Clean Edge Razor
Group 4
Thesis
After careful consideration, taking all factors into
account, and addressing Paramount’s lack of penetration
into the super-premium market, it is our belief that the
Clean Edge Razor should target the mainstream
consumer.
Why We Chose Mainstream:
●
●
●
●
●
Larger position in the super-premium market segment
Higher sales volume
Lower price point
Greater contribution to operating profits
Stronger EBITDA growth over the next two years
exists as
direct rivalry
Strategy
Threat of New
Entrants - Low
Porter’s Five Forces
Bargaining Power of
Suppliers - Low
Rivalry among
existing
competitors
Bargaining Power of
Buyers - Low
2nd largest
in the
industry
fragmented
buyer-based
market
Threat of Substitutes Low
disposable razors, depilatories, waxing - decline
non-disposable razors and cartridges - fastest grow
Strategy
Strategy
Marketing
● Target Market: All non disposable razor consumers
○ Every segment marketed to differently
Social/Emotional
Shavers
Aesthetic
Shavers
Maintenance
Shavers
Marketing
● “Clean Edge by Paramount”
○ Razor differentiated by vibrating blade head
○ Stands apart from Paramount Pro and Avail
○ Reduction of cannibalization
Marketing
● Advertising budget (year 1): $42 mil
○ Media: $19 mil
■ Social/Emotional Ads. 40%
■ Aesthetic Ads. 34%
■ Maintenance Ads. 26%
○ Consumer Promotions: $17mil
○ Trade Promotions: $6 mil
Management
●
●
Rosenberg vs. Kim
○
“I can’t believe we are even considering a mainstream
positioning strategy. You will just siphon off consumers
from Pro. A mainstream strategy will dilute the brand
power for our bread-and-butter product, Pro. We will
just be cannibalizing ourselves. A niche strategy
makes more sense. It will complement our existing
product portfolio perfectly.”
Consultative Style of Management
○
A solution that will be in the best interest for the
company and Rosenberg.
Finance
Finance
Sensitivity Risk Analysis
Finance
UPSIDE
DOWNSIDE
Razor
Sales +5%
Razor
Sales
-10%
Cartridge
Sales +5%
Cartridge
Sales
-10%
Unit Costs
+5%
Cannibal
+10%
Conclusion
Mainstream, because:
●
●
●
Profitability by units sold (higher sales volume)
Greater present value
Lower price point in comparison to a Niche market launch
Major Risk Factors:
1.
2.
3.
4.
Increase in Cannibalization
Cartridge sales are below forecast
Losing the pro razor manager, Albert Rosenberg
Increase in disposable razor sales
Conclusion
Summary:
●
●
●
Strategy- Gain competitive advantage over rivals
Marketing- Market the product as “Clean Edge by Paramount”
Management- Consultative approach to the threat of Cannibalization