Clean Edge Razor - Splitting Hairs in Product Positioning

Case Analysis

Clean Edge Razor

Splitting Hairs in Product Positioning

Section A - Group 8

Anurodh Tak (B14014)

Raman Ladda (B14043)

Shirish Pathak (B14050)

Introduction

The US Razor market has several categories namely non-disposable razors, refill cartridges, disposable razors, shaving cream and depilatories. In the period 2007 to 2010, the growth of non-disposable razors is approximately 5% and that for refill cartridges 2% per annum. Paramount was a global consumer products giant with $13 billion in sales. Its portfolio includes health, cleaning, beauty and grooming products. Paramount’s non-disposable razor and refill cartridges division contributed $170m revenue with a gross profit of $92m and an operating profit of $26m in 2009. Paramount currently offers two products, Paramount Avail and Pro in this category and the new product clean edge which is to be introduced.  Paramount Health and Beauty Company, a leading name in consumer products including Health, Cleaning, Beauty and Grooming is all set to launch a new non disposable razor with cutting edge technology to improve men’s shaving experience. The design provides superior performance by the use of a vibrating technology. The new product is to be launched in the Super premium segment, which is the first product in this segment by Paramount. The issue at hand is the decision regarding this product’s positioning which could be done either in the highly involved Niche market or in the main stream aesthetic shaver market.  

Market Trends – Environment Analysis

There have been numerous product introductions in non-disposable razors and refill cartridges category (22 new SKUs were introduced from 2008-2009). Purchase volumes are not high, but the margins tend to be considerably higher compared to other personal care products. Distribution also started to shift outside the traditional food and drug stores with the former being the main distributors followed by mass merchandisers. There was also a shift toward men’s grooming with more media attention and less stigma associated with it.

Product Features (Clean Edge Razor)

The razor has a vibrating, revolutionary ultra-thin five blade design. One AAA battery, housed in the handle of the razor provided vibrations that stimulated hair follicles. A larger, heavier handle allowed better grip, balance and control while shaving and the advanced ultra-thin blade design reduced irritation. Clinical trials indicated a 25% increase in hair removal and proved that it improves overall skin tone and skin texture.

Competition Analysis

Competition came from direct competitors as well as substitute products. Substitute products include disposables razors, electronic shavers, depilatory creams, wax and laser hair removal. In 2009 the market was dominated by three multinational single players, namely, Paramount, Prince and Benet & Klein. New entrants like Radiance Health Inc. and Simpsons were creating buzz in the market with their new products Tempest (Radiance) and Naiv (Simpsons) and poised to eat away the existing share of Paramount in their current segments which showed greater need for the new product in the pipeline.