Clean Edge Razor

Splitting Hairs in Product Positioning

Case Study Analysis

Presented by Group 5
 Current Trends in US Razor markets

Increase rate of New Product Shift in Distribution outside

introduction
22 traditional food and drug store

Increase in the Media Increase in Popularity of Male

Advertising Expenditure
PROJECT grooming products

Increase in the shelf space in Men’s body spray, fragranced

retail space because of higher shower gel and other skincare
margins lines
 Case Analysis

PRO’s CON’s
Mainstream

› Brand awareness is high in Mainstream market, would be › High Promotional and Advertisement budget as this
easy for the consumers to adopt to the new product caters the mass market

› Paramount Pro is at maturity stage in product life cycle, so › Cannibalization of Paramount Pro, which is the main
with Clean Edge it would provide new life for the brand revenue generator for Paramount the product
category
› Paramount would be recognized as the Innovation leader

› Prevent the extent of cannibalization and product line › Loss in the volume sales compared to the traditional/
Niche

extension Mainstream market

› Latest trends shows product are becoming more

specific, catering to specific needs of the consumers

› Lower advertisements costs ($15M)

 Financial Analysis
Niche Mainstream
Year 1 Year 2 Year 1 Year 2
Unit sales – Razors(units) 1 1.5 3.3 4.4
Dollar Sales – Razors (in dollars) 9.09 13.64 25.84 31.32
Unit sales – Cartridges(units) 4 10 9.9 21.9
Dollar Sales – Cartridges (in dollars) 29.40 73.5 61.58 136.22
Total Dollar sales(in dollars) 38.49 87.14 87.42 136.22

Production Costs Razors (in dollars) 5 7.5 15.64 18.96

Production Costs Cartridges(in dollars) 9.72 24.3 22.18 49.06
Capacity costs(in dollars) 0.61 0.87 1.71 2.45
Advertising and Promotion (in dollars) 15 16 42 39
Total Costs(in dollars) 30.33 48.67 81.53 109.47

Operating Profits (in dollars) 8.16 38.47 5.89 58.07

Profit as % of sales 21% 44% 7% 35%
Cost of Cannibalization –Razors (in dollars) 0.62 0.92 3.48 4.22
Cost of Cannibalization –Cartridges (in
dollars) 3.92 9.8 16.63 36.79
Profit after cannibalization (in dollars) 3.62 27.74 -14.23 17.06
Thank You