By Consulting Without Borders:Aditi Memani, Andres Ramirez, Katerina Potesta, and Camilo Romero

Paramount’s Launch: Clean Edge Razor

Agenda Situation Analysis

Competitors Consumers Distribution Channels

SWOT Analysis of Paramount Marketing Plan for the Launch of Clean Edge Razor

Positioning and Target Segments Marketing Campaign

Advertising Consumer Promotion Trade Promotion

Financials

Competitor Analysis

21.4

26.2

21.1

2.6

5.7

23

2010 Competitors Market's Share

ParamountPrinceBenet & KleinRadianceSimpsonsOther

Competitor Analysis

Cogent Plus

Cogent Victric Master

Victric Advanced

The Naiv The Tempest

10

10.5

11

11.5

12

12.5

13

Super-premium Competitor Analysis

Products

Pri

ce

Consumer Analysis More brand switching into

super premium market to superior products

Brand loyal Not price sensitive Aware of new products

through advertising Increased blade

replacement Generally interested in

beauty/grooming products

33%

39%

28%

Nondisposable Razor Consumers Market Share

MaintenanceSocial Emo-tionalAesthetic

Consumer Profiles Social/Emotional:

Shaving is an essential grooming ritual that makes them feel more attractive and confident

These consumers differentiate products based on both messaging and functionality

Aesthetic: Desire is for smooth skin and shaving is done consistently Differentiation of products is based solely on effectiveness

Maintenance: Have no interest in product category, are inconsistent, and see

shaving as a chore that should be done quickly

Distribution Channel Analysis

2007 2008 2009 20100

5

10

15

20

25

30

35

40

45

50

% of Sales in Each Distribution Channel

Food StoresDrug StoresMass MerchandiserClub Stores

Distribution Channel Analysis Basic Info about Retail Distribution Channels:

Razors provide higher profit margins Food Stores and Drug Stores are the biggest Retail channels Mass Merchandisers are increasing

Distribution Channel Analysis

Food Stores

• Provides:• All Products

(No Value Pack)

• Focus on:• Niche• Mainstream

Drug Stores

• Provides:• All Products

(No Value Pack)

• Focus on:• Niche• Mainstream

Mass Merchandisers

• Provides:• All Products

(No Value Pack)

• Focus on:• Mainstream• Uninvolved

Maintained

Club Stores

• Provides:• Value Pack

Only• Focus on:

• Mainstream

SWOT Analysis of Paramount

Strengths• Leader in technological

innovation.• Established brand with

strong brand equity.• Significant amount of

advertising expenditure at disposal.

Weaknesses • Lacks presence in the

super-premium segment of the market.

Opportunities• Increase popularity in

men’s grooming.• Growing super-

premium segment.

Threats• Competitors releasing

a similar razor into the Super-premium market.

• Unsuccessful launch could hurt strong brand equity.

Positioning and Target Markets Positioning:

Super-premium category razor Men’s market

Growth due to more media attention and grooming products targeted for men

Marketing strategy will target both a niche and a mainstream market

Target Markets: Social/Emotional Niche Segment

Largest Segment of Nondisposable Razors Needs of this segment fit the attributes Clean Edge Razor provides

Mainstream Large Market that is untouched by super premium products

Advertising: Social/Emotional Segment Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials

Partially cover cost of Ryan Gosling TV Campaign Print Advertisements

Publications that cover Men’s Fashion and Lifestyle EX: Esquire, Details, and Men’s World

Digital Marketing Digital Mediums of Print Publications Banner Advertising using Google target advertising platform

Focusing on Men’s Fashion and Lifestyle

Social Media Create Clean Edge Razor Social Platform

Including: Facebook, Tumbler, YouTube, and Twitter Accounts #CleanEdge

Give a Free Matte Black Razor with Customized Carrying Case to Top Men’s Fashion and Lifestyle Blogging Sites EX: Dappered.com, TheSatorialist.com Have them post about their experiences with Clean Edge Razor on all Social Media Platforms Feature post about different package options for the product

Repost any social media posts about Clean Edge Razor

Advertising: Mainstream Advertising Budget will cover TV, Print, Digital, and Social Media Platforms TV Commercials:

Joakim Noah – All Sporting Events Beginning from the Super Bowl (February)

Ryan Gosling – All Other Commercials Beginning January

Print Publications News Worthy Print Ads

EX: Forbes, Businessweek, NY Times, WSJ Sporting Print Ads

EX: ESPN, Sports Illustrated

Digital Marketing All Digital platforms of Print Publications Banner Advertising using Google target advertising platform Website for Countdown of “Let’s Shave Noah”

Social Media Efforts focused on promoting social media events “Let’s Shave Noah” Mustache March No Shave November

Consumer Promotion We are a super premium product therefore our focus will be

on Package Differentiation and Product Differentiation Product Differentiation

Offer 4 Different Product Packages: Original Clean Edge Razor Extra Comfort and Grip Clean Edge razor Original Clean Edge Razor with carrying case, and wall mount Matte Black Clean Edge Razor

Package Differentiation Offer 3 Different Package sizes for Refill Cartridges

4 – Pack 8 – Pack 16 – Pack

Reasons for our Consumer Promotions Product Differentiation:

Will allow us to maintain a super premium sub brand image by: Providing Added Value for Social/Emotional Segments Provide a reasonable priced super premium product for price sensitive

mainstream users

Package Differentiation: Refill Cartridges can be used for all the 4 different product options Allow mainstream users continue use of a super premium

product at a reasonable price

Data on Trade Promotion in Different Distribution Channels Food Store Shoppers

Are high impulse and unplanned utility item purchasers

Drug Store Shoppers plan their purchases and

look for features Mass Merchandiser

Shoppers Have an average response

to promotions and look for overall value with average price

Trade Promotion Food Stores:

Receive some of Trade Promotion Budget for: Displays that focus on different Product Options of Clean Edge Razor

Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges Drug Stores:

Receive some of Trade Promotion Budget for: Displays that focus on Attributes of Clean Edge Razor as a whole

Will Carry only the 4 different Product options and 4 Pack for Refill Cartridges Mass Merchandisers:

Receive some of Trade Promotion Budget for: Displays that focus on the 4 different Product options and the 2 Different Packages

for Refill Cartridges Will carry the 4 different Product options and the 4 - Pack and 8 – Pack Refill

Cartridges Club Stores

Will not receive any of the Trade Promotion Budget Will Carry only the 16 – Pack Refill Cartridges

Incentives for Distribution Channels Access to the first of its kind product Sales Forecast for Pro and Avail Razors are said to decrease Higher Gross Unit Contribution Trade Promotions target their specific consumer segments

Food Stores: Both Social/Emotional Segment and Mainstream

Drug Stores: Both Social/Emotional Segment and Mainstream

Mass Merchandisers: Both Social/Emotional Segment and Mainstream

Club Stores: Mainstream

Financials Agenda Retail Prices for Different Product Options and Packages Breakdown of Advertising Budget Expected Capture of Market Share Income Statement for Social/Emotional Segment Income Statement for Mainstream Combined Income Statement

Retail Prices: 4 Product Options

Orig

inal

Grip

/Com

fort

Carry

ing C

ase/

Wall

Mou

nt

Mat

te B

lack

$12.99

$15.99$17.99

$14.99

Expect 30% of Niche Unit Sales from Added Value Product Options

Avg. Price Increase for Added Value Options: $3.33

Consumer Promotion Budget Required: $4,896,000

Retail Prices: 3 Package Options

4 - Pack 8 - Pack 16 - Pack

$10.50

$18.38

$34.13

Price for Package Expectations Mainstream Unit Sales from Value Packs: 8 – Pack 20% 16 – Pack 5%

Consumer Promotion Budget Required to compensate for decrease in price per cartridge: $2,118,100

4 - Pack 8 - Pack 16 - Pack

$2.63 $2.30 $2.13

Price Per Cartridge

Advertising Breakdown: Social/Emotional Segment

  2011 2012Advertising Campaign $6,000,000 $6,000,000

TV $2,393,050.30 $2,393,050.30Print $3,340,000 $3,340,000Digital $220,500 $220,500Social Media $46,449.70 $46,449.70

Consumer Promotion $6,000,000 $6,000,000Costs of Added Value Product Options $4,896,000 $5,440,001Manufacturing Costs $1,104,000 $559,999

Trade Promotions $4,000,000 $4,000,000Instore Advertising for Clean Edge Features $1,240,000 $1,240,000

Instore Advertising for Product Options $2,560,000 $2,560,000Total Budget $16,000,000 $16,000,000

Advertising Breakdown: Mainstream

  2011 2012Advertising Campaign $10,000,000 $11,000,000

TV $4,287,050.30 $5,297,050.30

Print $5,056,000 $5,056,000

Digital $620,500 $610,500

Social Media $36,449.70 $36,449.70

Consumer Promotion $5,000,000 $8,000,000Costs of Value Pack Options $2,118,100 $6,824,989

Manufacturing Costs $2,881,900 $1,175,011

Trade Promotions $2,000,000 $3,000,000Instore Advertising for Value Packs $420,000 $630,000

Instore Advertising for Product Options $1,580,000 $2,370,000

Total Budget $17,000,000 $22,000,000

Gross Profit: Social/Emotional Segment

RAZORS GROSS PROFIT  2011 2012Retail    

Units - OP  700,000   1,166,667 Sales - OP $9,093,000 $15,155,003.03Unit Contribution - OP $3.90 $3.90Gross Contr. - OP $2,730,000 $4,550,000.91Units - AVP  300,000   500,000 Sales - AVP $4,896,000 $8,160,001.63Unit Contribution $5.57 $5.57Gross Contr. - AVP $1,669,500 $2,782,500.56

Total Units  1,000,000   1,666,667 Total Contribution $4,399,500 $7,332,501.47Paramount    Total Units  1,000,000   1,666,667 Total Sales - OP $6,363,000 $10,605,002Total Sales - AVP $3,168,000 $5,280,001Total Sales $9,531,000 $15,885,003Unit Contribution - OP $4.09 $4.09Unit Contribution - AVP $5.76 $5.76Total Gross Contr. $4,591,000 $7,651,668.20

REFILL CARTRIDGES GROSS PROFIT  2011 2012Retail    Total Units  4,000,000   12,888,888 Total Sales $42,000,000 $135,333,324Unit Contribution $3.15 $3.15Total Gross Contr. $41,999,997 $135,333,321Paramount Total Units  4,000,000   12,888,888 Total Sales $29,400,000 $94,733,327Unit Contribution $4.92 $4.92Total Gross Contr. $19,680,000 $63,413,328.96TOTAL GROSS PROFIT $24,271,000 $71,064,997.16

Gross Profit: MainstreamREFILL CARTRIDGES GROSS PROFIT

  2011 2012Retail    4 - Pack    

Units  4,425,000   14,258,334 Sales $46,462,500 $149,712,507Unit Contribution $3.15 $3.15Gross Contribution $13,938,750 $44,913,752

8 - Pack    Units  1,180,000   3,802,222 Sales $21,688,400 69,884,848Unit Contribution $5.51 5.51Gross Contribution $6,506,520 20,965,454

16 - Pack    Units  295,000   950,556 Sales $10,068,350 $32,442,463Unit Contribution $10.24 $10.24Gross Contribution $3,020,505 $9,732,739

Total Units $5,900,000  19,011,112 Total Contribution $23,465,775 $75,611,945.20Paramount    4 - Pack    

Sales $32,523,750 $104,798,754.90Unit Contribution $4.92 $4.92

8 - Pack    Sales $15,181,880 $48,919,393.40Unit Contribution $12.34 $12.34

16 - Pack    Sales $7,047,845 $22,709,723.84Unit Contribution $14.14 $14.14

Total Units  5,900,000   19,011,112 Total Sales $54,753,475 $176,427,872Total Gross Contr. $40,502,320  $130,507,482

RAZORS GROSS PROFIT  2011 2012Retail    Total Units 2,300,000 3,833,333Total Sales $29,877,000 $49,794,995.67Unit Contribution $3.90 $3.90Total Gross Contr. $8,970,000 $14,949,998.70Paramount Total Units 2,300,000 3,833,333Total Sales $20,907,000 $34,844,997Unit Contribution $4.09 $4.09Total Gross Contr. $9,407,000 $15,678,332TOTAL GROSS PROFIT $49,909,320 $146,185,814

Net Operating Profit

NET OPERATING PROFIT

2011 2012

Gross Profit $74,180,320 $217,250,811

Operating Expenses $35,145,000 $41,575,000

Capacity Cost $2,145,000 $3,575,000

Advertising Budget $33,000,000 $38,000,000

Cannibalization Costs $58,867,785 $165,222,887

Operating Profit -$18,832,465 $10,452,924