Clean Edge Razor: Splitting Hairs in Product Positioning
September 18, 14
Case Write Up #1 Clean Edge Razor: Splitting Hairs in Product Positioning
A well-known health and beauty company, Paramount is launching a high-technology nondisposable razor, Clean Edge. They are searching for the most efficient way to gain market share. Their concerns come down to three main problems: whether they should target niche market and price the product in the super-premium segment, or aim mainstream market and gain broad appeal, ;whether they should just emphasize the product name “Clean Edge” or add “Paramount” at the front to broaden brand image;whether they should sustain current market allocations and focus on niche market or increase the marketing budget for extensive …show more content…
Their effort of reaching out to more people is revealed in promotion costs.
Niche Market – From Exhibit 5, it is clear that Paramount’s market share is steadily increasing while other competitors’ market shares are slightly fluctuating. This is definitely the perfect timing for Paramount to improve their brand quality by entering to the niche market, at the same time slowing down strong growth of new competitors. According to financial data (see appendix 1), it is true that net profit is much higher in mainstream positioning, due to higher volume and lower unit cost. However, considering that Paramount’s nondisposable razor market share is continuously increasing from Paramount Pro and Avail, which are not super-premium products, suddenly introducing Clean Edge in the mainstream market to get mass appeal would cannibalize Paramount’s existing brands, potentially degrading Paramount as a ‘cheap brand’.
Do not keep “by the Paramount” label – Considering that Prince and Benet & Klein are still better known to customers not just for the razors but also for other health and beauty products, it is uneasy for Paramount to get their brand name widespread in the market, especially when they are spending less budget on advertising. Radiance, the new competitor that specifically targeted super-premium razor market and spent $16.1 million dollars on