Clean Edge Razor: Splitting Hairs in Product Positioning Report

Introduction

In the year 2007, the Chief Executive Officer (CEO) of Paramount Company established a team that would oversee the development of the company’s new product into the market with the help of technological innovation. This product was meant to be exceptional in the market through gaining a competitive advantage.

The team was made up of expertise from different departments of the company such as production, marketing and R & D department. After a thorough evaluation of numerous new designs, they concluded that Paramount company revolutionary product would be ultra-thin, vibrating five-blade design labeled” Clean Edge.” This was done with an aim of the company establishing itself as an innovative leader.

The Clean Edge non-disposable razor had attributes that were extremely striking and appealing to anyone who would use it. For instance, the handle contained an AAA battery which stimulated the hair follicles upon its vibration (Quelch & Becham, 2011, p. 1). Additionally, the razor handle was large and heavier enough to facilitate control, balance and grip while shaving. Similarly, the advanced design (Ultra-thin) of the blade reduced significantly the irritation of the skin.

The project team is trying to establish the positioning strategy, marketing, branding and budgeting of the new product in the market so as to attract a wide customer base. The report is going to provide the best solution that needs to be considered if the Clean Edge razor wants to be successful in the market.

Discussion

Changes have been experienced in various sectors of the non-disposable razor category. For example, this category of razor has continuously recorded an increase in revenue growth. From the year 2007 to 2010, the percentage growth was approximated to be five percent (5%) in comparison to 2% of the refill cartridges razors (Quelch & Becham, 2011, p.2).

The introduction and development of new products has significantly increased the non-disposable razor growth percentage in the market. For instance, Paramount Company has introduced the Clean Edge. Furthermore, the market segment for this type of razor has been categorized into three principal segments taking quality and price into consideration.

Under quality, the non-disposable razor category is based on super-premium, moderate and value. The super-premium premium segment in the previous decade has recorded a growth that is significant. This is as a result of the innovation of numerous products including the low resistance blade coating, 5-blade technology, lather bar and glide strips among others. The growth is as shown in the table below

The above table gives some highlights of the segments retail sales for both the Refill Cartridges and non-disposable razor as per 2009 Data. As compared to previous years, more replacement cartridges and razors were purchased by consumers more often. However, the level of replacement of refill cartridge razors has been negatively affected as a result of product innovations. Advertisements have also affected the benefits accrued from frequent replacement of razors.

Assessing and discussing the competitive position of Paramount

Competitive positioning is all about how paramount company will differentiate its product in the market as well as create market value for it. This will involve checking on the company’s positioning strategy, market profile, the segment of the customer, SWOT analysis and value proposition. The company offers its consumers with two categories of refill cartridges and non-disposable razors. The first category is the paramount Pro.

This product line is positioned in the product category moderate segment. The second product line is the Paramount Avail. This product is viewed as a value offering. For the past five years, none of the product line has been able to introduce important technological innovations in the market. However, they enabled the company in 2009 to conquer the market leader position in terms of unit-volume. This was in reference to the 23.3% share of retail unit.

The company new product “the Clean Edge” razor has resulted to disagreements in the company among various leaders. Some prefer niche product positioning for the product. This will seek to perfectly satisfy the needs of groomers who are fastidious and highly involved and in need of a powerful shaving experience. Some leaders advocate for mainstream positioning. This aims to focus on the superior advantage of offering its client with close to perfect shave.

For example, Rosenberg the Pro manager advocates for the adoption of the niche positioning rather than mainstream positioning. He feels that the adoption of the mainstream positioning will draw off clients from Pro. Additionally, the Pro power will be diluted by such a position and yet it’s the main brand of the company.

The end result will be cannibalizing of the company from internal factors. On the other hand, the consideration of the niche positioning will perfectly promote the company’s product portfolio. Kim the corporate company market director argues that, the adoption of niche positioning will only satisfy an individual desire rather than the overall company performance (Quelch & Becham, 2011, p.5).

As a result of advanced technology, consumers have become more sophisticated and are in dire need of technological innovative products which Pro does not provide. The main reason is that Pro has already reached the maturity stage in terms of product life cycle and it’s expected to decline.

Therefore, the application of the mainstream positioning to position Clean Edge will be valuable to the company. For instance, it will aid in preventing customers that are loyal to Paramount Company from being persuaded by brands that are more innovative. Clean Edge as the company’s new product has the potential of dominating in the market and therefore needs mainstream positioning.

Analyzing the non-disposable razor market consumer behavior and segmentation

The non-disposable razor market has been split into three based on quality and price. We have the super-premium segment, the value segment and the moderate segment. The super-premium has continuously experienced growth in terms of customer base and sales volume. This is attributed to product innovation in this segment as compared to the other segments. As a result of innovation, numerous products are available in the market.

These are such as the glide strips and lather bar types of non-disposable razor just to mention a few. From the 2009 research study conducted by Paramount, it was clear that there was an increase in the purchase of the replacement cartridges and razors as compared to other years. However, the company executives feel that the cycle of replacement has been affected as results of consumers need to try out products that are new in the market.

The consumer intimacy with products varies from one consumer to another. There are those who are loyal to a product and cannot be persuaded to purchase any new product in the market. These consumers in the razor market are labeled as” maintenance shavers” and they are never concerned with any product category.

On the contrary, the consumers who are interested in product category can be divided into various groups such as aesthetic and emotional/ social shavers. These groups are anxious and are willing to act as a guinea pig when it comes to testing of new products in the market.

The shavers who are emotional always gain motivation from the overall experience of shaving whilst the other group gets carried away by the outcome of the cosmetics (Aesthetic shavers). The increased demand for super-segment products will increase the sales of Paramount Company as it aims to put its new product” Clean Edge” along that product line. As a result of the introduction of this product into the market, the company will need to channel most of its resources into advertising in order to trigger demand.

Arguments for Clean Edge Launching

There exist two positions when it comes to launching of the Paramount new product: “Clean Edge”. There are those who are for mainstream positioning, whereas, there are those proposing the niche product position.

Niche product position: The Company CEO Mr. Randall recommends this position for the Clean Edge product. This is because of its focus on groomers that are fastidious and highly involved customers. These groomers are often pursuing a shaving experience that is more superior.

Mainstream product position: This position aims at Paramount advantage of presenting the closest promising shave. In order to come up with a financial forecast that perfectly fits the above options, Randal the Company’s CEO made consultations with the manufacturing and marketing project team. While doing this, the effects of cannibalization were taken into consideration. A hotly contested debate arose whilst a meeting was held with regards to the above product position.

This was between the company’s (Paramount) newly hired director of corporate marketing and Pros product Paramount manager Mr. William Kem and Albert Rosenberg respectively. Kim is in charge of the company’s non-disposable razor group while Rosenberg is in charge of the grooming division. The two managers hold different views regarding the positioning of Clean Edge product. Rosenberg considers niche-positioning strategy while Kim supports mainstream positioning strategy.

According to Rosenberg, mainstream positioning strategy will draw away clients from Pro product line. Furthermore, it will weaken the power of the brand (Pro) which is the superior product of the company. In his view, niche-positioning strategy will aid in complementing perfectly the company’s available product portfolio. This view is highly disputed by Kim. He thinks that Rosenberg is interested in fulfilling his desires rather than the company’s interest.

Given the fact that the consumers are more complicated thus, expecting more advanced products in terms of technology, then mainstream position is highly recommended for Clean Edge. The use of this positioning will help in preventing Paramount customers that are loyal from being persuaded to consume brands that are more innovative. Therefore, this is viewed by Kim as the perfect positioning as the product has the potential of dominating in the market and mainstream position will help meet the achievement of this goal.

Recommendation for Randal regarding the Argument Situation

From the above argument, I would recommend Randal as the Chief Executive Officer of Paramount Company to apply mainstream positioning. This is because of its potential in Clean Edge super-premium segment. As a result, the new product will be the men standard shaving and would rapidly gain a competitive advantage in the market. Nevertheless, Randall has to take into consideration the overall company best possible positioning strategy.

This is because the mainstream positioning strategy will be highly refuted by Rosenberg the product managers for the company’s Pro’s product. Therefore, Randall has to consider launching the product as a niche product. This should be done for one year and not more than two years to satisfy Rosenberg and create a good working relationship in the company.

Therefore, a simple pro forma should be established by Randall for purposes of identifying the cannibalization impact on paramount product line (Avail and Pro). Additionally, Randall should come up with contingency plans to deal with any challenges that might occur. This will aid in coming up with a decision that is more informed about the positioning of the product and identifying the perfect name of the brand and recommendations on the budget.

Brand name for the company

The identity of any product is what is known as brand name. It is often specific to a manufacture, a company or a producer. Brand name helps in differentiating similar products in the market such as the non-disposable razor. It is extremely important for a company to own a brand name if a company wants to survive in the aggressive business environment. Therefore, the selection of a brand name should be done keenly.

As the product identity and image highly depends on it. Brand name indicates product ownership. Given the current heavy marketing world, very distinct companies sell products that are similar. These products can only be differentiated through the use of a brand name which is unique to a company and easy to recognize.

The loyalty of the customers largely depends on the name of the brand. Therefore, these customers will prefer products from a specific company. This is because they are well conversant about their products quality and price. Therefore, I recommend the use of “Paramount Clean Edge” as it highlights the company as the owner of the product.

Market Budgeting Allocations

In order to have a Clean Edge successful launch in the market, a significant market budget allocation will be needed. Therefore, for the first year, a total of fifteen million dollars ($15M) will be required for the niche positioning strategy. On the other hand, to maximize on the mainstream position full potential a marketing budget of forty two million dollars ($ 42M) will be required. Therefore, if Clean Edge is launched as a mainstream product, more marketing support will be needed.

Despite this being expensive, I recommend mainstream position to be adopted as the market launching strategy. This is because of the underlying reasons. To begin with, the unit volumes for mainstream razors are expected in the first year to capture more than three times the volumes made by niche positioning.

As a result, an advertising campaign that is more intensive will be required to capture the wide customer base. Moreover, trade and consumer promotion events will be mandatory and the numerous expenses that will be incurred will be based on volumes.

The Key New Product Development lessons learned from the case Analysis

From the case, analysis, there are numerous lessons that I have learned. For instance, in order for a company to come up with a new product in the market, a group of various experts needs to come together and offer their knowledge. Furthermore, the product should be developed using advanced technology as consumers are becoming more sophisticated.

When it comes to market segmentation, there are those consumers who are loyal to a product to the extent that they are not interested in emerging products in the market. A part from the loyal customers, we have those customers who are emotional and aesthetic. These categories of consumers are always ready to experiment with any new product in the market. In a company, arguments are bound to arise when it comes to making decisions regarding the developed product.

For example, in terms of positioning, there will be those who will advocate for mainstream product positioning whilst there are those who will go for niche product positioning. Therefore, as a company executive, one needs to do a cost benefit analysis before making any informed decision.

A part from positioning, branding can also be a greatest challenge. Before, a brand name can be identified, some arguments have to exist. All in all, what the company really needs is for its product to improve on the sales volume and increase the number of its customers.

Reference

Quelch, J. A & Becham, H 2011, Clean Edge Razor: Splitting hairs in product positing, Brief Cases, 1 (2), pp. 1-10.