Clean Edge Razor Case

Clean Edge Razor Case
Kamakshi Thakur
219810001
New Products MKTG 6440 X
Q1. What changes are occurring in the non-disposable razor category?
The non-disposable razor category is experiencing several changes that are worth noting-
1. Growth and Innovation

The category experienced an approximate 5% growth per year from 2007 to 2010 due to
innovations and new product introductions. These new products are promoting benefits
from advances in technology, such as lubricating strips, lather bars, and 5-blade technology
to improve the performance and comfort of non-disposable razors. As a result, total media
advertising expenditures in this category have been rising faster than retail market sales,
and this trend is expected to continue in the future as companies invest more in marketing
and advertising to increase brand awareness and drive sales.
2. New product introductions and retail responses

Between 2008 and 2009, an unprecedented number of 22 new stock-keeping units (SKUs)
were introduced in the market. Retail outlets responded to this growth by increasing shelf
space for the product category, as this category tends to have considerably higher retail
margins compared to other personal care products.
3. Distribution channel shift

The way in which non-disposable razors are being distributed is evolving and moving away
from traditional food and drug stores to other outlets. This change is reflected in the data
that shows that food stores accounted for only 42% of sales in 2009, compared to 50% in
2000. This shift in distribution channels is most likely happening because the products are
becoming more widely available in other types of retail outlets, such as mass merchandisers
and club stores. This change in distribution channels presents an opportunity for companies
to expand their reach and tap into new markets, as well as give consumers convenience in
purchasing the products they need.
4. A rise in male-specific grooming products

Male-specific grooming products are becoming more popular as more media attention is
given to men's grooming issues and men's preening is less stigmatized. This trend is
expected to continue and drive growth in the category. With a growing interest in men's
grooming, there is an opportunity for non-disposable razor companies to target this
segment with new products and marketing campaigns.
5. The increased popularity of electric shavers

Approximately 27% of men are using electric shavers, which are becoming more popular in
the non-disposable razor market due to their ease of use and reduced skin irritation
compared to wet razors. This trend is driven by the convenience and comfort that electric
shavers provide, as they are easier to manoeuvre and cause less irritation on the skin,
making them a more attractive option for many men.
Q2. How is the non-disposable razor category segmented
The non-disposable razor market is segmented into three main segments: super-premium,
moderate, and value.
The super-premium segment includes the most advanced and highest-priced razors,
typically offering features such as multiple blades, lubricating strips, and special ergonomic
designs to improve the performance and comfort of the razor. While this segment has a
smaller share of the total volume sold, it generates a higher percentage of the total dollar
sales.
The moderate segment includes razors that offer more features than the value segment but
at a slightly higher price. This segment accounts for the highest total volume of sales and
total dollar sales in the market.
The value segment is made up of razors that are priced at the lower end of the spectrum
and typically offer basic features such as single blades or simple lubricating strips. These
razors are targeted towards consumers who are looking for a low-cost option and may not
be as concerned with advanced features or performance.
Q3. What are the arguments for launching Clean Edge as
o A niche product?
o A mainstream brand?
1) A niche product
 Targeting high-income demographics

Launching Clean Edge as a niche product allows Paramount to specifically target a high-
income demographic who may be more willing to pay for a high-end, high-quality product
leading to a higher return on investment. This strategy allows the company to focus their
marketing efforts and resources on a specific group of consumers rather than trying to
appeal to a broad market.
 Differentiation of product offerings

This strategy would also allow the company to differentiate its product offerings in the
market by having a super-premium product in addition to its existing Pro and Avail products
in the midrange and value segments. This helps in 25% lower cannibalisation of sales from
its existing products, Pro and Avail, which are already well-established in their respective
segments.
 Efficient marketing
Launching Clean Edge as a niche product would result in a much lower marketing spend
compared to a mainstream launch. This would allow the company to focus on reaching and
engaging with its target audience. The targeted marketing campaign could be tailored to the
specific needs and preferences of the niche market, allowing for more effective and efficient
use of resources.
 Cost-effectiveness
Launching the Clean Edge razor as a niche product lowers the average capacity costs in the
second year by approximately 6%, whereas as a mainstream product, the average capacity
cost increases by 17%. This is because fewer resources would be needed to produce,
distribute, and market the product on a smaller scale. This would include things like less
manufacturing equipment, less warehouse space, and a smaller marketing budget.
 Competitive advantage
By launching Clean Edge razor as a niche product later, after Naiv launches its advanced
non-disposable razor nationally, would be beneficial for Paramount as it would allow them
to learn from their competitor's successes and failures, take advantage of any market gaps
left by Naiv, gather more information about the product, take advantage of the market
interest and make informed decisions about how to position and market their own product.
2) A mainstream product
 Increased Market Availability: One of the main arguments for launching Clean Edge as a
mainstream brand is the availability of a larger market. The launch of Clean Edge may
cause some existing product sales to decrease, but if the new product is able to generate
more revenue overall, it can still be considered a good thing for the company. Clean
Edge may be able to attract new customers and increase the average revenue per
customer, which could compensate for the lost sales from existing products.
 Innovation Opportunity: Another argument for launching Clean Edge as a mainstream

brand is that it can take the spot of the company's existing products, Pro and Avail,
which have not seen any technological innovations in the last five years. Clean Edge,
with its advanced technology, could be a perfect replacement for Pro and help the
company to stay competitive in the market.
 Brand Recognition: Launching Clean Edge as a mainstream brand would increase brand
recognition, which is crucial for building a strong and successful brand. This would
increase customer loyalty, which would lead to more sales in the long run.
 Leverage on Distribution Channels: Launching Clean Edge as a mainstream brand would

allow Paramount to leverage its existing distribution channels to reach a larger customer
base. This would increase the product's availability, which would make it more
accessible to consumers and increase sales.
 Increased Advertising: The $42 million budget would allow Clean Edge to outspend its
competitors in advertising, which would give the company an advantage in terms of
brand recognition and market share.
Q4. Which launch strategy do you recommend? Why?
As a marketer, I believe that it is strategic to launch the Clean Edge razor as a niche product.
This approach allows Paramount to specifically target a high-income demographic who may
be more willing to invest in a high-end, high-quality product, resulting in a higher return on
investment.
Furthermore, having a super-premium product in addition to the existing Pro and Avail
products in the midrange and value segments enables the company to differentiate product
offerings in the market and reduce the cannibalization of sales from existing products.
Additionally, by launching the Clean Edge razor as a niche product, we can minimize costs
while maximizing market penetration and sales potential in a specific, high-income
demographic. A targeted marketing campaign can be tailored to the specific needs and
preferences of the niche market, which results in a much lower marketing spend compared
to a mainstream launch.
In conclusion, a niche product launch would allow the company to minimize costs while
maximizing market penetration and sales potential in a specific, high-income demographic.
Q5. What is the single most important thing this case teaches us in the context of new
product development?
The Clean Edge razor case serves as a valuable lesson in the realm of new product
development, particularly in terms of positioning strategy. It's essential to conduct thorough
market research, understand our target audience and their needs, and position the product
accordingly. By positioning the product in a unique and strategic way, we can differentiate it
from the competition, increase its perceived value, and appeal to our target market.
Furthermore, the case also highlights how the positioning strategy can have a significant
impact on the product's launch strategy, costs, and returns. Therefore, it's crucial to have a
clear understanding of the positioning strategy before launching a new product to increase
its chances of success in the market. In short, the Clean Edge razor case emphasizes the
importance of positioning strategy in new product development.

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Clean Edge Razor Case

1. Growth and Innovation

2. New product introductions and retail responses

3. Distribution channel shift

4. A rise in male-specific grooming products

5. The increased popularity of electric shavers

Q3. What are the arguments for launching Clean Edge as

 Targeting high-income demographics

 Differentiation of product offerings

 Innovation Opportunity: Another argument for launching Clean Edge as a mainstream

 Leverage on Distribution Channels: Launching Clean Edge as a mainstream brand would

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