Running Head: CLEAN EDGE RAZOR

Clean Edge Razor: Splitting Hairs in Product Positioning

MK-715
January 9, 2016
Prof. Leat Kodua
Brenau University
James Davis
Kristi Lee
Dana Nelms

Executive Summary

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

The purpose of this report is to analyze and recommend a best possible solution
for the market positioning of Paramount Healths newest non disposable razor, Clean Edge.
Even though the companys executives have agreed that the best product fit for the razor is the
super-premium market segment, the primary issue concerning the product is deciding whether to
specifically place it within the mainstream or niche market of this segment. Also, since the Clean
Edge isnt the only item in Paramounts product catalog, their decision regarding its placement
could have a negative impact on it other product offerings. Depending on the direction leadership
takes, inappropriate positioning of the Clean Edge could result in cannibalization of resources
and clientele from other Paramount products such as: the Paramount Pro razor and the
Paramount Avail. In addition to this, positioning their newest arrival may strain the companys
already limited financial resources, while also contributing to an ongoing conflict concerning
whether emphasis should be placed on product name or company brand.
Based on both market and product constraints/advantages such as: cannibalization,
budget availability, technology, and brand strength; we are persuaded that the product should be
launched into a niche market as: Clean Edge by Paramount. A niche based, product focused
delivery not only promotes higher differentiation of the product from its competitors, but also
guarantees a fiscally sound advertising plan. Even more so, such a strategy would be able to
strongly establish Clean Edges presence in the super premium, non disposable razor market,
without jeopardizing the market offerings of Paramounts other products.

Section I: Background

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

In order to fully understand the problems and constraints surrounding the launch of
Paramounts Clean Edge product; one must be fully aware of the external and internal influences
which possibly inspired its development.
Joseph Krutch noted that technology made large populations possible; large populations
now make technology indispensable, and in regards to technology; the non-disposable razor
industry is no different. Whether it was via the development of multi-blade, glide strip, and/or
lather bar technology, the evolution of the disposable value razor into a super-premium shaving
tool fueled the growth of mainstream shaving around the world. It fueled it so much that the
entire non-disposable razor industry saw a 15% spike in growth from 2007 to 2010 (Quelch &
Beckham, 2011) As a tenured industry giant, representing over 20% of the non-disposable razor
market, such a growth opportunity could hardly go unnoticed by Paramount Health. As a
response to the surge in interest, the company may have started laying the foundation for what
would become its vibration based Clean Edge technology.
However, the most significant external influence on the razor market was not
technological; it was social. Prior to the 21st century, the primary definition of heterosexual
masculinity depicted men as hairy primal beings. Yet, around the turn of the century, the
traditional animalistic depiction of men gave way to a more aesthetically refined and egalitarian
image of the modern man; an image and culture that readily embraced the idea of
Manscaping1(Boice, 2012) .
Another external factor that may have drove the Clean Edges development was the
presence of product competition. Despite 40+ years of industry success, Paramount wasnt the
1) Manscaping: the removal or trimming of hair on a man's body for cosmetic effect

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

top contender in the non-disposable razor market. For over 50 year the Prince Corporation had
been a global leader in personal care products; with its Cogent razors outpacing Paramount
products in revenue by at least 5% from 2007 - 2010. This very close struggle to be at the top of
the non-disposable hierarchy may have driven the Paramount Company to improve in order to
beat its oldest competitor. However, it may have been the arrival of its newest competitor,
Radiance, which inspired the company to innovate. In 2010 Radiance announced the launch of
its Naiv razor, touting its advanced vibration technology which promised a cleaner shave by
stimulating and lifting the hair follicles off the skin. Despite their similar function and very close
product launch dates, its difficult to determine whether Paramount or Radiance applied the
concept of vibrational technology first.
Nevertheless, one thing that was certain was the fact that Paramount Health was overdue
for technological change. According to Quelch & Beckham, since the launch of their Pro and
Avail razor lines in 2004, Paramount had not introduced significant technology innovations in
over 5 years. Unlike the previously listed external reasons, the creation of the Clean Edge
product could have been an internal response to a lapse in innovation.

Section II: The Core Problem: Product Positioning

Paramount faces numerous issues in the market from competition to product development
and wants to become the industry leader with their new product. The major core problem being
faced by Randall Jackson, product manager for Paramounts new product Clean Edge, is how to
properly position their newest non-disposable razor Clean Edge in order to capture the highest
returns. Executives at Paramount would like to positon Clean Edge in the super-premium
segment, while others would prefer to launch the new product in the mainstream segment of the

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

market. In either case the product will have strong competition to overcome as many different
companies have started to launch products in this industry. The idea of men using health and
beauty products has increased as the stigma surrounding mens grooming habits has declined;
causing exceptional growth in the market (Razing Prices, 2013).
Paramounts leading competitor is Prince who has two products in the super premium
segment, Cogent and Cogent Plus. Both products are in different stages of their product life
cycle, varying from mature to nascent growth, which has created room for new products in the
market. Additional competition will come from B & K who has products in the super premium
segment as well as the mainstream segment, all under the brand name Vitric. There is continued
growth in the marketplace with new companies such as Simpsons and Radiance getting into the
mix with newer technology. The real challenge to Clean Edge will be seen in the launch of
Radiances Naiv non-disposable razor. Due to it is similar design and availability in market
nearly four months prior to the Clean Edge, positioning their new product will be vital to
Paramounts success.
Paramount controls the market share currently with twenty-two percent (22.2%), but they
come up lower in overall revenues, with Prince taking the lead in generating sales. The lead
comes from Princes ability to market their products with high dollar investments in advertising
campaigns and promotions. Something that Paramount will have to match if they want to be a
contender in the super premium market. Radiances new product Naiv has already shown signs
of increasing their market share by over thirteen percent (13%) with the data back on early
market tests. The presence of this strong competition makes the decision for Mr. Randall even
tougher as he tries to position Clean Edge in the market.

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

Section III: Secondary Problems

Product positioning may be the core problem, but there are secondary problems that Mr.
Jackson must also take into account as he is making is decision on market segment. One of the
first is how to market Clean Edge without cannibalizing Paramounts other products in the
market. Paramount has two other products Paramount Pro and Paramount Avail. The product
manager for Paramount Pro is Howard Rosenberg and he has strong opposition to positioning
Clean Edge in the mainstream segment because it will remove business from Paramount Pro at
nearly sixty percent (60%) resulting in the decline of an already mature product that he manages.
Mr. Rosenberg would like to see Clean Edge positioned in a niche market to allow both products
to generate revenues for Paramount. Niche markets allow for innovative products to target
specific smaller groups of people within a market segment (Kotler & Keller, 2012). Mr.
Rosenberg believes a niche market positioning would align the Clean Edge to meet the needs of
a smaller audience that is looking for quality products that deliver a closer shave, an ultra-thin
blade, easy handling, while overall improving skin texture.
Another secondary problem faced by Mr. Randall revolves around the marketing budget
for the coming fiscal year. Paramount wants to maintain a steady marketing budget for the
coming fiscal year. If an increase in budget dollars is not possible, Mr. Randall will need to find
a way to market Clean Edge with limited resources or get additional money from other product
areas, which will create conflict with the other product managers. Mr. Randall has completed
pro formas for each plan to anticipate costs for the Clean Edge if positioned in the niche or the
mainstream markets. If Mr. Randall goes with the mainstream positioning he will need to spend
nearly $42 million in order to successfully launch the product. However when compared to a

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

niche market strategy, not only would Randall end up spending less for the marketing campaign
($15 million), he could reduce the likelihood of cannibalization of Paramount Pro. Thus a major
impact on Paramounts revenues. In the long run the mainstream market should bring in higher
returns than the niche market, so the higher advertising and promotion expenses may offset.
The final secondary problem that needs to be handled is how to brand the new product.
In the past Paramount has always used their name in conjunction with the product since they
have a long standing history of providing quality products in the market. Unfortunately, in the
situation the executives are split. The traditionalist believe the should lead with their strong
brand by calling the new product Paramount Clean Edge. Whereas others believe the name
should stand out as a new innovative product, so they want to go with Clean Edge by Paramount.
Branding a product can bring in consumers who are loyal to the company, so in either case the
Paramount name should be associated in some way to help consumers recognize the quality
being offered to them (Kotler & Keller, 2012).

Section IV: Constraints and Limiting Factors

The market competition from Radiance will be a major factor in how well Clean Edge
can perform; not to mention, how much advertising investment will needed in order to have a
successful product launch. The technology behind Clean Edge with the new vibrating head,
heavier handle, and ultra-thin blade will help to establish its superior design over the traditional
non-disposable razors, but Radiance will beat Paramount to the market by almost four months.
Paramount will need to tap into additional marketing dollars in order to overcome Radiances
market campaign and steal away those sales. Consumer promotions such as coupons and buy
one get one campaigns have been proven techniques to increase sales and if Paramount goes with

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

a mainstream positioning strategy they will need to invest almost $4 million in these types of
promotions in the first year (Clemons, Nunes, & Reilly, 2010).
Another limiting factor will be the political issues within Paramount, especially in how
much Clean Edge will likely cannibalized the other products. The pro formas, done based on
mainstream and niche positioning strategies, show significant cannibalization of the other
products within Paramount; which could lead to significant political battles between managers
and executives over advertising dollars. The biggest battle will come from Mr. Rosenberg who
handles paramount Pro a mature product that will likely lose anywhere from thirty-five to sixty
percent of sales to Clean Edge. Mr. Rosenberg has been a long time employee with Paramount
and has significant political power with some executives, so he could potentially prevent a
successful launch by not allowing additional advertising dollars be transferred between his
products and Clean Edge. Clean Edge will impact all existing products regardless of which
market segment it goes into, and it will require a significant amount of the advertising budget to
be successful.
Another limiting factor can be seen in how Paramount has conducted business over the
past five years. Paramount has not introduced a new product in those five years; instead they
have invested in advertising and pushing their current line of products that are now starting to
mature in the market. Most of the competition has been developing and introducing new
products, with almost twenty-two new products reaching the market during those five years and
this has taken business away from paramount. Now Paramount faces the challenge of
recapturing lost consumers and pushing a new innovative product into the market. Paramount
executives are unclear on how to proceed in a manner that will be successful and may not be
willing to invest the required resources to make Clean Edge their new brand image. During the

CLEAN EDGE RAZOR: SPLITTING HAIRS IN PRODUCT POSITIONING

last five years consumer choices have also changed with an emphasis on high quality with a
bargain price (Razing Prices, 2013). This change in consumer taste means that they are moving
away from the super-premium market and looking at a more mainstream market with a focus on
disposable razors, which can be seen in second quarter sales data for 2013. The drop was nearly
ten percent (10%) and can really put constraint on Clean Edges sales projections.

Section V: Alternative Solutions

A solution is to place Clean Edge into the mainstream market along with their
other products, Paramount Avail and Paramount Pro razors. Clean Edge would be offered as the
higher quality product and priced higher than the existing products; while careful marketing
would applied to help the consumers differentiate between the various products. However, this
could be costly, and could eventually cannibalize the existing Paramount products. There are
already numerous competitors in the mainstream market; the most direct being Prince which is
the leader in sales. This is due to Princes high investment in advertising, marketing and
promotions involving their products. Paramount will need to spend much of their advertising
budget creating innovating ways to out-advertise their competition.
Another solution is to launch the Clean Edge into a niche market, based on the fact that
Paramount already has successful products in the mainstream market. This would expand their
product base among three market segments, which in turn would attract new consumers.
Marketing cost would be less, according to the profit-and-loss forecast; $15 million has been
allotted for advertising in the niche market as compared to $42 million in the mainstream market.
To successfully promote a product in a mainstream market, heavy advertising in the form of

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media, trade promotions and promotions need to occur. This would allow marketing funds to still
be available to promote their exiting mainstream products.

Section VI: A Beneficial Solution: Niche Positioning

The recommended solution is to launch the Clean Edge in the niche market as being a superpremium razor; while promoting the products technology and high-quality. The appeal would
be to the consumer who wants shaving to be an experience and not a daily chore (Razing, 2013).
The profit-and-loss forecast indicates that by being in this market, Paramount will have a profit
of $31.7 million, much greater than $2.82 million if it was in the mainstream market. The
product should be branded as Clean Edge by Paramount, which will allow it to stand alone as a
premium product having the branding endorsement of the Paramount company. This will appeal
to the consumer who desires a superior shaving experience via a unique and innovative
technology.
This solution should appeal to Mr. Rosenberg, who desired to launch Clean Edge into a
niche market. He felt that this product would appeal to a sub-set in the niche market of those
who are looking for specific and specialized qualities in a product (Kotler & Keller, 2012).
Appeasement to the executives and managers can come from the cost savings in advertising
dollars and forecasted increase revenue.
.

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Section VII: Justification of Strategy

The recommendation would place Clean Edge into the super-premium niche of
the razor market. There are several competitors such as Radiances Navi, however it could be an
advantage to promote a known brand such as Paramount into the market. Fortunately with
22.2% of existing market share, consumers are likely to choose a familiar brand over a
competitors product. In addition, pricing the razor and cartridges at the higher end of the
market, will give it the perception of the consumer getting a higher quality and unique product
due to the higher price (Razing, 2013).
Placing Clean Edge into the niche market would also eliminate the issue of being their
own competitor in the mainstream market. This would also allow for an increased market share
by distributing their products over three consumer economic markets.

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References:
Boice, R. A. (2012). The age of manscaping: Controlling bodies and defining manhood in the
21st Century. UNIVERSITY OF COLORADO AT DENVER.
Clemons, E. K., Nunes, P. F., & Reilly, M. (2010, May 24). Six Strategies for Successful Niche
Marketing: How to Win Big by Thinking Small. The Wall Street Journal. Retrieved
December 29, 2015, from
http://www.wsj.com/articles/SB10001424052748704130904574644084205858424
Kotler, P., & Keller, K. L. (2012). Marketing Management (14th ed. ed.). Upper Saddle, NJ:
Prentice Hall.
Razing Prices. (2013, August 13). Economist. Retrieved December 29, 2015, from
http://www.economist.com/blogs/schumpeter/2013/08/male-grooming
Quelch, J. , Beckham, H. (2011, January 19). Clean Edge Razor: Splitting Hairs in Product
Positioning. Harvard Business Publishing