Clean Edge

1. It is the first entry in to the growing super-premium market. So even super-premium market is growing rapidly we can not guarantee if Pramount could perform successfully in the new market or not. If Clean Edge is successful as a niche brand, positioning could be broadened to mainstream.

2. Because Pro is a strong main stream brand, keeping Pro as a main stream brand would aid sales and avoid too much cannibalization. However, in the broader and longer term view, with declining of Moderate market, Pro will be lost their sales. Moreover, Paramount did not innovate Pro product for a long time and it is possible to lose their Uninvolved razor user to other competitors. So, Paramount should appeal Clean Edge to not only the involve razor users also the un or less- involved razor users and gradually extend their niche customers.l After quantitative analysis, from Exhibit 7 we see the total estimated profit generated by mainstream strategy in Year 1 & 2 is $64 million, bigger than $46.6 million generated by niche market strategy. However, because Paramount only have the budget totaled $48.3 million on advertising and promotions in 2010, it means if Randall requires $42 million to use mainstream strategy to promote Clean Edge Razor, the expense will account for 87% of the company’s annually marketing budget, which will definitely squeeze the budget of Paramount’s other cash cow products, and thus cause the tremendously potential risks on other product’s competitiveness in Moderate and value market.

l Secondly, after deducting the cannibalization effect, the profit come from “Paramount’s new customers” who buy Clean Edge Razor under niche strategy scenario in Year 1& 2 is $30.3 million, bigger than $25.6 million under mainstream strategy scenario. In other words, although the sales volume is evidently large by using mainstream strategy which William Kim suggests, Paramount can earn more money from new customers if it chooses to use niche