Clean Edge Razor: Splitting Hair in Product Development Essay Example

Paramount Pro and Paramount Avail. By offering these product lines, Paramount was able to dominate the market with a retail unit share of 23.7%.

The emergence of new technology products and competitors is causing a disruption in the market for non-disposable razors, posing a threat to Paramount. The rapid advancements in non-disposable razor designs present a considerable challenge for Paramount as their Paramount Pro razor falls behind in incorporating the latest technology. This suggests that it may be entering the maturity phase of its lifecycle.

The sales growth has likely begun to decline and more competitors are now selling similar razor products. Additionally, due to the lack of new innovative upgrades, the Pro will eventually enter the Decline phase with declining sales. Paramount will need to formulate a plan of action when the Pro reaches this phase. They can choose to retain the Pro and potentially revive it by improving its design. Furthermore, they can lower the cost of the Paramount Pro and potentially target a niche market segment.

Finally, Paramount may choose to discontinue the product or it may view The Clear Edge razor as capable of dominating the market. Paramount believes that the Clear Edge, with its innovative product design, has the potential to be a unique offering in the market. As the Clear Edge enters the Introduction Stage of the product lifecycle, Paramount must develop strategic marketing and advertising campaigns targeted at innovators and early adopters.

Furthermore, Paramount may need to create marketing and advertising strategies that not only showcase the benefits of the new razor but also illustrate its advantages for their target customers. Currently, experts categorize

non-disposable razors into three types (value, moderate, and super-premium) based on price and quality. Currently, customers who purchase non-disposable razors are becoming more selective and expect innovative technological advancements in the products they buy.

Hence, the "Involved Razor Users" category consists of consumers who prioritize a smooth shaving experience and are willing to pay a premium for razors that meet their needs. Conversely, there is another consumer category called "Maintenance users," which accounts for 33% of the market. These consumers are not particularly interested in any specific product and are unlikely to purchase products featuring the latest technological designs.

This specific group of consumers, accounting for 33% of the non-disposable razor market, should not be overlooked. The Paramount Pro and the Paramount Avail were positioned in different segments - moderate and value categories respectively. However, both product lines lacked technological advancements in their designs over the past five years. In contrast, the Clear Edge Razor was priced in the super-premium segment and featured several product innovations that Paramount believed would boost sales.

The main question for Paramount was whether to position Clear Edge as a niche or mainstream product. Paramount believed that their new Clear Edge Razor product, with its vibrating and ultra-thin five blade design, utilized revolutionary technology. They believed that the vibration would stimulate hair follicles as a benefit. Additionally, the new Clean Edge razor from Paramount Razor Products was designed to be larger and heavier. Moreover, consumers increasingly expected technological advancements to enhance razor features.

Paramount's reliance on their current products, Pro and Avail, has been significant. However, they should have foreseen the inevitable obsolescence of their existing

razor product line. William Kim, Corporate Marketing Director at Paramount, acknowledged this issue and alerted the company's executives that "Pro is in the mature phase of the product lifecycle." He also emphasized that "a decline is imminent." This leads us to ask: How is the non-disposable razor market segmented?

Customer behavior for non-disposable razors can be examined by dividing them into three segments: value, moderate, and super-premium, based on price and quality. Recent studies have revealed that consumers are now purchasing razors and replacing cartridges more frequently compared to the past. This change in behavior may be attributed to consumers trying out new razor products and an increase in advertising highlighting the benefits of frequent blade replacement.

Paramount could launch Clear Edge as a niche product to target Social/Emotional shavers who highly value their shaving experience. This decision would lead to a 35% reduction in sales for Paramount Pro and Avail. Executives in favor of positioning Clear Edge as a niche product argue that it could enhance the company's market presence and attract Aesthetic shavers who prioritize effective hair removal when choosing razor products.

Paramount aims to expand its consumer base and enhance brand recognition by positioning Clear Edge as a mainstream product. This strategic move would enable Paramount to increase market share and capitalize on the opportunity of being the pioneer in introducing innovative non-disposable razor products, considering that consumers are frequently swayed by technological advancements when making razor purchases.

Furthermore, if Paramount chooses to position Clear Edge as a mainstream product, it can target the Pro to the Maintenance Shavers, who constitute 33% of non-disposable razor users. My

recommendation is to initially launch the Clear Edge razor as a niche product and then reposition it as a mainstream offering after two years. While appeasing Paramount Pro’s product manager, Albert Rosenberg, was not my main objective in making this decision, I do agree with Mr. Rosenberg.

Rosenberg's analysis suggests that if Clear Edge were positioned in the same mainstream market as Paramount Pro and Avail, it would lead to consumers purchasing less of the Pro. To prevent this, it is recommended to initially introduce Clear Edge as a niche product, which would result in a smaller impact on the Pro and Avail product lines. The estimated cannibalization effect is projected to be 35% if Clear Edge is launched as a niche product. However, if Clear Edge is launched as a mainstream product, the expected cannibalization effect would increase to 60%.

Clean Edge Razor is using a niche positioning strategy to achieve profitability while minimizing the impact on Paramount's existing products. This approach also has the potential for Paramount to become the leading player in terms of unit volume by 2009. Furthermore, launching Clear Edge initially as a niche product would result in significantly lower marketing expenses compared to introducing it as a mainstream offering. The first year of targeting the niche market would involve $15 million in marketing costs, which would then increase to $16 million in the second year.

The marketing expenses for year one would be $42 million, decreasing to $40 million in year two. The total media advertising expenditures have been rapidly increasing due to the need to promote the benefits of using razors with 'revolutionary' technology. However,

it is important to note that Pro and Avail have not made any significant technological advancements in the past five years. If Paramount chooses not to make significant changes to the design of these products, their product lines will soon enter the decline stage.

According to William Kim, Paramount corporate marketing director, it was anticipated that Clear Edge would become a mainstream product due to consumers' desire for technological advancements in razors. Kim pointed out that consumer research indicated an increasing sophistication and expectation for more advanced technology. He emphasized that in comparison, Pro and Avail were not innovative products, prompting Paramount to take aggressive action to retain its customer base and prevent them from switching to competitors offering innovative razor products. Kim declared Clean Edge's potential for dominating the market and stressed the importance of positioning it accordingly.

Therefore, once the Pro and Avail product lines have reached their Decline Stage, Clear Edge should be re-positioned into the mainstream market. It is likely that newer technology will enhance Clear Edge when it is re-positioned in the mainstream in two years' time. Additionally, I recommend launching the Clear Edge razor as 'Paramount Clear Edge'. This would align with the company's current product names of Paramount Pro and Paramount Avail, and would further contribute to the development of brand equity for the Paramount brand.