERENCES:
1. As per the company’s current portfolio, it will be advantageous to
position clean edge razor as a niche product.
As per the above exhibit, the total cost for marketing in 1st year for clean
edge razor in niche positioning is 15$ million (advertising + consumer +
trade promotion cost)
However, the total cost for marketing in 1st year for clean edge razor in
mainstream positioning is 42$ million (advertising + consumer + trade
promotion cost).
This clearly shows that the marketing cost is less in a niche market.
2. Since there is no technological advancement done in the last 5 years,
introducing a cutting-edge shaving technology would attract customers
who want to remain updated with technology.
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3. The risk involved with launching this product in the mainstream market is
it might lead to cannibalization since Paramount Pro and Avail are doing
good in the market.
CONCLUSION:
o Hence, looking at the above inferences, it can be concluded that
launching clean edge razor in the niche market would be profitable for
the company in the long run in spite of the heavy competition in the
market.
o Improved technology would attract the social/emotional shavers and
aesthetic shavers which comprises of 67% of the entire customer base.
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