The document discusses positioning strategies for Clean Edge razor between a niche market focus on highly involved users or mainstream market. The niche strategy is recommended as it would earn more profits, require less marketing spending, have lower cannibalization rates of other products, and fit the preferred premium pricing. However, the mainstream market has larger potential sales volumes. Either way, branding it as "Clean Edge by Paramount" highlights its technology, and advertising should frame it as an exclusive high-end product for superior shaving experiences.
The document discusses positioning strategies for Clean Edge razor between a niche market focus on highly involved users or mainstream market. The niche strategy is recommended as it would earn more profits, require less marketing spending, have lower cannibalization rates of other products, and fit the preferred premium pricing. However, the mainstream market has larger potential sales volumes. Either way, branding it as "Clean Edge by Paramount" highlights its technology, and advertising should frame it as an exclusive high-end product for superior shaving experiences.
The document discusses positioning strategies for Clean Edge razor between a niche market focus on highly involved users or mainstream market. The niche strategy is recommended as it would earn more profits, require less marketing spending, have lower cannibalization rates of other products, and fit the preferred premium pricing. However, the mainstream market has larger potential sales volumes. Either way, branding it as "Clean Edge by Paramount" highlights its technology, and advertising should frame it as an exclusive high-end product for superior shaving experiences.
The document discusses positioning strategies for Clean Edge razor between a niche market focus on highly involved users or mainstream market. The niche strategy is recommended as it would earn more profits, require less marketing spending, have lower cannibalization rates of other products, and fit the preferred premium pricing. However, the mainstream market has larger potential sales volumes. Either way, branding it as "Clean Edge by Paramount" highlights its technology, and advertising should frame it as an exclusive high-end product for superior shaving experiences.
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Clean Edge Razor: Splitting Hairs in Product Positioning
Problem Statement: Selection of one from option of recommending Clean Edge for a niche product position focusing on highly involved, fastidious groomers looking for a superior shaving experience, or a mainstream position focusing on the broad advantage of offering the closest possible shave.
Solution:1) Niche Market: Paramount will get a lot of advantages by positioning in niche market. First, according to the P&L forecasting, niche market positioning scenario will earn more profits for Paramount after cannibalization (Paramount will earn $28.55 million more than mainstream positioning scenario after two years). Second, niche market could provide more consistency with the marketing message of promoting product’s high technology and innovation. Third, niche positioning requires relatively less marketing expenditures ($15 million) compare with mainstream positioning ($42 million) as well as advertising and promotions expenditures ($31 million in niche positioning vs. $81 million in mainstream positioning for two years). Fourth, the niche strategy can lower the cannibalization rate with Pro/Avail (35%) compare with applying mainstream strategy (60%). Fifth, currently, Paramount product lines were not creating any products to target the niche market; therefore, if Clean Edge could position into niche market, Paramount will have product lines in each market segments, especially, niche market is less saturated, and has potential growth in the future. Lastly, Paramount senior executives already had 8 preferences to price Clean Edge somewhere in the super-premium segment; therefore, the niche market will fit better the Clean Edge pricing strategy. The disadvantage is that the volume sales in the niche market are relatively less than the mainstream market.
2)Mainstream Market: The advantage of applying Clean Edge razors in the mainstream market is that Pro, the current backbone of the company, is in the mature phase of the product lifecycle and has possibility to decline in the near future. Therefore, in order to keep the current Pro loyal customers, Clean Edge, with its innovation technology, should position in the mainstream market to prevent current customers to go for other competitive innovation products. That is to say, since Paramount already has a customer base in the mainstream market, when they launch Clean Edge there might be more interest in Paramount’s other razors and products. Also, the volume sales are higher in mainstream market compare to niche market and Clean Edge has relatively fewer competitors in the mainstream market (only Paramount Pro and Vitric exist). The disadvantage of mainstream strategy are: the cannibalization rate is 60% (niche strategy is only 35%), the large marketing investment will be required, and total profits after two years will be only $2.82 million (niche market position will be $31.37 million).
Brand Name Suggestions: Since it’s been five years for Paramount to introduce the new technology on their products, Clean Edge will be a new star for Paramount if market it properly. Therefore, “Clean Edge by Paramount” will make Clean Edge to stand out from the current product lines, which have less technology and target lower price market, and promote it as the Paramount’s revolutionary product to attract those involved razor users.
Communication and Advertising Strategies: Clean Edge by Paramount is a high-class nondisposable
razor, which target super-premium market. Therefore, the overall communication strategy will highlight its breakthrough technology, aesthetic design, and its high quality. For example, Clean Edge by Paramount will be framed as an exclusive, stylish, high-tech and high-end razor for those customers who are either searching for the extremely high quality shaving experiences or want to enjoy the overall stylish grooming process.
