Clean Edge Razor - Case Analysis

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1. What changes are occurring in the nondisposable razor category? Assess Paramount’s competitive position. What are the strategic life cycle challenges for paramount’s current products as well as for Clean Edge?

Paramount’s competitive position looked promising after the testing of their new nondisposable razor, Clean Edge. Majority of men who discussed the experience of the new razor said that it was the closest, cleanest, and smoothest shave they had encountered. Paramount currently faces some challenges when it comes to their strategic life cycle. Competition is very stiff. Not only does it involve direct competitors, but also substitute products. Disposable razors appealed to value customers and provided a new blade for each shave. Electric shavers appealed to older consumers and were easier to maneuver while also causing less skin irritation. As of now, Paramount only offered two nondisposable razors and refill cartridges found in the value and moderate segment. Neither of these products had introduced any innovations in the last five years, and it is time for something new.

        The nondisposable razor market has been dominated by Paramount, Prince, and Benet & Klein. Prince is Paramount’s biggest competitor, holding the number one position in sales in 2009. Both of Prince’s products are marketed in the super-premium segment. Benet & Klein introduced a new product in 2009 that provided advance lubrication, a no-slip handle, and superior blades. New entrants into the market were also stepping on Paramount’s toes when it came to innovative products. Simpsons planned to launch a new product in 2010 that was almost identical to Clean Edge. Overall, with Paramount not introducing new products in over 5 years, it is time for some innovation. With new competitors on the rise and consumers freely trying new products, Paramount needed something new, and fast.

In 2009, Paramount discovered that consumers were purchasing razors and replacement cartridges more than ever before. They believed this was due to consumers wanting to try new products. Advertisements displaying the benefits of frequently changing your razor were becoming very popular. Advertising expenses were even higher than overall sales. Another change of the nondisposable razor category was where you could find the actual product. In 2000, food stores sold more than half of all razors, but by 2009, they only represented about 42% of sales. Mass merchandisers increased by 3% and club stores increased by 2%. Razors were showing up in new locations more frequently than ever.

1. How is the nondisposable razor market segmented? Discuss consumer behavior for nondisposable razors.

Overall, the U.S. Razor market is divided amongst several, different categories, including nondisposable razors, refill cartridges, disposable razors, shaving cream, and depilatories. Clean Edge’s competition would be found in the nondisposable and refill cartridge categories. The nondisposable razor category is segmented into value, moderate, or super-premium. Overall, super-premium has experienced the most significant growth over the last decade. Paramount had to make a choice on how to segment their new product. All of the executives at the company believed that Clean Edge should be placed in the super-premium segment while others thought it should take more of a mainstream entry in the beginning. They wanted to reach the most customers with the broad appeal that this product was the most effective razor available in the market. Paramount also thought it was a clever idea to launch the product into the men’s market before the women’s, where the company already had a strong presence.