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