The choice of positioning must factor in the presence of Paramount’s existing products. The main internal consideration for Paramount is the effect of cannibalization with the introduction of the Clean Edge. Statistics from previous product launches estimate that 60% of Clean Edge sales in the mainstream segment would come from current Paramount customers. A figure of 35% is given for the niche segment. With the effect of cannibalization varying based on positioning, Paramount must determine whether or not the cannibalization in the mainstream segment effect is too great to overcome with sales volume. A niche positioning strategy would establish the Clean Edge as more of a complement to current products, and it would prevent an innovative technological option that is non-existent in Paramount’s other more mature products. Clea...
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...mpany name. When considering the Paramount Pro, for example, one can note the emphasis on the company name, not so much the product. In a mainstream market, this strategy is more successful. However, in a niche market, the focus is more on the product, not the company that makes it. By using the brand name “Clean Edge by Paramount,” Paramount would focus its attention on pushing the growth of the Clean Edge razor name, not its company name. With the niche positioning strategy, I would recommend the estimated marketing budget of $15 million ($7 million to advertising, $6 million to consumer promotions, and $2 million to trade promotions) over the first year. Unlike the mainstream positioning strategy, there would be less need for consumer and trade promotion. The transition between the Paramount Pro and the Clean Edge would require less extensive advertising.
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