Clean Edge Razor KELOMPOK 7 MM KELAS 27C

DIAN ATIKA, RAFIKA, RERY INDRA KUSUMA

Clean Edge Razor

Clean Edge Razor

Case Summary

Main Issue

Problem Statement

Analysis

Recommendation

Desk Edge Razor

Case Summary

Clean Edge Razor

- 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 non-disposable razor market in 1962 and quickly became a market leader.

- Paramount offers two products, the Paramount Pro in the moderate segment of the product market and the Paramount Avail, which was considered the value offering market.

- With these two products the company enjoys 23.3% (2009) of the retail share.

Clean Edge Razor

- By 2009, the company realized $13 billion in worldwide sales and $7 billion in gross profits, with the non-disposable razors and refill cartridges in the U.S. contributing $170 million in revenue, gross profit of $92 million, and operating profit of $26 million.

- The company has developed their newest non-disposable razor, Clean Edge, which is currently undergoing review by market testers.

Clean Edge Razor

SUPER-PREMIUM

34%

MODERATE 44%

VALUE 22%

SALES

SUPER-PREMIUM 25%

MODERATE 43%

VALUE 32%

VOLUME

NON DISPOSABLE RAZORS AND REFILL CARTRIDGE RETAIL SALES BY SEGMENT FOR US MARKET (2009)

Clean Edge Razor

PARAMOUNT

PRINCE

B&K

RADIANCE SIMPSONS

OTHER

PARAMOUNT COMPETITORS AND MARKET SHARE (2010 E)

Market leader since 1950s, U$ 224 M revenue, U$45 M operating profit, 26,2% market share, brand: Cogent

Brand: Vitric, 21,1 % of market share

Brand: Naiv, 2,6% of market share

Brand: Tempest 5,7 % of market share

23 % of market share

21,4 % of market share

Clean Edge Razor

Main Issue

Clean Edge Razor

1. How Should Edge-Razor Enter The Market

2. Positioning strategy for the Clean-Edge

3. Brand Name for new product

4. Market budget for promoting Clean-Edge

Clean Edge Razor

Problem Statement

Clean Edge Razor

Market

Segments

Super-Premium

Mainstream Niche

Moderate Value

MARKET SEGMENT

Clean Edge Razor

ALBERT ROSENBERG

WILLIAM KIM

POSITIONING STRATEGY

Clean Edge Razor

BRAND NAME CONSIDERATIONS

Paramount Clean-Edge

Clean-Edge Paramount

Clean Edge Razor

MARKETING BUDGET ALLOCATION

•$ 15 Million NICHE

•$ 42 Million MAINSTREAM

Clean Edge Razor

Analysis

Clean Edge Razor

VIBRATING,ULTRA- THIN, 5 BLADE RAZOR

A LARGER ,HEAVIER HANDLE FOR A BETTER BALANCE ,GRIP & CONTROL VIBRATION FOR STIMULATE HAIR FOLLICLES, 25% INCREASE IN HAIR REMOVAL

CLEAN EDGE DESIGN AND TESTING

Clean Edge Razor

COMPARE THE SUGGESTED PRICE (IN MAINSTREAM POSITIONING) WITH COMPETITORS

Super Premium

Razor Standard Refill Cartridges

Cogent Plus $12.50 $10

Cogent $11.19 $8.89

Clean-Edge $11.19 $8.89

Naiv $11.80 $9.45

Vitric Advanced $11.20 $8.99

Vitric Master $10.85 $8.65

Tempest $10.99 $8.75

Clean Edge Razor

Niche Mainstream

Year 1 Year 2 Year 1 Year 2

unit price dollar unit price dollar unit price dollar unit price dollar

Razors sales 1 9.09 9.09 1.5 9.09 13.64 3.3 7.83 25.84 4 7.83 31.32

Cartridge sales 4 7.35 29.40 10 7.35 73.50 9.9 6.22 61.58 21.9 6.22 136.22

Total Sales (1) 38.49 87.14 87.42 167.54

Razors Production cost 1 5 5.00 1.5 5 7.50 3.3 4.74 15.64 4 4.74 18.96

Cartridge Production cost 4 2.43 9.72 10 2.43 24.30 9.9 2.24 22.18 21.9 2.24 49.06

Capacity Cost 0.61 0.87 1.71 2.45

Advertising & Promotion 15.00 16.00 42.00 39.00

Total Cost (2) 30.33 48.67 81.53 109.47

Profit (1-2) 8.16 38.47 5.89 58.07

Profit % from sales 21.20 44.14 6.74 34.66

Profit and Loss Forecasts for Clean Edge Under Niche and Mainstream Scenarios

Clean Edge Razor

SEGMENT MARKET COMPARATIONS

NICHE

• Create a One Strong Brand

• Avoid Cannibalization

• Lower Marketing Investment than Mainstream

• Higher Gross Profit than Mainstream

MAINSTREAM

• Replace Paramount Pro (Cannibalization)

• Higher Marketing Investment

• Lower Gross Profit

Clean Edge Razor

BEHAVIOR SEGMENTATION OF NON DISPOSABLE RAZOR CONSUMERS

Social/Emotional Shavers (39%)

Aesthetic Shavers (28%) Maintenance Shavers (33%)

Differentiate among product. Search for product based on both functionality and messaging. Shaving as an essential part of a daily grooming ritual. Shaving makes them feel more attractive and confident.

Search for product that most effectively remove hair. Shaving is consistently done to remove unwanted hair. Shaving is a means to smooth skin they desire.

View product as the same. Lack of interest in product category. Shaving routine is inconsistent. Shaving is a chore they try to finish as quickly as possible.

Clean Edge Razor

Recommendation

Clean Edge Razor

WE PREFERED “NICHE POSITIONING”

TARGETING THE MOST APPROPRIATE SEGMENTS

39%

28%

33% SOCIAL-EMOTIONALSHAVERSAESTHETICSHAVERS

MAINTENANCESHAVERS

CHOSE 2 SEGMENTS : SOCIAL-EMOTIONAL AND AESTHETIC SHAVERS (TOTAL SEGMENT 67%)

Clean Edge Razor