Analysis Of Paramount Health And Beauty Company 's Universal Disposable Razor Market

Analysis Of Paramount Health And Beauty Company 's Universal Disposable Razor Market

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Paramount Health and Beauty Company’s (Paramount) upcoming introduction of their new product, the Clean Edge Razor, into the non-disposable razor market presents a number of issues and questions that must be answered in order to maximize profit. Paramount already holds two products in the non-disposable market, both the Paramount Pro and the Paramount Avail, with the Pro being positioned in the mainstream segment of the market and the Avail being positioned in the value segment of the market. The decision Paramount faces involves where to position the Clean Edge Razor. The choice of positioning will ultimately determine profit/loss figures as well as Paramount’s market presence as it attempts to maintain a leading position in the non-disposable razor market. Debate about positioning is between launching the Clean Edge into the mainstream segment of the market and launching it as a niche product.
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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